DDR CORP (Form: 10-Q, Received: 11/08/2011 12:18:13)

XBRL Taxonomy Extension Label Linkbase Document

Submitted electronically herewith

XBRL Taxonomy Extension Presentation Linkbase Document

Submitted electronically herewith

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2011

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-11690

DDR Corp.

(Exact name of registrant as specified in its charter)

Ohio

34-1723097

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

3300 Enterprise Parkway, Beachwood, Ohio 44122

(Address of principal executive offices - zip code)

(216) 755-5500

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	x	Accelerated filer	¨

Non-accelerated filer	¨ (Do not check if smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of October 28, 2011, the registrant had 276,968,631 outstanding common shares, $0.10 par value per share.

PART I

FINANCIAL INFORMATION


Item 1. FINANCIAL STATEMENTS—Unaudited

Condensed Consolidated Balance Sheets as of September 30, 2011 and December 31, 2010.			2

Condensed Consolidated Statements of Operations for the Three-Month Periods Ended September 30, 2011 and 2010.			3

Condensed Consolidated Statements of Operations for the Nine-Month Periods Ended September 30, 2011 and 2010.			4

Consolidated Statement of Equity for the Nine-Month Period Ended September 30, 2011.			5

Condensed Consolidated Statements of Cash Flows for the Nine-Month Periods Ended September 30, 2011 and 2010.			6

Notes to Condensed Consolidated Financial Statements.			8

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DDR Corp.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except share amounts)

(Unaudited)


	September 30, 2011			December 31, 2010
Assets
Land	$	1,852,940		$	1,837,403
Buildings		5,494,699			5,491,489
Fixtures and tenant improvements		372,670			339,129

		7,720,309			7,668,021
Less: Accumulated depreciation		(1,537,709	)		(1,452,112	)

		6,182,600			6,215,909
Land held for development and construction in progress		644,028			743,218
Real estate held for sale, net		6,284			—

Total real estate assets, net		6,832,912			6,959,127
Investments in and advances to joint ventures		376,613			417,223
Cash and cash equivalents		20,681			19,416
Restricted cash		4,006			4,285
Notes receivable, net		112,458			120,330
Other assets, net		256,511			247,709

	$	7,603,181		$	7,768,090

Liabilities and Equity
Unsecured indebtedness:
Senior notes	$	2,158,931		$	2,043,582
Revolving credit facilities		226,433			279,865

		2,385,364			2,323,447

Secured indebtedness:
Term loan		500,000			600,000
Mortgage and other secured indebtedness		1,340,357			1,378,553

		1,840,357			1,978,553

Total indebtedness		4,225,721			4,302,000
Accounts payable and accrued expenses		147,810			127,715
Dividends payable		23,585			12,092
Equity derivative liability – affiliate		—			96,237
Other liabilities		101,747			95,359

Total liabilities		4,498,863			4,633,403

Commitments and contingencies (Note 9)
DDR Equity:
Class G — 8.0% cumulative redeemable preferred shares, without par value, $250 liquidation value; 750,000 shares authorized; 720,000 shares issued and outstanding at December 31, 2010		—			180,000
Class H — 7.375% cumulative redeemable preferred shares, without par value, $500 liquidation value; 750,000 shares authorized; 410,000 shares issued and outstanding at September 30, 2011 and December 31, 2010		205,000			205,000
Class I — 7.5% cumulative redeemable preferred shares, without par value, $500 liquidation value; 750,000 shares authorized; 340,000 shares issued and outstanding at September 30, 2011 and December 31, 2010		170,000			170,000
Common shares, with par value, $0.10 stated value; 500,000,000 shares authorized; 277,075,287 and 256,267,750 shares issued at September 30, 2011 and December 31, 2010, respectively		27,708			25,627
Paid-in capital		4,136,752			3,868,990
Accumulated distributions in excess of net income		(1,469,432	)		(1,378,341	)
Deferred compensation obligation		12,781			14,318
Accumulated other comprehensive income		1,885			25,646
Less: Common shares in treasury at cost: 682,138 and 712,310 shares at September 30, 2011 and December 31, 2010, respectively		(13,347	)		(14,638	)

Total DDR shareholders’ equity		3,071,347			3,096,602
Non-controlling interests		32,971			38,085

Total equity		3,104,318			3,134,687

	$	7,603,181		$	7,768,090

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

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DDR Corp.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE-MONTH PERIODS ENDED SEPTEMBER 30,

(Dollars in thousands, except per share amounts)

(Unaudited)


	2011			2010
Revenues from operations:
Minimum rents	$	131,457		$	129,120
Percentage and overage rents		1,110			895
Recoveries from tenants		42,586			43,331
Fee and other income		21,295			19,646

		196,448			192,992

Rental operation expenses:
Operating and maintenance		34,027			32,473
Real estate taxes		26,465			28,747
Impairment charges		51,245			—
General and administrative		17,954			20,180
Depreciation and amortization		56,249			53,052

		185,940			134,452

Other income (expense):
Interest income		2,459			1,614
Interest expense		(58,169	)		(52,014	)
(Loss) gain on debt retirement, net		(134	)		333
Loss on equity derivative instruments		—			(11,278	)
Other income (expense), net		182			(3,874	)

		(55,662	)		(65,219	)

Loss before earnings from equity method investments and other items		(45,154	)		(6,679	)
Equity in net loss of joint ventures		(2,590	)		(4,801	)

Loss before tax expense of taxable REIT subsidiaries and state franchise and income taxes		(47,744	)		(11,480	)
Tax expense of taxable REIT subsidiaries and state franchise and income taxes		(299	)		(1,118	)

Loss from continuing operations		(48,043	)		(12,598	)
Loss from discontinued operations		(5,226	)		(3,307	)

Loss before gain on disposition of real estate		(53,269	)		(15,905	)
Gain on disposition of real estate, net of tax		6,587			145

Net loss	$	(46,682	)	$	(15,760	)
Non-controlling interests		3,693			1,450

Net loss attributable to DDR	$	(42,989	)	$	(14,310	)

Preferred dividends		(6,967	)		(10,567	)

Net loss attributable to DDR common shareholders	$	(49,956	)	$	(24,877	)

Per share data:
Basic earnings per share data:
Loss from continuing operations attributable to DDR common shareholders	$	(0.16	)	$	(0.09	)
Loss from discontinued operations attributable to DDR common shareholders		(0.02	)		(0.01	)

Net loss attributable to DDR common shareholders	$	(0.18	)	$	(0.10	)

Diluted earnings per share data:
Loss from continuing operations attributable to DDR common shareholders	$	(0.16	)	$	(0.09	)
Loss from discontinued operations attributable to DDR common shareholders		(0.02	)		(0.01	)

Net loss attributable to DDR common shareholders	$	(0.18	)	$	(0.10	)

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

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DDR Corp.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30,

(Dollars in thousands, except per share amounts)

(Unaudited)


	2011			2010
Revenues from operations:
Minimum rents	$	393,146		$	388,393
Percentage and overage rents		3,812			3,319
Recoveries from tenants		131,898			130,038
Fee and other income		61,236			61,764

		590,092			583,514

Rental operation expenses:
Operating and maintenance		106,937			100,277
Real estate taxes		79,217			79,956
Impairment charges		68,457			59,277
General and administrative		65,310			62,546
Depreciation and amortization		166,496			159,705

		486,417			461,761

Other income (expense):
Interest income		7,675			4,425
Interest expense		(175,218	)		(161,488	)
(Loss) gain on debt retirement, net		(134	)		333
Gain (loss) on equity derivative instruments		21,926			(14,618	)
Other income (expense), net		(4,825	)		(18,357	)

		(150,576	)		(189,705	)

Loss before earnings from equity method investments and other items		(46,901	)		(67,952	)
Equity in net income (loss) of joint ventures		15,951			(3,777	)
Impairment of joint venture investments		(1,671	)		—
Gain on change in control of interests		22,710			—

Loss before tax (expense) benefit of taxable REIT subsidiaries and state franchise and income taxes		(9,911	)		(71,729	)
Tax (expense) benefit of taxable REIT subsidiaries and state franchise and income taxes		(1,041	)		1,527

Loss from continuing operations		(10,952	)		(70,202	)
Loss from discontinued operations		(21,656	)		(93,371	)

Loss before gain on disposition of real estate		(32,608	)		(163,573	)
Gain on disposition of real estate, net of tax		8,036			61

Net loss	$	(24,572	)	$	(163,512	)
Non-controlling interests		3,512			38,380

Net loss attributable to DDR	$	(21,060	)	$	(125,132	)

Write-off of original preferred share issuance costs		(6,402	)		—
Preferred dividends		(24,620	)		(31,702	)

Net loss attributable to DDR common shareholders	$	(52,082	)	$	(156,834	)

Per share data:
Basic earnings per share data:
Loss from continuing operations attributable to DDR common shareholders	$	(0.12	)	$	(0.37	)
Loss from discontinued operations attributable to DDR common shareholders		(0.08	)		(0.28	)

Net loss attributable to DDR common shareholders	$	(0.20	)	$	(0.65	)

Diluted earnings per share data:
Loss from continuing operations attributable to DDR common shareholders	$	(0.12	)	$	(0.37	)
Loss from discontinued operations attributable to DDR common shareholders		(0.08	)		(0.28	)

Net loss attributable to DDR common shareholders	$	(0.20	)	$	(0.65	)

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

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DDR Corp.

CONSOLIDATED STATEMENT OF EQUITY

FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2011

(Dollars in thousands)

(Unaudited)


	DDR Equity
	Preferred Shares			Common Shares		Paid-in Capital			Accumulated Distributions in Excess of Net Income (Loss)			Deferred Compensation Obligation			Accumulated Other Comprehensive Income (Loss)			Treasury Stock at Cost			Non- Controlling Interests			Total
Balance, December 31, 2010	$	555,000		$	25,627	$	3,868,990		$	(1,378,341	)	$	14,318		$	25,646		$	(14,638	)	$	38,085		$	3,134,687
Issuance of common shares related to the exercise of stock options, dividend reinvestment plan and director compensation					12		769												362						1,143
Issuance of common shares related to exercise of warrants					1,000		133,310																		134,310
Issuance of common shares for cash offering					950		128,715																		129,665
Contributions from non-controlling interests																						281			281
Issuance of restricted stock					119		(6,284	)					389						6,165						389
Vesting of restricted stock							1,694						(1,926	)					(5,236	)					(5,468	)
Stock-based compensation							3,156																		3,156
Redemption of preferred shares		(180,000	)				6,402			(6,402	)														(180,000	)
Dividends declared-common shares										(38,366	)														(38,366	)
Dividends declared-preferred shares										(25,263	)														(25,263	)
Distributions to non-controlling interests																						(1,743	)		(1,743	)
Comprehensive loss:
Net loss										(21,060	)											(3,512	)		(24,572	)
Other comprehensive (loss) income:
Change in fair value of interest-rate contracts																(6,926	)								(6,926	)
Amortization of interest-rate contracts																86									86
Foreign currency translation																(16,921	)					(140	)		(17,061	)

Comprehensive loss		—			—		—			(21,060	)		—			(23,761	)		—			(3,652	)		(48,473	)

Balance, September 30, 2011	$	375,000		$	27,708	$	4,136,752		$	(1,469,432	)	$	12,781		$	1,885		$	(13,347	)	$	32,971		$	3,104,318

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE

CONSOLIDATED FINANCIAL STATEMENTS.

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DDR Corp.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30,

(Dollars in thousands)

(Unaudited)


	2011			2010
Net cash flow provided by operating activities:	$	224,710		$	211,038

Cash flow from investing activities:
Proceeds from disposition of real estate		126,641			120,671
Real estate developed or acquired, net of liabilities assumed		(146,155	)		(123,808	)
Equity contributions to joint ventures		(7,501	)		(24,999	)
Repayments of joint venture advances, net		23,075			28
Distributions of proceeds from sale and refinancing of joint venture interests		21,502			5,109
Return of investments in joint ventures		8,110			19,084
Repayment (issuance) of notes receivable, net		4,007			(62,848	)
Decrease in restricted cash		279			76,075

Net cash flow provided by investing activities:		29,958			9,312

Cash flow from financing activities:
Repayments of revolving credit facilities, net		(54,598	)		(286,697	)
Repayment of senior notes		(185,566	)		(539,127	)
Proceeds from issuance of senior notes, net of underwriting commissions and offering expenses of $350 and $843 in 2011 and 2010, respectively		295,495			590,710
Proceeds from mortgages and other secured debt		186,956			4,460
Repayment of term loans and mortgage debt		(423,264	)		(384,151	)
Payment of debt issuance costs		(11,121	)		(2,537	)
Proceeds from issuance of common shares, net of underwriting commissions and issuance costs of $686 in 2011 and $956 in 2010		129,792			440,472
Proceeds from issuance of common shares related to the exercise of warrants		59,873			—
Redemption of preferred shares		(180,000	)		—
Purchase of common shares in conjunction with equity award plans		(6,111	)		(630	)
Contributions from non-controlling interests		281			486
Distributions to non-controlling interests and redeemable operating partnership units		(1,677	)		(2,382	)
Dividends paid		(63,238	)		(45,722	)

Net cash flow used for financing activities		(253,178	)		(225,118	)

Cash and cash equivalents
Decrease in cash and cash equivalents		1,490			(4,768	)
Effect of exchange rate changes on cash and cash equivalents		(225	)		(69	)
Cash and cash equivalents, beginning of period		19,416			26,172

Cash and cash equivalents, end of period	$	20,681		$	21,335

Supplemental disclosure of non-cash investing and financing activities:

At September 30, 2011, dividends payable were $23.6 million. In September 2011, the Company acquired $107.2 million of real estate assets (Note 3) and approximately $13.4 million of intangible assets and other assets. A portion of the consideration used to acquire the assets included assumed debt of $67.0 million and accounts payable and other liabilities aggregating approximately $9.2 million. In conjunction with the acquisition of its partners’ interests in two shopping centers (Note 3), the Company reversed its previously held equity interest by increasing Investments in and Advances to Joint Ventures by approximately $7.8 million as the investment basis was negative, increased net real estate assets by approximately $34.8 million for its previously held proportionate share of the assets, and assumed debt of approximately $50.1 million. At September 30, 2011, in accordance with ASC 810, the Company deconsolidated one asset. This deconsolidation resulted in a reduction of real estate assets, net of approximately $14.0 million and mortgages payable of approximately $18.3 million. In addition, in March 2011, warrants were exercised for an aggregate of 10 million common shares. The Equity Derivative Liability – Affiliate of $74.3 million was reclassified from liabilities to additional paid-in capital upon exercise. In conjunction with the redemption of the Company’s Class G cumulative redeemable preferred shares, the Company recorded a non-cash charge to net income available to common shareholders of $6.4 million related to the write-off of the original issuance costs. The foregoing transactions did not provide for or require the use of cash for the nine-month period ended September 30, 2011.

At September 30, 2010, dividends payable were $12.0 million. The Company deconsolidated one entity in connection with the adoption of the consolidation rules effective January 1, 2010. This resulted in a reduction to real estate assets, net, of approximately $28.7 million, an increase to Investments in and Advances to Joint Ventures of approximately $8.4 million, a reduction in non-controlling interests of approximately $12.4 million and an increase to Accumulated Distributions in Excess of Net Income of approximately $7.8 million. In addition, the Company foreclosed on its interest

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in a note receivable secured by a development project resulting in an increase to real estate assets and a decrease to notes receivable of approximately $19.0 million. At September 30, 2010, in accordance with ASC 810, 26 assets were deconsolidated. This deconsolidation resulted in a reduction of real estate assets, net of approximately $156.3 million, restricted cash of approximately $5.2 million, and mortgages payable by approximately $166.7 million. In addition, non-controlling interests increased by $3.9 million as a result of the deconsolidation. The foregoing transactions did not provide for or require the use of cash for the nine-month period ended September 30, 2010.

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

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DDR Corp.

Notes to Condensed Consolidated Financial Statements

1.	NATURE OF BUSINESS AND FINANCIAL STATEMENT PRESENTATION

DDR Corp. and its related real estate joint ventures and subsidiaries (collectively, the “Company” or “DDR”) are primarily engaged in the business of acquiring, expanding, owning, developing, redeveloping, leasing, managing and operating shopping centers. Unless otherwise provided, references herein to the Company or DDR include DDR Corp., its wholly-owned and majority-owned subsidiaries and its consolidated and unconsolidated joint ventures.

Principles of Consolidation

The Company follows the provisions of Accounting Standards Codification No. 810, Consolidation (“ASC 810”). This standard requires a company to perform an analysis to determine whether its variable interests give it a controlling financial interest in a Variable Interest Entity (“VIE”). This analysis identifies the primary beneficiary of a VIE as the entity that has (a) the power to direct the activities of the VIE that most significantly affect the VIE’s economic performance and (b) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. In determining whether it has the power to direct the activities of the VIE that most significantly affect the VIE’s performance, this standard requires a company to assess whether it has an implicit financial responsibility to ensure that a VIE operates as designed.

At September 30, 2011 and December 31, 2010, the Company’s investments in consolidated real estate joint ventures that are deemed to be VIEs in which the Company is deemed to be the primary beneficiary have total real estate assets of $315.5 million and $374.2 million, respectively, mortgages of $23.5 million and $42.9 million, respectively, and other liabilities of $13.5 million and $13.7 million, respectively.

In August 2011, one of the Company’s consolidated joint venture entities, which owns a mall in Martinsville, Virginia was transferred to the control of a court-appointed receiver. As a result, the Company no longer has a controlling financial interest in the entity. Consequently, the entity was deconsolidated as the Company was no longer in control. Upon deconsolidation, the Company recorded a gain of approximately $4.7 million because the carrying value of the non-recourse debt exceeded the carrying value of the collateralized asset of the joint venture. Following the appointment of the receiver, the Company no longer has any effective economic rights or obligations in this entity. The revenues and expenses associated with the entity for all of the periods presented, including the $4.7 million gain, are classified within discontinued operations in the condensed consolidated statements of operations (Note 13). Subsequent to the deconsolidation of this joint venture, the Company accounts for its retained interest in this joint venture investment, which approximates zero at September 30, 2011, under the cost method of accounting because the Company does not have the ability to exercise significant influence.

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Use of Estimates

The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Unaudited Interim Financial Statements

These financial statements have been prepared by the Company in accordance with generally accepted accounting principles for interim financial information and the applicable rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all information and footnotes required by generally accepted accounting principles for complete financial statements. However, in the opinion of management, the interim financial statements include all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of the results of the periods presented. The results of operations for the three- and nine-month periods ended September 30, 2011 and 2010, are not necessarily indicative of the results that may be expected for the full year. These condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto included in the Company’s Form 10-K for the year ended December 31, 2010.

Comprehensive Loss

Comprehensive loss is as follows (in thousands):


	Three-Month Periods Ended September 30,						Nine-Month Periods Ended September 30,
	2011			2010			2011			2010
Net loss	$	(46,682	)	$	(15,760	)	$	(24,572	)	$	(163,512	)
Other comprehensive (loss) income:
Change in fair value of interest-rate contracts		(4,154	)		1,708			(6,926	)		9,278
Amortization of interest-rate contracts		47			(46	)		86			(200	)
Foreign currency translation		(29,916	)		9,136			(17,061	)		(7,021	)

Total other comprehensive (loss) income		(34,023	)		10,798			(23,901	)		2,057

Comprehensive loss	$	(80,705	)	$	(4,962	)	$	(48,473	)	$	(161,455	)
Comprehensive loss (income) attributable to non-controlling interests		5,191			(249	)		3,652			41,057

Total comprehensive loss attributable to DDR	$	(75,514	)	$	(5,211	)	$	(44,821	)	$	(120,398	)

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New Accounting Standards

Presentation of Other Comprehensive Income

In June 2011, the Financial Accounting Standard Board (“FASB”) issued guidance on the presentation of comprehensive income. This guidance eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity, which is the Company’s current presentation, and also requires presentation of reclassification adjustments from other comprehensive income to net income on the face of the financial statements. This guidance is effective for fiscal years and interim periods beginning after December 15, 2011. The Company does not expect the adoption of this guidance to have a material effect on its financial position or results of operations, though it will change the Company’s financial statement presentation.

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2.	INVESTMENTS IN AND ADVANCES TO JOINT VENTURES

At September 30, 2011 and December 31, 2010, the Company had ownership interests in various unconsolidated joint ventures that had an investment in 231 and 236 shopping center properties, respectively. Condensed combined financial information of the Company’s unconsolidated joint venture investments is as follows (in thousands):


	September 30, 2011			December 31, 2010
Condensed Combined Balance Sheets
Land	$	1,519,924		$	1,566,682
Buildings		4,646,659			4,783,841
Fixtures and tenant improvements		162,398			154,292

		6,328,981			6,504,815
Less: Accumulated depreciation		(805,568	)		(726,291	)

		5,523,413			5,778,524
Land held for development and construction in progress		258,986			174,237

Real estate, net		5,782,399			5,952,761
Cash and restricted cash ^(A)		342,013			122,439
Receivables, net		108,486			111,569
Leasehold interests		9,426			10,296
Other assets		177,188			181,387

	$	6,419,512		$	6,378,452

Mortgage debt	$	3,891,045		$	3,940,597
Notes and accrued interest payable to DDR		98,512			87,282
Other liabilities		227,569			186,333

		4,217,126			4,214,212
Accumulated equity		2,202,386			2,164,240

	$	6,419,512		$	6,378,452

Company’s share of accumulated equity	$	457,215		$	480,200


	Three-Month Periods Ended September 30,						Nine-Month Periods Ended September 30,
	2011			2010			2011			2010
Condensed Combined Statements of Operations
Revenues from operations	$	174,735		$	160,440		$	518,279		$	479,095

Operating expenses		57,988			57,847			172,669			181,256
Impairment charges ^(B)		63,041			65			63,041			65
Depreciation and amortization		45,211			46,247			140,501			138,789
Interest expense		56,574			52,532			170,580			169,330

		222,814			156,691			546,791			489,440

(Loss) income before tax expense and discontinued operations		(48,079	)		3,749			(28,512	)		(10,345	)
Income tax expense (primarily Sonae Sierra Brasil), net		(9,434	)		(4,114	)		(26,963	)		(13,947	)

Loss from continuing operations		(57,513	)		(365	)		(55,475	)		(24,292	)
Discontinued operations:
Income (loss) from discontinued operations ^(C)		228			(7,583	)		(244	)		(19,742	)
Gain on debt forgiveness ^(D)		—			—			2,976			—
(Loss) gain on disposition of real estate, net of tax ^(E)		(593	)		(13,340	)		21,300			(25,303	)

Loss before gain on disposition of real estate, net		(57,878	)		(21,288	)		(31,443	)		(69,337	)
Gain on disposition of real estate, net		—			—			—			17

Net loss	$	(57,878	)	$	(21,288	)	$	(31,443	)	$	(69,320	)

Non-controlling interests		(6,570	)		10			(11,564	)		(253	)

Net loss attributable to unconsolidated joint ventures		(64,448	)		(21,278	)		(43,007	)		(69,573	)

Company’s share of equity in net (loss) income of joint ventures ^(F)	$	(6,199	)	$	(4,193	)	$	14,240		$	(4,362	)

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(A)

Increase in cash from December 31, 2010, is primarily driven by Sonae Sierra Brasil and proceeds generated from the February 2011 initial public offering.

(B)

For the three- and nine-month periods ended September 30, 2011, impairment charges were recorded on four assets being marketed for sale of which the Company’s proportionate share was approximately $6.2 million.

(C)

For the three- and nine-month periods ended September 30, 2010, impairment charges aggregating $8.8 million and $19.7 million, respectively, were reclassified to discontinued operations.

(D)

Gain on debt forgiveness is related to one property owned by an unconsolidated joint venture that was transferred to the lender pursuant to a consensual foreclosure proceeding. The operations of the asset have been reclassified as discontinued operations in the condensed combined statements of operations presented.

(E)

For the nine months ended September 30, 2011, gain on disposition of discontinued operations includes the sale of three properties by three of the Company’s unconsolidated joint ventures. The Company’s proportionate share of the aggregate gain for the assets sold for the nine-month period ended September 30, 2011 was approximately $10.5 million.

For the nine months ended September 30, 2010, loss on disposition of discontinued operations includes the sale of 25 properties by four separate unconsolidated joint ventures, of which four were sold in the third quarter of 2010. In the fourth quarter of 2009, these joint ventures recorded impairment charges aggregating $170.9 million related to certain of these asset sales. The Company’s proportionate share of the loss on sales for the assets sold during the three- and nine-month periods ended September 30, 2010, was approximately $2.8 million and $4.1 million, respectively.

(F)

The difference between the Company’s share of net loss, as reported above, and the amounts included in the condensed consolidated statements of operations is attributable to the amortization of basis differentials, deferred gains and differences in gain (loss) on sale of certain assets due to the basis differentials and other than temporary impairment charges. The Company is not recording income or loss from those investments in which its investment basis is zero and the Company does not have the obligation or intent to fund any additional capital. Adjustments to the Company’s share of joint venture net loss for these items are reflected as follows (in millions):


	Three-Month Periods Ended September 30,					Nine-Month Periods Ended September 30,
	2011		2010			2011		2010
Income (loss), net	$	3.6	$	(0.6	)	$	1.7	$	0.6

Investments in and advances to joint ventures include the following items, which represent the difference between the Company’s investment and its share of all of the unconsolidated joint ventures’ underlying net assets (in millions):


	September 30, 2011			December 31, 2010
Company’s share of accumulated equity	$	457.2		$	480.2
Basis differentials ^(A)		(176.0	)		(147.5	)
Deferred development fees, net of portion relating to the Company’s interest		(3.5	)		(3.4	)
Notes receivable from investments		0.4			0.6
Notes and accrued interest payable to DDR ^(B)		98.5			87.3

Investments in and advances to joint ventures	$	376.6		$	417.2

(A)	This amount represents the aggregate difference between the Company’s historical cost basis and the equity basis reflected at the joint venture level. Basis differentials recorded upon transfer of assets are primarily associated

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with assets previously owned by the Company that have been transferred into an unconsolidated joint venture at fair value. Other basis differentials occur primarily when the Company has purchased interests in existing unconsolidated joint ventures at fair market values, which differ from its proportionate share of the historical net assets of the unconsolidated joint ventures. In addition, certain transaction and other costs, including capitalized interest, reserves on notes receivable as discussed below and impairments of the Company’s investments that were other than temporary may not be reflected in the net assets at the joint venture level. Certain basis differentials indicated above are amortized over the life of the related assets.

(B)

The Company has made advances to several joint ventures that bear annual interest at rates ranging from 10.5% to 12.0%. The Company advanced financing of $66.9 million, which includes accrued interest of $8.8 million, to one of the Coventry II Fund joint ventures, Coventry II DDR Bloomfield, related to a development project in Bloomfield Hills, Michigan (the “Bloomfield Loan”). This loan accrues interest at a base rate of the greater of LIBOR plus 700 basis points or 12% and a default rate of 16% and has a stated maturity of July 2011. This loan is in default and was fully reserved by the Company in 2008. During the second quarter of 2011, the Company recorded a $1.6 million reserve associated with a $4.3 million construction loan advanced to a 50% owned joint venture. The impairment was driven by the deterioration in value of the real estate collateral supporting the note. The stated terms are payable on demand from available cash flow from the property after debt service on the first mortgage. The reserve is classified as an impairment of joint venture investments in the condensed consolidated statement of operations for the nine-month period ended September 30, 2011.

Service fees and income earned by the Company through management, financing, leasing and development activities performed related to all of the Company’s unconsolidated joint ventures are as follows (in millions):


	Three-Month Periods Ended September 30,		Nine-Month Periods Ended September 30,
	2011	2010	2011	2010
Management and other fees	$7.0	$8.3	$21.7	$25.2
Financing and other fees	0.3	—	—	0.2
Development fees and leasing commissions	1.6	1.5	5.3	5.2
Interest income	—	0.1	0.1	0.3

Sonae Sierra Brasil

In February 2011, the Company’s unconsolidated joint venture, Sonae Sierra Brasil (BM&FBOVESPA: SSBR3), completed an initial public offering of its common shares on the Sao Paulo Stock Exchange. The total proceeds raised of approximately US$280 million from the initial public offering will be used primarily to fund future developments and expansions, as well as repay a loan from its parent company, in which DDR owns a 50% interest. The Company’s share of the loan repayment proceeds, which were received during the first quarter of 2011, was approximately US$22.4 million. As a result of the initial public offering, the Company’s effective ownership interest in Sonae Sierra Brasil was reduced from 48% to approximately 33%.

Other Joint Venture Interests

In the first quarter of 2011, the Company acquired its partners’ 50% ownership interests in two shopping centers (Note 3).

In the second quarter of 2011, a 50% owned joint venture sold a shopping center asset to a third party for gross proceeds of $50.3 million. The gain recorded by the joint venture was $22.8 million, of which the Company’s share was $12.6 million, which includes the recognition of a previously recorded deferred gain that was associated with the initial formation of the joint venture.

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3.	ACQUISITIONS

In September 2011, the Company acquired three shopping centers, in two separate transactions, aggregating 0.5 million square feet of Company-owned gross leasable area (“GLA”) for an aggregate purchase price of approximately $110.0 million through the use of cash and assumed debt of $67.0 million at a fair market value of approximately $71.4 million.

In January and March 2011, in two separate transactions, the Company acquired its partners’ 50% ownership interests in two shopping centers for an aggregate purchase price of $40.0 million. The Company acquired these assets pursuant to the terms of the respective underlying joint venture agreements. After closing, the Company repaid one mortgage note payable with a principal amount of $29.2 million in total and refinanced the other mortgage with a new $21.0 million, eleven-year mortgage note payable. As a result of the transactions, the Company owns 100% of the two shopping centers with an aggregate gross value of approximately $80.0 million. Due to the change in control that occurred, the Company recorded an aggregate gain of approximately $22.7 million associated with the acquisitions related to the difference between the Company’s carrying value and fair value of its previously held equity interest on the respective acquisition date.

Upon acquisition of properties, the Company estimates the fair value of acquired tangible assets, consisting of land, building and improvements and intangible assets generally consisting of: (i) above- and below-market leases; (ii) in-place leases; and (iii) tenant relationships. The Company allocates the purchase price to assets acquired and liabilities assumed on a gross basis based on their relative fair values at the date of acquisition. In estimating the fair value of the tangible and intangible assets acquired, the Company considers information obtained about each property as a result of its due diligence, marketing and leasing activities and uses various valuation methods, such as estimated cash flow projections using appropriate discount and capitalization rates, analysis of recent comparable sales transactions, estimates of replacement costs net of depreciation and other available market information. Above- and below-market lease values are recorded based on the present value (using a discount rate that reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining term of the lease for above-market leases and the initial term plus the estimated term of any below-market fixed-rate renewal options for below-market leases. The capitalized above-market lease values are amortized as a reduction of base rental revenue over the remaining term of the respective leases, and the capitalized below-market lease values are amortized as an increase to base rental revenue over the remaining initial terms plus the estimated terms of any below-market fixed-rate renewal options of the respective leases. The purchase price is further allocated to in-place lease values and tenant relationship values based on management’s evaluation of the specific characteristics of the acquired lease portfolio and the Company’s overall relationship with anchor tenants. Such amounts are amortized to depreciation and amortization expense over the weighted average remaining initial term (and expected renewal periods for tenant relationships). The fair value of the tangible assets of an acquired property considers the value of the property as if it were vacant.

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The acquisition of the five shopping centers was allocated as follows (in thousands):


Land	$	54,698
Buildings		119,601
Tenant improvements		2,528
Intangible assets		22,441

	$	199,268

The Company also recorded below-market leases of approximately $4.5 million which will be amortized over a weighted-average life of 14.0 years. Intangible assets recorded in connection with the above acquisitions included the following (in thousands) (Note 5):


			Weighted Average Amortization Period (in Years)
In-place leases (including lease origination costs and fair market value of leases) ⁽¹⁾	$	12,357	5.2
Tenant relations		10,084	10.1

Total intangible assets acquired	$	22,441

(1)	Includes above-market value of leases of approximately $1.1 million.

The following unaudited supplemental pro forma operating data is presented for the three– and nine–month periods ended September 30, 2011 and 2010 as if the acquisition of the five properties were completed on January 1, 2010.

The unaudited supplemental pro forma operating data is not necessarily indicative of what the actual results of operations of the Company would have been assuming the transactions had been completed as set forth above, nor do they purport to represent the Company’s results of operations for future periods. The Company accounted for the acquisition of assets utilizing the purchase method of accounting (in thousands, except per share amounts).

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	Three-Month Periods Ended September 30,						Nine-Month Periods Ended September 30,
	2011			2010			2011			2010
Pro forma revenues	$	198,499		$	197,323		$	598,336		$	596,389

Pro forma loss from continuing operations	$	(48,774	)	$	(14,028	)	$	(13,123	)	$	(74,525	)

Pro forma loss from discontinued operations	$	(5,226	)	$	(3,307	)	$	(21,656	)	$	(93,371	)

Pro forma net loss attributable to DDR common shareholders	$	(50,684	)	$	(26,199	)	$	(54,253	)	$	(161,157	)

Per share data:
Basic earnings per share data:
Loss from continuing operations attributable to DDR common shareholders	$	(0.17	)	$	(0.10	)	$	(0.12	)	$	(0.39	)
Loss from discontinued operations attributable to DDR common shareholders		(0.02	)		(0.01	)		(0.08	)		(0.28	)

Net loss attributable to DDR common shareholders	$	(0.19	)	$	(0.11	)	$	(0.20	)	$	(0.67	)

Diluted earnings per share data:
Loss from continuing operations attributable to DDR common shareholders	$	(0.17	)	$	(0.10	)	$	(0.12	)	$	(0.39	)
Loss from discontinued operations attributable to DDR common shareholders		(0.02	)		(0.01	)		(0.08	)		(0.28	)

Net loss attributable to DDR common shareholders	$	(0.19	)	$	(0.11	)	$	(0.20	)	$	(0.67	)

4.	NOTES RECEIVABLE

The Company has notes receivable, including accrued interest, that are collateralized by certain rights in development projects, partnership interests, sponsor guaranties and real estate assets. Notes receivable include certain loans that are held for investment and are generally collateralized by real estate related investments. Loan receivables are recorded at stated principal amounts or at initial investment plus accretable yield for loans purchased at a discount. The Company defers certain loan origination and commitment fees, net of certain origination costs, and amortizes them over the term of the related loan. The Company considers notes receivable to be past-due or delinquent when a contractually required principal or interest payment is not remitted in accordance with the provisions of the underlying agreement. The Company evaluates the collectability of both interest and principal on each loan based on an assessment of the underlying collateral to determine whether it is impaired, and not by using internal risk ratings. A loan is considered to be impaired when, based upon current information and events, it is probable that the Company will be unable to collect all amounts due according to the existing contractual terms. When a loan is considered to be impaired, the amount of loss is calculated by comparing the recorded investment to the value of the underlying collateral. As the underlying collateral for a majority of the notes receivable are real estate related investments, the same valuation techniques are utilized to value the collateral as those used to determine the fair value of real estate investments for impairment purposes. A loan is placed on non-accrual status when,

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based upon current information and events, it is probable that the Company will not be able to collect all amounts due according to the existing contractual terms. Interest income on performing loans is accrued as earned. Interest income on non-performing loans is generally recognized on a cash basis. Recognition of interest income on an accrual basis is resumed when it is probable that the Company will be able to collect amounts due according to the contractual terms.

Notes receivable consist of the following (in millions):


	September 30, 2011		December 31, 2010
Loans receivable ^(A)	$	103.3	$	103.7
Other notes		2.9		2.8
Tax Increment Financing Bonds (“TIF Bonds”): ^(B)
Chemung County Industrial Development Agency		2.1		2.0
City of Merriam, Kansas		1.0		2.3
City of St. Louis, Missouri		3.2		3.2
Town of Plainville, Connecticut ^(C)		—		6.3

		6.3		13.8

	$	112.5	$	120.3

(A)	Amounts exclude notes receivable and advances from unconsolidated joint ventures including the Bloomfield Loan, which was in default and fully reserved at September 30, 2011 and December 31, 2010 (Note 2).

(B)	Principal and interest are payable solely from the incremental real estate taxes, if any, generated by the respective shopping center and development project pursuant to the terms of the financing agreement.

(C)	Repaid during the second quarter of 2011.

As of September 30, 2011 and December 31, 2010, the Company had eight loans receivable outstanding, with total remaining discretionary commitments of $6.0 million and $4.0 million, respectively. In June 2011, the Company sold a note receivable with a face value, including accrued interest, of $11.8 million for proceeds of $6.8 million, which resulted in the recognition of a $5.0 million reserve that is recorded in Other Expense in the condensed consolidated statement of operations for the nine-month period ended September 30, 2011. The following table reconciles the loans receivable on real estate for the nine months ended September 30, 2011 and 2010 (in millions):


	2011			2010
Balance at January 1	$	103.7		$	58.7
Additions:
New mortgage loans		10.0			58.3
Interest		0.8			4.8
Accretion of discount		0.6			0.1

Deductions:
Collections of principal		(6.8	)		—
Loan foreclosure		—			(19.0	)
Loan loss reserve ^(A)		(5.0	)		—

Balance at September 30	$	103.3		$	102.9

(A)	Amount classified in other expense, net in the consolidated statement of operations for the year ended September 30, 2011. This reserve was written off upon the sale of the note in the second quarter of 2011.

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The Company has one loan aggregating $9.3 million that is more than 90 days past due on interest payments and matured in September 2011. The Company has continued to record interest income through September 30, 2011 as the Company anticipates the note (including accrued interest) to be collected in full based upon the underlying estimated fair value of the real estate collateral.

