Donahue Schriber, Diversified Latest Retail Companies to Merge

Newport Beach, CA?The recent spate of retail real estate consolidation continued with the planned merger of two Orange County, Calif.-based developer/managers. Newport Beach-based private REIT Donahue Schriber intends to acquire Diversified Shopping Centers, based in neighboring Costa Mesa, in a deal that will expand Donahue Schriber to $500 million in assets and 12.5 million square feet under management. The combined portfolio would include 46 operating REIT properties and another 1.6 million square feet under development in California, Arizona and Nevada.

Both companies have operated from Orange County for decades, and the principals?primarily Dan Donahue and Tom Schriber of their namesake company and Diversified's Ranney Draper?have known each other for approximately 30 years. Diversified, which brings to the table assets that have reportedly been valued at $300 million or more, has historically specialized in grocery-anchored shopping centers. Donahue Schriber competes in the development, construction management, leasing, asset management and marketing disciplines.

Donahue Schriber, which developed the Glendale Galleria regional mall as well as other prime Southern California shopping centers, restructured as a private UPREIT early last year, raising $120 million from investors including New York State Teachers Retirement System and the U.S. affiliate of Toronto's Cambridge Shopping Centres Ltd.?the latter a major Donahue Schriber co-owner since 1991.

Donahue Schriber intended to grow substantially in the wake of the REIT formation but has reportedly only acquired a $9 million California strip center since that time.

?Brad Berton, Field Editor