DOW JONES NEWSWIRES

Developers Diversified Realty Corp. (DDR) said it may not be able to complete the previously announced $890 million sale of 13 properties to a joint venture as the shopping-center developer and unnamed institutional investor have yet to reach a definitive deal.

Shares slid 14% in recent trading to $4.90; through Friday the stock was down 85% this year.

The sale, announced in late October with a planned closing of mid-December, was intended to help the indebted real-estate investment trust raise cash.

But Developers Diversified said while it still has no agreement, it and the investor are still "in active discussions" regarding assets that might make up a potential deal in 2009.

Chief Investment Officer David Oakes said, "We are disappointed to not close on the large joint venture as we had expected, but we continue to access many sources of capital in order to meet our goals of improving our liquidity and lowering our leverage."

Chief Executive Scott Wolstein said in October he wanted Developers Diversified to cut debt levels following his own cash squeeze in which he had to sell nearly half his stake in the company to satisfy margin calls.

Despite the ongoing economic weakness and resulting bankruptcies in the retail sector, Developers Diversified said Monday it "continues to expect to maintain compliance with all loan covenants and the liquidity to meet all near-term liabilities."

Developers Diversified is trying to avoid the straits currently pressuring competitors General Growth Properties Inc. (GGP) and Centro Properties Group (CNP.AU), both of which are struggling to deal with looming debt payments and how to refinance or pay them.

-By Mike Barris, Dow Jones Newswires; 201-938-5658; mike.barris@dowjones.com

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