5.	OTHER ASSETS, NET

Other assets consist of the following (in thousands):


	September 30, 2011		December 31, 2010
Intangible assets:
In-place leases (including lease origination costs and fair market value of leases), net	$	21,389	$	14,228
Tenant relations, net		16,896		9,035

Total intangible assets ^(A)		38,285		23,263
Other assets:
Accounts receivable, net ^(B)		118,331		123,259
Deferred charges, net		47,728		44,988
Prepaids		8,721		11,566
Deposits		39,306		41,160
Other assets		4,140		3,473

Total other assets, net	$	256,511	$	247,709

(A)	The Company recorded amortization expense of $1.8 million and $1.6 million for the three-month periods ended September 30, 2011 and 2010, and $5.4 million and $5.0 million for the nine-month periods ended September 30, 2011 and 2010, respectively, related to these intangible assets.

(B)	Includes straight-line rent receivables, net, of $55.9 million and $56.2 million at September 30, 2011 and December 31, 2010, respectively.

6.	REVOLVING CREDIT FACILITIES AND TERM LOAN

The following table discloses certain information regarding the Company’s Revolving Credit Facilities and Term Loan (in millions):


	Carrying Value at		Weighted-Average Interest Rate at
	September 30, 2011		September 30, 2011			Maturity Date
Unsecured indebtedness:
Unsecured Credit Facility	$	214.9		2.3	%		February 2016
PNC Facility		11.5		1.9	%		February 2016
Secured indebtedness:
Term loan		500.0		3.0	%		September 2014

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Revolving Credit Facilities

The Company maintains an unsecured revolving credit facility with a syndicate of financial institutions, arranged by JP Morgan Securities, LLC and Wells Fargo Securities, LLC (the “Unsecured Credit Facility”). In June 2011, the Company amended the Unsecured Credit Facility and reduced the availability from $950 million to $750 million. The Unsecured Credit Facility maturity date was extended by two additional years from February 2014 to February 2016 and the current interest rate changed from LIBOR plus 275 basis points to LIBOR plus 165 basis points. The Unsecured Credit Facility provides for borrowings of up to $750 million, if certain financial covenants are maintained, and an accordion feature for expansion of availability to $1.25 billion upon the Company’s request, provided that new or existing lenders agree to the existing terms of the facility and increase their commitment level. The Unsecured Credit Facility includes a competitive bid option on periodic interest rates for up to 50% of the facility. The Unsecured Credit Facility also provides for an annual facility fee, that was reduced in June 2011 from 50 basis points to 35 basis points on the entire facility. The Unsecured Credit Facility also allows for foreign currency-denominated borrowings. At September 30, 2011, the Company had US$26.3 million of Euro borrowings and US$58.6 million of Canadian dollar borrowings outstanding.

The Company also maintains a $65 million unsecured revolving credit facility with PNC Bank, National Association, that also was amended in June 2011 (the “PNC Facility” and, together with the Unsecured Credit Facility, the “Revolving Credit Facilities”). The PNC Facility reflects terms consistent with those contained in the Unsecured Credit Facility.

The Company’s borrowings under the Revolving Credit Facilities bear interest at variable rates at the Company’s election, based on either (i) the prime rate plus a specified spread (0.65% at September 30, 2011), as defined in the facility, or (ii) LIBOR, plus a specified spread (1.65% at September 30, 2011). The specified spreads vary depending on the Company’s long-term senior unsecured debt rating from Standard and Poor’s (“S&P”) and Moody’s Investors Service (“Moody’s”). The Company is required to comply with certain covenants relating to total outstanding indebtedness, secured indebtedness, maintenance of unencumbered real estate assets, unencumbered debt yield and fixed charge coverage. The Company was in compliance with these covenants at September 30, 2011.

Term Loan

The Company maintains a collateralized term loan with a syndicate of financial institutions, for which KeyBank National Association serves as the administrative agent (the “Term Loan”). The Company amended the Term Loan in June 2011 and reduced the amount outstanding from $550 million to $500 million with an accordion feature of up to $600 million. The amended Term Loan matures in September 2014 with a one-year extension option. Borrowings under the Term Loan bear interest at variable rates based on LIBOR plus a specified spread based on the Company’s long-term senior unsecured debt rating (1.7% at September 30, 2011). The collateral for the Term Loan is real estate assets, or investment interests in certain assets, that are already encumbered by first mortgage loans. The Company is required to comply with covenants similar to those contained in the Revolving Credit Facilities. The Company was in compliance with these covenants at September 30, 2011.

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7.	SENIOR NOTES

In March 2011, the Company issued $300 million aggregate principal amount of 4.75% senior unsecured notes, due April 2018. The notes were offered to investors at a discount to par of 99.315%, resulting in an effective interest rate of 4.86%.

8.	FINANCIAL INSTRUMENTS

Cash Flow and Fair Value Hedges

In June 2011, the Company entered into an interest rate swap with a notional amount of $100.0 million. This swap was executed to hedge a portion of interest rate risk associated with variable-rate borrowings. The swap converts LIBOR into a fixed rate on the Term Loan.

In March 2011, the Company entered into an interest rate swap with a notional amount of $85.0 million, which will decrease with the associated principal amortization of the hedged debt. This swap was executed to hedge a portion of interest rate risk associated with variable-rate borrowings. The swap converts LIBOR into a fixed rate for seven-year mortgage debt entered into in 2011.

In March 2011, the Company terminated an interest rate swap with a notional amount of $50.0 million. The swap converted LIBOR into a fixed rate on the Company’s Revolving Credit Facilities. The fair value of the interest rate swap as of the termination date was not material.

In February 2011, the Company entered into treasury locks with an aggregate notional amount of $200.0 million. The treasury locks were terminated in connection with the issuance of the $300.0 million aggregate principal amount of senior notes in March 2011, resulting in a payment of approximately $2.2 million to the counterparty. The treasury locks were executed to hedge the benchmark interest rate associated with forecasted interest payments associated with the then-anticipated issuance of fixed-rate borrowings. The effective portion of these hedging relationships has been deferred in accumulated other comprehensive income and will be reclassified into earnings over the term of the debt as an adjustment to earnings.

Measurement of Fair Value

At September 30, 2011, the Company used pay-fixed interest rate swaps to manage its exposure to changes in benchmark interest rates (the “Swaps”). The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. The Company determined that the significant inputs used to value its derivatives fell within Level 2 of the fair value hierarchy.

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Items Measured at Fair Value on a Recurring Basis

The following table presents information about the Company’s financial assets and liabilities (in millions), which consist of interest rate swap agreements (included in Other Liabilities) and marketable securities (included in Other Assets) from investments in the Company’s elective deferred compensation plan at September 30, 2011, measured at fair value on a recurring basis, and indicates the fair value hierarchy of the valuation techniques used by the Company to determine such fair value (in millions):


	Fair Value Measurement at September 30, 2011
	Level 1		Level 2		Level 3		Total
Derivative financial instruments	$	—	$	9.7	$	—	$	9.7
Marketable securities	$	2.6	$	—	$	—	$	2.6

The unrealized loss of $4.6 million included in other comprehensive loss (“OCI”) is attributable to the net change in unrealized gains or losses related to derivative liabilities that remain outstanding at September 30, 2011, none of which were reported in the Company’s condensed consolidated statements of operations because they are documented and qualify as hedging instruments. The unrealized loss of $4.6 million is in addition to the $2.2 million payment made to the counterparty related to the treasury locks that were executed and settled during the nine months ended September 30, 2011.

Cash and Cash Equivalents, Restricted Cash, Accounts Receivable, Accounts Payable, Accrued Expenses and Other Liabilities

The carrying amounts reported in the condensed consolidated balance sheets for these financial instruments, excluding the liability associated with the equity derivative instruments, approximated fair value because of their short-term maturities.

Notes Receivable and Advances to Affiliates

The fair value is estimated by discounting the current rates at which management believes similar loans would be made. The fair value of these notes was approximately $109.0 million and $120.8 million at September 30, 2011 and December 31, 2010, respectively, as compared to the carrying amounts of $109.6 million and $122.6 million, respectively. The carrying value of the TIF bonds, which was $6.3 million and $13.8 million at September 30, 2011 and December 31, 2010, respectively, approximated their fair value as of both periods. The fair value of loans to affiliates has been estimated by management based upon its assessment of the interest rate, credit risk and performance risk.

Debt

The fair market value of debt is determined using the trading price of public debt, and for all other debt determined on a discounted cash flow technique that incorporates a market interest yield curve with adjustments for duration, optionality and risk profile including the Company’s non-performance risk.

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Considerable judgment is necessary to develop estimated fair values of financial instruments. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize on disposition of the financial instruments.

Debt instruments at September 30, 2011 and December 31, 2010, with carrying values that are different than estimated fair values, are summarized as follows (in thousands):


	September 30, 2011				December 31, 2010
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Senior notes	$	2,158,931	$	2,308,214	$	2,043,582	$	2,237,320
Revolving credit facilities and term loan		726,433		729,731		879,865		875,851
Mortgage payable and other indebtedness		1,340,357		1,328,505		1,378,553		1,394,393

	$	4,225,721	$	4,366,450	$	4,302,000	$	4,507,564

Risk Management Objective of Using Derivatives

The Company is exposed to certain risk arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity and credit risk, primarily by managing the amount, sources and duration of its debt funding and, from time to time, the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the values of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s investments and borrowings.

The Company has an interest in consolidated joint ventures that own real estate assets in Canada and Russia. The net assets of these subsidiaries are exposed to volatility in currency exchange rates. The Company uses non-derivative financial instruments to economically hedge a portion of this exposure. The Company manages its currency exposure related to the net assets of its Canadian and European subsidiaries through foreign currency-denominated debt agreements.

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Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to manage its exposure to interest rate movements. To accomplish this objective, the Company generally uses interest rate swaps as part of its interest rate risk management strategy. Swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The following table discloses certain information regarding the Swaps:


Aggregate Notional Amount (in millions)	LIBOR Fixed Rate	Maturity Date
$100.0	4.8%	February 2012
$100.0	1.0%	June 2014
$ 84.4	2.8%	September 2017

All components of the Swaps were included in the assessment of hedge effectiveness. The Company expects that within the next 12 months it will reflect an increase to interest expense (and a corresponding decrease to earnings) of approximately $4.4 million.

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated OCI and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During 2011, such derivatives were used to hedge the forecasted variable cash flows associated with existing obligations. The ineffective portion of the change in the fair value of derivatives is recognized directly in earnings. During the nine-month periods ended September 30, 2011 and 2010, the amount of hedge ineffectiveness recorded was not material.

The table below presents the fair value of the Company’s Swaps as well as their classification on the condensed consolidated balance sheets as of September 30, 2011 and December 31, 2010, as follows (in millions):

Liability Derivatives

September 30, 2011

December 31, 2010

Derivatives Designated as

Hedging Instruments

Balance Sheet
Location

Fair
Value

Balance Sheet
Location

Fair
Value

Interest rate products

Other liabilities

9.7

Other liabilities

5.2

- 23 -

The effect of the Company’s derivative instruments on net loss is as follows (in millions):


Derivatives in Cash Flow Hedging	Amount of (Loss) Gain Recognized in OCI on Derivatives (Effective Portion)										Location of Gain or (Loss) Reclassified from Accumulated OCI into Loss (Effective Portion)		Amount of (Loss) Gain Reclassified from Accumulated OCI into (Income) Loss (Effective Portion)
	Three-Month Periods Ended September 30					Nine-Month Periods Ended September 30							Three-Month Periods Ended September 30				Nine-Month Periods Ended September 30
	2011			2010		2011			2010				2011		2010		2011			2010
Interest rate products	$	(4.2	)	$	1.7	$	(6.9	)	$	9.2		Interest expense	$	—	$	—	$	(0.1	)	$	0.2

The Company is exposed to credit risk in the event of non-performance by the counterparties to the Swaps. The Company believes it mitigates its credit risk by entering into swaps with major financial institutions. The Company continually monitors and actively manages interest costs on its variable-rate debt portfolio and may enter into additional interest rate swap positions or other derivative interest rate instruments based on market conditions. The Company has not, and does not plan to enter, into any derivative financial instruments for trading or speculative purposes.

Credit-Risk-Related Contingent Features

The Company has agreements with each of its Swap counterparties that contain a provision whereby if the Company defaults on certain of its unsecured indebtedness, the Company could also be declared in default on its Swaps resulting in an acceleration of payment.

Net Investment Hedges

The Company is exposed to foreign exchange risk from its consolidated and unconsolidated international investments. The Company has foreign currency-denominated debt agreements, which expose the Company to fluctuations in foreign exchange rates. The Company has designated these foreign currency borrowings as a hedge of its net investment in its Canadian and European subsidiaries. Changes in the spot rate value are recorded as adjustments to the debt balance with offsetting unrealized gains and losses recorded in OCI. Because the notional amount of the non-derivative instrument substantially matches the portion of the net investment designated as being hedged, and the non-derivative instrument is denominated in the functional currency of the hedged net investment, the hedge ineffectiveness recognized in earnings was not material.

- 24 -

The effect of the Company’s net investment hedge derivative instruments on OCI is as follows (in millions):


	Amount of Gain (Loss) Recognized in OCI on Derivatives (Effective Portion)
	Three-Month Periods Ended September 30					Nine-Month Periods Ended September 30
Derivatives in Net Investment Hedging Relationships	2011		2010			2011			2010
Euro—denominated revolving credit facilities designated as a hedge of the Company’s net investment in its subsidiary	$	2.0	$	(4.9	)	$	(1.5	)	$	7.5

Canadian dollar—denominated revolving credit facilities designated as a hedge of the Company’s net investment in its subsidiaries	$	3.4	$	(2.1	)	$	0.3		$	(2.3	)

See discussion of equity derivative instruments in Note 10.

9.	COMMITMENTS AND CONTINGENCIES

Accrued Expense

The Company recorded a charge of $11.0 million in 2011 as a result of the termination without cause of its former Executive Chairman, the terms of which were pursuant to his amended and restated employment agreement dated July 2009. This charge included stock-based compensation expense of approximately $1.5 million related to the acceleration of expense associated with the grant date fair value of the unvested stock-based awards partially offset by the forfeiture of previously expensed awards that will no longer be issued. At September 30, 2011, approximately $8.3 million was included in accounts payable and accrued expenses in the Company’s condensed consolidated balance sheet related to this obligation.

Legal Matters

- 25 -

Coventry in favor of the Company in connection with one of the joint venture properties be voided on the grounds of economic duress. The complaint seeks compensatory and consequential damages in an amount not less than $500 million, as well as punitive damages. In response, the Company filed a motion to dismiss the complaint or, in the alternative, to sever the plaintiffs’ claims. In June 2010, the court granted in part (regarding Coventry’s claim that the Company breached a fiduciary duty owed to Coventry) and denied in part (all other claims) the Company’s motion. Coventry filed a notice of appeal regarding that portion of the motion granted by the court. In May 2011, the appeals court affirmed the trial court’s ruling regarding the dismissal of Coventry’s claim for breach of fiduciary duty. The Company filed an answer to the complaint, and has asserted various counterclaims against Coventry. On October 10, 2011, the Company filed a motion for summary judgment, seeking dismissal of all of Coventry’s remaining claims.

The Company believes that the allegations in the lawsuit are without merit and that it has strong defenses against this lawsuit. The Company will vigorously defend itself against the allegations contained in the complaint. This lawsuit is subject to the uncertainties inherent in the litigation process and, therefore, no assurance can be given as to its ultimate outcome and no loss provision has been recorded in the accompanying financial statements because a loss contingency is not deemed probable or estimable. However, based on the information presently available to the Company, the Company does not expect that the ultimate resolution of this lawsuit will have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

On November 18, 2009, the Company filed a complaint against Coventry in the Court of Common Pleas, Cuyahoga County, Ohio, seeking, among other things, a temporary restraining order enjoining Coventry from terminating “for cause” the management agreements between the Company and the various joint ventures because the Company believes that the requisite conduct in a “for-cause” termination (i.e., fraud or willful misconduct committed by an executive of the Company at the level of at least senior vice president) did not occur. The court heard testimony in support of the Company’s motion (and Coventry’s opposition) and on December 4, 2009, issued a ruling in the Company’s favor. Specifically, the court issued a temporary restraining order enjoining Coventry from terminating the Company as property manager “for cause.” The court found that the Company was likely to succeed on the merits, that immediate and irreparable injury, loss or damage would result to the Company in the absence of such restraint, and that the balance of equities favored injunctive relief in the Company’s favor. The Company filed a motion for summary judgment seeking a ruling by the Court that there was no basis for Coventry’s “for cause” termination as a matter of law. On August 2, 2011, the court entered an order granting the Company’s motion for summary judgment in all respects, finding that as a matter of law and fact, Coventry did not have the right to terminate the management agreements for cause. Coventry filed a notice of appeal of the court’s ruling.

In addition to the litigation discussed above, the Company and its subsidiaries are subject to various legal proceedings, which, taken together, are not expected to have a material adverse effect on the Company. The Company is also subject to a variety of legal actions for personal injury or property damage arising in the ordinary course of its business, most of which are covered by insurance. While the resolution of all matters cannot be predicted with certainty, management believes that the final outcome of such legal proceedings and claims will not have a material adverse effect on the Company’s liquidity, financial position or results of operations.

- 26 -

10.

EQUITY

Common Shares and Redemption of Preferred Shares

In March 2011, Mr. Alexander Otto and certain members of his family (the “Otto Family”) exercised their warrants for 10 million common shares for cash proceeds of $60 million. In addition, in March 2011, the Company entered into a forward sale agreement to sell an aggregate of 9.5 million of its common shares for net proceeds aggregating $130.2 million, or $13.71 per share, which settled in April 2011.

In April 2011, the Company redeemed all of its outstanding shares of 8.0% Class G cumulative redeemable preferred shares at a redemption price of $25.105556 per Class G depositary share (the sum of $25.00 per share and dividends per share of $0.105556 prorated to the redemption date) for an aggregate redemption price of $180.8 million. The Company recorded a charge of approximately $6.4 million to net loss available to common shareholders in the second quarter of 2011 related to the write-off of the Class G preferred shares’ original issuance costs.

Dividends

Common share dividends declared were $0.06 and $0.14 per share, respectively, for the three- and nine-month periods ended September 30, 2011, which were paid in cash. Common share dividends declared were $0.02 and $0.06 per share, respectively, for the three- and nine-month periods ended September 30, 2010, which were paid in cash.

Deferred Obligations

Certain officers elected to have their deferred compensation distributed in 2011, which resulted in a reduction of the deferred obligation and corresponding increase to paid-in capital of approximately $2.3 million.

Equity Derivative Instruments — Otto Transaction

In February 2009, the Company entered into a stock purchase agreement with the Otto Family that provided for the issuance of warrants to purchase up to 10.0 million common shares with an exercise price of $6.00 per share to members of the Otto Family. In March 2011, the Otto Family notified the Company regarding its intent to exercise the warrants. As discussed above, all of the warrants were exercised in March 2011 for cash at $6.00 per common share. The exercise price of the warrants was subject to downward adjustment if the weighted average purchase price of all additional common shares sold, as defined, from the date of issuance of the applicable warrant was less than $6.00 per share (herein referred to as the “Downward Price Protection Provisions”).

Although not triggered, the purchase price was subject to the Downward Price Protection Provisions described above which resulted in the warrants being required to be recorded at fair value as of the shareholder approval date of the Stock Purchase Agreement of April 9, 2009, and marked-to-market through earnings as of each balance sheet date thereafter until the exercise date of March 18, 2011. These equity instruments were issued as part of the Company’s overall deleveraging strategy and were not issued in connection with any speculative trading activity or to mitigate any market risks.

- 27 -

The fair value of the Company’s equity derivative instruments (warrants) were classified on the Company’s balance sheet as Equity Derivative Liability-Affiliate and had a fair value of $74.3 million at March 18, 2011, the exercise date. This liability was reclassified to paid-in capital and aggregated with the cash proceeds in the consolidated statement of equity.

The effect of the Company’s equity derivative instruments on net loss is as follows (in millions):


		Three-Month Periods Ended September 30,					Nine-Month Periods Ended September 30,
		2011		2010			2011		2010
Derivatives not Designated as Hedging Instruments	Income Statement Location	Gain (Loss)					Gain (Loss)
Warrants	Gain (loss) on equity derivative instruments	$	—	$	(11.3	)	$	21.9	$	(14.6	)

Measurement of Fair Value — Equity Derivative Instruments Valued on a Recurring Basis

The valuation of these instruments was determined using an option pricing model that considered all relevant assumptions including the Downward Price Protection Provisions. The two key unobservable input assumptions included in the valuation of the warrants were the volatility and dividend yield. Both measures were susceptible to change over time given the impact of movements in the Company’s common share price on each. The dividend yield assumptions used ranged from 3.0% - 3.2% in the first quarter of 2011 and 3.1% - 4.2% in the first nine months of 2010. Since the initial valuation date, the Company used historical volatility assumptions to determine the estimate of fair value of the five-year warrants. The Company believed that the long-term historic volatility better represented the long-term future volatility and was more consistent with how an investor would view the value of these securities. The Company continually reassessed these assumptions and reviewed the assumptions again in March 2011 upon notification from the Otto Family regarding their intent to exercise the warrants. The Company determined that an implied volatility assumption was more representative of how a market participant would value the instruments given the shorter term nature of the warrants. The volatility assumptions used were 36.6% in the first quarter of 2011 and 78.3% in the first nine months of 2010. The Company determined that the warrants fell within Level 3 of the fair value hierarchy due to the volatility and dividend yield assumptions used in the overall valuation.

- 28 -

The table below presents a reconciliation of the beginning and ending balances of the equity derivative instruments that were included in Other Liabilities at December 31, 2010 and having fair value measurements based on significant unobservable inputs (Level 3) (in millions):


	Equity Derivative Instruments – Liability
Balance of Level 3 at December 31, 2010	$	96.2
Unrealized gain		(21.9	)
Transfer out of liability to paid-in capital		(74.3	)

Balance of Level 3 at September 30, 2011	$	—

11.

FEE AND OTHER INCOME

Fee and other income from continuing operations were comprised of the following (in millions):


	Three-Month Periods Ended September 30,				Nine-Month Periods Ended September 30,
	2011		2010		2011		2010
Management, development, financing and other fee income	$	11.2	$	13.2	$	35.1	$	40.9
Ancillary and other property income		7.5		5.7		21.7		14.8
Lease termination fees		2.6		0.5		3.9		4.1
Other miscellaneous		—		0.2		0.5		2.0

	$	21.3	$	19.6	$	61.2	$	61.8

12.

IMPAIRMENT CHARGES

The Company recorded impairment charges during the three- and nine-month periods ended September 30, 2011 and 2010, on the following consolidated assets based on the difference of the carrying value of the assets and the estimated fair market value (in millions):


	Three-Month Periods Ended September 30,				Nine-Month Periods Ended September 30,
	2011		2010		2011		2010
Land held for development ^(A)	$	40.2	$	—	$	40.2	$	54.3
Undeveloped land ^(B)		2.0		—		5.9		5.0
Assets marketed for sale ^(B)		9.0		—		22.4		—

Total continuing operations	$	51.2	$	—	$	68.5	$	59.3

Sold assets or assets held for sale		2.4		7.1		11.3		48.4
Assets formerly occupied by Mervyns ^(C)		—		—		—		35.3

Total discontinued operations	$	2.4	$	7.1	$	11.3	$	83.7
Joint venture investments		—		—		1.6		—

Total impairment charges	$	53.6	$	7.1	$	81.4	$	143.0

- 29 -

(A)

Amounts reported in the three and nine months ended September 30, 2011 primarily related to land held for development in Yaroslavl, Russia (“Yaroslavl Project”) and Brampton, Canada (“Brampton Project”), which are owned through consolidated joint ventures. The Company’s proportionate share of the loss was approximately $36.4 million after adjusting for the allocation of loss to the non-controlling interest in the Yaroslavl Project. The asset impairments were triggered by the Company’s current decision to dispose of its interest in lieu of development and the execution of agreements during the third quarter of 2011 for the sale of its interest in these projects. In connection with the potential sale of the Yaroslavl Project, an affiliate of the Company’s joint venture partner and the Otto Family may enter into certain leasing and management agreements with the buyer of the Yaroslavl Project and could receive fees in exchange for its services. The Company anticipates selling its interest in the Brampton Project to its joint venture partner in the project.

Amounts reported in the nine months ended September 30, 2010 primarily related to land held for development at the Yaroslavl Project and in Togliatti, Russia, also owned through a consolidated joint venture. The Company’s proportionate share of the loss was approximately $41.9 million after adjusting for the allocation of loss to the non-controlling interest. The asset impairments were triggered primarily due to a change in the Company’s investment plans for these projects.

(B)	The impairment charges were triggered primarily due to the Company’s marketing of these assets for sale and management’s assessment as to the likelihood and timing of a potential transaction.

(C)

The Company’s proportionate share of these impairments was $16.5 million after adjusting for the allocation of loss to the non-controlling interest in this consolidated joint venture and including those assets classified as discontinued operations for the nine-month period ended September 30, 2010. The 2010 impairment charges were triggered in the second quarter of 2010 primarily due to a change in the Company’s business plans for these assets and the resulting impact on its holding period assumptions for this substantially vacant portfolio. As discussed in Note 13, these assets were deconsolidated in 2010 and all operating results, including the impairment charges, have been reclassified as discontinued operations.

Items Measured at Fair Value on a Non-Recurring Basis

The following table presents information about the Company’s impairment charges that were measured on a fair value basis for the nine-month period ended September 30, 2011. The table indicates the fair value hierarchy of the valuation techniques used by the Company to determine such fair value (in millions):


	Fair Value Measurement at September 30, 2011
	Level 1		Level 2		Level 3		Total		Total Losses
Long-lived assets — held and used and held for sale	$	—	$	—	$	116.7	$	116.7	$	79.8
Unconsolidated joint venture investments		—		—		—		—		1.6

- 30 -

13.

DISCONTINUED OPERATIONS

All revenues and expenses of discontinued operations sold have been reclassified in the condensed consolidated statements of operations for the three- and nine-month periods ended September 30, 2011 and 2010. The Company has one asset considered held for sale at September 30, 2011. The Company considers assets held for sale when the transaction has been approved by the appropriate levels of management and there are no known significant contingencies relating to the sale such that the sale of the property within one year is considered probable. Included in discontinued operations for the three- and nine-month periods ended September 30, 2011 and 2010, are 21 properties sold in 2011 and one property held for sale at September 30, 2011, aggregating 1.9 million square feet, and 31 properties sold in 2010 (including two held for sale at December 31, 2009), aggregating 2.9 million square feet, respectively. In addition, included in discontinued operations are 26 other properties that were deconsolidated for accounting purposes in 2011 and 2010, aggregating 2.3 million square feet, which primarily represents the activity associated with a joint venture that owns the underlying real estate of certain assets formerly occupied by Mervyns. These assets were classified as discontinued operations for all periods presented, as the Company has no significant continuing involvement. The balance sheet related to the asset held for sale and the operating results related to assets sold, designated as held for sale or deconsolidated as of September 30, 2011, are as follows (in thousands):


	September 30, 2011
Land	$	994
Building		11,636
Fixtures and tenant improvements		2,721

		15,351
Less: Accumulated depreciation		(9,067	)

Total assets held for sale	$	6,284

- 31 -


	Three-Month Periods Ended September 30,						Nine-Month Periods Ended September 30,
	2011			2010			2011			2010
Revenues	$	1,563		$	7,890		$	10,782		$	27,201

Operating expenses		109			3,571			3,640			14,638
Impairment charges		2,389			7,062			11,272			83,745
Interest, net		500			4,234			3,695			14,909
Depreciation and amortization		474			2,440			3,495			9,899

		3,472			17,307			22,102			123,191

Loss from discontinued operations		(1,909	)		(9,417	)		(11,320	)		(95,990	)
Gain on deconsolidation of interests, net		4,716			5,221			4,716			5,221
(Loss) gain on disposition of real estate		(8,033	)		889			(15,052	)		(2,602	)

Net loss	$	(5,226	)	$	(3,307	)	$	(21,656	)	$	(93,371	)

14.

EARNINGS PER SHARE

The Company’s unvested restricted share units contain rights to receive nonforfeitable dividends, and thus are participating securities requiring the two-class method of computing earnings per share (“EPS”). Under the two-class method, EPS is computed by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of common shares outstanding for the period. In applying the two-class method, undistributed earnings are allocated to both common shares and participating securities based on the weighted average shares outstanding during the period. The following table provides a reconciliation of net loss from continuing operations and the number of common shares used in the computations of “basic” EPS, which uses the weighted average number of common shares outstanding without regard to dilutive potential common shares, and “diluted” EPS, which includes all such shares (in thousands, except per share amounts):

- 32 -


	Three-Month Periods Ended September 30,						Nine-Month Periods Ended September 30,
	2011			2010			2011			2010
Basic Earnings:
Continuing Operations:
Loss from continuing operations	$	(48,043	)	$	(12,598	)	$	(10,952	)	$	(70,202	)
Plus: Gain on disposition of real estate		6,587			145			8,036			61
Plus: Income (loss) attributable to non-controlling interests		3,693			(108	)		3,512			12,088

(Loss) income from continuing operations attributable to DDR		(37,763	)		(12,561	)		596			(58,053	)
Write-off of original preferred share issuance costs		—			—			(6,402	)		—
Preferred dividends		(6,967	)		(10,567	)		(24,620	)		(31,702	)

Basic — Loss from continuing operations attributable to DDR common shareholders		(44,730	)		(23,128	)		(30,426	)		(89,755	)
Less: Earnings attributable to unvested shares and operating partnership units		(152	)		(46	)		(361	)		(138	)

Basic — Loss from continuing operations	$	(44,882	)	$	(23,174	)	$	(30,787	)	$	(89,893	)
Discontinued Operations:
Loss from discontinued operations		(5,226	)		(3,307	)		(21,656	)		(93,371	)
Plus: Loss attributable to non-controlling interests		—			1,558			—			26,292

Basic — Loss from discontinued operations		(5,226	)		(1,749	)		(21,656	)		(67,079	)
Basic — Net loss attributable to DDR common shareholders after allocation to participating securities	$	(50,108	)	$	(24,923	)	$	(52,443	)	$	(156,972	)

Diluted Earnings:
Continuing Operations:
Basic — Loss from continuing operations attributable to DDR common shareholders	$	(44,730	)	$	(23,128	)	$	(30,426	)	$	(89,755	)
Less: Earnings attributable to unvested shares and operating partnership units		(152	)		(46	)		(361	)		(138	)

Diluted — Loss from continuing operations		(44,882	)		(23,174	)		(30,787	)		(89,893	)
Discontinued Operations:
Basic — Loss from discontinued operations		(5,226	)		(1,749	)		(21,656	)		(67,079	)

Diluted—Net loss attributable to DDR common shareholders after allocation to participating securities	$	(50,108	)	$	(24,923	)	$	(52,443	)	$	(156,972	)

Number of Shares:
Basic and diluted — Average shares outstanding		274,639			249,139			268,270			241,679

Basic Earnings Per Share:
Loss from continuing operations attributable to DDR common shareholders	$	(0.16	)	$	(0.09	)	$	(0.12	)	$	(0.37	)
Loss from discontinued operations attributable to DDR common shareholders		(0.02	)		(0.01	)		(0.08	)		(0.28	)

Net loss attributable to DDR common shareholders	$	(0.18	)	$	(0.10	)	$	(0.20	)	$	(0.65	)

Dilutive Earnings Per Share:
Loss from continuing operations attributable to DDR common shareholders	$	(0.16	)	$	(0.09	)	$	(0.12	)	$	(0.37	)
Loss from discontinued operations attributable to DDR common shareholders		(0.02	)		(0.01	)		(0.08	)		(0.28	)

Net loss attributable to DDR common shareholders	$	(0.18	)	$	(0.10	)	$	(0.20	)	$	(0.65	)

- 33 -

The following potentially dilutive securities are considered in the calculation of EPS as described below:

Anti-dilutive Securities:

•

Warrants to purchase 10.0 million common shares issued in 2009 were anti-dilutive for all of the periods presented, as the options were anti-dilutive due to the Company’s loss from continuing operations

•

Shares subject to issuance under the Company’s value sharing equity program (“VSEP”) were not considered in the computation of diluted EPS for all of the periods presented, as the shares were anti-dilutive due to the Company’s loss from continuing operations.

•

Options to purchase 2.7 million and 3.3 million common shares were outstanding at September 30, 2011 and 2010, respectively and were not considered in the computation of diluted EPS for all of the periods presented, as the options were anti-dilutive due to the Company’s loss from continuing operations.

•

The forward equity agreement entered into in March 2011 for 9.5 million common shares was not included in the computation of diluted EPS using the treasury stock method for the nine-month period ended September 30, 2011 due to the Company’s loss from continuing operations. These shares were issued in April 2011. This agreement was not in effect in 2010.

•

The Company’s two series of senior convertible notes due 2012 and 2040, which are convertible into common shares of the Company with conversion prices of approximately $74.56 and $16.27, respectively, at September 30, 2011, were not included in the computation of diluted EPS for the three- and nine-month periods ended September 30, 2011 and 2010, because the Company’s common share price did not exceed the conversion prices of the conversion features in these periods and would therefore be anti-dilutive. The Company’s senior convertible notes due 2011, which were convertible into common shares of the Company at the conversion price of approximately $64.23 at September 30, 2010, were not included in the computation of diluted EPS for the nine-month period ended September 30, 2011 and the three- and nine-month periods ended September 30, 2010, because the Company’s common share price did not exceed the conversion prices of the conversion features in these periods and would therefore be anti-dilutive. The senior convertible notes due 2011 were repaid at maturity in August 2011. In addition, the purchased options related to two of the senior convertible notes issuances are not included in the computation of diluted EPS as the purchase options are anti-dilutive.

- 34 -

15.

SEGMENT INFORMATION

The Company has three reportable operating segments – shopping centers, Brazil equity investment and other investments. Each consolidated shopping center is considered a separate operating segment; however, each shopping center on a stand-alone basis represents less than 10% of the revenues, profit or loss, and assets of the combined reported operating segment and meets the majority of the aggregation criteria under the applicable standard. The following table summarizes the Company’s shopping centers and office properties, including those located in Brazil:


	September 30,
	2011		2010
Shopping centers owned		450		493
Unconsolidated joint ventures		184		198
Consolidated joint ventures		2		3
States ^(A)		39		41
Office properties		5		6
States		3		4

(A)	Excludes shopping centers owned in Puerto Rico and Brazil.

The tables below present information about the Company’s reportable segments (in thousands):


	Three-Month Period Ended September 30, 2011
	Other Investments			Shopping Centers					Brazil Equity Investment		Other			Total
Total revenues	$	1,603		$	194,845									$	196,448
Operating expenses		(408	)		(111,329	)	^(A	⁾							(111,737	)

Net operating income		1,195			83,516										84,711
Unallocated expenses ^(B)											$	(130,164	)		(130,164	)
Equity in net (loss) income of joint ventures					(7,190	)			$	4,600					(2,590	)

Loss from continuing operations														$	(48,043	)


	Three-Month Period Ended September 30, 2010
	Other Investments			Shopping Centers					Brazil Equity Investment		Other			Total
Total revenues	$	1,286		$	191,706									$	192,992
Operating expenses		(395	)		(60,825	)	^(A	⁾							(61,220	)

Net operating income		891			130,881										131,772
Unallocated expenses ^(B)											$	(139,569	)		(139,569	)
Equity in net (loss) income of joint ventures					(7,377	)			$	2,576					(4,801	)

Loss from continuing operations														$	(12,598	)

- 35 -


	Nine-Month Period Ended September 30, 2011
	Other Investments			Shopping Centers					Brazil Equity Investment		Other			Total
Total revenues	$	4,380		$	585,712									$	590,092
Operating expenses		(1,336	)		(253,275	)	^(A	⁾							(254,611	)

Net operating income		3,044			332,437										335,481
Unallocated expenses ^(B)											$	(360,713	)		(360,713	)
Equity in net income of joint ventures					568				$	15,383					15,951
Impairment of joint venture investments					(1,671	)									(1,671	)

Loss from continuing operations														$	(10,952	)

Total gross real estate assets	$	47,598		$	8,332,090									$	8,379,688


	Nine-Month Period Ended September 30, 2010
	Other Investments			Shopping Centers					Brazil Equity Investment		Other			Total
Total revenues	$	3,882		$	579,632									$	583,514
Operating expenses		(1,621	)		(237,889	)	^(A	⁾							(239,510	)

Net operating income		2,261			341,743										344,004
Unallocated expenses ^(B)											$	(410,429	)		(410,429	)
Equity in net (loss) income of joint ventures					(9,680	)			$	5,903					(3,777	)

Loss from continuing operations														$	(70,202	)

Total gross real estate assets	$	49,573		$	8,378,529									$	8,428,102

(A)	Includes impairment charges of $51.2 million for the three-month period ended September 30, 2011 and $68.5 million and $59.3 million for the nine-month periods ended September 30, 2011 and 2010, respectively.

(B)	Unallocated expenses consist of general and administrative, depreciation and amortization, other income/expense and tax benefit/expense as listed in the condensed consolidated statements of operations.

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Item 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) provides readers with a perspective from management on the Company’s financial condition, results of operations, liquidity and other factors that may affect the Company’s future results. The Company believes it is important to read the MD&A in conjunction with its Annual Report on Form 10-K for the year ended December 31, 2010 as well as other publicly available information.

Executive Summary

The Company is a self-administered and self-managed real estate investment trust (“REIT”) in the business of owning, managing and developing a portfolio of shopping centers. As of September 30, 2011, the Company’s portfolio consisted of 450 shopping centers and five office properties (including 184 shopping centers owned through unconsolidated joint ventures and two shopping centers that are otherwise consolidated by the Company) in which the Company had an economic interest. These properties consist of shopping centers, lifestyle centers and enclosed malls owned in the United States, Puerto Rico and Brazil. At September 30, 2011, the Company owned and/or managed approximately 130 million total square feet of gross leasable area (“GLA”), which includes all of the aforementioned properties, 47 properties in which the Company does not have an economic interest and 41 properties managed by the Company but owned by a third party. The Company also owns land in Canada and Russia at which active development has been deferred. At September 30, 2011, the aggregate occupancy of the Company’s operating shopping center portfolio in which the Company has an economic interest was 86.3%, as compared to 88.0% at September 30, 2010. The Company owned 493 shopping centers and six office properties at September 30, 2010. The average annualized base rent per occupied square foot was $13.76 at September 30, 2011, as compared to $13.03 at September 30, 2010.

