Q. Why did I receive the proxy statement?
A. Developers Diversified and IRRETI have agreed to the acquisition of IRRETI by Developers Diversified via merger in accordance with the terms of the merger agreement described in this proxy statement.

Q. Why are Developers Diversified and IRRETI proposing to enter into the merger?
A. IRRETI's reasons for the merger include among other things:

• the value and form of the merger consideration
• the current favorable market conditions for selling IRRETI
• the belief of the IRRETI board of directors that the merger represents a more desirable alternative for its stockholders than other strategic alternatives

Developers Diversified's reasons for the merger include, among other things:

• the similarity of IRRETI's and Developers Diversified's property portfolios
• the quality of IRRETI's property portfolio
• the potential to strengthen Developers Diversified's position as the nation's leading owner, developer and manager of market-dominant community centers

Q. What will IRRETI shareholders receive in the merger?
A. For each share of IRRETI common stock owned as of the completion of the merger, shareholders will be entitled to receive $14.00 in cash plus an amount referred to as the “distribution portion” equal to $0.069167 multiplied by the quotient of: (a) the number of days between the last day of the last month for which IRRETI paid a full monthly distribution and the closing date of the merger divided by (b) the number of days in the month in which the closing occurs.

However, Developers Diversified may elect to pay up to $4.00 of the per share merger consideration in the form of Developers Diversified common shares instead of cash.  Developers Diversified has the right to make this stock election any time prior to February 7, 2007, the date that is 15 days before the date of the Special Meeting.

Q. Where and when is the IRRETI shareholders’ Special Meeting?
A. The meeting will take place at the offices of Inland Retail Real Estate Trust, Inc., 2901 Butterfield Road, Oak Brook, Illinois 60523 on February 22, 2007 at 3:00 p.m. Central Standard Time.

Q. What vote is required to approve the merger agreement?
A. The affirmative vote, whether in person or by proxy, of the holders of at least two-thirds of the outstanding shares of IRRETI common stock is required to approve the merger agreement.

Q. Will IRRETI shareholders continue to receive monthly cash distributions on their share of IRRETI common stock?
A. Yes, of up to $0.069167 per share for each calendar month prior to the calendar month in which the merger occurs.  For the calendar month in which the merger occurs, IRRETI shareholders will not receive a monthly cash distribution on their IRRETI common stock, but rather the distribution portion of the merger consideration.

Q. How does the IRRETI board of directors recommend that shareholders vote?
A. The IRRETI board of directors unanimously (subject to the recusal of two directors) recommends that IRRETI stockholders vote "FOR" the proposal to approve the merger agreement.

Q. What do IRRETI shareholders need to do now?
A. After shareholders have read this proxy statement/prospectus carefully, they should indicate on the enclosed proxy card how they want to vote.  Mark, sign, date and return the proxy card in the enclosed prepaid return envelope as soon as possible. 

Alternatively, shareholders may vote via telephone or the internet:

Vote by telephone, call toll-free (800) 730-8449 on a touch-tone telephone.  Shareholders will be asked to enter a CONTROL NUMBER which is located in lower right hand corner of the proxy card.

OPTION A:  To vote as the Board of Directors recommends on all proposals; Press 1.

OPTION B:  If you choose to vote on each proposal separately, press 0.  You will hear these instructions:

Item 1: To vote FOR, press 1;  AGAINST, press 9;  ABSTAIN, press 0.  The instructions are the same for all remaining items to be voted.  When asked, please confirm your vote by pressing 1.

Vote by internet:  The web address is www.proxyvoting.com/INLAND  Shareholders will be asked to enter a CONTROL NUMBER which is located in the lower right hand corner of the proxy card.

IF YOU VOTE BY PHONE OR INTERNET-DO NOT MAIL THE PROXY STATEMENT

Q. Are IRRETI shareholders entitled to appraisal or dissenters’ rights?
A. No.

Q. When do you expect to complete the merger?
A. We must first obtain the approval of IRRETI stockholders at the special meeting.  If that approval is obtained, we expect to complete the merger during the first quarter of 2007.  However, we cannot assure you as to when, or if, the merger will occur.

Q. Where can I find more information about the companies?
A. Developers Diversified and IRRETI each file reports and other information with the Securities and Exchange Commission (SEC).  The SEC filings for Developers Diversified can be found under the Investor Relations heading on our website (www.ddr.com) or on the SEC’s website (www.sec.gov). Please call the SEC at (800) 732-0330 for more information.

Q. What should a stockholder do if they need additional copies of the proxy statement?
A. A stockholder can contact our independent proxy service, Morrow & Company at (800) 573-4804.

Q. Who can help answer my questions?
A. If you have questions about the merger, you may contact IRRETI at:

Inland Retail Real Estate Trust, Inc.
Investor Relations
Telephone: (800) 348-9192
Email: mcconnell@inland-retail.com

Or:

Developers Diversified
Investor Relations
Telephone: (877) DDR-LEAD (337-5323)
Email: mbander@ddr.com