As debt-laden Developers Diversified Realty Corp. (DDR) swung to a fourth-quarter loss, the company's capital-raising efforts could be insufficient.

Wall Street analysts say the shopping center real-estate investment trust must take bolder steps to ensure liquidity in the face of sizable loans coming due next year. Investors are skittish about Developers Diversified given its exposure to bankrupt big box retailers and refinancing concerns as larger rival General Growth Properties (GGP) struggles to avoid bankruptcy.

Shares of Developers Diversified, down 4.5% in recent trading, have plunged 48% since the beginning of the year to roughly $2.50.

"I think they're addressing their liquidity needs. (But), they're just taking baby steps. I don't know if they can take baby steps in this market," said Jeffrey Spector, an analyst at UBS. "The question is, do they need to do something more dramatic" given their hefty debt load?

To preserve cash, Developers Diversified said Monday that 10% of its first quarter dividend for 2009 will be paid in cash and the balance in company stock. Such actions, gaining popularity among REITs in the wake of a revised rule on the matter by the Internal Revenue Service, has been hailed by Wall Street as an efficient capital-saving measure.

"Our biggest area of concern remains this company's balance sheet and the fact that management continues to dribble out equity - either through a continuous equity issuance program or the newly announced payment of 90% of the dividend with stock," wrote Rich Moore, an analyst at RBC Capital Markets Monday.

He said the situation "suggests some measure of desperation with regard to capital access."

RBC's report said the company's credit facilities appeared stretched with under $300 million of availability. The firm noted Developers Diversified issued 8.6 million shares at $5 during the quarter and will now pay its $1.50 dividend mostly in stock.

A Developers Diversified official was not immediately available to comment.

The company accumulated a lot of debt via acquisitions, and in recent months has been looking to pare down its borrowings amid a continuing credit crunch.

Many REITs, particularly in the retail industry, have been slammed by a deepening recession as the housing market continues to drop because of tight credit, high foreclosure rates and rising unemployment. Meanwhile, some of Developers Diversified's tenants, including its second-largest, department-store owner Mervyn's, have gone bankrupt and liquidated.

The company reported on Monday a net loss of $179.6 million, or $1.57 a share, compared with year-earlier net income of $42.8 million, or 27 cents a share. The latest results included $1.78 a share in charges related to investments, the sale of real estate and write-downs.

Meanwhile, funds from operations, a key measure of REIT profitability, fell to negative 95 cents from 82 cents. FFO excluding items was 74 cents. Revenue decreased 1.8% to $231.2 million.

Excluding items, analysts surveyed by Thomson Reuters expected earnings of 17 cents, FFO of 78 cents and revenue of $222 million.

"They took a lot of impairments which are fairly common for...REITs in 2008 given the decrease in asset values," said Nicholas Vedder, an analyst at Green Street Advisors. "The impairments are necessary because the value of the assets are worth less than the value recorded on the balance sheet," he said.

UBS' Spector said among Developers Diversified's options includes executing larger equity offerings, management changes or adopt a different business strategy.

   -By A.D. Pruitt, Dow Jones Newswires, 201-938-2269, angela.pruitt@dowjones.com

(Kerry E. Grace contributed to this report)