Net loss applicable to DDR common shareholders for the three-month period ended September 30, 2011, was $50.0 million, or $0.18 per share (basic and diluted), compared to net loss applicable to DDR common shareholders of $24.9 million, or $0.10 per share (basic and diluted), for the prior-year comparable period. Net loss applicable to DDR common shareholders for the nine-month period ended September 30, 2011, was $52.1 million, or $0.20 per share (basic and diluted), compared to net loss applicable to DDR common shareholders of $156.8 million, or $0.65 per share (basic and diluted), for the prior-year comparable period. Funds from operations (“FFO”) applicable to DDR common shareholders for the three-month period ended September 30, 2011, was $8.1 million compared to $37.1 million for the three-month period ended September 30, 2010. FFO applicable to DDR common shareholders for the nine-month period ended September 30, 2011 was $121.3 million compared to $32.7 million for the nine-month period ended September 30, 2010. The decrease in net loss applicable to DDR common shareholders and the corresponding increase in FFO applicable to DDR common shareholders for the nine-month period ended September 30, 2011, was primarily the result of a reduction in the aggregate impairment charges recorded in 2011, the gain on change in control of interests related to the Company’s acquisition of two assets from unconsolidated joint ventures and the effect of the valuation adjustments associated with the warrants exercised in 2011 partially offset by higher interest expense, an executive separation charge and the write-off of the original issuance costs due to the redemption of the Company’s Class G cumulative redeemable preferred shares.

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Third Quarter 2011 Operating Results

In the third quarter of 2011, the Company acquired three prime shopping centers for an aggregate purchase price of approximately $110.0 million through the use of cash and assumed debt. The Company also sold consolidated non-prime assets generating gross proceeds of approximately $59.1 million. Combined with the activity from the first half of 2011, the Company’s transactional activity consisted of $150 million of acquisitions and $214 million in asset sales (of which the Company’s share was approximately $166 million). This activity demonstrates the Company’s strategy to recycle capital from non-prime asset sales into the acquisitions of prime assets (i.e., market-dominant shopping centers with high-quality tenants located in attractive markets with strong demographic profiles) to improve portfolio quality. The Company continues to carefully consider opportunities that fit its selective acquisition requirements and remains prudent in its underwriting and bidding practices.

The Company increased its third quarter dividend on its common shares to $0.06 per common share from $0.04 per common share in the second quarter. This increase still allows the Company to retain free cash flow, yet reflects the Company’s execution on its long-term strategies.

The Company continued its improvement in operating performance in the third quarter of 2011 as evidenced by the number of leases executed during the quarter and continued upward trending in average rental rates. The Company executed 516 total leases for over 2.5 million square feet during the third quarter. First-year rents on new leases provide a solid indicator of leasing trends. The average first-year rent for all new leases executed in the third quarter of 2011 was $15.18 per square foot, an increase from $12.65 per square foot in the third quarter of 2010. This growth was achieved without increasing the Company’s historically low tenant capital expenditures. The weighted average cost of tenant improvements and lease commissions estimated to be incurred for leases executed during the quarter was only $2.57 per rentable square foot over the lease term.

In the third quarter of 2011, the Company continued its focus on maximizing internal growth opportunities while taking a balanced approach to external growth with a consistent execution of its previously set strategic objectives.

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Results of Operations

Continuing Operations

Shopping center properties owned as of January 1, 2010, but excluding properties under development or redevelopment and those classified in discontinued operations, are referred to herein as the “Comparable Portfolio Properties.”

Revenues from Operations (in thousands)


	Three-Month Periods Ended September 30,
	2011		2010		$ Change			% Change
Base and percentage rental revenues	$	132,567	$	130,015	$	2,552			2.0	%
Recoveries from tenants		42,586		43,331		(745	)		(1.7	)%
Fee and other income		21,295		19,646		1,649			8.4	%

Total revenues	$	196,448	$	192,992	$	3,456			1.8	%


	Nine-Month Periods Ended September 30,
	2011		2010		$ Change			% Change
Base and percentage rental revenues ⁽ ^A ⁾	$	396,958	$	391,712	$	5,246			1.3	%
Recoveries from tenants ⁽ ^B)		131,898		130,038		1,860			1.4	%
Fee and other income ⁽ ^C)		61,236		61,764		(528	)		(0.9	)%

Total revenues	$	590,092	$	583,514	$	6,578			1.1	%

(A)	The increase is due to the following (in millions):


	Increase (Decrease)
Comparable Portfolio Properties	$	4.0
Acquisition of shopping centers		3.7
Development/redevelopment of shopping center properties		(1.2	)
Straight-line rents		(1.3	)

	$	5.2

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The following tables present the statistics for the Company’s operating shopping center portfolio (in which the Company has an economic interest) impacting base and percentage rental revenues summarized by the following portfolios: combined shopping center portfolio, office property portfolio, wholly-owned shopping center portfolio and joint venture shopping center portfolio:


	Shopping Center Portfolio ⁽¹⁾ September 30,						Office Property Portfolio September 30,
	Shopping Center Portfolio ⁽¹⁾ September 30,						Office Property Portfolio September 30,
	2011			2010			2011			2010
Centers owned		450			493			5			6
Aggregate occupancy rate		86.3	%		88.0	%		79.5	%		80.7	%
Average annualized base rent per occupied square foot	$	13.76		$	13.03		$	12.46		$	11.00


	Wholly-Owned Shopping Centers September 30,						Joint Venture Shopping Centers ⁽¹⁾ September 30,
	Wholly-Owned Shopping Centers September 30,						Joint Venture Shopping Centers ⁽¹⁾ September 30,
	2011			2010			2011			2010
Centers owned		264			293			184			198
Consolidated centers		n/a			n/a			2			3
Aggregate occupancy rate		86.5	%		88.3	%		86.1	%		87.7	%
Average annualized base rent per occupied square foot	$	12.32		$	11.96		$	15.65		$	14.39

(1)

Excludes shopping centers owned by unconsolidated joint ventures in which the Company’s investment basis is zero and is receiving no allocation of income or loss.

(B)

The increase in recoveries is a result of the acquisition of five assets in 2011 as well as an increase in recoverable operating and maintenance expenses. Recoveries were approximately 86% and 85% of reimbursable operating expenses and real estate taxes for the nine months ended September 30, 2011 and 2010, respectively. The improvement in the recovery percentage primarily relates to the disposition of non-prime assets with lower recovery rates.

(C)	Composed of the following (in millions):


	Three-Month Periods Ended September 30,
	2011		2010		(Decrease) Increase
Management, development, financing and other fee income	$	11.2	$	13.2	$	(2.0	)
Ancillary and other property income		7.5		5.7		1.8
Lease termination fees		2.6		0.5		2.1
Other miscellaneous		—		0.2		(0.2	)

	$	21.3	$	19.6	$	1.7

- 40 -


	Nine-Month Periods Ended September 30,
	2011		2010		(Decrease) Increase
Management, development, financing and other fee income	$	35.1	$	40.9	$	(5.8	)
Ancillary and other property income		21.7		14.8		6.9
Lease termination fees		3.9		4.1		(0.2	)
Other miscellaneous		0.5		2.0		(1.5	)

	$	61.2	$	61.8	$	(0.6	)

The decrease in management fee income in 2011 is largely a result of 39 asset sales by the Company’s unconsolidated joint ventures from January 1, 2010 through September 30, 2011. The increase in ancillary and other income primarily is related to the revenue associated with cinema and entertainment operations located at two of the Company’s shopping centers.

Expenses from Operations (in thousands)


	Three-Month Periods Ended September 30,
	2011		2010		$ Change			% Change
Operating and maintenance	$	34,027	$	32,473	$	1,554			4.8	%
Real estate taxes		26,465		28,747		(2,282	)		(7.9	)%
Impairment charges		51,245		—		51,245			100.0	%
General and administrative		17,954		20,180		(2,226	)		(11.0	)%
Depreciation and amortization		56,249		53,052		3,197			6.0	%

	$	185,940	$	134,452	$	51,488			38.3	%


	Nine-Month Periods Ended September 30,
	2011		2010		$ Change			% Change
Operating and maintenance ^(A)	$	106,937	$	100,277	$	6,660			6.6	%
Real estate taxes ^(A)		79,217		79,956		(739	)		(0.9	)%
Impairment charges ^(B ⁾		68,457		59,277		9,180			15.5	%
General and administrative ^(C)		65,310		62,546		2,764			4.4	%
Depreciation and amortization ^(A)		166,496		159,705		6,791			4.3	%

	$	486,417	$	461,761	$	24,656			5.3	%

- 41 -

(A)	The changes for the nine months ended September 30, 2011 compared to 2010, are due to the following (in millions):


	Operating and Maintenance			Real Estate Taxes			Depreciation
Comparable Portfolio Properties	$	5.4		$	0.9		$	2.8
Acquisitions of shopping centers		0.5			0.9			2.5
Development/redevelopment of shopping center properties		3.5			(2.5	)		1.4
Office properties		(0.2	)		—			0.1
Provision for bad debt expense		(2.5	)		—			—

	$	6.7		$	(0.7	)	$	6.8

The increase in operating and maintenance expenses in 2011 for the Comparable Portfolio Properties primarily is due to higher insurance related costs and various other property level expenditures. The increase in the Development/redevelopment shopping centers primarily is due to expenses associated with the cinema and entertainment operations located at two of the Company’s shopping centers.

(B)	The Company recorded impairment charges during the three- and nine-month periods ended September 30, 2011 and 2010, on the following categories of consolidated assets (in millions):


	Three-Month Periods Ended September 30,				Nine-Month Periods Ended September 30,
	2011		2010		2011		2010
Land held for development ⁽¹ ⁾	$	40.2	$	—	$	40.2	$	54.3
Undeveloped land ⁽² ⁾		2.0		—		5.9		5.0
Assets marketed for sale ⁽² ⁾		9.0		—		22.4		—

Total continuing operations	$	51.2	$	—	$	68.5	$	59.3

Sold assets or assets held for sale		2.4		7.1		11.3		48.4
Assets formerly occupied by Mervyns ⁽³ ⁾		—		—		—		35.3

Total discontinued operations	$	2.4	$	7.1	$	11.3	$	83.7

Total impairment charges	$	53.6	$	7.1	$	79.8	$	143.0

(1)

Amounts reported in the three and nine months ended September 30, 2011 primarily related to land held for development in Yaroslavl, Russia (“Yaroslavl Project”) and Brampton, Canada (“Brampton Project”), which are owned through consolidated joint ventures. The Company’s proportionate share of the aggregate loss was approximately $36.4 million after adjusting for the allocation of loss to the non-controlling interest in the Yaroslavl Project. The asset impairments were triggered by the Company’s current decision to dispose of its interest in lieu of development and the execution of agreements during the third quarter of 2011 for the sale of its interest in these projects. In connection with the potential sale of the Yaroslavl Project, an affiliate of the Company’s joint venture partner and the Otto Family may enter into certain leasing and management agreements with the buyer of the Yaroslavl Project and could receive fees in exchange for its services. The Company anticipates selling its interest in the Brampton Project to its joint venture partner in the project.

- 42 -

(2)

The impairment charges were triggered primarily due to the Company’s marketing of these assets for sale and management’s assessment as to the likelihood and timing of sale.

(3)

The Company’s proportionate share of these impairments was $16.5 million after adjusting for the allocation of loss to the non-controlling interest in this previously consolidated joint venture for the nine-month period ended September 30, 2010. The 2010 impairment charges were triggered in the nine months ended September 30, 2010 primarily due to a change in the Company’s business plans for these assets and the resulting impact on its holding period assumptions for this substantially vacant portfolio. During the second quarter of 2010, the Company determined it was no longer committed to the long-term management and investment of these assets. These assets were deconsolidated in the third quarter of 2010 and all operating results, including the impairment changes, have been reclassified as discontinued operations.

(C)

General and administrative expenses were approximately 5.3% and 5.0% of total revenues, including total revenues of unconsolidated joint ventures and managed properties and discontinued operations, for the nine-month periods ended September 30, 2011 and 2010, respectively. The Company continues to expense internal leasing salaries, legal salaries and related expenses associated with certain leasing and re-leasing of existing space.

During the nine months ended September 30, 2011, the Company recorded a charge of $11.0 million as a result of the termination without cause of its Executive Chairman, the terms of which were pursuant to his amended and restated employment agreement. During the nine months ended September 30, 2010, the Company incurred a $2.1 million separation charge related to the departure of another executive officer. The decrease in general and administrative expenses for the nine months ended September 30, 2011 as compared to September 30, 2010 excluding these executive separation charges is due to general cost cutting measures.

Other Income and Expenses (in thousands)


	Three-Month Periods Ended September 30,
	2011			2010			$ Change			% Change
Interest income	$	2,459		$	1,614		$	845			52.4	%
Interest expense		(58,169	)		(52,014	)		(6,155	)		11.8	%
(Loss) gain on retirement of debt, net		(134	)		333			(467	)		(140.2	)%
Loss on equity derivative instruments		—			(11,278	)		11,278			(100.0	)%
Other expense, net		182			(3,874	)		4,056			(104.7	)%

	$	(55,662	)	$	(65,219	)	$	9,557			(14.7	)%


	Nine-Month Periods Ended September 30,
	2011			2010			$ Change			% Change
Interest income ^(A)	$	7,675		$	4,425		$	3,250			73.4	%
Interest expense ^(B)		(175,218	)		(161,488	)		(13,730	)		8.5	%
(Loss) gain on retirement of debt, net		(134	)		333			(467	)		(140.2	)%
Gain (loss) on equity derivative instruments ⁽ ^C ⁾		21,926			(14,618	)		36,544			(250.0	)%
Other expense, net ⁽ ^D ⁾		(4,825	)		(18,357	)		13,532			(73.7	)%

	$	(150,576	)	$	(189,705	)	$	39,129			(20.6	)%

(A)	Increased primarily related to $58.3 million in loan receivables originated and purchased in September 2010.

- 43 -

(B)	The weighted-average debt outstanding and related weighted-average interest rates, excluding the impact of deferred financing costs and including amounts allocated to discontinued operations are as follows:


	Nine-Month Periods Ended September 30,
	2011			2010
Weighted-average debt outstanding (in billions)	$	4.3		$	4.7
Weighted-average interest rate		5.6	%		5.0	%

The weighted average interest rate (based on contractual rates and excludes convertible debt accretion and deferred financing costs) at September 30, 2011 and 2010 was 5.1% and 5.0%, respectively.

The increase in 2011 interest expense is primarily due to the repayment of shorter-term, lower interest rate debt with the proceeds from long-term, higher interest rate debt, partially offset by a reduction in outstanding debt. Interest costs capitalized in conjunction with development and redevelopment projects and unconsolidated development and redevelopment joint venture interests were $3.3 million and $9.4 million for the three- and nine-month periods ended September 30, 2011, respectively, as compared to $3.3 million and $9.5 million for the respective periods in 2010. The Company ceases the capitalization of interest when assets are placed in service or upon the suspension of construction.

(C)

Represents the impact of the valuation adjustments for the equity derivative instruments issued as part of the stock purchase agreement with Mr. Alexander Otto (the “Investor”) and certain members of the Otto family (collectively with the Investor, the “Otto Family”). The valuation and resulting charges/gains primarily related to the difference between the closing trading value of the Company’s common shares from the beginning of the period through the end of the respective period presented except that in 2011, the final valuation was done as of March 18, 2011, the exercise date of the warrants. Because all of the warrants were exercised in March 2011, the Company no longer records the changes in fair value of these instruments in its earnings. The liability at the date of exercise was reclassified into paid-in capital upon the receipt of cash from the Otto Family and the issuance of the Company's common shares.

(D)	Other income (expenses) were comprised of the following (in millions):


	Nine-Month Periods Ended September 30,
	2011			2010
Litigation-related expenses	$	(2.0	)	$	(13.5	)
Note receivable reserve		(5.0	)		—
Debt extinguishment gain (costs), net		0.3			(3.3	)
Settlement of lease liability obligation		2.6			—
Abandoned projects and other expenses		(0.7	)		(1.6	)

	$	(4.8	)	$	(18.4	)

In June 2011, the Company sold a note receivable with a face value, including accrued but unpaid interest, of $11.8 million for proceeds of $6.8 million. This transaction resulted in the recognition of a reserve of $5.0 million prior to the sale to reduce the loan receivable to fair value.

In the fourth quarter of 2010, the Company established a lease liability reserve in the amount of $3.3 million for three operating leases as a result of an abandoned development project and two office closures. The Company reversed $2.6 million of this previously recorded charge due to the termination of the ground lease related to the abandoned development project in the first quarter of 2011.

- 44 -

Other Items (in thousands)


	Three-Month Periods Ended September 30,
	2011			2010			$ Change		% Change
Equity in net loss of joint ventures	$	(2,590	)	$	(4,801	)	$	2,211		(46.1	)%
Tax expense of taxable REIT subsidiaries and state franchise and income taxes		(299	)		(1,118	)		819		(73.3	)%


	Nine-Month Periods Ended September 30,
	2011			2010			$ Change			% Change
Equity in net income (loss) of joint ventures ^(A)	$	15,951		$	(3,777	)	$	19,728			(522.3	)%
Impairment of joint venture investments		(1,671	)		—			(1,671	)		(100.0	)%
Gain on change in control of interests ^(B)		22,710			—			22,710			(100.0	)%
Tax (expense) benefit of taxable REIT subsidiaries and state franchise and income taxes		(1,041	)		1,527			(2,568	)		(168.2	)%

(A)

The increase in equity in net income of joint ventures for the nine months ended September 30, 2011 compared to the prior-year period is primarily a result of the gain recognized on the sale of an asset by one unconsolidated joint venture of which the Company’s share was $12.6 million and higher income from the Company’s investment in Sonae Sierra Brasil discussed below, partially offset by the Company’s proportionate share of unconsolidated joint venture impairments, loss on sale and the elimination of equity income from unconsolidated joint venture assets sold in the first nine months of 2010.

At September 30, 2011 and 2010, the Company had an approximate 33% and 48% interest, respectively, in an unconsolidated joint venture, Sonae Sierra Brasil, which owns real estate in Brazil and is headquartered in San Paulo, Brazil. In February 2011, Sonae Sierra Brasil, completed an initial public offering (“IPO”) of its common shares on the Sao Paulo Stock Exchange, raising total proceeds of approximately US$280 million. The Company’s effective ownership interest in Sonae Sierra Brasil decreased during the first quarter of 2011 due to the IPO. This entity uses the functional currency of Brazilian Reais. The Company has generally chosen not to mitigate any of the foreign currency risk through the use of hedging instruments for this entity. The operating cash flow generated by this investment has been generally retained by the joint venture and reinvested in ground up developments and expansions in Brazil. The weighted average exchange rate used for recording the equity in net income was 1.63 and 1.79 for the nine months ended September 30, 2011 and 2010, respectively. The overall increase in equity in net income from the Sonae Sierra Brasil joint venture, net of the impact of foreign currency translation, primarily is due to shopping center expansion activity coming on line, increases in parking revenue and increases in ancillary income and interest income.

(B)

In the first quarter of 2011, the Company acquired its partners’ 50% interest in two shopping centers. The Company accounted for both of these transactions as step acquisitions. Due to the change in control that occurred, the Company recorded an aggregate gain associated with the acquisitions related to the difference between the Company’s carrying value and fair value of the previously held equity interests.

- 45 -

Discontinued Operations (in thousands)


	Three-Month Periods Ended September 30,
	2011			2010			$ Change			% Change
Loss from discontinued operations	$	(1,909	)	$	(9,417	)	$	7,508			(79.7	)%
Gain on deconsolidation of interests, net		4,716			5,221			(505	)		(9.7	)%
(Loss) gain on disposition of real estate, net of tax		(8,033	)		889			(8,922	)		(1,003.6	)%

	$	(5,226	)	$	(3,307	)	$	(1,919	)		58.0	%


	Nine-Month Periods Ended September 30,
	2011			2010			$ Change			% Change
Loss from discontinued operations ^(A)	$	(11,320	)	$	(95,990	)	$	84,670			(88.2	)%
Gain on deconsolidation of interests, net ^(B ⁾		4,716			5,221			(505	)		(9.7	)%
Loss on disposition of real estate, net of tax		(15,052	)		(2,602	)		(12,450	)		478.5	%

	$	(21,656	)	$	(93,371	)	$	71,715			(76.8	)%

(A)

The Company sold 21 properties during the nine-month period ended September 30, 2011 and had one property held for sale at September 30, 2011, aggregating 1.9 million square feet. In addition, the Company sold 31 properties in 2010 (including two properties held for sale at December 31, 2009) aggregating 2.9 million square feet. Also, included in discontinued operations are 26 other properties that were deconsolidated for accounting purposes in 2011 and 2010, aggregating 2.3 million square feet, which primarily represents the activity associated with a joint venture that owns the underlying real estate of certain assets formerly occupied by Mervyns. These assets were classified as discontinued operations for all periods presented as the Company has no significant continuing involvement. In addition, included in the reported loss for the nine-month periods ended September 30, 2011 and 2010, is $11.3 million and $83.7 million, respectively, of impairment charges related to assets classified as discontinued operations.

(B)

The Company recorded a gain in both the three-month periods ended September 30, 2011 and 2010 associated with the deconsolidation of assets owned in consolidated joint ventures that were transferred to the control of a court appointed receiver. The Company recorded a gain because the carrying value of the non-recourse debt exceeded the carrying value of the collateralized assets of the joint ventures. The revenues and expenses associated with these joint ventures are classified within discontinued operations.

Gain on Disposition of Real Estate (in thousands)


	Three-Month Periods Ended September 30,
	2011		2010		$ Change		% Change
Gain on disposition of real estate, net	$	6,587	$	145	$	6,442		4,442.8	%


	Nine-Month Periods Ended September 30,
	2011		2010		$ Change		% Change
Gain on disposition of real estate, net ^(A)	$	8,036	$	61	$	7,975		13,073.8	%

- 46 -

(A)	Amounts generally attributable to the sale of land. The sales of land did not meet the criteria for discontinued operations because the land did not have any significant operations prior to disposition.

Non-Controlling Interests (in thousands)


	Three-Month Periods Ended September 30,
	2011		2010		$ Change		% Change
Non-controlling interests	$	3,693	$	1,450	$	2,243	154.7 %


	Nine Months Periods Ended September 30,
	2011		2010		$ Change			% Change
Non-controlling interests ⁽ ^A ⁾	$	3,512	$	38,380	$	(34,868	)	(90.8)%

(A)

The change is a result of impairment charges in 2011 and 2010 by one of the Company’s 75% owned consolidated investments, which owns land held for development in Togliatti and Yaroslavl, Russia and one of the Company’s 50% owned consolidated investment, which own land held for development in Brampton, Canada. In addition, in 2010, non-controlling interests included the net loss attributable to a consolidated joint venture, which held assets previously occupied by Mervyns, that were deconsolidated in the third quarter of 2010, and the operating results are reported as a component of discontinued operations.

Net Loss (in thousands)


	Three-Month Periods Ended September 30,
	2011			2010			$ Change			% Change
Net loss attributable to DDR	$	(42,989	)	$	(14,310	)	$	(28,679	)	200.4%


	Nine-Month Periods Ended September 30,
	2011			2010			$ Change		% Change
Net loss attributable to DDR	$	(21,060	)	$	(125,132	)	$	104,072	(83.2)%

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The decrease in net loss attributable to DDR for the three- and nine-month periods ended September 30, 2011 compared to 2010, primarily was the result of a reduction in the aggregate impairment charges recorded in 2011, the gain on change in control of interests related to the Company’s acquisition of two assets from unconsolidated joint ventures and the effect of the valuation adjustments associated with the warrants exercised in 2011 partially offset by higher interest expense and an executive separation charge. A summary of changes in 2011 as compared to 2010 is as follows (in millions):


	Three-Month Period Ended September 30,			Nine-Month Period Ended September 30,
Increase in net operating revenues (total revenues in excess of operating and maintenance expenses and real estate taxes)	$	4.2		$	0.7
Increase in consolidated impairment charges		(51.2	)		(9.2	)
Decrease (increase) in general and administrative expenses ^(A)		2.2			(2.8	)
Increase in depreciation expense		(3.2	)		(6.8	)
Increase in interest income		0.8			3.3
Increase in interest expense		(6.1	)		(13.7	)
Increase in loss on retirement of debt, net		(0.5	)		(0.5	)
Change in equity derivative instrument valuation adjustments		11.3			36.5
Change in other expense		4.1			13.5
Increase in equity in net income of joint ventures		2.2			19.7
Increase in impairment of joint venture investments		—			(1.6	)
Increase in gain on change in control of interests		—			22.7
Decrease (increase) in income tax expense		0.8			(2.5	)
(Increase) decrease in loss from discontinued operations		(1.9	)		71.7
Increase in gain on disposition of real estate		6.4			8.0
Change in non-controlling interests		2.2			(34.9	)

(Increase) decrease in net loss attributable to DDR	$	(28.7	)	$	104.1

(A)	Included in general and administrative expenses are executive separation charges of $11.0 million and $2.1 million for the nine-month periods ended September 30, 2011 and 2010, respectively.

Funds From Operations

Definition and Basis of Presentation

The Company believes that FFO, which is a non-GAAP financial measure, provides an additional and useful means to assess the financial performance of REITs. FFO is frequently used by securities analysts, investors and other interested parties to evaluate the performance of REITs, most of which present FFO along with net income as calculated in accordance with GAAP.

FFO excludes GAAP historical cost depreciation and amortization of real estate and real estate investments, which assumes that the value of real estate assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions, and many companies use different depreciable lives and methods. Because FFO excludes depreciation and amortization unique to real estate, gains and certain losses from depreciable property dispositions, and extraordinary items, it can provide a performance measure that, when compared year over year, reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, acquisition and development activities and financing costs. This provides a perspective of the Company’s financial performance not immediately apparent from net income determined in accordance with GAAP.

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FFO is generally defined and calculated by the Company as net income (loss), adjusted to exclude (i) preferred share dividends, (ii) gains from disposition of depreciable real estate property, except for those properties sold through the Company’s merchant building program, which are presented net of taxes, and those gains that represent the recapture of a previously recognized impairment charge, (iii) extraordinary items and (iv) certain non-cash items. These non-cash items principally include real property depreciation, equity income (loss) from joint ventures and equity income (loss) from non-controlling interests, and adding the Company’s proportionate share of FFO from its unconsolidated joint ventures and non-controlling interests, determined on a consistent basis. For the periods presented below, the Company’s calculation of FFO is consistent with the definition of FFO provided by the National Association of Real Estate Investment Trusts (NAREIT) at September 30, 2011, because there were no gains generated from the Company's merchant building program.

During 2008, due to the volatility and volume of significant charges and gains recorded in the Company’s operating results that the Company believes were not reflective of the Company’s core operating performance, management began computing Operating FFO and discussing it with the users of the Company’s financial statements, in addition to other measures such as net income/loss determined in accordance with GAAP as well as FFO. Operating FFO is generally calculated by the Company as FFO excluding certain charges and gains that management believes are not indicative of the results of the Company’s operating real estate portfolio. The disclosure of these charges and gains are regularly requested by users of the Company’s financial statements.

The original NAREIT definition of FFO did not explicitly address the treatment of impairment charges of depreciable real estate. As a result, there were different industry views regarding whether such charges should be excluded from FFO. The Company’s historical calculation of FFO included impairment charges as well as losses on sale of depreciable real estate. On October 31, 2011, NAREIT reaffirmed that the exclusion of impairment charges of depreciable real estate is consistent with the definition of FFO. Further, NAREIT indicated that it was its preference for companies to restate previously reported NAREIT FFO in order to provide consistent and comparable presentation of FFO measures. As the Company has included impairment charges and losses on sale of depreciable real estate in its FFO, the Company is currently evaluating its presentation of FFO in the current period and all previously reported periods. Impairments and losses on sale recorded by the Company for the periods presented herein are disclosed below in the reconciliation of Operating FFO.

Operating FFO is a non-GAAP financial measure, and, as described above, its use, combined with the required primary GAAP presentations, has been beneficial to management in improving the understanding of the Company’s operating results among the investing public and making comparisons of other REITs’ operating results to the Company’s more meaningful. The adjustments may not be comparable to how other REITs or real estate companies calculate their results of operations, and the Company’s calculation of Operating FFO differs from NAREIT’s definition of FFO. The Company will continue to evaluate the usefulness and relevance of the reported non-GAAP measures, and such reported measures could change. Additionally, the Company provides no assurances that these charges and gains are non-recurring. These charges and gains could be reasonably expected to recur in future results of operations.

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These measures of performance are used by the Company for several business purposes and by other REITs. The Company uses FFO and/or Operating FFO in part (i) as a measure of a real estate asset’s performance, (ii) to influence acquisition, disposition and capital investment strategies, and (iii) to compare the Company’s performance to that of other publicly traded shopping center REITs.

For the reasons described above, management believes that FFO and Operating FFO provide the Company and investors with an important indicator of the Company’s operating performance. It provides a recognized measure of performance other than GAAP net income, which may include non-cash items (often significant). Other real estate companies may calculate FFO and Operating FFO in a different manner.

Management recognizes FFO’s and Operating FFO’s limitations when compared to GAAP’s income from continuing operations. FFO and Operating FFO do not represent amounts available for needed dividends, capital replacement or expansion, debt service obligations, or other commitments and uncertainties. Management does not use FFO or Operating FFO as an indicator of the Company’s cash obligations and funding requirements for future commitments, acquisitions or development activities. Neither FFO nor Operating FFO represents cash generated from operating activities in accordance with GAAP and neither is necessarily indicative of cash available to fund cash needs, including the payment of dividends. Neither FFO nor Operating FFO should be considered an alternative to net income (computed in accordance with GAAP) or as an alternative to cash flow as a measure of liquidity. FFO and Operating FFO are simply used as additional indicators of the Company’s operating performance. The Company believes that to further understand its performance, FFO and operating FFO should be compared with the Company’s reported net income (loss) and considered in addition to cash flows in accordance with GAAP, as presented in its consolidated financial statements.

Reconciliation Presentation

For the three-month period ended September 30, 2011, FFO applicable to DDR common shareholders was $8.1 million, compared to $37.1 million for the same period in 2010. For the nine-month period ended September 30, 2011, FFO applicable to DDR common shareholders was $121.3 million, as compared to $32.7 million for the same period in 2010. The increase in FFO for the nine-month period ended September 30, 2011, was primarily the result of a reduction in the aggregate impairment charges recorded in 2011, the gain on change in control of interests related to the Company’s acquisition of two assets from unconsolidated joint ventures and the effect of the non-cash valuation adjustments associated with the warrants exercised in 2011 partially offset by higher interest expense, an executive separation charge and the write-off of the original issuance costs due to the redemption of the Company’s Class G cumulative redeemable preferred shares.

For the three-month period ended September 30, 2011, Operating FFO applicable to DDR common shareholders was $67.4 million, compared to $63.2 million for the same period in 2010. For the nine-month period ended September 30, 2011, Operating FFO applicable to DDR common shareholders was $195.0 million, as compared to $193.4 million for the same period in 2010. The slight increase in Operating FFO for the nine-month period ended September 30, 2011, was primarily the result of increased revenue and interest income partially offset by higher general and administrative costs and interest expense.

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The Company’s reconciliation of net loss applicable to DDR common shareholders to FFO applicable to DDR common shareholders and Operating FFO applicable to common shareholders is as follows (in thousands):


	Three-Month Periods Ended September 30,						Nine-Month Periods Ended September 30,
	2011			2010			2011			2010
Net loss applicable to DDR common shareholders ^(A)(B)	$	(49,956	)	$	(24,877	)	$	(52,082	)	$	(156,834	)
Depreciation and amortization of real estate investments		54,474			53,026			163,197			161,769
Equity in net loss (income) of joint ventures		2,590			4,801			(15,951	)		3,777
Joint ventures’ FFO ⁽ ^C ⁾		7,569			10,457			35,158			32,319
Non-controlling interests (OP Units)		24			8			56			24
Gain on disposition of depreciable real estate ⁽ ^D ⁾		(6,602	)		(6,339	)		(9,120	)		(8,394	)

FFO applicable to DDR common shareholders	$	8,099		$	37,076		$	121,258		$	32,661
Total non-operating items ^(E ⁾		59,301			26,141			73,755			160,731

Operating FFO applicable to DDR common shareholders	$	67,400		$	63,217		$	195,013		$	193,392

(A)

Includes the deduction of preferred dividends of $7.0 million and $10.6 million for the three-month periods ended September 30, 2011 and 2010, respectively, and $24.6 million and $31.7 million for the nine-month periods ended September 30, 2011 and 2010, respectively. Also includes a charge of $6.4 million related to the write off of the Class G cumulative redeemable preferred shares’ original issuance costs for the nine-month period ended September 30, 2011.

(B)

Includes straight-line rental revenue of approximately $0.1 million and $0.4 million for the three-month periods ended September 30, 2011 and 2010, respectively (including discontinued operations), and straight-line rental revenue of $0.2 million and $1.7 million for the nine-month periods ended September 30, 2011 and 2010, respectively. In addition, includes straight-line ground rent expense of approximately $0.5 million for both the three-month periods ended September 30, 2011 and 2010, and $1.5 million for both the nine-month periods ended September 30, 2011 and 2010, respectively (including discontinued operations).

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(C)

At September 30, 2011 and 2010, the Company had an economic investment in joint ventures relating to 184 and 198 operating shopping center properties, respectively. These joint ventures represent the investments in which the Company was recording its share of equity in net income or loss and accordingly, FFO.

Joint ventures’ FFO is summarized as follows (in thousands):


	Three-Month Periods Ended September 30,						Nine-Month Periods Ended September 30,
	2011			2010			2011			2010
Net loss attributable to unconsolidated joint ventures ⁽¹⁾	$	(64,448	)	$	(21,278	)	$	(43,007	)	$	(69,573	)
Loss (gain) on sale of real estate		10			—			(22,743	)		(47	)
Depreciation and amortization of real estate investments		45,397			47,814			138,473			149,815

FFO	$	(19,041	)	$	26,536		$	72,723		$	80,195

FFO at DDR ownership interests ⁽² ⁾	$	7,569		$	10,457		$	35,158		$	32,319

(1)

Revenues for the three-month periods include the following (in millions):


	Three-Month Periods Ended September 30,				Nine-Month Periods Ended September 30,
	2011		2010		2011		2010
Straight-line rents	$	1.0	$	0.9	$	3.6	$	3.0
DDR’s proportionate share		0.2		0.1		0.9		0.4

(2)

FFO at DDR ownership interests considers the impact of basis differentials.

(D)

The amount reflected as gains on disposition of real estate and real estate investments from continuing operations in the condensed consolidated statements of operations includes residual land sales, which management considers being the disposition of non-depreciable real property. These dispositions are included in the Company’s FFO and, therefore, are not reflected as an adjustment to FFO. For the three-month period ended September 30, 2011, the Company recorded $0.8 million of gain on land sales. For the nine-month periods ended September 30, 2011 and 2010, the Company recorded $1.0 million and $0.4 million of gain on land sales, respectively.

(E)	Amounts are described below in the Operating FFO Adjustments section.

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Operating FFO Adjustments

The Company’s adjustments to arrive at Operating FFO are comprised of the following for the three- and nine-month periods ended September 30, 2011 and 2010 (in millions). The Company provides no assurances that these charges and gains are non-recurring. These charges and gains could be reasonably expected to recur in future results of operations.


	Three-Month Periods Ended September 30,						Nine-Month Periods Ended September 30,
	2011			2010			2011			2010
Impairment charges – consolidated assets ^(A)	$	51.2		$	—		$	68.5		$	59.3
Executive separation charges ^(B)		0.3			—			11.0			2.1
Loss (gain) on debt retirement, net ^(A)		0.1			(0.3	)		0.1			(0.3	)
Loss (gain) on equity derivative instruments ^(A)		—			11.3			(21.9	)		14.6
Other (income) expense, net ^(C)		(0.2	)		3.9			4.8			16.0
Equity in net income of joint ventures – loss on asset sales and impairment charges net of gain on debt forgiveness		6.3			3.0			7.5			6.4
Impairment of joint venture investments		—			—			1.6			—
Gain on change in control of interests ^(A)		—			—			(22.7	)		—
Discontinued operations – consolidated impairment charges, loss on sales and gain on debt extinguishment		10.5			12.4			27.4			94.2
Discontinued operations – FFO associated with Mervyns Joint Venture, net of non-controlling interest		—			1.0			—			4.8
Discontinued operations – Gain on deconsolidation of interests, net		(4.7	)		(5.2	)		(4.7	)		(5.2	)
Gain on disposition of real estate (land), net		(0.4	)		—			(0.4	)		—
Non-controlling interest—portion of impairment charges allocated to outside partners		(3.8	)		—			(3.8	)		(31.2	)
Write-off of original preferred share issuance costs ^(A)		—			—			6.4			—

Total non–operating items	$	59.3		$	26.1		$	73.8		$	160.7
FFO applicable to DDR common shareholders		8.1			37.1			121.2			32.7

Operating FFO applicable to DDR common shareholders	$	67.4		$	63.2		$	195.0		$	193.4

(A)	Amount agrees to the face of the condensed consolidated statements of operations.

(B)	Amounts included in general and administrative expenses.

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(C)	Amounts included in other (income) expenses in the condensed consolidated statements of operations and detailed as follows:


	For the Three-Month Periods Ended September 30,						For the Nine-Month Periods Ended September 30,
	2011			2010			2011			2010
Litigation-related expenses, net of tax	$	—		$	3.5		$	2.0		$	11.1
Note receivable reserve		—			—			5.0			—
Debt extinguishment (gain) costs		(0.5	)		(0.3	)		(0.3	)		3.3
Settlement of lease liability obligation		—			—			(2.6	)		—
Abandoned projects and other expenses		0.3			0.7			0.7			1.6

	$	(0.2	)	$	3.9		$	4.8		$	16.0

Liquidity and Capital Resources

The Company periodically evaluates opportunities to issue and sell additional debt or equity securities, obtain credit facilities from lenders, or repurchase, refinance or otherwise restructure long-term debt for strategic reasons, or to further strengthen the financial position of the Company. In the first nine months of 2011, the Company continued to strategically allocate cash flow from operating and financing activities. The Company also completed public debt and equity offerings in order to strengthen its balance sheet and improve its financial flexibility.

