Developers Diversified HQ to grow
Richmond Road project will enhance REIT's
Developers Diversified Realty Corp. will give itself a new corporate address and a new entrance off busy Richmond Road with a planned four-story, multimillion-dollar addition to its Beachwood headquarters. In the process, the growing real estate investment trust that specializes in shopping centers also is going to gain a high-visibility presence on a highly trafficked street — similar to what it prides itself on providing to retailers that inhabit its 740 properties in the United States, Puerto Rico and three foreign countries. "We bought this parcel with the idea of someday creating a corporate campus," said Daniel Hurwitz, Developers Diversified president and chief operating officer, in talking about the land the REIT acquired two years ago when it finished its last headquarters expansion at 3300 Enterprise Parkway. Developers Diversified has grown so much through acquisitions and continued development projects that someday is now. The new building at 3333 Richmond will add 140,000 square feet to Developers' Diversified's current 90,000-square-foot corporate headquarters. Developers Diversified ultimately may use all the new space itself, but for now will offer 50,000 square feet to space-hungry tenants in the eastern suburbs. Mr. Hurwitz said Developers Diversified's Northeast Ohio headquarters staff now numbers 500, and it forecasts hiring another 50 by the end of 2008. Those hires would hike DDR's corporate staff 57% from the 350 employees it had in 2005, when the REIT last added to its headquarters. Developers Diversified already has about 100 employees in rented office space in Beachwood and Moreland Hills, Mr. Hurwitz said. The new space will help the REIT house those employees at the corporate campus and will offer other benefits. "This will also allow us to satisfy some needs we have now for training and meeting space," Mr. Hurwitz said. The new building will include a 150-seat amphitheater with teleconferencing capability. It also will feature a 5,000-square-foot fitness center and will double the size of its company café so it can have on-premises cooking services. "We now have to go off site, and do so on a regular basis" to accommodate large company meetings, Mr. Hurwitz said.
A Premier project
Developers Diversified expects to submit its plans to Beachwood Planning Commission for final review this Thursday, Nov. 29. If the city approves the plans, construction will begin in January with the goal of occupying the new building by fall 2009, Mr. Hurwitz said. The company has retained Premier Development Partners of Cleveland to serve as its developer and general contractor for the project. Premier is run by Ross Farro, a longtime office developer who is a partner with the family of Developers Diversified chairman and CEO Scott Wolstein in the US Bank Building in Cleveland's Theater District, and industrial developer Spencer Pisczak. The two are former Duke Realty Corp. executives who teamed up last year to buy 330 acres of Duke's industrial land and to provide development services to Northeast Ohio companies. Mr. Hurwitz said Developers Diversified retained Premier for the project because it decided it is a better use of its "human capital" to keep its development and construction personnel focused on retail projects. The company also wanted to hire experts in office development, Mr. Hurwitz said. With Mr. Farro's relationship with the Wolstein family and extensive office experience, Premier was a natural for the job, Mr. Hurwitz said. Mr. Farro, who is Premier's CEO, developed more than 20 Northeast Ohio office buildings before and during his years with Duke. Richard L. Bowen & Associates of Cleveland will design the building. The structure will have a two-story atrium at its Richmond Road entrance and will connect to Developers Diversified's existing building with a pedestrian bridge, said Mr. Pisczak, Premier's president. The principals would not disclose a cost estimate for the project, but industry standards indicate such a structure would cost $22 million. The existing café will become additional offices after the new building is finished. The executive offices will remain in the original headquarters building, Mr. Hurwitz said. Otherwise, the units that will transfer to the new building have not yet determined. Developers Diversified's growth has added employees in its property and corporate accounting groups as well as its corporate finance, legal and information technology units, Mr. Hurwitz said.
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