The Company’s and its unconsolidated debt obligations generally require monthly payments of principal and/or interest over the term of the obligation. No assurance can be provided that these obligations will be refinanced or repaid as currently anticipated. Also, additional financing may not be available at all or on terms favorable to the Company or its joint ventures (see Contractual Obligations and Other Commitments).

The Company maintains an unsecured revolving credit facility with a syndicate of financial institutions, arranged by JP Morgan Securities, LLC and Wells Fargo Securities, LLC (the “Unsecured Credit Facility”). In June 2011, the Company amended the Unsecured Credit Facility and reduced its availability from $950 million to $750 million. The maturity date was extended to February 2016. The Unsecured Credit Facility includes an accordion feature for expansion of availability to $1.25 billion upon the Company’s request, provided that new or existing lenders agree to the existing terms of the facility and increase their commitment level. The Company also maintains a $65 million unsecured revolving credit facility with PNC Bank, National Association, that was also amended in June 2011 to match the terms of the Unsecured Credit Facility (the “PNC Facility” and, together with the Unsecured Credit Facility, the “Revolving Credit Facilities”). The Company’s borrowings under these facilities bear interest at variable rates currently based on LIBOR plus 165 basis points, subject to adjustment based on the Company’s current corporate credit ratings from Standard and Poor’s (“S&P”) and Moody’s Investors Service (“Moody’s”), which reflects a reduction in the interest rates from LIBOR plus 275 basis points.

The Revolving Credit Facilities and the indentures under which the Company’s senior and subordinated unsecured indebtedness is, or may be, issued contain certain financial and operating

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covenants and require the Company to comply with certain covenants including, among other things, leverage ratios and debt service coverage and fixed charge coverage ratios, as well as limitations on the Company’s ability to incur secured and unsecured indebtedness, sell all or substantially all of the Company’s assets, and engage in mergers and certain acquisitions. These credit facilities and indentures also contain customary default provisions including the failure to make timely payments of principal and interest payable thereunder, the failure to comply with the Company’s financial and operating covenants, the occurrence of a material adverse effect on the Company, and the failure of the Company or its majority-owned subsidiaries (i.e., entities in which the Company has a greater than 50% interest) to pay when due certain indebtedness in excess of certain thresholds beyond applicable grace and cure periods. In the event the Company’s lenders or note holders declare a default, as defined in the applicable agreements governing the debt, the Company may be unable to obtain further funding and/or an acceleration of any outstanding borrowings may occur. As of September 30, 2011, the Company was in compliance with all of its financial covenants in the agreements governing its debt. Although the Company intends to operate in compliance with these covenants, if the Company were to violate these covenants, the Company may be subject to higher finance costs and fees or accelerated maturities. The Company’s current business plans indicate that it will continue to be able to operate in compliance with these covenants for the remainder of 2011 and beyond.

Certain of the Company’s credit facilities and indentures permit the acceleration of the maturity of the underlying debt in the event certain other debt of the Company has been accelerated. Furthermore, a default under a loan by the Company or its affiliates, a foreclosure on a mortgaged property owned by the Company or its affiliates or the inability to refinance existing indebtedness may have a negative impact on the Company’s financial condition, cash flows and results of operations. These facts, and an inability to predict future economic conditions, have encouraged the Company to adopt a strict focus on lowering leverage and increasing financial flexibility.

The Company expects to fund its obligations from available cash, current operations and utilization of its Revolving Credit Facilities. The following information summarizes the availability of the Revolving Credit Facilities at September 30, 2011 (in millions):


Cash and cash equivalents	$	20.7

Revolving Credit Facilities	$	815.0
Less:
Amount outstanding		(226.4	)
Letters of credit		(10.2	)

Borrowing capacity available	$	578.4

Additionally, as of October 28, 2011, the Company had $200 million of its common shares available for future issuance under its continuous equity program.

The Company intends to maintain a longer-term financing strategy and continue to reduce its reliance on short-term debt. The Company believes its Revolving Credit Facilities is sufficient for its liquidity strategy and longer-term capital structure needs.

Part of the Company’s overall strategy includes addressing debt maturing in future years following well before the maturity date. In March 2011, the Company issued $300 million aggregate

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principal amount of 4.75% senior unsecured notes due April 2018. Net proceeds from the offering were used to repay short-term, higher cost mortgage debt and to reduce balances on its Revolving Credit Facilities and secured term loan.

In March 2011, the Otto Family exercised their warrants for 10 million common shares for cash proceeds of $60.0 million. In April 2011, the Company issued 9.5 million of its common shares for $130.2 million, or $13.71 per share. The net proceeds from the issuance of these common shares were used to redeem $180.0 million of the Company's 8.0% Class G cumulative redeemable preferred shares in April 2011. The excess proceeds were used for general corporate purposes.

In June 2011, the Company amended its secured term loan arranged by KeyBank Capital Markets and JP Morgan Securities, LLC, reducing the amount outstanding from $550 million to $500 million. The new secured term loan matures in September 2014 and has a one-year extension option.

The Company is focused on the timing and deleveraging opportunities for the consolidated debt maturing in 2012 as the Company has addressed all 2011 maturities. Included in the 2012 maturities are an aggregate of approximately $409.2 million of unsecured senior notes and approximately $110.7 million of mortgage debt. At September 30, 2011, there remains enough borrowing capacity available under the Revolving Credit Facilities to fund these maturities as they come due. At this date, there are no future years in which the Company’s scheduled consolidated debt maturities exceed $1 billion. Management believes that the scheduled debt maturities in future years are manageable for the size of its balance sheet. The Company continually evaluates its debt maturities and, based on management’s current assessment, believes it has viable financing and refinancing alternatives.

The Company continues to look beyond 2011 to ensure that it executes its strategy to lower leverage, increase liquidity, improve the Company’s credit ratings and extend debt duration with the goal of lowering the Company's risk profile and long-term cost of capital.

Unconsolidated Joint Ventures

At September 30, 2011, the Company’s unconsolidated joint venture mortgage debt that has matured or is maturing in 2011 was $135.8 million (of which the Company’s proportionate share is $19.2 million). Of this amount, $121.2 million (of which the Company’s proportionate share is $16.3 million) was attributable to the Coventry II Fund assets (see Off-Balance Sheet Arrangements).

Cash Flow Activity

The Company’s core business of leasing space to well-capitalized retailers continues to generate consistent and predictable cash flow after expenses, interest payments and preferred share dividends. This capital is available for use at the Company’s discretion for investment, debt repayment and the payment of dividends on the common shares.

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The Company’s cash flow activities are summarized as follows (in thousands):


	Nine-Month Periods Ended September 30,
	2011			2010
Cash flow provided by operating activities	$	224,710		$	211,038
Cash flow provided by investing activities		29,958			9,312
Cash flow used for financing activities		(253,178	)		(225,118	)

Operating Activities: There were no significant changes from operating activities for the nine months ended September 30, 2011, as compared to the same period in 2010.

Investing Activities: The change in cash flow from investing activities for the nine months ended September 30, 2011 as compared to the same period in 2010, was primarily due to an increase in proceeds from note repayments and increased distributions from joint ventures related to asset sales and refinancings offset by the change in restricted cash.

Financing Activities: The change in cash flow used for financing activities for the nine months ended September 30, 2011, as compared to the same period in 2010, was primarily due to a decrease in proceeds received from the issuance of common shares partially offset by a decrease in the level of debt repayments.

The Company satisfied its REIT requirement of distributing at least 90% of ordinary taxable income with declared common and preferred share cash dividends of $63.6 million for the nine months ended September 30, 2011, as compared to $46.8 million of dividends paid for the same period in 2010. Because actual distributions were greater than 100% of taxable income, federal income taxes have not been incurred by the Company thus far during 2011.

The Company declared a quarterly dividend of $0.06 per common share for the third quarter of 2011 and $0.04 per common share in each of the first two quarters of 2011, which aggregates $0.14 per common share for the first three quarters of 2011. The Board of Directors of the Company will continue to monitor the 2011 dividend policy and provide for adjustments, as determined to be in the best interests of the Company and its shareholders to maximize the Company’s free cash flow while still adhering to REIT payout requirements.

Sources and Uses of Capital

Strategic Purchase and Sale Transactions

The Company and Glimcher Realty Trust (NYSE: GRT) (“Glimcher”) entered into an agreement to swap two assets better aligned with the other's operating platforms and strategies. The Company plans to sell its open-air mall, Town Center Plaza, in Kansas City, Kansas to Glimcher for approximately $139 million with the existing loan encumbering this asset to be defeased immediately prior to closing; and Glimcher plans to sell its power center, Polaris Towne Center, in Columbus, Ohio to the Company for approximately $80 million, including the assumption of approximately $45 million in debt currently encumbering the property, which matures in 2020. The Company currently anticipates recognizing a gain, estimated to be approximately $60 million, in connection with the sale

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of Town Center Plaza, which amount is subject to change based on actual closing and other costs associated with the sale. Each of the transactions is expected to close in the fourth quarter of 2011, subject to the satisfaction or waiver of customary closing conditions, including lender approval and a closing condition requiring the contemporaneous closing of each transaction.

Acquisitions

The Company has a portfolio management strategy to recycle capital from lower quality, lower growth potential assets into prime assets with long-term growth potential. As part of that strategy, in the third quarter of 2011, the Company acquired three assets aggregating 0.5 million square feet for a total purchase price of approximately $110.0 million. The Company assumed an aggregate of $67.0 million of mortgage debt in connection with these acquisitions. Two of the assets are in Charlotte, North Carolina (Cotswold Village and The Terraces at SouthPark) and one asset is in Colorado Springs, Colorado (Chapel Hills East). In September 2011, the Company invested $10 million in a loan collateralized by a prime shopping center in Miami, Florida. In the first quarter of 2011, the Company acquired its partners' 50% ownership interests in two shopping centers for $40 million. As a result, the Company now owns 100% of the two prime shopping centers. The aggregate gross value of the shopping centers is $80 million, and a new $21.0 million, eleven-year mortgage encumbers one of the assets. The Company recorded an aggregate gain of approximately $22.7 million in connection with the first quarter acquisitions related to the step-up of its investment basis to fair value due to the change in control that occurred.

Dispositions

During the nine-month period ended September 30, 2011, the Company sold 20 shopping center properties and one office property, aggregating 1.9 million square feet, at an aggregate sales price of $106.9 million. In addition, the Company also sold $27.3 million of consolidated non-income producing assets. The Company recorded a net loss of $7.0 million, which excludes the impact of $52.6 million in related impairment charges that were recorded in prior periods. During the nine-month period ended September 30, 2011, three of the Company’s joint ventures sold three shopping centers, aggregating approximately 0.6 million square feet, generating gross proceeds of approximately $80.0 million. The joint ventures recorded an aggregate net gain of approximately $21.3 million related to these asset sales, of which the Company’s share was approximately $10.5 million.

As discussed above, as part of the Company’s portfolio management strategy, the Company has been marketing non-prime assets for sale. The Company is focusing on selling single-tenant assets and/or smaller shopping centers that do not meet the Company’s current business strategy. The Company has entered into agreements, including contracts executed through October 28, 2011, to sell real estate assets that are subject to contingencies. An aggregate gain on sale of approximately $85 million could be recorded if certain sales were consummated on the terms currently being negotiated, which could be offset, in whole or in part, by an aggregate loss of approximately $15 million from the sale of additional assets. Given the Company’s experience over the past few years, it is difficult for many buyers to complete these transactions in the timing contemplated or at all. The Company has not recorded an impairment charge on the assets that would result in a loss at September 30, 2011, as the undiscounted cash flows, when considering and evaluating the various alternative courses of action

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that may occur, exceed the assets’ current carrying value. The Company evaluates all potential sale opportunities taking into account the long-term growth prospects of assets being sold, the use of proceeds and the impact to the Company’s balance sheet, in addition to the impact on operating results. As a result, if actual results differ from expectations, it is possible that additional assets could be sold in subsequent periods for a gain or loss after taking into account the above considerations.

Developments and Redevelopments

As part of its portfolio management strategy to develop, expand, improve and re-tenant various consolidated properties, the Company expects to expend an aggregate of approximately $61.2 million in 2011, of which approximately $42.7 million was spent through September 30, 2011 on a net basis.

The Company will continue to closely monitor its spending in the remainder of 2011 and its expected spending in 2012 for developments and redevelopments, both for consolidated and unconsolidated projects, as the Company considers this funding to be discretionary spending. The Company does not anticipate expending a significant amount of funds on joint venture development projects in the remainder of 2011 or in 2012, excluding projects at Sonae Sierra Brasil. The projects in Brazil will be funded with proceeds from the recently completed IPO or entity level financing. One of the important benefits of the Company’s asset class is the ability to phase development projects over time until appropriate leasing levels can be achieved. To maximize the return on capital spending and balance the Company’s de-leveraging strategy, the Company adheres to strict investment criteria thresholds. The revised underwriting criteria followed for almost the past two years includes a higher cash-on-cost project return threshold, and incorporates a longer period before the leases commence and a higher stabilized vacancy rate. The Company applies this revised strategy to both its consolidated and certain unconsolidated joint ventures that own assets under development because the Company has significant influence and, in most cases, approval rights over decisions relating to significant capital expenditures.

The Company has two consolidated projects that are being developed in phases at a projected aggregate net cost of approximately $204.0 million. At September 30, 2011, approximately $189.5 million of costs had been incurred in relation to these projects. The Company is also currently redeveloping seven shopping center developments (one owned by a consolidated joint venture) at a projected aggregate net cost of approximately $79.8 million. At September 30, 2011, approximately $61.6 million of costs had been incurred in relation to these redevelopment projects.

At September 30, 2011, the Company has approximately $483.7 million of recorded costs related to land and projects under development, for which active construction has temporarily ceased or had not yet commenced. Based on the Company’s current intentions and business plans, the Company believes that the expected undiscounted cash flows exceed its current carrying value on each of these projects. However, if the Company were to dispose of certain of these assets in the current market, the Company would likely incur a loss, which may be material. The Company evaluates its intentions with respect to these assets each reporting period and records an impairment charge equal to the difference between the current carrying value and fair value when the expected undiscounted cash flows are less than the asset’s carrying value.

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The Company and its joint venture partners intend to commence construction on various other developments, only after substantial tenant leasing has occurred and acceptable construction financing is available.

Off-Balance Sheet Arrangements

The Company has a number of off-balance sheet joint ventures and other unconsolidated entities with varying economic structures. Through these interests, the Company has investments in operating properties, development properties and two management and development companies. Such arrangements are generally with institutional investors and various developers located throughout the United States and Brazil.

The unconsolidated joint ventures that have total assets greater than $250 million (based on the historical cost of acquisition by the unconsolidated joint venture) at September 30, 2011, are as follows:


Unconsolidated Real Estate Ventures	Effective Ownership Percentage ^(A)	Assets Owned	Company- Owned Square Feet (Millions)		Total Debt (Millions)
DDRTC Core Retail Fund LLC	15.0%	42 shopping centers in several states		11.6		1,212.0
DDR Domestic Retail Fund I	20.0%	63 shopping centers in several states		8.2		951.5
Sonae Sierra Brasil BV Sarl	33.3%	10 shopping centers, a management company and three development projects in Brazil		3.7		175.9
DDR – SAU Retail Fund LLC	20.0%	27 shopping centers in several states		2.3		183.1

(A)	Ownership may be held through different investment structures. Percentage ownerships are subject to change, as certain investments contain promoted structures.

Funding for Unconsolidated Joint Ventures

The Company has provided loans and advances to certain unconsolidated entities and/or related partners in the amount of $71.1 million at September 30, 2011, for which the Company’s joint venture partners have not funded their proportionate share. Included in this amount, the Company advanced $66.9 million of financing to one of its unconsolidated joint ventures, which accrued interest at the greater of LIBOR plus 700 basis points, or 12%, and a default rate of 16%, and has an initial maturity of July 2011. The Company reserved this advance in full in 2009 (see Coventry II Fund discussion below).

Coventry II Fund

At September 30, 2011, the Company maintains several investments with the Coventry II Fund. The Company co-invested approximately 20% in each joint venture and is generally responsible for day-to-day management of the properties. Pursuant to the terms of the joint venture’s management, leasing and development agreements, the Company presently earns fees for property management, leasing and construction management. These agreements expire by their own terms on December 31, 2011, and the Company does not anticipate that these agreements will be renewed or extended. The Company also could earn a promoted interest, along with Coventry Real Estate Advisors L.L.C., above a preferred return after return of capital to fund investors (see Part II, Item 1. Legal Proceedings).

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As of September 30, 2011, the aggregate carrying amount of the Company’s net investment in the Coventry II Fund joint ventures was approximately $15.7 million. An affiliate of the Company has also advanced $66.9 million of financing to one of the Coventry II Fund joint ventures, Coventry II DDR Bloomfield, related to the development of the project in Bloomfield Hills, Michigan (“Bloomfield Loan”). In addition to its existing equity and note receivable, the Company has provided partial payment guaranties to third-party lenders in connection with the financing for five of the Coventry II Fund projects. The amount of each such guaranty is not greater than the proportion to the Company’s investment percentage in the underlying projects, and the aggregate amount of the Company’s guaranties is approximately $33.9 million at September 30, 2011.

Although the Company will not acquire additional investments through the Coventry II Fund joint ventures, additional funds may be required to address ongoing operational needs and costs associated with the joint ventures undergoing development or redevelopment. The Coventry II Fund is exploring a variety of strategies to obtain such funds, including potential dispositions and financings. The Company continues to maintain the position that it does not intend to fund any of its joint venture partners’ capital contributions or their share of debt maturities.

A summary of the Coventry II Fund investments is as follows:


Unconsolidated Real Estate Ventures	Shopping Center or Development Owned	Loan Balance Outstanding
Coventry II DDR Bloomfield LLC	Bloomfield Hills, Michigan	$	39.8	^{(A),(B),(C),(D)}
Coventry II DDR Buena Park LLC	Buena Park, California		61.0	^(B)
Coventry II DDR Westover LLC	San Antonio, Texas		20.4	^(B)
Coventry II DDR Tri-County LLC	Cincinnati, Ohio		150.6	^(B),(C),(D)
Coventry II DDR Marley Creek Square LLC	Orland Park, Illinois		10.7	^(B),(D),(E)
Coventry II DDR Totem Lakes LLC	Kirkland, Washington		27.4	^(B),(D),(E)
Service Holdings LLC	38 retail sites in several states		99.8	^(B),(D),(E)
Coventry II DDR Fairplain LLC	Benton Harbor, Michigan		15.1	^(B),(E)
Coventry II DDR Montgomery Farm LLC	Allen, Texas		136.3	^(B),(E)
Coventry II DDR Phoenix Spectrum LLC	Phoenix, Arizona		65.0

(A)

In 2009, the senior secured lender sent to the borrower a formal notice of default and filed a foreclosure action. The Company paid its 20% guaranty of this loan in 2009, and the senior secured lender initiated legal proceedings against the Coventry II Fund for its failure to fund its 80% payment guaranty. The senior secured lender and the Coventry II Fund subsequently entered into a settlement arrangement in connection with the legal proceedings. The above-referenced $66.9 million Bloomfield Loan from the Company related to the Bloomfield Hills, Michigan, project is cross-defaulted with this third-party loan. The Bloomfield Loan is considered past due and has been fully reserved by the Company.

(B)	As of September 30, 2011, lenders are managing the cash receipts and expenditures related to the assets collateralizing these loans.

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(C)	As of October 28, 2011, these loans are in default, and the Coventry II Fund is exploring a variety of strategies with the lenders.

(D)	The Company has written its investment basis in this joint venture down to zero and is no longer reporting an allocation of income or loss.

(E)	As of September 30, 2011, the Company provided payment guaranties that are not greater than the proportion to its investment interest.

Other Joint Ventures

The Company is involved with overseeing the development activities for several of its unconsolidated joint ventures that are constructing or redeveloping shopping centers. The Company earns a fee for its services commensurate with the level of oversight provided. The Company generally provides a completion guaranty to the third-party lending institution(s) providing construction financing.

The Company’s unconsolidated joint ventures had aggregate outstanding indebtedness to third parties of approximately $3.9 billion and $4.0 billion at September 30, 2011 and 2010, respectively (see Part I, Item 3. Quantitative and Qualitative Disclosures About Market Risk). Such mortgages and construction loans are generally non-recourse to the Company and its partners; however, certain mortgages may have recourse to the Company and its partners in certain limited situations, such as misuse of funds and material misrepresentations. In connection with certain of the Company’s unconsolidated joint ventures, the Company agreed to fund any amounts due to the joint venture’s lender if such amounts are not paid by the joint venture based on the Company’s pro rata share of such amount, which aggregated $41.1 million at September 30, 2011, including guaranties associated with the Coventry II Fund joint ventures.

On February 2, 2011, the Company’s unconsolidated joint venture, Sonae Sierra Brasil (BM&FBOVESPA: SSBR3), completed an IPO of its common shares on the Sao Paulo Stock Exchange. The total proceeds raised of approximately US$280 million from the IPO will be used primarily to fund future developments and expansions, as well as repay a loan from its parent company, in which DDR owns a 50% interest. The Company’s proportionate share of the loan repayment proceeds was approximately US$22.4 million. As a result of the initial public offering, the Company’s effective ownership interest in Sonae Sierra Brasil was reduced from 48% to approximately 33%.

The Company has generally chosen not to mitigate any of the foreign currency risk through the use of hedging instruments for Sonae Sierra Brasil. The Company will continue to monitor and evaluate this risk and may enter into hedging agreements at a later date.

The Company has interests in consolidated joint ventures that own real estate assets in Canada and Russia. The net assets of these subsidiaries are exposed to volatility in currency exchange rates. As such, the Company uses non-derivative financial instruments to hedge this exposure. The Company manages currency exposure related to the net assets of the Company’s Canadian and European subsidiaries primarily through foreign currency-denominated debt agreements into which the Company enters. Gains and losses in the parent company’s net investments in its subsidiaries are economically offset by losses and gains in the parent company’s foreign currency-denominated debt obligations.

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For the nine months ended September 30, 2011, $1.2 million of net losses related to the foreign currency-denominated debt agreements were included in the Company’s cumulative translation adjustment. As the notional amount of the non-derivative instrument substantially matches the portion of the net investment designated as being hedged and the non-derivative instrument is denominated in the functional currency of the hedged net investment, the hedge ineffectiveness recognized in earnings was not material.

Financing Activities

The Company has historically accessed capital sources through both the public and private markets. The Company’s acquisitions, developments and redevelopments are generally financed through cash provided from operating activities, revolving credit facilities, mortgages assumed, construction loans, secured debt, unsecured debt, common and preferred equity offerings, joint venture capital and asset sales. Total consolidated debt outstanding was $4.2 billion, $4.3 billion and $4.4 billion at September 30, 2011, December 31, 2010 and September 30, 2010, respectively.

In June 2011, the Company amended its Revolving Credit Facilities. The maturity date was extended from February 2014 to February 2016 and the interest rate was reduced from LIBOR plus 275 basis points to LIBOR plus 165 basis points. In June 2011, the Company also amended its term loan arranged by KeyBank Capital Markets and JP Morgan Securities, LLC, reducing the amount outstanding from $550 million to $500 million. The new facility matures in September 2014 and has a one-year extension option. In addition, the interest rate changed from LIBOR plus 87.5 basis points to LIBOR plus 170 basis points which represents current competitive pricing.

In March 2011, the Company issued $300 million aggregate principal amount of 4.75% senior unsecured notes due April 2018. Net proceeds from the offering were used to repay short-term, higher cost mortgage debt and to reduce balances on its Revolving Credit Facilities and secured term loan.

In March 2011, the Otto Family exercised their warrants for 10 million common shares for cash proceeds of $60.0 million. In April 2011, the Company issued 9.5 million of its common shares for $130.2 million, or $13.71 per share. The net proceeds from the issuance of these common shares were used to redeem $180.0 million of the Company's 8.0% Class G cumulative redeemable preferred shares in April 2011. Excess proceeds were used for general corporate purposes.

Capitalization

At September 30, 2011, the Company’s capitalization consisted of $4.2 billion of debt, $375 million of preferred shares and $3.0 billion of market equity (market equity is defined as common shares and OP Units outstanding multiplied by $10.90, the closing price of the Company’s common shares on the New York Stock Exchange at September 30, 2011), resulting in a debt to total market capitalization ratio of 0.6 to 1.0 at September 30, 2011. The debt to total market capitalization ratio was 0.6 to 1.0 at September 30, 2010. The closing price of the common shares on the New York Stock Exchange was $11.22 at September 30, 2010. At September 30, 2011, the Company’s total debt consisted of $3.6 billion of fixed-rate debt (including $284.4 million of variable-rate debt that had

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been effectively swapped to a fixed rate through the use of interest rate derivative contracts) and $0.6 billion of variable-rate debt. At September 30, 2010, the Company’s total debt consisted of $3.1 billion of fixed-rate debt (including $100.0 million of variable-rate debt that had been effectively swapped to a fixed rate through the use of interest rate derivative contracts) and $1.3 billion of variable-rate debt.

It is management’s current strategy to have access to the capital resources necessary to manage the Company’s balance sheet, to repay upcoming maturities and to consider making prudent opportunistic investments. Accordingly, the Company may seek to obtain funds through additional debt or equity financings and/or joint venture capital in a manner consistent with its intention to operate with a conservative debt capitalization policy and to reduce the Company’s cost of capital by maintaining an investment grade rating with Moody’s and re-establishing an investment grade rating with S&P and Fitch. The security rating is not a recommendation to buy, sell or hold securities, as it may be subject to revision or withdrawal at any time by the rating organization. Each rating should be evaluated independently of any other rating. The Company may not be able to obtain financing on favorable terms, or at all, which may negatively affect future ratings.

Contractual Obligations and Other Commitments

The Company does not have any remaining wholly-owned maturities in 2011 and has shifted its focus to the timing and opportunities for 2012 maturities.

At September 30, 2011, the Company had letters of credit outstanding of approximately $32.3 million. The Company has not recorded any obligations associated with these letters of credit, the majority of which are collateral for existing indebtedness and other obligations of the Company.

In conjunction with the development of shopping centers, the Company has entered into commitments aggregating approximately $23.5 million with general contractors for its wholly-owned and consolidated joint venture properties at September 30, 2011. These obligations, comprised principally of construction contracts, are generally due in 12 to 18 months, as the related construction costs are incurred, and are expected to be financed through operating cash flow, new or existing construction loans, asset sales or revolving credit facilities.

The Company routinely enters into contracts for the maintenance of its properties. These contracts typically can be cancelled upon 30 to 60 days notice without penalty. At September 30, 2011, the Company had purchase order obligations, typically payable within one year, aggregating approximately $3.3 million related to the maintenance of its properties and general and administrative expenses.

Inflation

Most of the Company’s long-term leases contain provisions designed to mitigate the adverse impact of inflation. Such provisions include clauses enabling the Company to receive additional rental income from escalation clauses that generally increase rental rates during the terms of the leases and/or percentage rentals based on tenants’ gross sales. Such escalations are determined by negotiation, increases in the consumer price index or similar inflation indices. In addition, many of

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the Company’s leases are for terms of less than 10 years, permitting the Company to seek increased rents at market rates upon renewal. Most of the Company’s leases require the tenants to pay their share of operating expenses, including common area maintenance, real estate taxes, insurance and utilities, thereby reducing the Company’s exposure to increases in costs and operating expenses resulting from inflation.

Economic Conditions

The retail market in the United States significantly weakened in 2008 and continued to be challenged in 2009. Retail sales declined and tenants became more selective for new store openings. Some retailers closed existing locations and, as a result, the Company experienced a loss in occupancy compared to its historic levels. The reduction in occupancy in 2009 has continued to have a negative impact on the Company’s consolidated cash flows, results of operations and financial position in 2011. However, the Company believes there is an improvement in the level of optimism within its tenant base. Many retailers have executed contracts in 2010 and 2011 to open new stores and have strong store opening plans for 2012 and 2013. The lack of new supply is causing retailers to reconsider opportunities to open new stores in quality locations in well-positioned shopping centers. The Company continues to see strong demand from a broad range of retailers, particularly in the off-price sector, which is a reflection of the general outlook of consumers who are demanding more value for their dollars. Offsetting some of the impact resulting from the reduced historical occupancy is that the Company has a low occupancy cost relative to other retail formats and historic averages, as well as a diversified tenant base with only one tenant exceeding 2.5% of total 2011 consolidated revenues and joint venture revenues (Walmart at 3.2%). Other significant tenants include Target, Lowe’s, Home Depot, Kohl’s, T.J. Maxx/Marshalls, Publix Supermarkets, PetSmart and Bed Bath & Beyond, all of which have relatively strong credit ratings, remain well-capitalized and have outperformed other retail categories on a relative basis over time. The Company believes these tenants should continue providing it with a stable revenue base for the foreseeable future, given the long-term nature of these leases. Moreover, the majority of the tenants in the Company’s shopping centers provide day-to-day consumer necessities with a focus toward value and convenience versus high-priced discretionary luxury items, which the Company believes will enable many of the tenants to continue operating within this challenging economic environment.

The retail shopping sector has been affected by the competitive nature of the retail business and the competition for market share as well as general economic conditions where stronger retailers have out-positioned some of the weaker retailers. These shifts have forced some market share away from weaker retailers and required them, in some cases, to declare bankruptcy and/or close stores. Overall, the Company’s portfolio remains stable. However, there can be no assurance that these events will not adversely affect the Company (see Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010).

Historically, the Company’s portfolio has performed consistently throughout many economic cycles, including downward cycles. Broadly speaking, national retail sales have grown since World War II, including during several recessions and housing slowdowns. In the past, the Company has not experienced significant volatility in its long-term portfolio occupancy rate. The Company has experienced downward cycles before and has made the necessary adjustments to leasing and development strategies to accommodate the changes in the operating environment and mitigate risk.

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In many cases, the loss of a weaker tenant creates an opportunity to re-lease space at higher rents to a stronger retailer. More importantly, the quality of the property revenue stream is high and consistent, as it is generally derived from retailers with good credit profiles under long-term leases, with very little reliance on overage rents generated by tenant sales performance. The Company believes that the quality of its shopping center portfolio is strong, as evidenced by the high historical occupancy rates, which have generally ranged from 92% to 96% since the Company’s initial public offering in 1993. Although the Company experienced a significant decline in occupancy in 2009 due to several major tenant bankruptcies, the shopping center portfolio occupancy was at 86.3% at September 30, 2011. Notwithstanding the decline in occupancy compared to historic levels, the Company continues to sign new leases at rental rates that are returning to historic averages. The total portfolio average annualized base rent per occupied square foot including the results of Sonae Sierra Brasil was $13.76 at September 30, 2011 as compared to $13.03 at September 30, 2010. Moreover, the Company has been able to achieve these results without significant capital investment in tenant improvements or leasing commissions. The weighted average cost of tenant improvements and lease commissions estimated to be incurred for leases executed during the third quarter of 2011 for the U.S. portfolio was only $2.57 per rentable square foot. The Company is very conscious of, and sensitive to, the risks posed to the economy, but is currently comfortable that the position of its portfolio and the general diversity and credit quality of its tenant base should enable it to successfully navigate through these challenging economic times.

New Accounting Standards

Presentation of Other Comprehensive Income

Forward-Looking Statements

Management’s discussion and analysis should be read in conjunction with the condensed consolidated financial statements and the notes thereto appearing elsewhere in this report. Historical results and percentage relationships set forth in the condensed consolidated financial statements, including trends that might appear, should not be taken as indicative of future operations. The Company considers portions of this information to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, both as amended, with respect to the Company’s expectations for future periods. Forward-looking statements include, without limitation, statements related to acquisitions (including any related pro forma financial information) and other business development activities, future capital expenditures, financing sources and availability, and the effects of environmental and other regulations. Although the Company believes that the expectations reflected in these forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will

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be achieved. For this purpose, any statements contained herein that are not statements of historical fact should be deemed to be forward-looking statements. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects,” “seeks,” “estimates” and similar expressions are intended to identify forward-looking statements. Readers should exercise caution in interpreting and relying on forward-looking statements because such statements involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond the Company’s control and that could cause actual results to differ materially from those expressed or implied in the forward-looking statements and that could materially affect the Company’s actual results, performance or achievements.

Factors that could cause actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements include, but are not limited to, the following:

•

The Company is subject to general risks affecting the real estate industry, including the need to enter into new leases or renew leases on favorable terms to generate rental revenues, and the economic downturn may adversely affect the ability of the Company’s tenants, or new tenants, to enter into new leases or the ability of the Company’s existing tenants to renew their leases at rates at least as favorable as their current rates;

•

The Company could be adversely affected by changes in the local markets where its properties are located, as well as by adverse changes in national economic and market conditions;

•

The Company may fail to anticipate the effects on its properties of changes in consumer buying practices, including catalog sales and sales over the Internet and the resulting retailing practices and space needs of its tenants, or a general downturn in its tenants’ businesses, which may cause tenants to close stores or default in payment of rent;

•

The Company is subject to competition for tenants from other owners of retail properties and its tenants are subject to competition from other retailers and methods of distribution. The Company is dependent upon the successful operations and financial condition of its tenants, in particular its major tenants, and could be adversely affected by the bankruptcy of those tenants;

•

The Company relies on major tenants, which makes it vulnerable to changes in the business and financial condition of, or demand for its space by, such tenants;

•

The Company may not realize the intended benefits of acquisition or merger transactions. The acquired assets may not perform as well as the Company anticipated, or the Company may not successfully integrate the assets and realize improvements in occupancy and operating results. The acquisition of certain assets may subject the Company to liabilities, including environmental liabilities;

•

The Company may fail to identify, acquire, construct or develop additional properties that produce a desired yield on invested capital, or may fail to effectively integrate acquisitions of properties or portfolios of properties. In addition, the Company may be limited in its acquisition opportunities due to competition, the inability to obtain financing on reasonable terms or any financing at all, and other factors;

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•

The Company may fail to dispose of properties on favorable terms. In addition, real estate investments can be illiquid, particularly as prospective buyers may experience increased costs of financing or difficulties obtaining financing, and could limit the Company’s ability to promptly make changes to its portfolio to respond to economic and other conditions;

•

The Company may abandon a development opportunity after expending resources if it determines that the development opportunity is not feasible due to a variety of factors, including a lack of availability of construction financing on reasonable terms, the impact of the economic environment on prospective tenants’ ability to enter into new leases or pay contractual rent, or the inability of the Company to obtain all necessary zoning and other required governmental permits and authorizations;

•

The Company may not complete development projects on schedule as a result of various factors, many of which are beyond the Company’s control, such as weather, labor conditions, governmental approvals, material shortages or general economic downturn resulting in limited availability of capital, increased debt service expense and construction costs, and decreases in revenue;

•

The Company’s financial condition may be affected by required debt service payments, the risk of default, and restrictions on its ability to incur additional debt or to enter into certain transactions under its credit facilities and other documents governing its debt obligations. In addition, the Company may encounter difficulties in obtaining permanent financing or refinancing existing debt. Borrowings under the Company’s revolving credit facilities are subject to certain representations and warranties and customary events of default, including any event that has had or could reasonably be expected to have a material adverse effect on the Company’s business or financial condition;

•

Changes in interest rates could adversely affect the market price of the Company’s common shares, as well as its performance and cash flow;

•

Debt and/or equity financing necessary for the Company to continue to grow and operate its business may not be available or may not be available on favorable terms;

•

Disruptions in the financial markets could affect the Company’s ability to obtain financing on reasonable terms and have other adverse effects on the Company and the market price of the Company’s common shares;

•

The Company is subject to complex regulations related to its status as a REIT and would be adversely affected if it failed to qualify as a REIT;

•

The Company must make distributions to shareholders to continue to qualify as a REIT, and if the Company must borrow funds to make distributions, those borrowings may not be available on favorable terms or at all;

•

Joint venture investments may involve risks not otherwise present for investments made solely by the Company, including the possibility that a partner or co-venturer may become bankrupt, may at any time have interests or goals different from those of the Company and may take action contrary to the Company’s instructions, requests, policies or objectives,

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including the Company’s policy with respect to maintaining its qualification as a REIT. In addition, a partner or co-venturer may not have access to sufficient capital to satisfy its funding obligations to the joint venture. The partner could cause a default under the joint venture loan for reasons outside of the Company’s control. Furthermore, the Company could be required to reduce the carrying value of its equity method investments if a loss in the carrying value of the investment is other than temporary;

•

The outcome of pending or future litigation, including litigation with tenants or joint venture partners, may adversely affect the Company’s results of operations and financial condition;

•

The Company may not realize anticipated returns from its real estate assets outside the United States. The Company may continue to pursue international opportunities that may subject the Company to different or greater risks than those associated with its domestic operations. The Company owns assets in Puerto Rico, an interest in an unconsolidated joint venture that owns properties in Brazil and an interest in consolidated joint ventures that were formed to develop and own properties in Canada and Russia;

•

International development and ownership activities carry risks in addition to those the Company faces with the Company’s domestic properties and operations. These risks include the following:

•

Adverse effects of changes in exchange rates for foreign currencies;

•

Changes in foreign political or economic environments;

•

Challenges of complying with a wide variety of foreign laws, including tax laws, and addressing different practices and customs relating to corporate governance, operations and litigation;

•

Different lending practices;

•

Cultural and consumer differences;

•

Changes in applicable laws and regulations in the United States that affect foreign operations;

•

Difficulties in managing international operations; and

•

Obstacles to the repatriation of earnings and cash.

•

Although the Company’s international activities are currently a relatively small portion of its business, to the extent the Company expands its international activities, these risks could significantly increase and adversely affect its results of operations and financial condition;

•

The Company is subject to potential environmental liabilities;

•

The Company may incur losses that are uninsured or exceed policy coverage due to its liability for certain injuries to persons, property or the environment occurring on its properties;

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•

The Company could incur additional expenses to comply with or respond to claims under the Americans with Disabilities Act or otherwise be adversely affected by changes in government regulations, including changes in environmental, zoning, tax and other regulations and

•

The Company may have to restate certain financial statements as a result of changes in, or the adoption of, new accounting rules and regulations to which the Company is subject, including accounting rules and regulations affecting the Company’s accounting policies.

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ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company’s primary market risk exposure is interest rate risk. The Company’s debt, excluding unconsolidated joint venture debt, is summarized as follows:


	September 30, 2011										December 31, 2010
	Amount (Millions)		Weighted- Average Maturity (Years)		Weighted- Average Interest Rate			Percentage of Total			Amount (Millions)		Weighted- Average Maturity (Years)		Weighted- Average Interest Rate			Percentage of Total
Fixed-Rate Debt ^(A)	$	3,603.7		4.4		6.0	%		85.3	%	$	3,428.1		4.3		6.3	%		79.7	%
Variable-Rate Debt ^(A)	$	622.0		4.2		2.0	%		14.7	%	$	873.9		1.7		2.3	%		20.3	%

(A)	Adjusted to reflect the $284.4 million and $150 million of variable-rate debt that LIBOR was swapped to a fixed-rate of 2.9% and 3.4% at September 30, 2011 and December 31, 2010, respectively.

The Company’s unconsolidated joint ventures’ fixed-rate indebtedness is summarized as follows:


	September 30, 2011									December 31, 2010
	Joint Venture Debt (Millions)		Company’s Proportionate Share (Millions)		Weighted- Average Maturity (Years)		Weighted- Average Interest Rate			Joint Venture Debt (Millions)		Company’s Proportionate Share (Millions)		Weighted- Average Maturity (Years)		Weighted- Average Interest Rate
Fixed-Rate Debt	$	3,218.3	$	662.3		3.8		5.6	%	$	3,279.1	$	705.3		4.1		5.6	%
Variable-Rate Debt	$	672.7	$	126.8		3.4		5.4	%	$	661.5	$	128.5		1.8		4.0	%

The Company intends to use retained cash flow, proceeds from asset sales, financing and variable-rate indebtedness available under its Revolving Credit Facilities to repay indebtedness and fund capital expenditures of the Company’s shopping centers. Thus, to the extent the Company incurs additional variable-rate indebtedness, its exposure to increases in interest rates in an inflationary period would increase. The Company does not believe, however, that increases in interest expense as a result of inflation will significantly impact the Company’s distributable cash flow.

The interest rate risk on a portion of the Company’s variable-rate debt described above has been mitigated through the use of interest rate swap agreements (the “Swaps”) with major financial institutions. At September 30, 2011 and December 31, 2010, the interest rate on the Company’s $284.4 million and $150 million, respectively, consolidated floating rate debt was swapped to fixed rates. The Company is exposed to credit risk in the event of nonperformance by the counterparties to the Swaps. The Company believes it mitigates its credit risk by entering into Swaps with major financial institutions.

In February 2011, the Company entered into treasury locks with a notional amount of $200 million. The treasury locks were terminated in connection with the issuance of unsecured notes in March 2011. The treasury locks were executed to hedge the benchmark interest rate associated with forecasted interest payments associated with the anticipated issuance of fixed-rate borrowings. The effective portion of these hedging relationships has been deferred in accumulated other comprehensive income and will be reclassified into earnings over the term of the debt as an adjustment to earnings, based on the effective-yield method.

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The carrying value of the Company’s fixed-rate debt is adjusted to include the $284.4 million and $150 million that were swapped to a fixed rate at September 30, 2011 and December 31, 2010, respectively. The fair value of the Company’s fixed-rate debt is adjusted to (i) include the swaps reflected in the carrying value and (ii) include the Company’s proportionate share of the joint venture fixed-rate debt. An estimate of the effect of a 100 basis-point increase at September 30, 2011 and December 31, 2010, is summarized as follows (in millions):


	September 30, 2011								December 31, 2010
	Carrying Value		Fair Value			100 Basis Point Increase in Market Interest Rates			Carrying Value		Fair Value			100 Basis Point Increase in Market Interest Rates
Company’s fixed-rate debt	$	3,603.7	$	3,762.0	^(A)	$	3,688.0	^(B)	$	3,428.1	$	3,647.2	^(A)	$	3,527.0	^(B)
Company’s proportionate share of joint venture fixed-rate debt	$	662.3	$	634.7		$	617.7		$	705.3	$	689.3		$	670.3

(A)	Includes the fair value of interest rate swaps, which was a liability of $9.7 million and $5.2 million at September 30, 2011 and December 31, 2010, respectively.

(B)	Includes the fair value of interest rate swaps, which was a liability of $2.2 million and a liability of $3.1 million at September 30, 2011 and December 31, 2010, respectively.

The sensitivity to changes in interest rates of the Company’s fixed-rate debt was determined using a valuation model based upon factors that measure the net present value of such obligations that arise from the hypothetical estimate as discussed above.

Further, a 100 basis point increase in short-term market interest rates on variable-rate debt at September 30, 2011, would result in an increase in interest expense of approximately $4.7 million for the Company and $1.0 million representing the Company’s proportionate share of the joint ventures’ interest expense relating to variable-rate debt outstanding for the nine-month period. The estimated increase in interest expense for the year does not give effect to possible changes in the daily balance for the Company’s or joint ventures’ outstanding variable-rate debt.

The Company and its joint ventures intend to continually monitor and actively manage interest costs on their variable-rate debt portfolio and may enter into swap positions based on market fluctuations. In addition, the Company believes that it has the ability to obtain funds through additional equity and/or debt offerings and joint venture capital. Accordingly, the cost of obtaining such protection agreements in relation to the Company’s access to capital markets will continue to be evaluated. The Company has not entered, and does not plan to enter, into any derivative financial instruments for trading or speculative purposes. As of September 30, 2011, the Company had no other material exposure to market risk.

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ITEM 4.

CONTROLS AND PROCEDURES

Based on their evaluation as required by Securities Exchange Act Rules 13a-15(b) and 15d-15(b), the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) have concluded that the Company’s disclosure controls and procedures (as defined in Securities Exchange Act Rule 13a-15(e)) are effective as of the end of the period covered by this quarterly report on Form 10-Q to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and were effective as of the end of such period to ensure that information required to be disclosed by the Company issuer in reports that it files or submits under the Securities Exchange Act is accumulated and communicated to the Company’s management, including its CEO and CFO, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

During the three-month period ended September 30, 2011, there were no changes in the Company’s internal control over financial reporting that materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

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PART II

OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

Other than routine litigation and administrative proceedings arising in the ordinary course of business, the Company is not presently involved in any litigation nor, to its knowledge, is any litigation threatened against the Company or its properties that is reasonably likely to have a material adverse effect on the liquidity or results of operations of the Company.

The Company is a party to various joint ventures with the Coventry II Fund, through which 11 existing or proposed retail properties, along with a portfolio of former Service Merchandise locations, were acquired at various times from 2003 through 2006. The properties were acquired by the joint ventures as value-add investments, with major renovation and/or ground-up development contemplated for many of the properties. The Company is generally responsible for day-to-day management of the properties through December 2011. On November 4, 2009, Coventry Real Estate Advisors L.L.C., Coventry Real Estate Fund II, L.L.C. and Coventry Fund II Parallel Fund, L.L.C. (collectively, “Coventry”) filed suit against the Company and certain of its affiliates and officers in the Supreme Court of the State of New York, County of New York. The complaint alleges that the Company: (i) breached contractual obligations under a co-investment agreement and various joint venture limited liability company agreements, project development agreements and management and leasing agreements; (ii) breached its fiduciary duties as a member of various limited liability companies; (iii) fraudulently induced the plaintiffs to enter into certain agreements; and (iv) made certain material misrepresentations. The complaint also requests that a general release made by Coventry in favor of the Company in connection with one of the joint venture properties be voided on the grounds of economic duress. The complaint seeks compensatory and consequential damages in an amount not less than $500 million, as well as punitive damages. In response, the Company filed a motion to dismiss the complaint or, in the alternative, to sever the plaintiffs’ claims. In June 2010, the court granted in part (regarding Coventry’s claim that the Company breached a fiduciary duty owed to Coventry) and denied in part (all other claims) the Company’s motion. Coventry filed a notice of appeal regarding that portion of the motion granted by the court. In May 2011, the appeals court affirmed the trial court’s ruling regarding the dismissal of Coventry’s claim for breach of fiduciary duty. The Company filed an answer to the complaint, and has asserted various counterclaims against Coventry. On October 10, 2011, the Company filed a motion for summary judgment, seeking dismissal of all of Coventry’s remaining claims.

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ITEM 1A.

RISK FACTORS

None.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

ISSUER PURCHASES OF EQUITY SECURITIES


	(a) Total Number of Shares Purchased ⁽¹⁾		(b) Average Price Paid per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		(d) Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
July 1—31, 2011		369,764	$	14.49		—		—
August 1—31, 2011		—		—		—		—
September 1—30, 2011		—		—		—		—

Total		369,764	$	14.49		—		—

(1)	Consists of common shares surrendered or deemed surrendered to the Company to satisfy statutory minimum tax withholding obligations in connection with the vesting and/or exercise of awards under the Company’s equity-based compensation plans.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.

[REMOVED AND RESERVED]

ITEM 5.

OTHER INFORMATION

None

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ITEM 6.

EXHIBITS


3.1		Amendment to Second Amended and Restated Articles of Incorporation of the Company

10.1		Employment Agreement, dated April 12, 2011, by and between the Company and David J. Oakes

10.2		Employment Agreement, dated April 12, 2011, by and between the Company and Paul W. Freddo

10.3		Employment Agreement, dated April 12, 2011, by and between the Company and John S. Kokinchak

10.4		Employment Agreement, dated April 12, 2011, by and between the Company and Christa A. Vesy

10.5		Form of Director and Officer Indemnification Agreement

10.6		Release Agreement, dated as of April 11, 2011, by and between the Company and Scott A. Wolstein

31.1		Certification of principal financial officer pursuant to Rule 13a-14(a) of the Exchange Act of 1934

31.2		Certification of principal financial officer pursuant to Rule 13a-14(a) of the Exchange Act of 1934

32.1		Certification of CEO pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of this report pursuant to the Sarbanes-Oxley Act of 2002 ¹

32.2		Certification of CFO pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of this report pursuant to the Sarbanes-Oxley Act of 2002 ¹

101.INS		XBRL Instance Document. ²

101.SCH		XBRL Taxonomy Extension Schema Document. ²

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document. ²

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document. ²

101.LAB		XBRL Taxonomy Extension Label Linkbase Document. ²

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document. ²

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1	Pursuant to SEC Release No. 34-4751, these exhibits are deemed to accompany this report and are not “filed” as part of this report.

2	Submitted electronically herewith.

Attached as Exhibit 101 to this report are the following formatted in XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of September 30, 2011 and December 31, 2010, (ii) Condensed Consolidated Statements of Operations for the Three- and Nine-Month Periods Ended September 30, 2011 and 2010, (iii) Consolidated Statement of Equity for the Nine-Month Period Ended September 30, 2011, (iv) Condensed Consolidated Statements of Cash Flows for the Nine-Month Periods Ended September 30, 2011 and 2010, and (v) Notes to Condensed Consolidated Financial Statements.

In accordance with Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be part of any registration or other document filed under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


				DDR CORP.

November 8, 2011				/s/ Christa A. Vesy
(Date)				Christa A. Vesy
				Senior Vice President and Chief Accounting Officer (Authorized Officer)

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EXHIBIT INDEX


Exhibit No. Under Reg. S-K Item 601	Form 10-Q Exhibit No.	Description	Filed Herewith or Incorporated Herein by Reference

3.1	3.1	Amendment to Second Amended and Restated Articles of Incorporation of the Company	Current Report on Form 8-K (Filed with the SEC on September 14, 2011; File No. 001-11690)

10.1	10.1	Employment Agreement, dated April 12, 2011, by and between the Company and David J. Oakes	Filed herewith

10.2	10.2	Employment Agreement, dated April 12, 2011, by and between the Company and Paul W. Freddo	Filed herewith

10.3	10.3	Employment Agreement, dated April 12, 2011, by and between the Company and John S. Kokinchak	Filed herewith

10.4	10.4	Employment Agreement, dated April 12, 2011, by and between the Company and Christa A. Vesy	Filed herewith

10.5	10.5	Form of Director and Officer Indemnification Agreement	Filed herewith

10.6	10.6	Release Agreement, dated as of April 11, 2011, by and between the Company and Scott A. Wolstein	Filed herewith

31	31.1	Certification of principal executive officer pursuant to Rule 13a-14(a) of the Exchange Act of 1934	Filed herewith

31	31.2	Certification of principal financial officer pursuant to Rule 13a-14(a) of the Exchange Act of 1934	Filed herewith

32	32.1	Certification of CEO pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of this report pursuant to the Sarbanes-Oxley Act of 2002 1	Filed herewith

32	32.2	Certification of CFO pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of this report pursuant to the Sarbanes-Oxley Act of 2002 1	Filed herewith

101	101.INS	XBRL Instance Document	Submitted electronically herewith

101	101.SCH	XBRL Taxonomy Extension Schema Document	Submitted electronically herewith

101	101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document	Submitted electronically herewith

101	101.DEF	XBRL Taxonomy Extension Definition Linkbase Document	Submitted electronically herewith

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Exhibit 10.1

EMPLOYMENT AGREEMENT

This Employment Agreement (this “Agreement”) is entered into on April 12, 2011, between Developers Diversified Realty Corporation, an Ohio corporation (“DDR”), and David J. Oakes (“Executive”).

Executive is now serving DDR as its Senior Executive Vice President & Chief Financial Officer. Executive and DDR are currently party to an Amended and Restated Employment Agreement, dated as of December 29, 2008, and an Amended and Restated Change in Control Agreement, dated as of December 29, 2008. DDR and Executive desire to enter into this Agreement to supersede in its entirety the existing employment agreement, to supersede and terminate in its entirety the existing change in control agreement, and to reflect the terms pursuant to which Executive will continue to serve DDR. Certain capitalized terms used in this Agreement have the meanings ascribed to them in Section 21 of this Agreement.

DDR and Executive agree, effective as of the date first set forth above (the “Effective Date”), as follows:

1. Employment, Term . DDR engages and employs Executive to render services in the administration and operation of its affairs as its Senior Executive Vice President & Chief Financial Officer, reporting directly to DDR’s Chief Executive Officer (the “CEO”), all in accordance with the terms and conditions of this Agreement, for a term beginning on the Effective Date and expiring on December 31, 2012. The period of time from the Effective Date until December 31, 2012 is sometimes referred to herein as the “Contract Period.”

2. Full-Time Services . Throughout the Contract Period while Executive is employed by DDR, Executive will devote all of Executive’s business time and efforts to the service of DDR, except for (a) usual vacation periods and reasonable periods of illness, (b) reasonable periods of time devoted to Executive’s personal financial affairs, and (c) services as a director or trustee of other corporations or organizations, either for profit or not for profit, that are not in competition with DDR; provided , that in no event shall Executive devote less than 90% of Executive’s business time and efforts to the service of DDR.

3. Compensation . For all services to be rendered by Executive to DDR under this Agreement during the Contract Period while Executive is employed by DDR, including services as Senior Executive Vice President & Chief Financial Officer, and any other services specified by the CEO, DDR will pay and provide to Executive the compensation and benefits specified in this Section 3 .

3.1 Base Salary . From and after the Effective Date and through the Contract Period while Executive is employed by DDR, DDR will pay Executive base salary (the “Base Salary”), in equal monthly or more frequent installments, at the rate of not less than Four Hundred and Seventy Five Thousand Dollars ($475,000) per year, subject to such increases as approved by DDR.

Bonus to Executive shall be determined based on the factors and criteria that may be established from time to time for the calculation of the Annual Cash Bonus by DDR; provided , that for 2011, the Annual Cash Bonus for Executive will be determined in accordance with the performance metrics and their relative weighting set forth on Exhibit A attached hereto. For 2012, if Executive is then employed by DDR, DDR will provide Executive with written notice of the performance metrics and their relative weighting to be used in, and any specific threshold, target and maximum performance targets applicable to, the determination of the Annual Cash Bonus for Executive for such calendar year not later than March 15th of such year. There is no guaranteed Annual Cash Bonus under this Agreement, and for each applicable year, Executive’s Annual Cash Bonus could be as low as zero or as high as the maximum percentage set forth on Exhibit A attached hereto.

3.3 Annual Equity Bonus. If Executive achieves the factors and criteria for an Annual Cash Bonus , as described in Section 3.2, for any calendar year (beginning with 2011) during the Contract Period while Executive is employed by DDR, then DDR shall pay an annual bonus to Executive, in the form of a time-based vesting equity award (an “Annual Equity Bonus”), for such calendar year not later than March 15 of the immediately subsequent calendar year, determined and calculated in accordance with the percentages set forth on Exhibit A attached hereto. DDR’s award of an Annual Equity Bonus to Executive shall be determined based on the factors and criteria that may be established from time to time for the calculation of the Annual Equity Bonus by DDR; provided , that for 2011, the Annual Equity Bonus for Executive will be determined in accordance with the performance metrics and their relative weighting set forth on Exhibit A attached hereto. For 2012, if Executive is then employed by DDR, DDR will provide Executive with written notice of the performance metrics and their relative weighting to be used in, and any specific threshold, target and maximum performance targets applicable to, the determination of the Annual Equity Bonus for Executive for such calendar year not later than March 15th of such year. There is no guaranteed Annual Equity Bonus under this Agreement, and for each applicable year, Executive’s Annual Equity Bonus could be as low as zero or as high as the maximum percentage set forth on Exhibit A attached hereto. The Annual Equity Bonus shall be on the terms and subject to such conditions as are specified for the particular Company plans or programs pursuant to which the Annual Equity Bonus is granted.

3.4 Equity Awards . During the Contract Period while Executive is employed by DDR, Executive shall be entitled to participate in any equity or other employee benefit plan that is generally available to senior executive officers, as distinguished from general management, of DDR, including, without limitation, any long-term incentive compensation plans or similar programs. Executive’s participation in and benefits under any such plans or programs shall be on the terms and subject to such conditions as are specified for the particular Company plans or programs.

3.5 Taxes . Executive shall be solely responsible for taxes imposed on Executive by reason of any compensation and benefits provided under this Agreement, and all such compensation and benefits shall be subject to applicable withholding taxes.

4. Benefits .

4.1 Retirement and Other Benefit Plans Generally . Throughout the Contract Period while Executive is employed by DDR, Executive will be entitled to participate in all retirement and other benefit plans maintained by DDR that are generally available to its employees and with respect to which Executive is eligible pursuant to the terms of the underlying plan or plans, including, without limitation, the DDR 401(k) plan for its employees and any DDR deferred compensation program.

4.2 Insurance, Generally . Throughout the Contract Period while Executive is employed by DDR, DDR will provide an enrollment opportunity to Executive and Executive’s eligible dependents for health, dental and vision insurance coverage and any other benefits maintained by DDR from time to time, if any, during the Contract Period that are generally available to its employees and with respect to which Executive is eligible pursuant to the terms of the underlying plan or plans.

4.3 Paid Time Off . Executive will be entitled to such periods of paid time off during the Contract Period while Executive is employed by DDR as may be determined by the CEO in his or her reasonable and good faith discretion (but in any event not less than 20 days per year or such longer period as may be provided from time to time under any DDR paid time off policy for executive officers).

4.4 Club Membership . Throughout the Contract Period while Executive is employed by DDR, DDR will name Executive as a corporate designee under DDR’s membership at Barrington Country Club, will bear the cost of regular membership fees, assessments, and dues incurred at that club by Executive, and will reimburse Executive for the amount of any charges actually and reasonably incurred at that club in the conduct of DDR’s business.

5. Expense Reimbursement . DDR will reimburse Executive during the Contract Period while Executive is employed by DDR for travel, entertainment, and other expenses reasonably and necessarily incurred by Executive in connection with DDR’s business. Executive will provide such documentation with respect to expenses to be reimbursed as DDR may reasonably request.

6. Termination .

6.1 Death or Disability . Executive’s employment under this Agreement will terminate immediately upon Executive’s death. DDR may terminate Executive’s employment under this Agreement immediately upon giving notice of termination if Executive is Totally Disabled (as that term is defined in Section 9.1 below) for an aggregate of 120 days in any consecutive 12 calendar months or for 90 consecutive days.

6.2 For Cause by DDR.

(a) During the Contract Period while Executive is employed by DDR, DDR may terminate Executive’s employment under this Agreement for “Cause” at any time upon the occurrence of any of the following circumstances:

(i) (A) Executive commits a fraud or a felony or an act that is not or a series of acts that are not taken in good faith and (B) the commission of such fraud, felony or act or series of acts results in material injury to the business reputation of DDR.

(ii) Executive commits an act or series of repeated acts of dishonesty that are materially inimical to the best interests of DDR.

(iii) Other than as a result of disability, Executive consistently fails to perform Executive’s duties and responsibilities as specified in Sections 1 and 2 above and the failure continues for 15 days after DDR has advised Executive in writing of that failure.

(iv) Executive has materially breached any provision of this Agreement (other than Section 1 or 2 above, as to any breach of which Section 6.2(a)(iii) would apply) and the breach has not been cured in all substantial respects within 30 days after DDR has advised Executive in writing of the nature of the breach.

(b) The termination of Executive’s employment under this Agreement shall not be deemed to be for Cause pursuant to this Section 6.2 unless and until there shall have been delivered to Executive reasonable notice that Executive is guilty of the conduct described in Sections 6.2(a)(i) , (ii) , (iii) or (iv) above, and specifying the particulars thereof in detail.

6.3 For Good Reason by Executive . During the Contract Period while Executive is employed by DDR, Executive may terminate Executive’s employment under this Agreement for “Good Reason” if any of the following circumstances occur:

(a) DDR materially changes Executive’s duties and responsibilities from those set forth in Section 1 above and the change has not been rescinded to Executive’s satisfaction within 15 days after Executive has advised DDR in writing of dissatisfaction with the change.

(b) DDR changes Executive’s place of employment or its principal executive offices to a location that is more than 50 miles from the geographical center of Cleveland, Ohio.

(c) DDR materially breaches any of its obligations under this Agreement (other than its obligations under Section 1 above, as to any breach of which Section 6.3(a) would apply) and the breach is not cured in all material respects within 30 days after Executive has advised DDR in writing of the breach.

6.4 Without Cause by DDR . During the Contract Period while Executive is employed by DDR, DDR may terminate Executive’s employment under this Agreement at any time without Cause pursuant to written notice provided to Executive not less than 90 days in advance of such termination. Any termination under this Section 6.4 will be effective at such time during the Contract Period while Executive is employed by DDR as may be specified in that written notice.

6.5 Without Good Reason by Executive . During the Contract Period while Executive is employed by DDR, Executive may terminate Executive’s employment under this Agreement at any time without Good Reason pursuant to written notice provided to DDR not less than 90 days in advance of such termination. Any termination under this Section 6.5 will be effective at such time during the Contract Period while Executive is employed by DDR as Executive may specify in that written notice.

7. Payments upon Termination .

insurance at the levels specified in Section 4.2 through the Termination Date, and, except as may otherwise be required by law, DDR will not pay or provide to Executive any further compensation or other benefits under this Agreement. DDR will pay any Base Salary referred to in this Section 7.1 to Executive within 30 days of the Termination Date.

7.2 Upon Termination Without Cause or For Good Reason . If Executive’s employment under this Agreement is terminated by DDR without Cause or by Executive for Good Reason during the Contract Period and Section 7.5 does not apply, DDR will pay and provide to Executive the amounts and benefits specified in this Section 7.2 , except that DDR will not be obligated to pay the lump sum amounts specified in Section 7.2(c) unless either (x) DDR is deemed to have waived the obligation to provide a Release as provided in Section 8.2 or (y) Executive has timely executed a Release as contemplated by Section 8.3 . The amounts and benefits specified in this Section 7.2 are as follows:

(a) A lump sum amount equal to Executive’s Base Salary for the year through the Termination Date, to the extent not already paid. DDR will pay this amount to Executive within 30 days of the Termination Date.

(b) A lump sum amount equal to Executive’s Annual Cash Bonus earned for the calendar year immediately preceding the calendar year in which the Termination Date occurs, to the extent not already paid. DDR will pay this amount to Executive on the same date and in the same amount that the Annual Cash Bonus for such year would have been paid if Executive’s employment had not been terminated, but in any event not later than March 15 of the calendar year in which the Termination Date occurs.

(c) A lump sum amount equal to (i) one year of Executive’s Base Salary as of the Termination Date, plus (ii) the Annual Cash Bonus at the target level for Executive for the year in which the Termination Date occurs. Except as otherwise provided in Section 13.2 , DDR will pay the amount referred to in this Section 7.2(c)(i) to Executive during the Seventh Month after the Termination Date (as defined in Section 13.1 below) and will pay the amount referred to in this Section 7.2(c)(ii) to Executive on the same date that the Annual Cash Bonus for that year would have been paid if Executive’s employment had not been terminated, but in any event not later than March 15 of the calendar year following the calendar year in which Executive’s employment is terminated pursuant to this Section 7.2 .

(d) Provided that Executive timely elects continuation coverage under DDR’s health and dental plan pursuant to COBRA, DDR shall pay the COBRA premiums for Executive until the first anniversary of the Termination Date. Such payments shall be taxable to the Executive. To assure compliance with Section 409A, the timing of the provision of these benefits will be subject to Sections 13.1 and 13.3 if and to the extent either of those sections is applicable according to its terms.

(e) Outplacement services and support, the reasonable scope and provider of which will be selected by DDR, for a period of one year following the Termination Date; provided , that Executive must first utilize such outplacement services and support within 90 days following the Termination Date. To assure compliance with Section 409A, the timing of the provision of these benefits will be subject to Sections 13.1 and 13.3 if and to the extent either of those sections is applicable according to its terms.

7.3 Upon Termination by Reason of Death . If Executive’s employment under this Agreement is terminated by reason of Executive’s death during the Contract Period, DDR will pay, or cause to be paid, and provide, or cause to be provided, to Executive’s personal representative and Executive’s eligible dependents, as appropriate, the amounts and benefits specified in this Section 7.3 , except that DDR will not be obligated to pay the lump sum amount specified in Section 7.3(c) unless either (x) DDR is deemed to have waived the obligation to provide a Release as provided in Section 8.2 or (y) Executive’s personal representative has timely executed a Release as contemplated by Section 8.3 . The amounts and benefits specified in this Section 7.3 are as follows:

(a) A lump sum amount equal to Executive’s Base Salary for the year through the Termination Date, to the extent not already paid. DDR will pay this amount to Executive’s personal representative within 30 days of the Termination Date.

(b) A lump sum amount equal to Executive’s Annual Cash Bonus earned for the calendar year immediately preceding the calendar year in which the Termination Date occurs, to the extent not already paid. DDR will pay this amount to Executive’s personal representative on the same date and in the same amount that the Annual Cash Bonus for such year would have been paid if Executive’s employment had not been terminated, but in any event not later than March 15 of the calendar year in which the Termination Date occurs.

(c) A lump sum amount equal to (i) one year of Executive’s Base Salary as of the Termination Date, plus (ii) the Annual Cash Bonus at the target level for Executive for the year in which the Termination Date occurs. Except as otherwise provided in Section 13.2 , DDR will pay the amount referred to in this Section 7.3(c)(i) to Executive’s personal representative as soon as practicable following Executive’s death, but in no event later than March 15 of the year after the year in which Executive’s death occurs (provided that neither Executive nor Executive’s estate may designate the taxable year of payment) and will pay the amount referred to in this Section 7.3(c)(ii) to Executive on the same date that the Annual Cash Bonus for that year would have been paid if Executive’s employment had not been terminated, but in any event not later than March 15 of the calendar year following the calendar year in which Executive’s employment is terminated.

(d) Continuing health, dental and vision insurance coverage and benefits to Executive’s eligible dependents at the levels specified in Section 4.2 until the first anniversary of the Termination Date. To assure compliance with Section 409A, the timing of the provision of these benefits will be subject to Sections 13.1 and 13.3 if and to the extent either of those sections is applicable according to its terms.

7.4 Upon Termination by Reason of Disability . If Executive’s employment under this Agreement is terminated by DDR pursuant to Section 6.1 during the Contract Period following Executive’s disability, DDR will pay and provide to Executive and Executive’s eligible dependents, as appropriate, the amounts and benefits specified in this Section 7.4 . The amounts and benefits specified in this Section 7.4 are as follows:

(c) A lump sum amount equal to (i) Executive’s Base Salary for one year as of the Termination Date, plus (ii) the Annual Cash Bonus for Executive at the target level for the year in which the Termination Date occurs. Except as otherwise provided in Section 13.2 , DDR will pay the amount referred to in this Section 7.4(c)(i) to Executive during the Seventh Month after the Termination Date (as defined in Section 13.1 below) and will pay the amount referred to in this Section 7.4(c)(ii) to Executive on the same date that the Annual Cash Bonus for that year would have been paid if Executive’s employment had not been terminated, but in any event not later than March 15 of the calendar year following the calendar year in which Executive’s employment is terminated by DDR.

(d) Continuing health, dental and vision insurance coverage and benefits to Executive and Executive’s eligible dependents at the levels specified in Section 4.2 until the first anniversary of the Termination Date. To assure compliance with Section 409A, the timing of the provision of these benefits will be subject to Sections 13.1 and 13.3 if and to the extent either of those sections is applicable according to its terms.

7.5 Upon Termination In Connection With a Change in Control . Upon the occurrence of a Triggering Event during the Contract Period while Executive is employed by DDR, DDR will pay and provide to Executive the amounts and benefits specified in this Section 7.5 , and DDR will be deemed to have waived its right to provide a Release as provided in Section 8.2 , and the provision of a Release will not be a condition to Executive receiving any payment or benefit from DDR under this Section 7.5 . The amounts and benefits specified in this Section 7.5 are as follows:

(a) A lump sum amount equal to Executive’s Base Salary through the Termination Date, to the extent not already paid. DDR will pay this amount to Executive within 30 days of the Termination Date.

(c) A lump sum amount equal to (i) two times Executive’s target Annual Cash Bonus for the year in which the Termination Date occurs plus (ii) two times Executive’s annual Base Salary as of the Termination Date. Except as otherwise provided in Section 13.2 , DDR will pay this amount to Executive during the Seventh Month after the Termination Date (as defined in Section 13.1 below).

(d) Provided that Executive timely elects continuation coverage under DDR’s health and dental plan pursuant to COBRA, DDR shall pay the COBRA premiums for the Executive until the 18-month anniversary of the Termination Date. Such payments shall be taxable to Executive. To assure compliance with Section 409A, the timing of the provision of these benefits will be subject to Sections 13.1 and 13.3 if and to the extent either of those sections is applicable according to its terms.

8. Release . This Section 8 will apply only upon termination of Executive’s employment during the Contract Period (a) by reason of Executive’s death, (b) by DDR without Cause or (c) by Executive for Good Reason.

8.1 Presentation of Release by DDR . If this Section 8 applies, DDR may present to Executive (or in the case of Executive’s death or legal incapacity, to Executive’s personal representative), not later than 21 days after the Termination Date, a form of release (a “Release”) of all current and future claims, known or unknown, arising on or before the date on which the Release is to be executed, that Executive or Executive’s assigns have or may have against DDR or any Subsidiary, and the directors, officers, and affiliates of any of them, in such form as may reasonably be presented by DDR together with a covering message in which DDR advises Executive (or Executive’s personal representative) that the Release is being presented in accordance with this Section 8.1 and that a failure by Executive (or Executive’s personal representative) to execute and return the Release as contemplated by Section 8.3 would relieve DDR of the obligation to make payments otherwise due to Executive (or to Executive’s personal representative) under one or more portions of either of Sections 7.2 or 7.3 , as the case may be.

8.2 Effect of Failure by DDR to Present Release . If DDR fails to present a Release and covering message to Executive (or Executive’s personal representative) as contemplated by Section 8.1 , DDR will be deemed to have waived the requirement that Executive (or Executive’s personal representative) execute a Release as a condition to receiving payments under any portion of either of Sections 7.2 or 7.3 , as the case may be.

8.3 Execution of Release by Executive or Executive’s Personal Representative . If DDR does present a Release and covering message to Executive (or Executive’s personal representative) as contemplated by Section 8.1 , Executive (or Executive’s personal representative) will have until 50 days after the Termination Date ( i.e. , at least 29 days after presentation of the Release to Executive (or Executive’s personal representative) within which to deliver an executed copy of the Release to DDR and thereby satisfy the condition to receiving payments under any portion of either of Sections 7.2 or 7.3 , as the case may be, provided that Executive (or Executive’s personal representative) does not revoke the execution of the Release during any applicable revocation period.

applicable revocation period, Executive (or Executive’s personal representative) will be deemed to have waived the right to receive all payments under Sections 7.2 or 7.3 , as the case may be, that were conditioned on the Release.

9. Disability Definitions; Physical Examination .

9.1 Definitions . For all purposes of this Agreement:

(a) Executive’s “Own Occupation” means the regular occupation in which Executive is engaged under this Agreement at the time Executive becomes disabled.

(b) “Total Disability” means that, because of sickness or injury, Executive is not able to perform the material and substantial duties of Executive’s Own Occupation.

(c) “Totally Disabled” means that Executive suffers from Total Disability (and Executive will be deemed to continue to be Totally Disabled so long as Executive is not able to work in Executive’s Own Occupation even if Executive works in some other capacity).

9.2 Physical Examination . If either DDR or Executive, at any time or from time to time after receipt of notice of Executive’s Total Disability from the other, desires to contend that Executive is not Totally Disabled, Executive will promptly submit to a physical examination by the chief of medicine of any major accredited hospital in the Cleveland, Ohio area and, unless that physician issues his or her written statement to the effect that, in his or her opinion, based on his or her diagnosis, Executive is capable of resuming Executive’s Own Occupation and devoting Executive’s full time and energy to discharging the duties of Executive’s Own Occupation, Executive will be deemed to be and to continue to be Totally Disabled for all purposes of this Agreement.

10. No Set-Off; No Obligation to Seek Other Employment or to Otherwise Mitigate Damages; No Effect Upon Other Plans . DDR’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations under this Agreement will not be affected by any set-off, counterclaim, recoupment, defense, or other claim whatsoever that DDR or any Subsidiary may have against Executive, except that the prohibition on set-off, counterclaim, recoupment, defense, or other claim contained in this sentence will not apply if Executive’s employment is terminated by DDR for Cause. Executive will not be required to mitigate damages or the amount of any payment provided for under this Agreement by seeking other employment or otherwise. The amount of any payment provided for under this Agreement will not be reduced by any compensation or benefits earned by Executive as the result of employment by another employer or otherwise after the Termination Date. Neither the provisions of this Agreement nor the making of any payment provided for under this Agreement, nor the termination of DDR’s obligations under this Agreement, will reduce any amounts otherwise payable, or in any way diminish Executive’s rights, under any incentive compensation plan, stock option or stock appreciation rights plan, restricted stock plan or agreement, deferred compensation, retirement, or supplemental retirement plan, stock purchase and savings plan, disability or insurance plan, or other similar contract, plan, or arrangement of DDR or any Subsidiary, all of which will be governed by their respective terms.

11. Payments Are in Lieu of Severance Payments . If Executive becomes entitled to receive payments under this Agreement as a result of termination of Executive’s employment, those payments will be in lieu of any and all other claims or rights that Executive may have against DDR for severance, separation, and/or salary continuation pay upon that termination of Executive’s employment.

12. Covenants and Confidential Information . Executive acknowledges DDR’s reliance on and expectation of Executive’s continued commitment to performance of Executive’s duties and responsibilities during the Contract Period while Executive is employed by DDR and Executive assumes the obligations set out in this Section 12 in light of that reliance and expectation on the part of DDR.

12.1 Noncompetition . During the Contract Period while Executive is employed by DDR, and for one year after the Termination Date, Executive will not, directly or indirectly, own, manage, control, or participate in the ownership, management, or control of, or be employed or engaged by or otherwise affiliated or associated as a consultant, independent contractor, or otherwise with, any of the four largest real estate investment trusts (excluding DDR) that focus primarily on neighborhood and community shopping centers, based on market capitalization as of the Termination Date; provided , however , that the ownership by Executive of not more than one percent of any class of publicly traded securities of any entity will not be deemed a violation of this Section 12.1 .

12.2 Confidentiality . Throughout the Contract Period and for a period of two years thereafter, Executive will not disclose, divulge, discuss, copy, or otherwise use or suffer to be used in any manner, in competition with, or contrary to the interests of, DDR, any confidential information relating to DDR’s operations, properties, or otherwise to its particular business or other trade secrets of DDR, it being acknowledged by Executive that all such information regarding the business of DDR compiled or obtained by, or furnished to, Executive during Executive’s employment by or association with DDR is confidential information and DDR’s exclusive property. The restrictions in this Section 12.2 will not apply to any information to the extent that it (a) is clearly obtainable in the public domain, (b) becomes obtainable in the public domain, except by reason of the breach by Executive of Executive’s obligations under this Section 12.2 , (c) was not acquired by Executive in connection with Executive’s employment or affiliation with DDR, (d) was not acquired by Executive from DDR or its representatives, or (e) is required to be disclosed by rule of law or by order of a court or governmental body or agency.

12.3 Nonsolicitation . During the Contract Period while Executive is employed by DDR, and for one year after the Termination Date, Executive will not directly or indirectly solicit or induce or attempt to solicit or induce any employee of DDR and/or of any Subsidiary or affiliate to terminate his or her employment with DDR and/or any Subsidiary.

12.4 Remedies . Executive acknowledges that the remedy at law for any breach by Executive of this Section 12 may be inadequate and that the damages following from any such breach may not be readily susceptible to being measured in monetary terms. Accordingly, Executive agrees that, upon adequate proof of Executive’s violation of any legally enforceable provision of this Section 12 , DDR will be entitled to immediate injunctive relief and may obtain a temporary order restraining any threatened or further breach. Nothing in this Section 12 will be deemed to limit DDR’s remedies at law or in equity for any breach by Executive of any of the provisions of this Section 12 that may be pursued or availed of by DDR.

12.5 Acknowledgement . Executive has carefully considered the nature and extent of the restrictions upon Executive and the rights and remedies conferred upon DDR under this Section 12 , and hereby acknowledges and agrees that the same are reasonable in time and territory, are designed to eliminate competition that otherwise would be unfair to DDR, do not stifle the inherent skill and experience of Executive, would not operate as a bar to Executive’s sole means of support, are fully required to protect the legitimate interests of DDR and do not confer a benefit upon DDR disproportionate to the detriment to Executive.

13. Compliance with Section 409A .

13.1 Six Month Delay on Certain Payments, Benefits, and Reimbursements . If Executive is a “specified employee” for purposes of Section 409A, as determined under DDR’s policy for determining specified employees on the Termination Date, each payment, benefit, or reimbursement paid or provided under this Agreement that constitutes a “deferral of compensation” within the meaning of Section 409A, that is to be paid or provided as a result of a “separation from service” within the meaning of Section 409A, and that would otherwise be paid or provided at any time (a “Scheduled Time”) that is on or before the date (the “Six Month Date”) that is exactly six months after the Termination Date (other than payments, benefits, or reimbursements that are treated as separation pay under Section 1.409A-1(b)(9)(v) of the Treasury Regulations) will not be paid or provided at the Scheduled Time but will be accumulated (together with interest at the applicable federal rate under Section 7872(f)(2)(A) of the Code in effect on the Termination Date) through the Six Month Date and paid or provided during the period of 30 consecutive days beginning on the first business day after the Six Month Date (that period of 30 consecutive days, the “Seventh Month after the Termination Date”), except that if Executive dies before the Six Month Date, the payments, benefits, or reimbursements will be accumulated only through the date of Executive’s death and thereafter paid or provided not later than 30 days after the date of death.

13.2 Earlier Payment if Not a Specified Employee . If Executive is not a “specified employee” for purposes of Section 409A, as determined under DDR’s policy for determining specified employees on the Termination Date, any lump sum payment to be made by DDR to Executive pursuant to any one or more of Sections 7.2(c) , 7.4(c) and 7.5(c) will be made by DDR to Executive during the 30-day period that begins exactly 60 days after the Termination Date rather than during the Seventh Month after the Termination Date.

13.3 Additional Limitations on Reimbursements and In-Kind Benefits . The reimbursement of expenses or in-kind benefits provided under Section 7 or under any other section of this Agreement that are taxable benefits (and that are not disability pay or death benefit plans within the meaning of Section 409A of the Code) are intended to comply, to the maximum extent possible, with the exception to Section 409A set forth in Section 1.409A-1(b)(9)(v) of the Treasury Regulations. To the extent that any reimbursement of expenses or in-kind benefits provided under Section 7 or under any other section of this Agreement either do not qualify for that exception, or are provided beyond the applicable time periods set forth in Section 1.409A-1(b)(9)(v) of the Treasury Regulations, then they will be subject to the following additional rules: (i) any reimbursement of eligible expenses will be paid within 30 days following Executive’s written request for reimbursement; provided , that Executive provides written notice no later than 60 days before the last day of the calendar year following the calendar year in which the expense was incurred so that DDR can make the reimbursement within the time periods required by Section 409A; (ii) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during any calendar year will not affect the amount of expenses eligible for reimbursement, or in-kind benefits to be provided, during any other calendar year; and (iii) the right to reimbursement or in-kind benefits will not be subject to liquidation or exchange for any other benefit.

requirements of Section 409A. This Agreement is to be construed, administered, and governed in a manner that effects that intent and DDR will not take any action that is inconsistent with that intent. Without limiting the foregoing, the payments and benefits provided under this Agreement may not be deferred, accelerated, extended, paid out, or modified in a manner that would result in the imposition of an additional tax under Section 409A upon Executive.

13.5 Termination of Employment to Constitute a Separation from Service . The parties intend that the phrase “termination of employment” and words and phrases of similar import mean a “separation from service” with DDR within the meaning of Section 409A. Executive and DDR will take all steps necessary (including taking into account this Section 13.5 when considering any further agreement regarding provision of services by Executive to DDR after the Termination Date) to ensure that (a) any termination of employment under this Agreement constitutes a “separation from service” within the meaning of Section 409A, and (b) the Termination Date is the date on which Executive experiences a “separation from service” within the meaning of Section 409A.

14. Indemnification . DDR will indemnify Executive, to the full extent permitted or authorized by the Ohio General Corporation Law as it may from time to time be amended, if Executive is made or threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, by reason of the fact that Executive is or was a director, officer, or employee of DDR and/or of any Subsidiary, or is or was serving at the request of DDR and/or of any Subsidiary as a director, trustee, officer, or employee of a corporation, partnership, joint venture, trust, or other enterprise. The indemnification provided by this Section 14 will not be deemed exclusive of any other rights to which Executive may be entitled under the articles of incorporation or the regulations of DDR and/or of any Subsidiary, or any agreement, vote of shareholders or disinterested directors, or otherwise, both as to action in Executive’s official capacity and as to action in another capacity while holding such office, and will continue as to Executive after Executive has ceased to be a director, trustee, officer, or employee and will inure to the benefit of Executive’s heirs, executors, and administrators. In particular, Executive will continue to be entitled to the full benefit of the indemnification agreement dated April 12, 2011, between Executive and DDR (the “Indemnification Agreement”) for so long as that Indemnification Agreement remains in effect according to its terms. In the event of any conflict or inconsistency between the provisions of this Section 14 and the provisions of the Indemnification Agreement, the provisions of the Indemnification Agreement shall control.

15. Certain Expenses . This Section 15 will apply only to expenses that (a) are otherwise described in one or more of its subsections and (b) are incurred at any time from the Effective Date through the fifth anniversary of Executive’s death.

15.1 Reimbursement of Certain Expenses . DDR will pay, as incurred, all expenses, including the reasonable fees of counsel engaged by Executive, of Executive in (a) prosecuting any action to compel DDR to comply with the terms of this Agreement upon receipt from Executive of an undertaking to repay DDR for such expenses if it is ultimately determined by a court of competent jurisdiction that Executive had no reasonable grounds for bringing such action or (b) defending any action brought by a party other than Executive or Executive’s personal representative to have this Agreement declared invalid or unenforceable.

final disposition of the action, suit, or proceeding upon receipt of an undertaking by or on behalf of Executive in which Executive agrees to reasonably cooperate with DDR and/or the Subsidiary, as the case may be, concerning the action, suit, or proceeding, and if the action, suit, or proceeding is commenced or threatened against Executive for any action or failure to act as an officer or employee, to repay the amount if it is ultimately determined that Executive is not entitled to be indemnified. The obligation of DDR to advance expenses provided for in this Section 15.2 will not be deemed exclusive of any other rights to which Executive may be entitled under the articles of incorporation or the regulations of DDR or of any Subsidiary, or any agreement, vote of shareholders or disinterested directors, or otherwise.

16. Survival of Obligations . Except as is otherwise expressly provided in this Agreement, the respective obligations of DDR and Executive under this Agreement will survive any termination of Executive’s employment under this Agreement.

17. Notices . Notices and all other communications provided for in this Agreement must be in writing and will be deemed to have been duly given upon receipt (or rejection) when delivered in person or by overnight delivery (to the CEO of DDR in the case of notices to DDR and to Executive in the case of notices to Executive) or mailed by United States registered mail, return receipt requested, postage prepaid, and addressed, if to DDR, to its principal place of business, attention: CEO, and, if to Executive, to Executive’s home address last shown on the records of DDR, or to such other address or addresses as either party may furnish to the other in accordance with this Section 17 .

18. Entire Agreement, Certain Prior Arrangements . Except as otherwise set forth below in this Section 18 , this Agreement supersedes in their entirety all prior employment and change in control agreements between the parties, if any, and all understandings between them, if any, with respect to the subject matter of this Agreement, including, without limitation, the Amended and Restated Employment Agreement, dated as of December 29, 2008, by and between DDR and Executive and the Amended and Restated Change in Control Agreement, dated as of December 29, 2008, by and between DDR and Executive. As provided in Section 14 , Executive will continue to be entitled to the full benefit of the Indemnification Agreement for so long as it remains in effect according to its terms.

19. Mandatory Arbitration Before a Change in Control . Section 19.1 will apply if and only if either party notifies the other, in writing, that it is demanding resolution of a then-current controversy or claim by arbitration and the notice is provided by the notifying party to the other party before any Change in Control has occurred. Nothing in this Section 19 will limit the right of DDR to seek and obtain injunctive relief in a court of equity for any breach or threatened breach by Executive of any of Executive’s covenants contained in Section 12 above.

19.1 Scope of Arbitration . If this Section 19.1 applies, any controversy or claim arising out of or relating to this Agreement or any breach of this Agreement will be settled by binding arbitration to be held before three arbitrators and conducted in accordance with the Employment Arbitration Rules and Mediation Procedures of the American Arbitration Association in the City of Cleveland, Ohio. The decision of the arbitrators will be final and binding on both parties and judgment on any award rendered by the arbitrators may be entered in any court of competent jurisdiction. Costs and expenses of any such arbitration will be borne by the parties as may be directed by the arbitrators taking into account the extent to which the positions taken by each of the parties are reasonable. The arbitrators will have the power to issue mandatory orders and restraining orders in connection with any such arbitration.

19.2 Other Disputes . If Section 19.1 does not apply to any claim or controversy between the parties, the parties may nevertheless, but need not, mutually agree to submit any controversy or claim to arbitration as though Section 19.1 did apply. Failing any such mutual agreement, either party may bring proceedings against the other with respect to any claim or controversy in any court of competent jurisdiction that satisfies the venue requirements set forth in Section 20.8 . Nothing in this Section 19.2 imposes upon either party any obligation to discuss possible arbitration of any claim or controversy to which Section 19.1 does not apply before bringing any court proceedings with respect to that claim or controversy.

20. Miscellaneous .

20.1 No Conflict . Executive represents and warrants that Executive is not a party to any agreement, contract, or understanding, whether employment or otherwise, that would restrict or prohibit Executive from undertaking or performing employment in accordance with the terms and conditions of this Agreement.

20.2 Assistance . During the term of this Agreement and thereafter, Executive will provide reasonable assistance to DDR in litigation and regulatory matters that relate to events that occurred during Executive’s period of employment with DDR and its predecessors, and will provide reasonable assistance to DDR with matters relating to its corporate history from the period of Executive’s employment with it or its predecessors. Executive will be entitled to reimbursement of reasonable out-of-pocket travel or related costs and expenses relating to any such cooperation or assistance that occurs following the Termination Date.

20.3 Severability . The provisions of this Agreement are severable and if any one or more provision is determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions and any partially unenforceable provision to the extent enforceable in any jurisdiction nevertheless will be binding and enforceable.

20.4 Benefit of Agreement . The rights and obligations of DDR under this Agreement will inure to the benefit of, and will be binding on, DDR and its successors and assigns, and the rights and obligations (other than obligations to perform services) of Executive under this Agreement will inure to the benefit of, and will be binding upon, Executive and Executive’s heirs, personal representatives, and assigns.

20.5 No Waiver . The failure of either party to enforce any provision or provisions of this Agreement will not in any way be construed as a waiver of any such provision or provisions as to any future violations thereof, nor prevent that party from later enforcing each and every other provision of this Agreement. The rights granted the parties in this Agreement are cumulative and the waiver of any single remedy will not constitute a waiver of that party’s right to assert all other legal remedies available to it under the circumstances.

20.6 Modification . This Agreement may not be modified or terminated orally. No modification or termination will be valid unless in writing and signed by the party against which the modification or termination is sought to be enforced.

signed writing may consist of the merger or sale agreement, or similar document. Upon any such assumption, the successor corporation will become obligated to perform the obligations of DDR under this Agreement, and the term “DDR,” as used in this Agreement, will be deemed to refer to that successor corporation, and the term “the Board” as used in this Agreement will be deemed to refer to the board of directors of that successor corporation.

20.8 Governing Law and Venue . The provisions of this Agreement will be governed by and construed in accordance with the laws of the State of Ohio applicable to contracts made in and to be performed exclusively within that State, notwithstanding any conflict of law provision to the contrary. Subject to the mandatory arbitration provisions of Section 19 , the parties consent to venue and personal jurisdiction over them in the courts of the State of Ohio and federal courts sitting in Cleveland, Ohio, for purposes of construing and enforcing this Agreement.

20.9 Termination of Status as Director or Officer . Notwithstanding anything in this Agreement to the contrary, unless otherwise agreed to by DDR and Executive prior to the Termination Date, Executive shall be deemed to have automatically resigned from all directorships and offices with DDR and its Subsidiaries, and their affiliates (including joint ventures), as of the Termination Date.

21. Definitions .

21.1 Reserved.

21.2 Reserved.

21.3 Cause . The term “Cause” has the meaning set forth in Section 6.2 .

21.4 Change in Control . The term “Change in Control” means the occurrence, during the Contract Period while Executive is employed by DDR, of any of the following:

(a) consummation of a consolidation or merger in which DDR is not the surviving corporation, the sale of substantially all of the assets of DDR, or the liquidation or dissolution of DDR;

(b) any person or other entity (other than DDR or a Subsidiary or any DDR employee benefit plan (including any trustee of any such plan acting in its capacity as trustee)) purchases any Shares (or securities convertible into Shares) pursuant to a tender or exchange offer without the prior consent of the Board, or becomes the beneficial owner of securities of DDR representing 30% or more of the voting power of DDR’s outstanding securities without the prior consent of the Board of Directors of DDR (the “Board”); or

actual or threatened election contest with respect to the election or removal of directors of DDR or other actual or threatened solicitation of proxies or consents by or on behalf of an individual, corporation, partnership, group, associate or other entity or person other than the Board, shall be, for purposes of this Section 21.4(c) , considered as though such person was a member of the Board at the beginning of such period.

21.5 Committee . The term “Committee” means Executive Compensation Committee of the Board or any other committee or subcommittee authorized by the Board to discharge the Board’s responsibilities relating to the compensation of DDR’s executives and directors.

21.6 Reserved.

21.7 Reserved.

21.8 Good Reason . The term “Good Reason” has the meaning set forth in Section 6.3 .

21.9 Internal Revenue Code . The term “Internal Revenue Code” means the Internal Revenue Code of 1986, as amended.

21.10 Reserved.

21.11 Section . References in this Agreement to one or more “Sections” are to sections of this Agreement, except for references to Section 409A, which are references to that section of the Internal Revenue Code.

21.12 Section 409A . The term “Section 409A” means Section 409A of the Internal Revenue Code. References in this Agreement to Section 409A are intended to include any proposed, temporary, or final regulations, or any other guidance, promulgated with respect to Section 409A by the U.S. Department of Treasury or the Internal Revenue Service.

21.13 Shares . The term “Shares” means the Common Shares, par value $0.10 per share, of DDR.

21.14 Subsidiary . The term “Subsidiary” means any corporation, partnership, or other entity a majority of the voting control of which is directly or indirectly owned or controlled by DDR.

21.15 Termination Date . The term “Termination Date” means the date on which Executive’s employment with DDR and its Subsidiaries terminates.

21.16 Triggering Event . A “Triggering Event” for the purpose of this Agreement will be deemed to have occurred if, during the Contract Period while Executive is employed by DDR:

(a) Within two years after the date on which a Change in Control occurs, DDR terminates the employment of Executive, other than in the case of a termination for Cause, a termination by DDR pursuant to Section 6.1 following Executive’s disability, or a termination based on death;

(b) Within two years after the date on which a Change in Control occurs, DDR reduces Executive’s title, responsibilities, power or authority in comparison with Executive’s title, responsibilities, power or authority at the time of the Change in Control and Executive thereafter terminates Executive’s employment with DDR within such two-year period;

(c) Within two years after the date on which a Change in Control occurs, DDR assigns Executive duties which are inconsistent with the duties assigned to Executive on the date on which the Change in Control occurred and which duties DDR persists in assigning to Executive despite the prior written objection of Executive and Executive thereafter terminates Executive’s employment with DDR within such two-year period;

(d) Within two years after the date on which a Change in Control occurs, DDR (i) reduces Executive’s base compensation, Executive’s incentive opportunity bonus percentages of salary, Executive’s health and dental insurance coverage and benefits (including any such benefits provided to Executive’s eligible dependents), Executive’s pension, retirement, or profit-sharing benefits or any benefits provided by any of DDR’s equity-based award plans, or any substitute therefor, unless in any case such reduction applies generally to all employees of DDR, (ii) establishes criteria and factors to be achieved for the payment of bonus compensation that are substantially different than the criteria and factors established for other similar executive officers of DDR, (iii) fails to pay Executive any bonus compensation to which Executive is entitled through the achievement of the criteria and factors established for the payment of such bonus, or (iv) excludes Executive from any plan, program, or arrangement in which the other executive officers of DDR are included, and Executive thereafter terminates Executive’s employment with DDR within such two-year period; or

(e) Within two years after the date on which a Change in Control occurs, DDR requires Executive to be based at or generally work from any location more than fifty miles from the geographical center of Cleveland, Ohio and Executive thereafter terminates Executive’s employment with DDR within such two-year period.

21.17 Reserved.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, DDR and Executive have executed this Agreement, DDR by its duly authorized Chief Executive Officer, as of the date first written above.


DEVELOPERS DIVERSIFIED REALTY CORPORATION

By:		/s/ Daniel B. Hurwitz
Daniel B. Hurwitz, President & Chief Executive Officer

/s/ David J. Oakes David J. Oakes

EXHIBIT A

PERFORMANCE METRICS AND RELATIVE WEIGHTING

FOR 2011 ANNUAL CASH BONUS OPPORTUNITY


Performance Metrics	Relative Weighting

Same Store EBITDA		1/3
Relative Total Shareholder Return		1/3
Strategic Objectives		1/3

ANNUAL CASH BONUS OPPORTUNITY

AS A PERCENTAGE OF YEAR-END BASE SALARY


Threshold	Target			Maximum

50%		75	%		150	%

ANNUAL EQUITY BONUS OPPORTUNITY

AS A PERCENTAGE OF YEAR END BASE SALARY PLUS AMOUNTS EARNED UNDER

THE ANNUAL CASH BONUS


Threshold	Target			Maximum

50%		75	%		150	%

Exhibit 10.2

EMPLOYMENT AGREEMENT

This Employment Agreement (this “Agreement”) is entered into on April 12, 2011, between Developers Diversified Realty Corporation, an Ohio corporation (“DDR”), and Paul W. Freddo (“Executive”).

Executive is now serving DDR as its Senior Executive Vice President of Leasing and Development. Executive and DDR are currently party to an Amended and Restated Employment Agreement, dated as of December 29, 2008, and an Amended and Restated Change in Control Agreement, dated as of December 29, 2008. DDR and Executive desire to enter into this Agreement to supersede in its entirety the existing employment agreement, to supersede and terminate in its entirety the existing change in control agreement, and to reflect the terms pursuant to which Executive will continue to serve DDR. Certain capitalized terms used in this Agreement have the meanings ascribed to them in Section 21 of this Agreement.

DDR and Executive agree, effective as of the date first set forth above (the “Effective Date”), as follows:

1. Employment, Term . DDR engages and employs Executive to render services in the administration and operation of its affairs as its Senior Executive Vice President of Leasing and Development, reporting directly to DDR’s Chief Executive Officer (the “CEO”), all in accordance with the terms and conditions of this Agreement, for a term beginning on the Effective Date and expiring on December 31, 2012. The period of time from the Effective Date until December 31, 2012 is sometimes referred to herein as the “Contract Period.”

3. Compensation . For all services to be rendered by Executive to DDR under this Agreement during the Contract Period while Executive is employed by DDR, including services as Senior Executive Vice President of Leasing and Development, and any other services specified by the CEO, DDR will pay and provide to Executive the compensation and benefits specified in this Section 3 .

3.1 Base Salary . From and after the Effective Date and through the Contract Period while Executive is employed by DDR, DDR will pay Executive base salary (the “Base Salary”), in equal monthly or more frequent installments, at the rate of not less than Four Hundred Thousand Dollars ($400,000) per year, subject to such increases as approved by DDR.

3.2 Annual Cash Bonus . In addition to Base Salary, if Executive achieves the factors and criteria for annual bonus compensation hereinafter described for any calendar year (beginning with 2011) during the Contract Period while Executive is employed by DDR, then DDR shall pay an annual bonus to Executive, in cash (an “Annual Cash Bonus”), for such calendar year not later than March 15 of the immediately subsequent calendar year, determined and calculated in accordance with the percentages set forth on Exhibit A attached hereto. DDR’s award of an Annual Cash Bonus to Executive shall be determined based on the factors and criteria that may be established

from time to time for the calculation of the Annual Cash Bonus by DDR; provided , that for 2011, the Annual Cash Bonus for Executive will be determined in accordance with the performance metrics and their relative weighting set forth on Exhibit A attached hereto. For 2012, if Executive is then employed by DDR, DDR will provide Executive with written notice of the performance metrics and their relative weighting to be used in, and any specific threshold, target and maximum performance targets applicable to, the determination of the Annual Cash Bonus for Executive for such calendar year not later than March 15th of such year. There is no guaranteed Annual Cash Bonus under this Agreement, and for each applicable year, Executive’s Annual Cash Bonus could be as low as zero or as high as the maximum percentage set forth on Exhibit A attached hereto.

4. Benefits .

4.4 Club Membership . Throughout the Contract Period while Executive is employed by DDR and should Executive choose to avail himself of the benefit, DDR will pay for a membership for Executive at a local country or social club in an amount customary for similarly situated executives. DDR will bear the cost of regular membership fees, assessments, and dues incurred at that club by Executive, and will reimburse Executive for the amount of any charges actually and reasonably incurred at that club in the conduct of DDR’s business.

6. Termination .

6.2 For Cause by DDR.

(ii) Executive commits an act or series of repeated acts of dishonesty that are materially inimical to the best interests of DDR.

(b) DDR changes Executive’s place of employment or its principal executive offices to a location that is more than 50 miles from the geographical center of Cleveland, Ohio.

7. Payments upon Termination .

7.1 Upon Termination For Cause or Without Good Reason . If Executive’s employment under this Agreement is terminated by DDR for Cause or by Executive without Good Reason during the

Contract Period, DDR will pay and provide to Executive the Executive’s Base Salary through the Termination Date to the extent not already paid and continuing health, dental and vision insurance at the levels specified in Section 4.2 through the Termination Date, and, except as may otherwise be required by law, DDR will not pay or provide to Executive any further compensation or other benefits under this Agreement. DDR will pay any Base Salary referred to in this Section 7.1 to Executive within 30 days of the Termination Date.

(b) A lump sum amount equal to Executive’s Annual Cash Bonus earned for the calendar year immediately preceding the calendar year in which the Termination Date occurs, to the extent not already paid. DDR will pay this amount to Executive’s personal representative on the same date and in the same amount that the Annual Cash Bonus for such year would have been paid if Executive’s employment had not been terminated, but in any event not later than March 15 of the calendar year in which the Termination Date occurs.

(c) A lump sum amount equal to (i) one year of Executive’s Base Salary as of the Termination Date, plus (ii) the Annual Cash Bonus at the target level for Executive for the year in which the Termination Date occurs. Except as otherwise provided in Section 13.2 , DDR will pay the amount referred to in this Section 7.3(c)(i) to Executive’s personal representative as soon as practicable following Executive’s death, but in no event later than March 15 of the year after the year in which Executive’s death occurs (provided that neither Executive nor Executive’s estate may designate the taxable year of payment) and will pay the amount referred to in this Section 7.3(c)(ii) to Executive on the same date that the Annual Cash Bonus for that year would have been paid if Executive’s employment had not been terminated, but in any event not later than March 15 of the calendar year following the calendar year in which Executive’s employment is terminated.

(a) A lump sum amount equal to Executive’s Base Salary through the Termination Date, to the extent not already paid. DDR will pay this amount to Executive within 30 days of the Termination Date.

8.4 Effect of Failure to Execute Release or of Revocation of Release . If Executive (or Executive’s personal representative) fails to deliver an executed copy of the Release to DDR within 50 days after the Termination Date or revokes the execution of the Release during any applicable revocation period, Executive (or Executive’s personal representative) will be deemed to have waived the right to receive all payments under Sections 7.2 or 7.3 , as the case may be, that were conditioned on the Release.

9. Disability Definitions; Physical Examination .

9.1 Definitions . For all purposes of this Agreement:

(a) Executive’s “Own Occupation” means the regular occupation in which Executive is engaged under this Agreement at the time Executive becomes disabled.

(b) “Total Disability” means that, because of sickness or injury, Executive is not able to perform the material and substantial duties of Executive’s Own Occupation.

inherent skill and experience of Executive, would not operate as a bar to Executive’s sole means of support, are fully required to protect the legitimate interests of DDR and do not confer a benefit upon DDR disproportionate to the detriment to Executive.

13. Compliance with Section 409A .

13.4 Compliance Generally . Each payment or reimbursement and the provision of each benefit under this Agreement shall be considered a separate payment and not one of a series of payments for purposes of Section 409A. DDR and Executive intend that the payments and benefits provided under this Agreement will either be exempt from the application of, or comply with, the requirements of Section 409A. This Agreement is to be construed, administered, and governed in a manner that effects that intent and DDR will not take any action that is inconsistent with that intent. Without limiting the foregoing, the payments and benefits provided under this Agreement may not be deferred, accelerated, extended, paid out, or modified in a manner that would result in the imposition of an additional tax under Section 409A upon Executive.

15.2 Advancement of Certain Expenses . Expenses (including the reasonable fees of counsel engaged by Executive) incurred by Executive in defending any action, suit, or proceeding commenced or threatened against Executive for any action or failure to act as an employee or officer of DDR and/or of any Subsidiary will be paid by DDR, as they are incurred, in advance of final disposition of the action, suit, or proceeding upon receipt of an undertaking by or on behalf of Executive in which Executive agrees to reasonably cooperate with DDR and/or the Subsidiary, as the case may be, concerning the action, suit, or proceeding, and if the action, suit, or proceeding is commenced or threatened against Executive for any action or failure to act as an officer or employee, to repay the amount if it is ultimately determined that Executive is not entitled to be indemnified. The obligation of DDR to advance expenses provided for in this Section 15.2 will not be deemed exclusive of any other rights to which Executive may be entitled under the articles of incorporation or the regulations of DDR or of any Subsidiary, or any agreement, vote of shareholders or disinterested directors, or otherwise.

20. Miscellaneous .

20.7 Merger or Transfer of Assets of DDR . During the Contract Period while Executive is employed by DDR, DDR will not consolidate with or merge into any other corporation, or transfer all or substantially all of its assets to another corporation, unless such other corporation assumes this Agreement in a signed writing and delivers a copy thereof to Executive, which signed writing may consist of the merger or sale agreement, or similar document. Upon any such assumption, the successor corporation will become obligated to perform the obligations of DDR under this Agreement, and the term “DDR,” as used in this Agreement, will be deemed to refer to that successor corporation, and the term “the Board” as used in this Agreement will be deemed to refer to the board of directors of that successor corporation.

21. Definitions .

21.1 Reserved.

21.2 Reserved.

21.3 Cause . The term “Cause” has the meaning set forth in Section 6.2 .

21.4 Change in Control . The term “Change in Control” means the occurrence, during the Contract Period while Executive is employed by DDR, of any of the following:

(a) consummation of a consolidation or merger in which DDR is not the surviving corporation, the sale of substantially all of the assets of DDR, or the liquidation or dissolution of DDR;

of the directors who at the beginning of such period constituted the entire Board (either by a specific vote or by approval of DDR’s proxy statement in which such person is named as a nominee of DDR for director), but excluding for this purpose any person whose initial assumption of office as a director of DDR occurs as a result of either an actual or threatened election contest with respect to the election or removal of directors of DDR or other actual or threatened solicitation of proxies or consents by or on behalf of an individual, corporation, partnership, group, associate or other entity or person other than the Board, shall be, for purposes of this Section 21.4(c) , considered as though such person was a member of the Board at the beginning of such period.

21.6 Reserved.

21.7 Reserved.

21.8 Good Reason . The term “Good Reason” has the meaning set forth in Section 6.3 .

21.9 Internal Revenue Code . The term “Internal Revenue Code” means the Internal Revenue Code of 1986, as amended.

21.10 Reserved.

21.13 Shares . The term “Shares” means the Common Shares, par value $0.10 per share, of DDR.

21.14 Subsidiary . The term “Subsidiary” means any corporation, partnership, or other entity a majority of the voting control of which is directly or indirectly owned or controlled by DDR.

21.15 Termination Date . The term “Termination Date” means the date on which Executive’s employment with DDR and its Subsidiaries terminates.

21.16 Triggering Event . A “Triggering Event” for the purpose of this Agreement will be deemed to have occurred if, during the Contract Period while Executive is employed by DDR:

21.17 Reserved.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, DDR and Executive have executed this Agreement, DDR by its duly authorized Chief Executive Officer, as of the date first written above.


DEVELOPERS DIVERSIFIED REALTY CORPORATION

By:		/s/ Daniel B. Hurwitz
Daniel B. Hurwitz, President & Chief Executive Officer

/s/ Paul W. Freddo
Paul W. Freddo

EXHIBIT A

ANNUAL CASH BONUS OPPORTUNITY

AS A PERCENTAGE OF YEAR-END BASE SALARY


Threshold			Target			Maximum

	50	%		75	%		125	%

PERFORMANCE METRICS AND RELATIVE WEIGHTING

FOR 2011 ANNUAL CASH BONUS OPPORTUNITY


Performance Metrics	Relative Weighting

Same Store EBITDA		55	%
Relative Total Shareholder Return		10	%
Strategic Objectives		20	%
CEO Assessment		15	%

ANNUAL EQUITY BONUS OPPORTUNITY

AS A PERCENTAGE OF YEAR END BASE SALARY PLUS AMOUNTS EARNED UNDER

THE ANNUAL CASH BONUS


Threshold			Target			Maximum

	25	%		50	%		100	%

Exhibit 10.3

EMPLOYMENT AGREEMENT

This Employment Agreement (this “Agreement”) is entered into on April 12, 2011, between Developers Diversified Realty Corporation, an Ohio corporation (“DDR”), and John S. Kokinchak (“Executive”).

Executive is now serving DDR as its Senior Executive Vice President & Chief Administrative Officer. Executive and DDR are currently party to an Amended and Restated Employment Agreement, dated as of December 29, 2008, and an Amended and Restated Change in Control Agreement, dated as of December 29, 2008. DDR and Executive desire to enter into this Agreement to supersede in its entirety the existing employment agreement, to supersede and terminate in its entirety the existing change in control agreement, and to reflect the terms pursuant to which Executive will continue to serve DDR. Certain capitalized terms used in this Agreement have the meanings ascribed to them in Section 21 of this Agreement.

DDR and Executive agree, effective as of the date first set forth above (the “Effective Date”), as follows:

1. Employment, Term . DDR engages and employs Executive to render services in the administration and operation of its affairs as its Senior Executive Vice President & Chief Administrative Officer, reporting directly to DDR’s Chief Executive Officer (the “CEO”), all in accordance with the terms and conditions of this Agreement, for a term beginning on the Effective Date and expiring on December 31, 2012. The period of time from the Effective Date until December 31, 2012 is sometimes referred to herein as the “Contract Period.”

3. Compensation . For all services to be rendered by Executive to DDR under this Agreement during the Contract Period while Executive is employed by DDR, including services as Senior Executive Vice President & Chief Administrative Officer, and any other services specified by the CEO, DDR will pay and provide to Executive the compensation and benefits specified in this Section 3 .

3.1 Base Salary . From and after the Effective Date and through the Contract Period while Executive is employed by DDR, DDR will pay Executive base salary (the “Base Salary”), in equal monthly or more frequent installments, at the rate of not less than Three Hundred and Ten Thousand Dollars ($310,000) per year, subject to such increases as approved by DDR.

3.2 Annual Cash Bonus . In addition to Base Salary, if Executive achieves the factors and criteria for annual bonus compensation hereinafter described for any calendar year of DDR (beginning with 2011) during the Contract Period while Executive is employed by DDR, then DDR shall pay an annual bonus to Executive, in cash (an “Annual Cash Bonus”), for such calendar year not later than March 15 of the immediately subsequent calendar year, determined and calculated in accordance with the percentages set forth on Exhibit A attached hereto. DDR’s award of an Annual Cash Bonus to Executive shall be determined based on the factors and criteria that may be

established from time to time for the calculation of the Annual Cash Bonus by DDR; provided , that for 2011, the Annual Cash Bonus for Executive will be determined in accordance with the performance metrics and their relative weighting set forth on Exhibit A attached hereto. For 2012, if Executive is then employed by DDR, DDR will provide Executive with written notice of the performance metrics and their relative weighting to be used in, and any specific threshold, target and maximum performance targets applicable to, the determination of the Annual Cash Bonus for Executive for such calendar year not later than March 15th of such year. There is no guaranteed Annual Cash Bonus under this Agreement, and for each applicable year, Executive’s Annual Cash Bonus could be as low as zero or as high as the maximum percentage set forth on Exhibit A attached hereto.

3.3 Annual Equity Bonus . If Executive achieves the factors and criteria for an Annual Cash Bonus, as described in Section 3.2, for any calendar year (beginning with 2011) during the Contract Period while Executive is employed by DDR, then DDR shall pay an annual bonus to Executive, in the form of a time-based vesting equity award (an “Annual Equity Bonus”), for such calendar year not later than March 15 of the immediately subsequent calendar year, determined and calculated in accordance with the percentages set forth on Exhibit A attached hereto. DDR’s award of an Annual Equity Bonus to Executive shall be determined based on the factors and criteria that may be established from time to time for the calculation of the Annual Equity Bonus by DDR; provided , that for 2011, the Annual Equity Bonus for Executive will be determined in accordance with the performance metrics and their relative weighting set forth on Exhibit A attached hereto. For 2012, if Executive is then employed by DDR, DDR will provide Executive with written notice of the performance metrics and their relative weighting to be used in, and any specific threshold, target and maximum performance targets applicable to, the determination of the Annual Equity Bonus for Executive for such calendar year not later than March 15th of such year. There is no guaranteed Annual Equity Bonus under this Agreement, and for each applicable year, Executive’s Annual Equity Bonus could be as low as zero or as high as the maximum percentage set forth on Exhibit A attached hereto. The Annual Equity Bonus shall be on the terms and subject to such conditions as are specified for the particular Company plans or programs pursuant to which the Annual Equity Bonus is granted.

4. Benefits .

6. Termination .

6.2 For Cause by DDR.

(ii) Executive commits an act or series of repeated acts of dishonesty that are materially inimical to the best interests of DDR.

(b) DDR changes Executive’s place of employment or its principal executive offices to a location that is more than 50 miles from the geographical center of Cleveland, Ohio.

7. Payments upon Termination .

7.1 Upon Termination For Cause or Without Good Reason . If Executive’s employment under this Agreement is terminated by DDR for Cause or by Executive without Good Reason during the Contract Period, DDR will pay and provide to Executive the Executive’s Base Salary through the Termination Date to the extent not already paid and continuing health, dental and vision insurance at the levels specified in Section 4.2 through the Termination Date, and, except as may otherwise be required by law, DDR will not pay or provide to Executive any further compensation or other benefits under this Agreement. DDR will pay any Base Salary referred to in this Section 7.1 to Executive within 30 days of the Termination Date.

(b) A lump sum amount equal to Executive’s Annual Cash Bonus earned for the calendar year immediately preceding the calendar year in which the Termination Date occurs, to

the extent not already paid. DDR will pay this amount to Executive on the same date and in the same amount that the Annual Cash Bonus for such year would have been paid if Executive’s employment had not been terminated, but in any event not later than March 15 of the calendar year in which the Termination Date occurs.

(b) A lump sum amount equal to Executive’s Annual Cash Bonus earned for the calendar year immediately preceding the calendar year in which the Termination Date occurs, to the extent not already paid. DDR will pay this amount to Executive’s personal representative on the same date and in the same amount that the Annual Cash Bonus for such year would have been paid if Executive’s employment had not been terminated, but in any event not later than March 15 of the calendar year in which the Termination Date occurs.

(c) A lump sum amount equal to (i) one year of Executive’s Base Salary as of the Termination Date, plus (ii) the Annual Cash Bonus at the target level for Executive for the year in which the Termination Date occurs. Except as otherwise provided in Section 13.2 , DDR will pay the amount referred to in this Section 7.3(c)(i) to Executive’s personal representative as soon as practicable following Executive’s death, but in no event later than March 15 of the year after the year in which Executive’s death occurs (provided that neither Executive nor Executive’s estate may designate the taxable year of payment) and will pay the amount referred to in this Section 7.3(c)(ii) to Executive on the same date that the Annual Cash Bonus for that year would have been paid if Executive’s employment had not been terminated, but in any event not later than March 15 of the calendar year following the calendar year in which Executive’s employment is terminated.

(a) A lump sum amount equal to Executive’s Base Salary through the Termination Date, to the extent not already paid. DDR will pay this amount to Executive within 30 days of the Termination Date.

9. Disability Definitions; Physical Examination .

9.1 Definitions . For all purposes of this Agreement:

(a) Executive’s “Own Occupation” means the regular occupation in which Executive is engaged under this Agreement at the time Executive becomes disabled.

(b) “Total Disability” means that, because of sickness or injury, Executive is not able to perform the material and substantial duties of Executive’s Own Occupation.

relating to DDR’s operations, properties, or otherwise to its particular business or other trade secrets of DDR, it being acknowledged by Executive that all such information regarding the business of DDR compiled or obtained by, or furnished to, Executive during Executive’s employment by or association with DDR is confidential information and DDR’s exclusive property. The restrictions in this Section 12.2 will not apply to any information to the extent that it (a) is clearly obtainable in the public domain, (b) becomes obtainable in the public domain, except by reason of the breach by Executive of Executive’s obligations under this Section 12.2 , (c) was not acquired by Executive in connection with Executive’s employment or affiliation with DDR, (d) was not acquired by Executive from DDR or its representatives, or (e) is required to be disclosed by rule of law or by order of a court or governmental body or agency.

13. Compliance with Section 409A .

overnight delivery (to the CEO of DDR in the case of notices to DDR and to Executive in the case of notices to Executive) or mailed by United States registered mail, return receipt requested, postage prepaid, and addressed, if to DDR, to its principal place of business, attention: CEO, and, if to Executive, to Executive’s home address last shown on the records of DDR, or to such other address or addresses as either party may furnish to the other in accordance with this Section 17 .

20. Miscellaneous .

21. Definitions .

21.1 Reserved.

21.2 Reserved.

21.3 Cause . The term “Cause” has the meaning set forth in Section 6.2 .

21.4 Change in Control . The term “Change in Control” means the occurrence, during the Contract Period while Executive is employed by DDR, of any of the following:

(a) consummation of a consolidation or merger in which DDR is not the surviving corporation, the sale of substantially all of the assets of DDR, or the liquidation or dissolution of DDR;

(c) during any two-year period, individuals who at the beginning of such period constitute the entire Board cease to constitute a majority of the Board; provided , that any person becoming a director of DDR during such two-year period whose election, or nomination for election by DDR’s shareholders, was approved by a vote of at least two-thirds of the directors who at the beginning of such period constituted the entire Board (either by a specific vote or by approval of DDR’s proxy statement in which such person is named as a nominee of DDR for director), but excluding for this purpose any person whose initial assumption of office as a director of DDR occurs as a result of either an actual or threatened election contest with respect to the election or removal of directors of DDR or other actual or threatened solicitation of proxies or consents by or on behalf of an individual, corporation, partnership, group, associate or other entity or person other than the Board, shall be, for purposes of this Section 21.4(c) , considered as though such person was a member of the Board at the beginning of such period.

21.6 Reserved.

21.7 Reserved.

21.8 Good Reason . The term “Good Reason” has the meaning set forth in Section 6.3 .

21.9 Internal Revenue Code . The term “Internal Revenue Code” means the Internal Revenue Code of 1986, as amended.

21.10 Reserved.

21.13 Shares . The term “Shares” means the Common Shares, par value $0.10 per share, of DDR.

21.14 Subsidiary . The term “Subsidiary” means any corporation, partnership, or other entity a majority of the voting control of which is directly or indirectly owned or controlled by DDR.

21.15 Termination Date . The term “Termination Date” means the date on which Executive’s employment with DDR and its Subsidiaries terminates.

21.16 Triggering Event . A “Triggering Event” for the purpose of this Agreement will be deemed to have occurred if, during the Contract Period while Executive is employed by DDR:

achieved for the payment of bonus compensation that are substantially different than the criteria and factors established for other similar executive officers of DDR, (iii) fails to pay Executive any bonus compensation to which Executive is entitled through the achievement of the criteria and factors established for the payment of such bonus, or (iv) excludes Executive from any plan, program, or arrangement in which the other executive officers of DDR are included, and Executive thereafter terminates Executive’s employment with DDR within such two-year period; or

21.17 Reserved.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, DDR and Executive have executed this Agreement, DDR by its duly authorized Chief Executive Officer, as of the date first written above.


DEVELOPERS DIVERSIFIED REALTY CORPORATION

By:		/s/ Daniel B. Hurwitz
		Daniel B. Hurwitz, President & Chief Executive Officer

/s/ John S. Kokinchak
John S. Kokinchak

EXHIBIT A

PERFORMANCE METRICS AND RELATIVE WEIGHTING

FOR 2011 ANNUAL CASH BONUS OPPORTUNITY


Performance Metrics	Relative Weighting

Same Store EBITDA		55	%
Relative Total Shareholder Return		10	%
Strategic Objectives		20	%
CEO Assessment		15	%

ANNUAL CASH BONUS OPPORTUNITY

AS A PERCENTAGE OF YEAR-END BASE SALARY


Threshold			Target			Maximum

	50	%		75	%		125	%

ANNUAL EQUITY BONUS OPPORTUNITY

AS A PERCENTAGE OF YEAR END BASE SALARY PLUS AMOUNTS EARNED UNDER

THE ANNUAL CASH BONUS


Threshold			Target			Maximum

	25	%		50	%		100	%

Exhibit 10.4

EMPLOYMENT AGREEMENT

This Employment Agreement (this “Agreement”) is entered into on April 12, 2011, between Developers Diversified Realty Corporation, an Ohio corporation (“DDR”), and Christa A. Vesy (“Executive”).

Executive is now serving DDR as its Senior Vice President & Chief Accounting Officer. Executive and DDR are currently party to an Amended and Restated Change in Control Agreement, dated as of December 29, 2008. DDR and Executive desire to enter into this Agreement to supersede and terminate in its entirety the existing change in control agreement, and to reflect the terms pursuant to which Executive will continue to serve DDR. Certain capitalized terms used in this Agreement have the meanings ascribed to them in Section 21 of this Agreement.

DDR and Executive agree, effective as of the date first set forth above (the “Effective Date”), as follows:

1. Employment, Term . DDR engages and employs Executive to render services in the administration and operation of its affairs as its Senior Vice President & Chief Accounting Officer, reporting directly to DDR’s Chief Financial Officer (the “CFO”), all in accordance with the terms and conditions of this Agreement, for a term beginning on the Effective Date and expiring on February 28, 2012. The period of time from the Effective Date until February 28, 2012 is sometimes referred to herein as the “Contract Period.”

3. Compensation . For all services to be rendered by Executive to DDR under this Agreement during the Contract Period while Executive is employed by DDR, including services as Senior Vice President & Chief Accounting Officer, and any other services specified by the CFO, DDR will pay and provide to Executive the compensation and benefits specified in this Section 3 .

3.1 Base Salary . From and after the Effective Date and through the Contract Period while Executive is employed by DDR, DDR will pay Executive base salary (the “Base Salary”), in equal monthly or more frequent installments, at the rate of not less than Two Hundred Twenty and Five Thousand Dollars ($225,000) per year, subject to such increases as approved by DDR.

metrics and their relative weighting set forth on Exhibit A attached hereto. For 2012, if Executive is then employed by DDR, DDR will provide Executive with written notice of the performance metrics and their relative weighting to be used in, and any specific threshold, target and maximum performance targets applicable to, the determination of the Annual Cash Bonus for Executive for such calendar year not later than March 15th of such year. There is no guaranteed Annual Cash Bonus under this Agreement, and for each applicable year, Executive’s Annual Cash Bonus could be as low as zero or as high as the maximum percentage set forth on Exhibit A attached hereto.

3.3 Annual Equity Bonus. If Executive achieves the factors and criteria for an Annual Cash Bonus as described in Section 3.2 , for any calendar year (beginning with 2011) during the Contract Period while Executive is employed by DDR, then DDR shall pay an annual bonus to Executive, in the form of a time-based vesting equity award (an “Annual Equity Bonus”), for such calendar year not later than March 15 of the immediately subsequent calendar year, determined and calculated in accordance with the percentages set forth on Exhibit A attached hereto. DDR’s award of an Annual Equity Bonus to Executive shall be determined based on the factors and criteria that may be established from time to time for the calculation of the Annual Equity Bonus by DDR; provided , that for 2011, the Annual Equity Bonus for Executive will be determined in accordance with the performance metrics and their relative weighting set forth on Exhibit A attached hereto. For 2012, if Executive is then employed by DDR, DDR will provide Executive with written notice of the performance metrics and their relative weighting to be used in, and any specific threshold, target and maximum performance targets applicable to, the determination of the Annual Equity Bonus for Executive for such calendar year not later than March 15th of such year. There is no guaranteed Annual Equity Bonus under this Agreement, and for each applicable year, Executive’s Annual Equity Bonus could be as low as zero or as high as the maximum percentage set forth on Exhibit A attached hereto. The Annual Equity Bonus shall be on the terms and subject to such conditions as are specified for the particular Company plans or programs pursuant to which the Annual Equity Bonus is granted.

4. Benefits .

4.2 Insurance, Generally . Throughout the Contract Period while Executive is employed by DDR, DDR will provide an enrollment opportunity to Executive and Executive’s eligible dependents for

health, dental and vision insurance coverage and any other benefits maintained by DDR from time to time, if any, during the Contract Period that are generally available to its employees and with respect to which Executive is eligible pursuant to the terms of the underlying plan or plans.

4.3 Paid Time Off . Executive will be entitled to such periods of paid time off during the Contract Period while Executive is employed by DDR as may be determined by the CFO in his or her reasonable and good faith discretion (but in any event not less than 20 days per year or such longer period as may be provided from time to time under any DDR paid time off policy for executive officers).

6. Termination .

6.2 For Cause by DDR.

(ii) Executive commits an act or series of repeated acts of dishonesty that are materially inimical to the best interests of DDR.

(b) DDR changes Executive’s place of employment or its principal executive offices to a location that is more than 50 miles from the geographical center of Cleveland, Ohio.

7. Payments upon Termination .

(b) A lump sum amount equal to Executive’s Annual Cash Bonus earned for the calendar year immediately preceding the calendar year in which the Termination Date occurs, to the extent not already paid. DDR will pay this amount to Executive’s personal representative on the same date and in the same amount that the Annual Cash Bonus for such year would have been paid if Executive’s employment had not been terminated, but in any event not later than March 15 of the calendar year in which the Termination Date occurs.

(c) A lump sum amount equal to (i) one year of Executive’s Base Salary as of the Termination Date, plus (ii) the Annual Cash Bonus at the target level for Executive for the year in which the Termination Date occurs. Except as otherwise provided in Section 13.2 , DDR will pay the amount referred to in this Section 7.3(c)(i) to Executive’s personal representative as soon as practicable following Executive’s death, but in no event later than March 15 of the year after the year in which Executive’s death occurs (provided that neither Executive nor Executive’s estate may designate the taxable year of payment) and will pay the amount referred to in this Section 7.3(c)(ii) to Executive on the same date that the Annual Cash Bonus for that year would have been paid if Executive’s employment had not been terminated, but in any event not later than March 15 of the calendar year following the calendar year in which Executive’s employment is terminated.

(c) A lump sum amount equal to (i) Executive’s Base Salary for one year as of the Termination Date, plus (ii) the Annual Cash Bonus for Executive at the target level for

the year in which the Termination Date occurs. Except as otherwise provided in Section 13.2 , DDR will pay the amount referred to in this Section 7.4(c)(i) to Executive during the Seventh Month after the Termination Date (as defined in Section 13.1 below) and will pay the amount referred to in this Section 7.4(c)(ii) to Executive on the same date that the Annual Cash Bonus for that year would have been paid if Executive’s employment had not been terminated, but in any event not later than March 15 of the calendar year following the calendar year in which Executive’s employment is terminated by DDR.

(a) A lump sum amount equal to Executive’s Base Salary through the Termination Date, to the extent not already paid. DDR will pay this amount to Executive within 30 days of the Termination Date.

9. Disability Definitions; Physical Examination .

9.1 Definitions . For all purposes of this Agreement:

(a) Executive’s “Own Occupation” means the regular occupation in which Executive is engaged under this Agreement at the time Executive becomes disabled.

(b) “Total Disability” means that, because of sickness or injury, Executive is not able to perform the material and substantial duties of Executive’s Own Occupation.

Termination Date; provided , however , that the ownership by Executive of not more than one percent of any class of publicly traded securities of any entity will not be deemed a violation of this Section 12.1 .

13. Compliance with Section 409A .

reimbursements that are treated as separation pay under Section 1.409A-1(b)(9)(v) of the Treasury Regulations) will not be paid or provided at the Scheduled Time but will be accumulated (together with interest at the applicable federal rate under Section 7872(f)(2)(A) of the Code in effect on the Termination Date) through the Six Month Date and paid or provided during the period of 30 consecutive days beginning on the first business day after the Six Month Date (that period of 30 consecutive days, the “Seventh Month after the Termination Date”), except that if Executive dies before the Six Month Date, the payments, benefits, or reimbursements will be accumulated only through the date of Executive’s death and thereafter paid or provided not later than 30 days after the date of death.

Date) to ensure that (a) any termination of employment under this Agreement constitutes a “separation from service” within the meaning of Section 409A, and (b) the Termination Date is the date on which Executive experiences a “separation from service” within the meaning of Section 409A.

18. Entire Agreement, Certain Prior Arrangements . Except as otherwise set forth below in this Section 18 , this Agreement supersedes in their entirety all prior employment and change in control agreements between the parties, if any, and all understandings between them, if any, with respect to the subject matter of this Agreement, including, without limitation, the Amended and Restated Change in Control Agreement, dated as of December 29, 2008, by and between DDR and Executive. As provided in Section 14 , Executive will continue to be entitled to the full benefit of the Indemnification Agreement for so long as it remains in effect according to its terms.

20. Miscellaneous .

21. Definitions .

21.1 Reserved.

21.2 Reserved.

21.3 Cause . The term “Cause” has the meaning set forth in Section 6.2 .

21.4 Change in Control . The term “Change in Control” means the occurrence, during the Contract Period while Executive is employed by DDR, of any of the following:

(a) consummation of a consolidation or merger in which DDR is not the surviving corporation, the sale of substantially all of the assets of DDR, or the liquidation or dissolution of DDR;

21.6 Reserved.

21.7 Reserved.

21.8 Good Reason . The term “Good Reason” has the meaning set forth in Section 6.3 .

21.9 Internal Revenue Code . The term “Internal Revenue Code” means the Internal Revenue Code of 1986, as amended.

21.10 Reserved.

21.13 Shares . The term “Shares” means the Common Shares, par value $0.10 per share, of DDR.

21.14 Subsidiary . The term “Subsidiary” means any corporation, partnership, or other entity a majority of the voting control of which is directly or indirectly owned or controlled by DDR.

21.15 Termination Date . The term “Termination Date” means the date on which Executive’s employment with DDR and its Subsidiaries terminates.

21.16 Triggering Event . A “Triggering Event” for the purpose of this Agreement will be deemed to have occurred if, during the Contract Period while Executive is employed by DDR:

(including any such benefits provided to Executive’s eligible dependents), Executive’s pension, retirement, or profit-sharing benefits or any benefits provided by any of DDR’s equity-based award plans, or any substitute therefor, unless in any case such reduction applies generally to all employees of DDR, (ii) establishes criteria and factors to be achieved for the payment of bonus compensation that are substantially different than the criteria and factors established for other similar executive officers of DDR, (iii) fails to pay Executive any bonus compensation to which Executive is entitled through the achievement of the criteria and factors established for the payment of such bonus, or (iv) excludes Executive from any plan, program, or arrangement in which the other executive officers of DDR are included, and Executive thereafter terminates Executive’s employment with DDR within such two-year period; or

21.17 Reserved.

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IN WITNESS WHEREOF, DDR and Executive have executed this Agreement, DDR by its duly authorized Chief Executive Officer, as of the date first written above.


DEVELOPERS DIVERSIFIED REALTY CORPORATION

By:		/s/ Daniel B. Hurwitz
Daniel B. Hurwitz, President & Chief Executive Officer

/s/ Christa A. Vesy
Christa A. Vesy

EXHIBIT A

ANNUAL CASH BONUS OPPORTUNITY

AS A PERCENTAGE OF YEAR-END BASE SALARY


Threshold			Target			Maximum

	15	%		30	%		60	%

PERFORMANCE METRICS AND RELATIVE WEIGHTING

FOR 2011 ANNUAL CASH BONUS OPPORTUNITY


Performance Metrics	Relative Weighting

Same Store EBITDA		55	%
Relative Total Shareholder Return		10	%
Strategic Objectives		20	%
CFO Assessment		15	%

ANNUAL EQUITY BONUS OPPORTUNITY

AS A PERCENTAGE OF YEAR END BASE SALARY PLUS AMOUNTS EARNED UNDER

THE ANNUAL CASH BONUS


Threshold			Target			Maximum

	10	%		20	%		40	%

Exhibit 10.5

DIRECTOR AND OFFICER INDEMNIFICATION AGREEMENT

This Director and Officer Indemnification Agreement, dated as of , 20 (this “ Agreement ”), is made by and between Developers Diversified Realty Corporation, an Ohio corporation (the “ Company ”), and (“ Indemnitee ”).

RECITALS:

A. Section 1701.59 of the ORC provides that the business and affairs of a corporation shall be managed by or under the direction of its board of directors.

B. By virtue of the managerial prerogatives vested in the directors and officers of an Ohio corporation, directors and officers act as fiduciaries of the corporation and its shareholders.

C. Thus, it is critically important to the Company and its shareholders that the Company be able to attract and retain the most capable persons reasonably available to serve as directors and officers of the Company.

D. In recognition of the need for corporations to be able to induce capable and responsible persons to accept positions in corporate management, Ohio law authorizes (and in some instances requires) corporations to indemnify their directors and officers, and further authorizes corporations to purchase and maintain insurance for the benefit of their directors and officers.

E. Indemnification by a corporation serves the dual policies of (1) allowing corporate officials to resist unjustified lawsuits, secure in the knowledge that, if vindicated, the corporation will bear the expense of litigation and (2) encouraging capable women and men to serve as corporate directors and officers, secure in the knowledge that the corporation will absorb the costs of defending their honesty and integrity.

F. Lawsuits challenging the judgment and actions of directors and officers of corporations are frequent, and the high costs of defending those lawsuits, and the related threat to directors’ and officers’ personal assets have made individuals less willing to undertake the responsibilities imposed on corporate directors and officers.

G. Recent federal legislation and rules adopted by the Securities and Exchange Commission and the national securities exchanges have imposed additional disclosure and corporate governance obligations on directors and officers of public companies and have exposed such directors and officers to new and substantially broadened civil liabilities.

H. These legislative and regulatory initiatives have also exposed directors and officers of public companies to a significantly greater risk of criminal proceedings, with attendant defense costs and potential criminal fines and penalties.

I. Under Ohio law, a director’s and officer’s right to be reimbursed for the costs of defense of criminal actions does not depend upon the merits of the claims asserted against the director or officer and indemnification of the director or officer against criminal fines is permitted if the director or officer satisfies the applicable standard of conduct.

J. Indemnitee is a director and officer of the Company and Indemnitee’s willingness to serve in such capacity is predicated, in substantial part, upon the Company’s willingness to indemnify Indemnitee in accordance with the principles reflected above, to the fullest extent permitted by the laws of the state of Ohio, and upon the other undertakings set forth in this Agreement.

K. Therefore, in recognition of the need to provide Indemnitee with substantial protection against personal liability, in order to procure Indemnitee’s continued service as a director and officer of the Company and to enhance Indemnitee’s ability to serve the Company in an effective manner, and in order to provide such protection pursuant to express contract rights (intended to be enforceable irrespective of, among other things, any amendment to any provisions relating to indemnification included in the Constituent Documents, any change in the composition of the Board or any change-in-control or business combination transaction relating to the Company), the Company wishes to provide in this Agreement for the indemnification of and the advancement of Expenses to Indemnitee as set forth in this Agreement and for the continued coverage of Indemnitee under the Company’s directors’ and officers’ liability insurance policies.

L. In light of the considerations referred to in the preceding recitals, it is the Company’s intention and desire that the provisions of this Agreement be construed liberally, subject to their express terms, to maximize the protections to be provided to Indemnitee hereunder.

AGREEMENT:

NOW, THEREFORE, the parties hereby agree as follows:

1. Certain Definitions . In addition to terms defined elsewhere herein, including Section 22, the following terms have the following meanings when used in this Agreement:

(a) “ Board ” means the Board of Directors of the Company.

(b) “ Change in Control ” means the occurrence of any of the following:

(i) the Board or shareholders of the Company approve a consolidation or merger in which the Company is not the surviving corporation, the sale of substantially all of the assets of the Company, or the liquidation or dissolution of the Company;

(ii) any person or other entity (other than the Company or a Subsidiary or any Company employee benefit plan (including any trustee of any such plan acting in its capacity as trustee)) purchases any Shares (or securities convertible into Shares) pursuant to a tender or exchange offer without the prior consent of the Board, or becomes the beneficial owner of securities of the Company representing 20% or more of the voting power of the Company’s outstanding securities without the prior consent of the Board;

(iii) during any two-year period, individuals who at the beginning of such period constitute the entire Board cease to constitute a majority of the Board, unless the election or the nomination for election of each new director is approved by at least two-thirds of the directors then still in office who were directors at the beginning of that period; or

(iv) a record date is established for determining shareholders of the Company entitled to vote upon (A) a merger or consolidation of the Company with another real estate investment trust, partnership, corporation or other entity in which the Company is not the surviving or continuing entity or in which all or a substantial part of the outstanding shares are to be converted into or exchanged for cash, securities or other property, (B) a sale or other disposition of all or substantially all of the assets of the Company or (C) the dissolution of the Company.

(c) “ Claim ” means (i) any threatened, asserted, pending or completed claim, demand, action, suit or proceeding, whether civil, criminal, administrative, arbitrative, investigative or other, and whether made pursuant to federal, state or other law; and (ii) any threatened, pending or completed inquiry or investigation, whether made, instituted or conducted by the Company or any other person, including any federal, state or other governmental entity, that Indemnitee determines might lead to the institution of any such claim, demand, action, suit or proceeding.

(d) “ Constituent Documents ” means the Company’s articles of incorporation and code of regulations.

(e) “ Controlled Affiliate ” means any corporation, limited liability company, partnership, joint venture, trust or other entity or enterprise, whether or not for profit, that is directly or indirectly controlled by the Company. For purposes of this definition, “ control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of an entity or enterprise, whether through the ownership of voting securities, through other voting rights, by contract or otherwise; provided that direct or indirect beneficial ownership of capital stock or other interests in an entity or enterprise entitling the holder to cast 20% or more of the total number of votes generally entitled to be cast in the election of directors (or persons performing comparable functions) of such entity or enterprise shall be deemed to constitute “control” for purposes of this definition.

(f) “ Disinterested Director ” means a director of the Company who is not and was not a party to or threatened with the Claim in respect of which indemnification is sought by Indemnitee.

(g) “ Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended.

(h) “ Expenses ” means attorneys’ and experts’ fees and expenses and all other costs and expenses paid or payable in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to investigate, defend, be a witness in or participate in (including on appeal), any Claim.

(i) “ Incumbent Directors ” means the individuals who, as of the date hereof, are directors of the Company and any individual becoming a director subsequent to the date hereof whose election, nomination for election by the Company’s shareholders, or appointment, was approved by a vote of at least two-thirds of the then Incumbent Directors (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without objection to such nomination); provided , however , that an individual shall not be an Incumbent Director if such individual’s election or appointment to the Board occurs as a result of an actual or threatened election contest (as described in Rule 14a-12(c) of the Exchange Act) with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board.

(j) “ Indemnifiable Claim ” means any Claim based upon, arising out of or resulting from (i) any actual, alleged or suspected act or failure to act by Indemnitee in his or her capacity as a director, officer, employee or agent of the Company or as a director, officer, employee, member, manager, trustee or agent of any other corporation, limited liability company, partnership, joint venture, trust or other entity or enterprise, whether or not for profit, as to which Indemnitee is or was serving at the request of the Company as a director, officer, employee, member, manager, trustee or agent, (ii) any actual, alleged or suspected act or failure to act by Indemnitee in respect of any business, transaction, communication, filing, disclosure or other activity of the Company or any other entity or enterprise referred to in clause (i) of this sentence, or (iii) Indemnitee’s status as a current or former director, officer, employee or agent of the Company or as a current or former director, officer, employee, member, manager, trustee or agent of the Company or any other entity or enterprise referred to in clause (i) of this sentence or any actual, alleged or suspected act or failure to act by Indemnitee in connection with any obligation or restriction imposed upon Indemnitee by reason of such status. In addition to any service at the actual request of the Company, for purposes of this Agreement, Indemnitee shall be deemed to be serving or to have served at the request of the Company as a director, officer, employee, member, manager, trustee or agent of another entity or enterprise if Indemnitee is or was serving as a director, officer, employee, member, manager, trustee or agent of such entity or enterprise and (i) such entity or enterprise is or at the time of such service was a Controlled Affiliate, (ii) such entity or enterprise is or at the time of such service was an employee benefit plan (or related trust) sponsored or maintained by the Company or a Controlled Affiliate, or (iii) the Company or a Controlled Affiliate directly or indirectly caused or authorized Indemnitee to be nominated, elected, appointed, designated, employed, engaged or selected to serve in such capacity.

(k) “ Indemnifiable Losses ” means any and all Losses relating to, arising out of or resulting from any Indemnifiable Claim.

(l) “ Independent Counsel ” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent: (i) the Company (or any subsidiary) or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other named (or, as to a threatened matter, reasonably likely to be named) party to the Indemnifiable Claim giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.

(m) “ Losses ” means any and all Expenses, damages, losses, liabilities, judgments, fines, penalties (whether civil, criminal or other) and amounts paid in settlement, including all interest, assessments and other charges paid or payable in connection with or in respect of any of the foregoing.

(n) “ Notification Date ” means the date of receipt by the Company of written notice from Indemnitee advising the Company of the final disposition of the applicable Indemnifiable Claim or portion thereof to which such Indemnifiable Losses are related, out of which such Indemnifiable Losses arose or from which such Indemnifiable Losses resulted.

(o) “ ORC ” means the Ohio Revised Code.

(p) “ Other Indemnity Provisions ” means, collectively, (i) the Constituent Documents, (ii) the substantive laws of Ohio, and (iii) any other contract to which both Indemnitee and the Company (or a Subsidiary of the Company) are a party.

(q) “ Shares ” means the Common Shares, par value $0.10 per share, of the Company.

(r) “ Standard of Conduct Determination ” means a determination of whether Indemnitee has satisfied any applicable standard of conduct under Ohio law that is a legally required condition precedent to indemnification of Indemnitee under this Agreement against Indemnifiable Losses relating to, arising out of or resulting from an Indemnifiable Claim.

(s) “ Subsidiary ” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if each of the corporations (other than the last corporation in the unbroken chain) owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in that chain.

(t) “ Undertaking ” means a sworn request for advancement of Expenses substantially in the form of Exhibit A attached hereto, with the blanks therein appropriately completed and the proper selection made for the execution of Part A and Part B therein as set forth in Section 3(b) .

2. Indemnification Obligation . Subject to Section 7 , the Company shall indemnify, defend and hold harmless Indemnitee, to the fullest extent permitted or required by the laws of the State of Ohio in effect on the date hereof or as such laws may from time to time hereafter be amended to increase the scope of such permitted indemnification, against any and all Indemnifiable Claims and Indemnifiable Losses; provided , however , that, except as provided in Section 4 and Section 21 , Indemnitee shall not be entitled to indemnification pursuant to this Agreement in connection with any Claim (i) initiated by Indemnitee against the Company or any director or officer of the Company unless the Company has joined in or consented to the initiation of such Claim or (ii) in which judgment is rendered against Indemnitee for an accounting of profits made from the purchase or sale of securities of the Company pursuant to the provisions of Section 16(b) of the Exchange Act.

3. Advancement of Expenses Incurred with Respect to Indemnifiable Claims .

(a) Indemnitee shall have the right to advancement by the Company prior to the final disposition of any Indemnifiable Claim of any and all Expenses relating to, arising out of or resulting from any Indemnifiable Claim paid or incurred by Indemnitee or which Indemnitee determines are reasonably likely to be paid or incurred by Indemnitee. Subject to Section 3(b) , Indemnitee’s right to such advancement is not subject to the satisfaction of any standard of conduct. Without limiting the generality or effect of the foregoing, within five business days after any request by Indemnitee, the Company shall, in accordance with such request (but without duplication), (i) pay such Expenses on behalf of Indemnitee, (ii) advance to Indemnitee funds in an amount sufficient to pay such Expenses, or (iii) reimburse Indemnitee for such Expenses; provided that Indemnitee shall repay, without interest any amounts actually advanced to Indemnitee that, at the final disposition of the Indemnifiable Claim to which the advance related, were in excess of amounts paid or payable by Indemnitee in respect of Expenses relating to, arising out of or resulting from such Indemnifiable Claim. For purposes of this Section 3 , the determination of when a “final disposition” of any Indemnifiable Claim will be deemed to occur or have occurred shall be made by the person or entity that has or will make any required Standard of Conduct Determination with respect to such Indemnifiable Claim pursuant to Section 7(b) or Section 7(c) .

(b) For purposes of obtaining payments of Expenses in advance of final disposition of any Indemnifiable Claim, Indemnitee shall submit to the Company an Undertaking averring that Indemnitee has reasonably incurred or will reasonably incur actual Expenses in defending an Indemnifiable Claim. The Undertaking need not be secured and the Company must accept the Undertaking without reference to Indemnitee’s ability to repay the Expenses. Unless at the time of Indemnitee’s act or omission at issue, the Constituent Documents prohibit such advances by specific reference to ORC Section l701.13(E)(5)(a) or unless the only liability asserted against Indemnitee in the subject action, suit or proceeding is pursuant to ORC Section 1701.95, Indemnitee shall be eligible to execute Part A of the Undertaking by which Indemnitee undertakes to: (i) repay such amount if it is proved by clear and convincing evidence in a court of competent jurisdiction that Indemnitee’s action or failure to act involved an act or omission undertaken with deliberate intent to cause injury to the Company or undertaken with reckless disregard for the best interests of the Company; and (ii) reasonably cooperate with the Company concerning the action, suit, proceeding or claim. In all cases, Indemnitee shall be eligible to execute Part B of the Undertaking by which Indemnitee undertakes to repay such amount if it ultimately is determined that Indemnitee is not entitled to be indemnified by the Company under this Agreement or otherwise. In the event that Indemnitee is eligible to and does execute both Part A and Part B of the Undertaking, the Expenses which are paid by the Company pursuant thereto shall be required to be repaid by Indemnitee only if Indemnitee is required to do so under the terms of both Part A and Part B of the Undertaking. In no event shall Indemnitee’s right to the payment, advancement or reimbursement of Expenses pursuant to this Section 3 be conditioned upon any undertaking that is less favorable to Indemnitee than, or that is in addition to, the undertakings set forth in Exhibit A .

4. Indemnification for Expenses Incurred with Respect to Certain Claims Made by Indemnitee . Without limiting the generality or effect of the foregoing, the Company shall indemnify and hold harmless Indemnitee against and, if requested by Indemnitee, shall reimburse

Indemnitee for, or advance to Indemnitee, within five business days of such request, any and all Expenses paid or incurred by Indemnitee or which Indemnitee determines are reasonably likely to be paid or incurred by Indemnitee in connection with any Claim made, instituted or conducted by Indemnitee for (a) indemnification or payment, advancement or reimbursement of Expenses by the Company under any provision of this Agreement, or under any other agreement or provision of the Constituent Documents now or hereafter in effect relating to Indemnifiable Claims, and/or (b) recovery under any directors’ and officers’ liability insurance policies maintained by the Company, regardless in each case of whether Indemnitee ultimately is determined to be entitled to such indemnification, reimbursement, advance or insurance recovery, as the case may be; provided , however , that Indemnitee shall return, without interest, any such advance of Expenses (or portion thereof) which remains unspent at the final disposition of the Claim to which the advance related.

5. Partial Indemnity . If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for a portion of any Indemnifiable Loss, but not for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.

6. Procedure for Notification . To obtain indemnification under this Agreement in respect of an Indemnifiable Claim or Indemnifiable Loss, Indemnitee shall submit to the Company a written request, including a brief description (based upon information then available to Indemnitee) of such Indemnifiable Claim or Indemnifiable Loss. If, at the time of the receipt of such request, the Company has directors’ and officers’ liability insurance in effect under which coverage for such Indemnifiable Claim or Indemnifiable Loss is potentially available, the Company shall give prompt written notice of such Indemnifiable Claim or Indemnifiable Loss to the applicable insurers in accordance with the procedures set forth in the applicable policies. The Company shall provide to Indemnitee a copy of such notice delivered to the applicable insurers, and copies of all subsequent correspondence between the Company and such insurers regarding the Indemnifiable Claim or Indemnifiable Loss, in each case substantially concurrently with the delivery or receipt thereof by the Company. The failure by Indemnitee to timely notify the Company of any Indemnifiable Claim or Indemnifiable Loss shall not relieve the Company from any liability hereunder unless, and only to the extent that, the Company did not otherwise learn of such Indemnifiable Claim or Indemnifiable Loss and such failure results in forfeiture by the Company of substantial defenses, rights or insurance coverage.

7. Determination of Right to Indemnification .

(a) Circumstances in Which No Standard of Conduct Determination is Required . To the extent that Indemnitee shall have been successful on the merits or otherwise in defense of any Indemnifiable Claim or any portion thereof or in defense of any issue or matter therein, including dismissal without prejudice, Indemnitee shall be indemnified against all Indemnifiable Losses relating to, arising out of or resulting from such Indemnifiable Claim in accordance with Section 2 and no Standard of Conduct Determination shall be required.

(b) Standard of Conduct Determination Prior to a Change in Control . To the extent that (i) the provisions of Section 7(a) are inapplicable to an Indemnifiable Claim that shall have been finally disposed of and (ii) a Change in Control shall not have occurred, or a Change

in Control shall have occurred but Indemnitee shall have requested that the Standard of Conduct Determination be made pursuant to this Section 7(b) , any Standard of Conduct Determination shall be made (A) by a majority vote of a quorum consisting of the Disinterested Directors, (B) if the Disinterested Directors so direct, by a majority vote of a committee of Disinterested Directors designated by a majority vote of all Disinterested Directors, or (C) if such quorum of Disinterested Directors is not available or if a majority of such a quorum so directs, by Independent Counsel in a written opinion addressed to the Board, a copy of which shall be delivered to Indemnitee.

(c) Standard of Conduct Determination Following a Change in Control . To the extent that (i) the provisions of Section 7(a) are inapplicable to an Indemnifiable Claim that shall have been finally disposed of and (ii) a Change in Control shall have occurred and Indemnitee shall not have requested that the Standard of Conduct Determination be made pursuant to Section 7(b) , the Standard of Conduct Determination shall be made by Independent Counsel in a written opinion addressed to the Board, a copy of which shall be delivered to Indemnitee.

(d) Cooperation by Indemnitee . Indemnitee will cooperate with the person or persons making such Standard of Conduct Determination pursuant to Section 7(b) or Section 7(c) , including providing to such person or persons, upon reasonable advance request, any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such Standard of Conduct Determination. The Company shall indemnify and hold harmless Indemnitee against and, if requested by Indemnitee, shall reimburse Indemnitee for, or advance to Indemnitee, within five business days of such request, any and all costs and expenses (including attorneys’ and experts’ fees and expenses) incurred by Indemnitee in so cooperating with the person or persons making such Standard of Conduct Determination.

(e) Timing of Standard of Conduct Determination . The Company shall use its reasonable best efforts to cause any Standard of Conduct Determination required under Section 7(b) or Section 7(c) to be made as promptly as practicable. If (i) the person or persons empowered or selected under Section 7(b) or Section 7(c) to make the Standard of Conduct Determination shall not have made a determination within 30 days after the later of (A) the Notification Date and (B) the selection of an Independent Counsel, if such determination is to be made by Independent Counsel, that is permitted under the provisions of Section 7(g) to make such determination and (ii) Indemnitee shall have fulfilled his/her obligations set forth in the first sentence of Section 7(d) , then Indemnitee shall be deemed to have satisfied the applicable standard of conduct; provided that such 30-day period may be extended for a reasonable time, not to exceed an additional 30 days, if the person or persons making such Standard of Conduct Determination in good faith requires such additional time for the obtaining or evaluation or documentation and/or information relating thereto.

(f) Timing of Payment . If (i) Indemnitee shall be entitled to indemnification hereunder against any Indemnifiable Losses pursuant to Section 7(a) , (ii) no determination of whether Indemnitee has satisfied any applicable standard of conduct under Ohio law is a legally required condition precedent to indemnification of Indemnitee hereunder against any Indemnifiable Losses, or (iii) Indemnitee has been determined or deemed pursuant to Section 7(b) ,

Section 7(c) or Section 7(e) to have satisfied any applicable standard of conduct under Ohio law which is a legally required condition precedent to indemnification of Indemnitee hereunder against any Indemnifiable Losses, then the Company shall pay to Indemnitee, within five business days after the later of (x) the Notification Date and (y) the earliest date on which the applicable criterion specified in clause (i), (ii) or (iii) of this Section 7(f) shall have been satisfied, an amount equal to the amount of such Indemnifiable Losses.

(g) Selection of Independent Counsel . If a Standard of Conduct Determination is to be made by Independent Counsel pursuant to Section 7(b) , the Independent Counsel shall be selected by the Board of Directors, and the Company shall give written notice to Indemnitee advising him or her of the identity of the Independent Counsel so selected. If a Standard of Conduct Determination is to be made by Independent Counsel pursuant to Section 7(c) , the Independent Counsel shall be selected by Indemnitee, and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected. In either case, Indemnitee or the Company, as applicable, may, within five business days after receiving written notice of selection from the other, deliver to the other a written objection to such selection; provided , however , that such objection may be asserted only on the ground that the Independent Counsel so selected does not satisfy the criteria set forth in the definition of “Independent Counsel” set forth in Section 1(l) , and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person or firm so selected shall act as Independent Counsel. If such written objection is properly and timely made and substantiated, (i) the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit and (ii) the non-objecting party may, at its option, select an alternative Independent Counsel and give written notice to the other party advising such other party of the identity of the alternative Independent Counsel so selected, in which case the provisions of the two immediately preceding sentences and clause (i) of this sentence shall apply to such subsequent selection and notice. If applicable, the provisions of clause (ii) of the immediately preceding sentence shall apply to successive alternative selections. If no Independent Counsel that is permitted under the foregoing provisions of this Section 7(g) to make the Standard of Conduct Determination shall have been selected within 30 days after the Company gives its initial notice pursuant to the first sentence of this Section 7(g) or Indemnitee gives its initial notice pursuant to the second sentence of this Section 7(g) , as the case may be, either the Company or Indemnitee may petition a court of competent jurisdiction for resolution of any objection which shall have been made by the Company or Indemnitee to the other’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person or firm selected by the court or by such other person as the court shall designate, and the person or firm with respect to whom all objections are so resolved or the person or firm so appointed will act as Independent Counsel. In all events, the Company shall pay all of the reasonable fees and expenses of the Independent Counsel incurred in connection with the Independent Counsel’s determination pursuant to Section 7(b) or Section 7(c) .

8. Presumption of Entitlement . In making any Standard of Conduct Determination, the person or persons making such determination shall presume that Indemnitee has satisfied the applicable standard of conduct, and the Company may overcome such presumption only by its adducing clear and convincing evidence to the contrary. Any Standard of Conduct Determination that is adverse to Indemnitee may be challenged by Indemnitee in the

state or federal courts in Ohio. No determination by the Company (including by its directors or any Independent Counsel) that Indemnitee has not satisfied any applicable standard of conduct shall be a defense to any Claim by Indemnitee for indemnification or reimbursement or advance payment of Expenses by the Company hereunder or create a presumption that Indemnitee has not met any applicable standard of conduct.

9. No Other Presumption . For purposes of this Agreement, the termination of any Claim by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere or its equivalent, will not create a presumption that Indemnitee did not meet any applicable standard of conduct or that indemnification hereunder is otherwise not permitted.

10. Non-Exclusivity . The rights of Indemnitee hereunder will be in addition to any other rights Indemnitee may have under any Other Indemnity Provisions; provided , however , that (a) to the extent that Indemnitee otherwise would have any greater right to indemnification under any Other Indemnity Provision, Indemnitee will be deemed to have such greater right hereunder and (b) to the extent that any change is made to any Other Indemnity Provision which permits any greater right to indemnification than that provided under this Agreement as of the date hereof, Indemnitee will be deemed to have such greater right hereunder. The Company will not adopt any amendment to any of the Constituent Documents the effect of which would be to deny, diminish or encumber Indemnitee’s right to indemnification under this Agreement or any Other Indemnity Provision.

11. Liability Insurance and Funding . For the duration of Indemnitee’s service as a director and/or officer of the Company, and thereafter for so long as Indemnitee shall be subject to any pending or possible Indemnifiable Claim, the Company shall use commercially reasonable efforts (taking into account the scope and amount of coverage available relative to the cost thereof) to cause to be maintained in effect policies of directors’ and officers’ liability insurance providing coverage for directors and/or officers of the Company that is at least substantially comparable in scope and amount to that provided by the Company’s current policies of directors’ and officers’ liability insurance. The Company shall provide Indemnitee with a copy of all directors’ and officers’ liability insurance policies in effect from time to time. Without limiting the generality or effect of the two immediately preceding sentences, the Company shall not discontinue or significantly reduce the scope or amount of coverage from one policy period to the next (i) without the prior approval thereof by a majority vote of the Incumbent Directors, even if less than a quorum, or (ii) if at the time that any such discontinuation or significant reduction in the scope or amount of coverage is proposed there are no Incumbent Directors, without the prior written consent of Indemnitee (which consent shall not be unreasonably withheld or delayed). In all policies of directors’ and officers’ liability insurance obtained by the Company, Indemnitee shall be named as an insured in such a manner as to provide Indemnitee the same rights and benefits, subject to the same limitations, as are accorded to the Company’s directors and officers most favorably insured by such policy. The Company may, but shall not be required to, create a trust fund, grant a security interest or use other means, including a letter of credit, to ensure the payment of such amounts as may be necessary to satisfy its obligations to indemnify and advance expenses pursuant to this Agreement.

12. Subrogation . In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the related rights of recovery of Indemnitee against other persons or entities (other than Indemnitee’s successors), including any entity or enterprise referred to in clause (i) of the definition of “Indemnifiable Claim” in Section 1(j) . Indemnitee shall execute all papers reasonably required to evidence such rights (all of Indemnitee’s reasonable Expenses, including attorneys’ fees and charges, related thereto to be reimbursed by or, at the option of Indemnitee, advanced by the Company).

13. No Duplication of Payments . The Company shall not be liable under this Agreement to make any payment to Indemnitee in respect of any Indemnifiable Losses to the extent Indemnitee has otherwise actually received payment (net of Expenses incurred in connection therewith) under any insurance policy, the Constituent Documents, Other Indemnity Provisions or otherwise (including from any entity or enterprise referred to in clause (i) of the definition of “Indemnifiable Claim” in Section 1(j) ) in respect of such Indemnifiable Losses otherwise indemnifiable hereunder.

14. Defense of Claims . The Company shall be entitled to participate in the defense of any Indemnifiable Claim or to assume the defense thereof, with counsel reasonably satisfactory to Indemnitee; provided that if Indemnitee believes, after consultation with counsel selected by Indemnitee, that (a) the use of counsel chosen by the Company to represent Indemnitee would present such counsel with an actual or potential conflict, (b) the named parties in any such Indemnifiable Claim (including any impleaded parties) include both the Company and Indemnitee and Indemnitee shall conclude that there may be one or more legal defenses available to Indemnitee that are different from or in addition to those available to the Company, or (c) any such representation by such counsel would be precluded under the applicable standards of professional conduct then prevailing, then Indemnitee shall be entitled to retain separate counsel (but not more than one law firm plus, if applicable, local counsel in respect of any particular Indemnifiable Claim) at the Company’s expense. The Company shall not be liable to Indemnitee under this Agreement for any amounts paid in settlement of any threatened or pending Indemnifiable Claim effected without the Company’s prior written consent. The Company shall not, without the prior written consent of Indemnitee, effect any settlement of any threatened or pending Indemnifiable Claim to which Indemnitee is, or could have been, a party unless such settlement solely involves the payment of money and includes a complete and unconditional release of Indemnitee from all liability on any claims that are the subject matter of such Indemnifiable Claim. Neither the Company nor Indemnitee shall unreasonably withhold its consent to any proposed settlement; provided that Indemnitee may withhold consent to any settlement that does not provide a complete and unconditional release of Indemnitee.

15. Successors and Binding Agreement . (a) The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business or assets of the Company, by agreement in form and substance satisfactory to Indemnitee and his or her counsel, expressly to assume and agree to perform this Agreement in the same manner and to the same extent the Company would be required to perform if no such succession had taken place. This Agreement shall be binding upon and inure to the benefit of the Company and any successor to the Company, including any person acquiring directly or indirectly all or substantially all of the business or assets of the Company whether by purchase, merger, consolidation, reorganization or otherwise (and such successor will thereafter be deemed the “Company” for purposes of this Agreement), but shall not otherwise be assignable or delegatable by the Company.

(b) This Agreement shall inure to the benefit of and be enforceable by Indemnitee’s personal or legal representatives, executors, administrators, heirs, distributees, legatees and other successors.

(c) This Agreement is personal in nature and neither of the parties hereto shall, without the consent of the other, assign or delegate this Agreement or any rights or obligations hereunder except as expressly provided in Section 15(a) and Section 15(b) . Without limiting the generality or effect of the foregoing, Indemnitee’s right to receive payments hereunder shall not be assignable, whether by pledge, creation of a security interest or otherwise, other than by a transfer by Indemnitee’s will or by the laws of descent and distribution, and, in the event of any attempted assignment or transfer contrary to this Section 15(c) , the Company shall have no liability to pay any amount so attempted to be assigned or transferred.

16. Notices . For all purposes of this Agreement, all communications, including notices, consents, requests or approvals, required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given when hand delivered or dispatched by electronic facsimile transmission (with receipt thereof orally confirmed), or five business days after having been mailed by United States registered or certified mail, return receipt requested, postage prepaid or one business day after having been sent for next day delivery by a nationally recognized overnight courier service, addressed to the Company (to the attention of the Secretary of the Company) and to Indemnitee at the applicable address shown on the signature page hereto, or to such other address as any party may have furnished to the other in writing and in accordance herewith, except that notices of changes of address will be effective only upon receipt.

17. Governing Law . The validity, interpretation, construction and performance of this Agreement shall be governed by and construed in accordance with the substantive laws of the State of Ohio, without giving effect to the principles of conflict of laws of such State. The Company and Indemnitee each hereby irrevocably consent to the jurisdiction of the state and federal courts in Ohio for all purposes in connection with any action or proceeding which arises out of or relates to this Agreement and agree that any action instituted under this Agreement shall be brought only in the state or federal courts in Ohio.

18. Validity . If any provision of this Agreement or the application of any provision hereof to any person or circumstance is held invalid, unenforceable or otherwise illegal, the remainder of this Agreement and the application of such provision to any other person or circumstance shall not be affected, and the provision so held to be invalid, unenforceable or otherwise illegal shall be reformed to the extent, and only to the extent, necessary to make it enforceable, valid or legal. In the event that any court or other adjudicative body shall decline to reform any provision of this Agreement held to be invalid, unenforceable or otherwise illegal as contemplated by the immediately preceding sentence, the parties thereto shall take all such action as may be necessary or appropriate to replace the provision so held to be invalid, unenforceable or otherwise illegal with one or more alternative provisions that effectuate the purpose and intent of the original provisions of this Agreement as fully as possible without being invalid, unenforceable or otherwise illegal.

19. Prior Agreements . This Agreement shall supersede any and all prior indemnification agreements between the Company and Indemnitee.

20. Miscellaneous . No provision of this Agreement may be waived, modified or discharged unless such waiver, modification or discharge is agreed to in writing signed by Indemnitee and the Company. No waiver by either party hereto at any time of any breach by the other party hereto or compliance with any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, expressed or implied with respect to the subject matter hereof have been made by either party that are not set forth expressly in this Agreement.

21. Legal Fees and Expenses . It is the intent of the Company that Indemnitee not be required to incur legal fees and or other Expenses associated with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to Indemnitee hereunder. Accordingly, without limiting the generality or effect of any other provision hereof, if it should appear to Indemnitee that the Company has failed to comply with any of its obligations under this Agreement (including its obligations under Section 3 ) or in the event that the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or proceeding designed to deny, or to recover from, Indemnitee the benefits provided or intended to be provided to Indemnitee hereunder, the Company irrevocably authorizes Indemnitee from time to time to retain counsel of Indemnitee’s choice, at the expense of the Company as hereafter provided, to advise and represent Indemnitee in connection with any such interpretation, enforcement or defense, including the initiation or defense of any litigation or other legal action, whether by or against the Company or any director, officer, shareholder or other person affiliated with the Company, in any jurisdiction. Notwithstanding any existing or prior attorney-client relationship between the Company and such counsel, the Company irrevocably consents to Indemnitee’s entering into an attorney-client relationship with such counsel, and in that connection the Company and Indemnitee agree that a confidential relationship shall exist between Indemnitee and such counsel. Without respect to whether Indemnitee prevails, in whole or in part, in connection with any of the foregoing, the Company will pay and be solely financially responsible for any and all attorneys’ and related fees and expenses incurred by Indemnitee in connection with any of the foregoing.

22. Certain Interpretive Matters . Unless the context of this Agreement otherwise requires, (a) “it” or “its” or words of any gender include each other gender, (b) words using the singular or plural number also include the plural or singular number, respectively, (c) the terms “hereof,” “herein,” “hereby” and derivative or similar words refer to this entire Agreement, (d) the terms “Article,” “Section,” “Annex” or “Exhibit” refer to the specified Article, Section, Annex or Exhibit of or to this Agreement, (e) the terms “include,” “includes” and “including” will be deemed to be followed by the words “without limitation” (whether or not so expressed), (f) the word “or” is disjunctive but not exclusive, and (g) descriptive headings of the Sections

and subsections of this Agreement are inserted for convenience only and will not control or affect the meaning or construction of any of the provisions of this Agreement. Whenever this Agreement refers to a number of days, such number will refer to calendar days unless business days are specified and whenever action must be taken (including the giving of notice or the delivery of documents) under this Agreement during a certain period of time or by a particular date that ends or occurs on a non-business day, then such period or date will be extended until the immediately following business day. As used herein, “business day” means any day other than Saturday, Sunday or a United States federal holiday.

23. Counterparts . This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original but all of which together shall constitute one and the same agreement.

[Signatures Appear On Following Page]

IN WITNESS WHEREOF, Indemnitee has executed, and the Company has caused its duly authorized representative to execute, this Agreement as of the date first above written.


DEVELOPERS DIVERSIFIED REALTY CORPORATION
3300 Enterprise Parkway Beachwood, Ohio 44122

By:
		Name:
		Title:

[INDEMNITEE] [Address]


[Indemnitee]

EXHIBIT A

UNDERTAKING


STATE OF OHIO	)
	)	SS
COUNTY OF	)

I, , being first duly sworn, do depose and say as follows:

1. This Undertaking is submitted pursuant to the Director and Officer Indemnification Agreement, dated , 2011, between Developers Diversified Realty Corporation, an Ohio corporation (the “ Company ”) and the undersigned.

2. I am requesting payment of Expenses that I have reasonably incurred or will reasonably incur in defending an Indemnifiable Claim referred to in the aforesaid Director and Officer Indemnification Agreement.

3. The Expenses for which payment is requested are, in general, all expenses related to .

4. Part A ⁱ

I hereby undertake to (a) repay the amounts paid pursuant hereto if and to the extent it is proved by clear and convincing evidence in a court of competent jurisdiction that my action or failure to act which is the subject of the matter described herein involved an act or omission undertaken with deliberate intent to cause injury to the Company or undertaken with reckless disregard for the best interests of the Company and (b) reasonably cooperate with the Company concerning the action, suit, proceeding or claim.

[Indemnitee Name]

5. Part B

I hereby undertake to repay the amounts paid pursuant hereto if and to the extent it ultimately is determined that I am not entitled to be indemnified by the Company for all or part of such amounts under the aforesaid Director and Officer Indemnification Agreement or otherwise.

ⁱ

Indemnitee shall not be eligible to execute Part A of this Undertaking if, at the time of Indemnitee’s act or omission at issue, the Articles or the Regulations of the Company prohibit such advances by specific reference to the ORC Section 1701.13(E)(5)(a), or if the only liability asserted against Indemnitee is in an action, suit, or proceeding on the Company’s behalf pursuant to ORC Section 1701.95. In the event that Indemnitee is eligible to and does execute both Part A and Part B hereof, the costs, charges, and expenses which are paid by the Company pursuant hereto shall be required to be repaid by Indemnitee only if Indemnitee is required to do so under the terms of both Part A and Part B.

[Indemnitee Name]

Subscribed and sworn to before me, a Notary Public in and for said County and State, this day of , .

[Seal]

My commission expires the day of , .

Exhibit 10.6

RELEASE AGREEMENT

This Release Agreement (“ Agreement ”) is made and entered into this 11th day of April 2011 (the “ Effective Date ”), by and between SCOTT A. WOLSTEIN, his heirs, executors, successors and administrators (“ YOU ,” “ YOUR ” or “ YOURSELF ”), and DEVELOPERS DIVERSIFIED REALTY CORPORATION (“ DDR ”). (YOU and DDR are each sometimes referred to herein as a “ Party ” or collectively as the “ Parties ”).

Under the terms of this Agreement, DDR and YOU further agree as follows:

1. Separation . YOUR employment with DDR will terminate on July 1, 2011 (the “ Separation Date ”). Pursuant to the terms of the Amended and Restated Employment Agreement, dated as of July 29, 2009, between YOU and DDR (the “ Employment Agreement ”), the termination of YOUR employment with DDR will be designated a termination without Cause by the Board of Directors of DDR (the “ Board ”) in accordance with Section 7.4 of the Employment Agreement that is effective as of the Separation Date, and YOU acknowledge and agree that YOU have received all applicable notices required under the Employment Agreement in connection with the termination of YOUR employment with DDR in a timely manner. The Separation Date will be YOUR “Termination Date” as defined in the Employment Agreement. Notwithstanding the Separation Date, YOU hereby resign from the Board and all offices, other directorships and committee positions (and similar positions) with DDR and any and all subsidiaries or affiliates of DDR, including as Executive Chairman of the Board, effective as of the Effective Date. YOU acknowledge and agree that neither the Board nor DDR has an obligation to nominate YOU for election as a director of DDR or to use any effort to cause YOU to be elected as a director of DDR at the 2011 Annual Meeting

of Shareholders of DDR or any time thereafter, and that YOU will not be nominated for election as a director of DDR at the 2011 Annual Meeting of Shareholders of DDR. From the Effective Date until the Separation Date, YOU will remain a non-officer employee of DDR, but YOU will perform only those duties expressly directed to YOU by the Chief Executive Officer of DDR. YOUR final day of employment with DDR is the Separation Date, and any benefits provided to YOU pursuant to YOUR employment with DDR shall cease as of the Separation Date unless otherwise specifically provided at law or under this Agreement or the Employment Agreement, or under any other DDR plan or agreement that provides for benefits to be provided to YOU following termination of YOUR employment.

2. Release . In consideration of the payments and benefits provided to YOU pursuant to the Employment Agreement and this Agreement, by signing this Agreement, YOU agree to release DDR, its predecessors, current and former subsidiaries, divisions, related entities and affiliates and all of their current and former boards, owners, officers, trustees, directors, members, shareholders, agents, representatives, employees, employee benefit plans, insurers, attorneys and their successors and assigns (collectively referred to hereafter as the “ DDR Released Parties ”) from any and all claims that have arisen or may arise out of YOUR employment with or separation from DDR, up to the date of this Agreement, whether now known or unknown, including, but not limited to, all claims for compensation and fringe benefits; all claims of wrongful discharge or constructive discharge; all claims of breach of express or implied contract or promissory estoppel; all claims of breach of public policy or tort; all claims of defamation or emotional distress; and all other claims under Ohio or federal law,

including without limitation any and all claims of discrimination, harassment or retaliation arising under the Age Discrimination in Employment Act of 1967, as amended, or any other law, statute, code or ordinance or under the common law (“ Release ”). YOU hereby agree to execute an updated Release as of the Separation Date, if requested by DDR, covering the matters addressed in this Section 2 .

Subject to applicable law, by signing this Agreement, YOU also warrant that YOU have not filed any action against or sued the DDR Released Parties, and will not sue or file any actions against the DDR Released Parties, with respect to claims covered by this Agreement.

YOU recognize and understand that, by signing this Agreement, YOU are giving up the opportunity to obtain compensation, damages, and other forms of relief for YOURSELF. This Agreement, however, is not intended to and does not interfere with the right of any governmental agency to enforce laws or to seek relief that may benefit the general public, or YOUR right to assist with or participate in that process. By signing this Agreement, however, YOU waive any right to personally recover against the DDR Released Parties, and YOU give up the opportunity to obtain compensation, damages or other forms of relief for YOURSELF other than that provided in this Agreement. YOU are not, by this Release, waiving any rights: (a) to continuing coverage as an insured under DDR’s directors and officers liability insurance for acts or omissions during the period YOU were employed by or served as a director of DDR; (b) to indemnification to the extent provided under YOUR Officer Indemnification Agreement, dated April 3, 2009; or (c) to the payments and benefits expressly set forth or referenced in this Agreement or the Employment Agreement; and this Release does

not prohibit YOU and shall not be interpreted as prohibiting YOU from taking any action to enforce such rights.

YOU also recognize, understand and agree that DDR’s provision of the payments and benefits described in Sections 3(c) , 4 , 5(a) and 5(c) of this Agreement are contingent on YOUR timely execution of this Agreement and YOUR not revoking this Agreement pursuant to Section 9 of this Agreement, and that in the event that YOU revoke this Agreement pursuant to Section 9 of this Agreement (x) YOU will be obligated to restore and repay to DDR any and all payments and benefits described in Sections 3(c) , 5(a) and 5(c) of this Agreement that have previously been provided to YOU by DDR and (y) the vesting and acceleration of the Accelerated Award Shares described in Section 4 of this Agreement shall be null and void.

3. Payments Under Employment Agreement . Pursuant to the terms of the Employment Agreement, YOU shall be provided with the following payments and benefits. YOU hereby agree that the payments and benefits set forth in this Section 3 , in conjunction with the payments and benefits provided for under Sections 4 and 5 of this Agreement, will fully and completely satisfy any and all of DDR’s obligations to YOU under Sections 8.2 and 9 of the Employment Agreement:

(a) In accordance with the terms of Section 8.2(a) of the Employment Agreement, DDR will continue to pay YOU YOUR base salary at the annual rate of $875,000 through the Separation Date in accordance with DDR’s current payroll practices;

(b) In accordance with the terms of Section 8.2(b) of the Employment Agreement, YOU and DDR acknowledge and agree that DDR has already paid YOU

YOUR Annual Cash Bonus (as defined in the Employment Agreement) earned for 2010, and no lump sum amount will be paid by DDR to YOU pursuant to Section 8.2(b) of the Employment Agreement;

(c) In accordance with the terms of Section 8.2(c) of the Employment Agreement, subject to the other terms of this Agreement, DDR will pay to YOU a lump sum amount equal to $7,871,719 (consisting of $1,309,219 as payment of YOUR base salary for the period after the Separation Date through December 31, 2012 plus $6,562,500 as payment of an amount measured by and equal to two times YOUR Annual Cash Bonus (as defined in the Employment Agreement) for 2011 at the “Target” level described in the Employment Agreement), which payment, plus interest at the short-term applicable federal rate under Section 7872(f)(2)(A) of the Internal Revenue Code in effect on the Separation Date through the payment date, will be made by DDR as soon as administratively practicable after January 1, 2012, but no later than January 15, 2012; and

(d) In accordance with the terms of Section 8.2(d) of the Employment Agreement, DDR will provide YOU and YOUR eligible dependents with continuing medical, hospitalization, vision, and dental insurance through July 1, 2012 under the plans with respect to which YOU are eligible at the same levels maintained by DDR from time to time between the date of this Agreement and July 1, 2012 for DDR’s employees in the following manner: YOU shall timely elect continuation coverage under DDR’s health and dental plans for YOU and YOUR eligible dependents pursuant to COBRA, and DDR shall pay the COBRA premiums for YOU through July 1, 2012. Such payments will be taxable to YOU.

4. Accelerated Vesting of Shares . Pursuant to the Amended and Restated 2008 Developers Diversified Realty Corporation Equity-Based Award Plan (Amended and Restated as of June 25, 2009) (the “ 2008 Equity Plan ”) and applicable award agreements under the 2008 Equity Plan, the Executive Compensation Committee of the Board has determined that, in connection with the termination of YOUR employment with DDR, an aggregate of 94,387 Award Shares (as such term is defined in DDR’s Value Sharing Equity Program (“ VSEP ”), the “ Award Shares ”) that have been earned by YOU but have not vested as of immediately prior to the Separation Date — consisting specifically of 40,364 Award Shares scheduled to vest on January 31, 2015, 48,747 Award Shares scheduled to vest on July 31, 2014 and 5,276 Award Shares scheduled to vest on January 31, 2014 — will accelerate and vest in full as of the Separation Date (such 94,387 Award Shares, the “ Accelerated Award Shares ” ) and will be delivered to YOU in YOUR name.

5. Cash Payments; Forfeiture of Certain Award Shares .

(a) Pursuant to the terms of Section 8.2(e) of the Employment Agreement, the Board has determined that, in connection with the termination of YOUR employment with DDR, DDR shall pay YOU:

(i) an aggregate lump sum amount in cash equal to the product of (A) 100,000 restricted DDR Common Shares awarded to YOU under a 2009 Retention Award Agreement with DDR that have not vested as of immediately prior to the Separation Date (the “ Retention Shares ”) — consisting specifically of 100,000 Retention Shares scheduled to vest on December 31, 2012 — (such 100,000 Retention Shares, the “ Cashed Out Retention Shares ” ), multiplied by (B) Fair Market Value (as

such term is defined in the Employment Agreement, “ Fair Market Value ”) as of the Separation Date, and the Cashed Out Retention Shares will thereby be forfeited by YOU, which amount will be paid by DDR to YOU as soon as administratively practicable after the Separation Date, but no later than July 15, 2011; PLUS

(ii) an aggregate lump sum amount in cash equal to the product of (A) 133,429 Award Shares that have been earned by YOU through and including January 31, 2011 under the VSEP that have not vested as of immediately prior to the Separation Date — consisting specifically of 35,088 Award Shares scheduled to vest on January 31, 2014, 48,747 Award Shares scheduled to vest on July 31, 2013, 40,364 Award Shares scheduled to vest on January 31, 2013 and 9,230 Award Shares scheduled to vest on July 31, 2012 — (such 133,429 Award Shares, the “ Cashed Out VSEP Shares ”), multiplied by (B) Fair Market Value as of the Separation Date, and the Cashed Out VSEP Shares will thereby be forfeited by YOU, which amount will be paid by DDR to YOU as soon as administratively practicable after the Separation Date, but no later than July 15, 2011; PLUS

(iii) a lump sum amount in cash equal to $160,000 (which amount equals the non-employee director fees YOU could have received, based on DDR’s current Board compensation policy, had YOU served on the Board and certain committees of the Board for the 2011-2012 term), which amount will be paid by DDR to YOU as soon as administratively practicable after the end of the Revocation Period, but no later than April 30, 2011; PLUS

(iv) a lump sum amount in cash equal to $30,000 for the fees of legal and other advisors incurred by YOU in connection with entering into this Agreement,

which amount will be paid by DDR to YOU as soon as administratively practicable after the end of the Revocation Period, but no later than April 30, 2011;

provided , that DDR’s payment of the amounts described in Section 5(a) of this Agreement is subject to YOUR timely execution of this Agreement and YOUR non-revocation of this Agreement as described herein.

(b) Pursuant to the terms of Section 9 of the Employment Agreement, DDR shall pay YOU a lump sum amount in cash equal to $300,000 for Continuing Office Support (as such term is defined in the Employment Agreement), which payment will fully and completely satisfy any and all of DDR’s obligations to YOU under Section 9 of the Employment Agreement, which amount, plus interest at the short-term applicable federal rate under Section 7872(f)(2)(A) of the Internal Revenue Code in effect on the Separation Date through the payment date, will be paid by DDR to YOU as soon as administratively practicable after January 1, 2012, but no later than January 15, 2012.

(c) Pursuant to the terms of Section 8.2(e) of the Employment Agreement, the Board has determined that, in connection with the termination of YOUR employment with DDR, DDR shall pay YOU, as soon as administratively practicable after July 31, 2011, but no later than August 15, 2011, an aggregate lump sum amount in cash equal to the product of (i) the Cashed Out Pro Rata VSEP Shares, multiplied by (ii) Fair Market Value as of July 31, 2011, and the Cashed Out Pro Rata VSEP Shares will thereby be forfeited by YOU. For purposes of this Section 5(c) : (1) “ Pro Rata VSEP Shares ” means the number of pro rata Award Shares earned by YOU, if any, through and including May 16, 2011 under the VSEP for the Third Measurement Period (as such term is defined in the VSEP, the “ Third Measurement Period ”) due to the termination

of YOUR employment with DDR on the Separation Date; (2) “ Cashed Out Pro Rata VSEP Shares ” means a number of Pro Rata VSEP Shares (rounded to the nearest whole Pro Rata VSEP Share) equal to the quotient of (x) the actual dollar amount of YOUR withholding tax obligation for the Pro Rata VSEP Shares divided by (y) Fair Market Value as of July 31, 2011; and (3) the Cashed Out Pro Rata VSEP Shares shall be deemed to consist of those Pro Rata VSEP Shares that are subject under the terms of the VSEP to the longest vesting period under the Vesting Schedule (as such term is defined in the VSEP).

(d) Notwithstanding anything in this Agreement or any other agreement to the contrary, YOU hereby agree to forfeit any Award Shares that YOU may otherwise have been able to earn for the period after May 16, 2011 through and including the Separation Date under the VSEP for the Third Measurement Period due to the termination of YOUR employment with DDR on the Separation Date, and YOU shall have no right to continuing participation in the VSEP after the Separation Date or to earn additional Award Shares under the VSEP after May 16, 2011 except for the Pro Rata VSEP Shares.

(e) YOU and DDR hereby acknowledge and agree that the cash amounts provided under Sections 5(a)(i), 5(a)(ii) and 5(c) of this Agreement are intended to cover YOUR withholding tax obligations with respect to certain restricted DDR Common Shares either awarded to YOU under a 2009 Retention Award Agreement with DDR or earned under the VSEP, and that such cash amounts will be available to and may be used by DDR in satisfaction of such withholding tax obligations.

6. Cooperation . From and after the Separation Date, YOU agree to cooperate fully with DDR and with DDR’s counsel in connection with any present and future matters involving regulatory bodies, stock exchanges or independent audits, governmental investigations or reviews, and any actual or threatened litigation or administrative proceedings involving DDR that relate to events, occurrences or conduct occurring (or claimed to have occurred) during the period of YOUR employment by DDR, or any investigation, charge, proceeding or other action or potential action by any governmental agency throughout the world involving DDR (collectively, “ Legal Matters ”). This cooperation by YOU shall include, but not be limited to, the following to the extent allowed by applicable law:

(a)

making YOURSELF reasonably available for interviews and discussions with DDR’s counsel as well as for depositions and trial testimony regarding Legal Matters;

(b)

if depositions or trial testimony regarding Legal Matters are to occur, making YOURSELF reasonably available and cooperating in the preparation for depositions or trial regarding Legal Matters as and to the extent that DDR or DDR’s counsel reasonably requests;

(c)

refraining from impeding in any way DDR’s prosecution or defense of litigation or administrative proceedings regarding Legal Matters;

(d)

cooperating fully in the development and presentation of DDR’s prosecution or defense of litigation or administrative proceedings regarding Legal Matters;

(e)

promptly notifying DDR’s Chief Executive Officer and DDR’s chief legal officer in the event that YOU are contacted by any governmental authority in connection with any investigation, charge or proceeding or any other third party in connection with any actual or threatened Legal Matters involving DDR; and

(f)

promptly executing any statements, affidavits, filings, notices or other documents necessary or appropriate to facilitate the obligations contemplated by this Agreement, including an affidavit substantially in a form previously circulated to YOU regarding the Coventry litigation.

YOU shall be reimbursed by DDR for reasonable travel, lodging, telephone and similar expenses incurred in connection with such cooperation. YOU shall not unreasonably withhold YOUR availability for such cooperation. Upon the Separation Date, YOU shall update DDR as to the status of all pending matters in which YOU were involved.

7. Co-Chairman Emeritus Title . After YOU cease serving as a director of DDR, YOU shall hold the title of “Co-Chairman Emeritus” of the Board, which will be solely an honorary title (in other words, there will be no compensation or other benefits provided to YOU in connection with such title, and such title shall not entitle YOU to attend meetings of the Board once YOU no longer serve as an elected director of DDR).

8. Application of Section 409A . Payments and benefits provided under this Agreement are intended to be exempt from, or comply with, Section 409A of the Internal Revenue Code (“ Code Section 409A ”). This Agreement shall be construed, administered, and governed in a manner that effects such intent, and DDR shall not

take any action that would be inconsistent with such intent. Without limiting the foregoing, the payments and benefits provided under this Agreement may not be deferred, accelerated, extended, paid out or modified in a manner that would result in the imposition of additional tax under Code Section 409A. Although DDR shall use its best efforts to avoid the imposition of taxation, interest and penalties under Code Section 409A, the treatment of the benefits provided under this Agreement under Code Section 409A is not warranted or guaranteed. DDR shall not be held liable for any taxes, interest, penalties or other monetary amounts owed by YOU or any other taxpayer under Code Section 409A as a result of this Agreement. YOU hereby acknowledge and agree that, despite the efforts of the Parties to comply with Code Section 409A, notwithstanding anything in this Agreement or the Employment Agreement to the contrary, YOU have no right to any indemnity, gross-up, reimbursement or similar payment from DDR and expressly waive any and all claims against and release DDR with respect to the imposition, if any, of additional tax, interest or penalties under Code Section 409A in connection with this Agreement.

9. Representations . YOU further represent, warrant and agree that:

(a) YOU are legally competent to enter into this Agreement and that YOU do so voluntarily;

(b)

YOU have been and are hereby advised by DDR that YOU should have an attorney of YOUR choice review this Agreement;

(c)

YOU have been advised by DDR, and YOU acknowledge that YOU have had at least twenty-one (21) days from receipt of this Agreement to determine whether to sign it and to return it; and

(d)

YOU have been advised by DDR that this Agreement may be revoked by YOU within seven (7) days following YOUR signing it (the “ Revocation Period ”), which revocation would render this Agreement null and void.

In order to revoke, YOU understand that YOU must provide written notice of revocation to DDR. YOUR written notice of the revocation of this Agreement shall be delivered by certified or registered mail (first class postage pre-paid), guaranteed overnight delivery or personal delivery to the following address: Chief Executive Officer, Developers Diversified Realty Corporation, 3300 Enterprise Parkway, Beachwood, Ohio 44122. This Agreement shall not become enforceable or effective until the Revocation Period has expired.

10. Non-Disparagement . YOU agree that YOU will not, directly or indirectly, defame, disparage or otherwise attempt to damage, or encourage any third party to defame, disparage or otherwise attempt to damage, the name or reputation of DDR, its directors and executive officers (as defined below). YOU further agree that YOU will not provide assistance to or consult with, directly or indirectly, any former, current or future employee of DDR in connection with any claims or disputes alleged by such employee against DDR, unless otherwise required by law. DDR agrees that it will use its best efforts to cause its directors and executive officers (i.e., Chief Executive Officer, all Senior Executive Vice Presidents, all Executive Vice Presidents, and all Senior Vice Presidents) to not defame, disparage or otherwise attempt to damage, YOUR name or reputation, and DDR will not encourage any third party to defame, disparage or otherwise attempt to damage, YOUR name or reputation.

11. Entire Agreement . YOU acknowledge that YOU have carefully read and fully understand the terms, considerations, and consequences of this Agreement, including the Release of any of YOUR potential claims set forth in Section 2 of this Agreement. YOU further acknowledge that YOU have not relied upon any other representations or statements, whether written or oral, and that this Agreement contains the entire agreement between YOU and DDR, except as otherwise expressly provided herein or in the Employment Agreement. YOU further acknowledge that the covenants and promises made by YOU in this Agreement are in consideration of the payment and other promises made hereunder by DDR, which YOU acknowledge to be sufficient, just and adequate consideration for YOUR covenants and promises. YOU acknowledge that but for YOUR execution of this Agreement, YOU would not be entitled to the amounts being paid to YOU, or on YOUR behalf, hereunder, except for any amounts legally owed under a DDR benefit plan or as otherwise provided in the Employment Agreement.

12. Treatment of the Employment Agreement . Notwithstanding anything herein to the contrary, YOU acknowledge that upon the Separation Date, the Employment Agreement shall immediately terminate and DDR’s and YOUR rights and obligations provided for therein shall cease, except that Sections 5.2, 8.2, 9, 10, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22 and 23 (but with respect to Sections 5.2 and 23, only to the extent relevant to the preceding listed sections) shall continue to apply in accordance with their terms (except that YOU have agreed herein to all amounts owed to YOU by DDR pursuant to the Employment Agreement and YOU have released all rights to bring any claims with respect thereto).

13. Enforceability and Successors . In the event that any provision of this Agreement is found, by any court or governmental agency, to be unlawful or unenforceable, YOU and DDR have the right to require both Parties to continue complying with the remaining provisions of this Agreement or the Agreement as a whole as may be modified by the court or governmental agency. In the event of a breach of this Agreement by YOU or DDR, either Party may seek equitable or other relief and/or enforcement in a court of competent jurisdiction in accordance with Section 15 of this Agreement. The provisions of this Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective heirs, executors, legal representatives, successors and permitted assigns.

14. Disclaimer . YOU acknowledge that (a) neither this Agreement nor compliance with its terms shall be construed as an admission by DDR of a violation of any statutory, contractual, quasi-contractual, common law or other right of YOURS, and (b) neither this Agreement nor the fact of its delivery to YOU shall be admissible in any proceeding as evidence of unlawful or improper conduct by DDR. DDR expressly disclaims any liability to YOU arising out of YOUR employment, separation of employment and otherwise, except for DDR’s obligations (x) as provided in the Employment Agreement and pursuant to any applicable DDR benefit plan if this Agreement is not executed or is revoked during the Revocation Period as expressly permitted herein, or (y) as provided for herein and pursuant to any applicable DDR benefit plan if this Agreement is executed and not revoked during the Revocation Period as expressly permitted herein.

15. Governing Law . The Parties agree that this Agreement shall be construed in accordance with Ohio law, that any action brought by any Party hereunder may be instituted and maintained only in a state or federal court in Cuyahoga County, Ohio.

16. Interpretation . This Agreement has been drafted with input from counsel for both Parties and shall be interpreted in accordance with the plain meaning of its terms and not strictly for or against any Party. The Parties agree that if any suit is filed in Cuyahoga County Common Pleas Court regarding the construction or enforcement of this Agreement, such suit is appropriate for and shall be filed on the commercial docket.

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		DEVELOPERS DIVERSIFIED REALTY CORPORATION

/s/ Scott A. Wolstein		By:	/s/ Daniel B. Hurwitz
Scott A. Wolstein		Name:	Daniel B. Hurwitz
		Title:	President and Chief Executive Officer

Date:	4/11/11	Date:	April 11, 2011

Exhibit 31.1

CERTIFICATIONS

I, Daniel B. Hurwitz, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of DDR Corp.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Exhibit 31.2

CERTIFICATIONS

I, David J. Oakes, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of DDR Corp.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Exhibit 32.1

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Daniel B. Hurwitz, President and Chief Executive Officer of DDR Corp. (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Quarterly Report on Form 10-Q of the Company for the period ended September 30, 2011, as filed with the Securities and Exchange Commission (the “Report”), which this certification accompanies, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.

/s/ Daniel B. Hurwitz

Daniel B. Hurwitz

President and Chief Executive Officer

November 8, 2011

Exhibit 32.2

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, David J. Oakes, Senior Executive Vice President and Chief Financial Officer of DDR Corp. (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

/s/ David J. Oakes

David J. Oakes

Senior Executive Vice President and Chief Financial Officer

November 8, 2011