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Ramco-Gershenson Properties Trust Reports Financial and Operating Results for the Second Quarter 2017

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FARMINGTON HILLS, Mich., Aug. 01, 2017 (GLOBE NEWSWIRE) -- Ramco-Gershenson Properties Trust (NYSE:RPT) today announced its financial and operating results for the three and six months ended June 30, 2017.

SECOND QUARTER FINANCIAL AND OPERATING RESULTS:

  • Net income attributable to common shareholders of $0.05 per diluted share, compared to $0.32 per diluted share, for the same period in 2016, reflecting lower gains on land sales during the second quarter of 2017.
  • Operating Funds from Operations ("Operating FFO") of $0.35 per diluted share, compared to $0.35 per diluted share for the same period in 2016.
  • Generated same property NOI growth with redevelopment of 1.1% for the three months ended June 30, 2017, positively impacted by strong minimum rent growth of 2.9% offset by lower comparable recovery income and credit adjustments recognized in the same period in 2016.
  • Signed 38 comparable leases encompassing 234,503 square feet at a positive leasing spread of 7.1% with an average base rent of $16.53 per square feet.
  • Posted portfolio leased occupancy of 93.7%, compared to 95.0% for the same period in 2016.

"Our second quarter results reflect anticipated short-term moderation in our operating performance. We are maintaining same-property NOI and operating FFO guidance for the year," said Dennis Gershenson, President and Chief Executive Officer. "Subsequent to quarter-end we closed, or expect to close within the next 30 days, an additional $75 million in planned shopping center dispositions, bringing our year-to-date sales to $104 million and reducing our rental exposure to the state of Michigan to less than 22%, in line with our stated goal."

FINANCIAL RESULTS:

For the three months ended June 30, 2017:

  • Net income available to common shareholders of $4.4 million, or $0.05 per diluted share, compared to $25.7 million, which included a $19.8 million gain on land sales, or $0.32 per diluted share for the same period in 2016. 
  • Funds from Operations ("FFO") of $30.4 million, or $0.35 per diluted share, compared to $32.1 million, or $0.36 per diluted share for the same period in 2016.
  • Operating FFO of $31.0 million, or $0.35 per diluted share, compared to $30.8 million or $0.35 per diluted share for the same period in 2016. 

For the six months ended June 30, 2017:

  • Net income available to common shareholders of $15.9 million, or $0.20 per diluted share, compared to $35.9 million, or $0.45 per diluted share for the same period in 2016. 
  • Funds from Operations ("FFO") of $61.2 million, or $0.69 per diluted share, compared to $61.8 million, or $0.70 per diluted share for the same period in 2016.
  • Operating FFO of $61.6 million, or $0.70 per diluted share, compared to $60.4 million or $0.69 per diluted share for the same period in 2016. 

BALANCE SHEET METRICS:

  • Net debt to EBITDA of 7.0X, interest coverage of 3.7X, and fixed charge coverage of 3.0X. Including funds held in escrow of $26.1 million for two asset sales, net debt to EBITDA would have been 6.9X.
  • Weighted average cost and term of debt of 3.84% and 5.6 years, respectively.

INVESTMENT ACTIVITY:

Dispositions

Subsequent to quarter-end, the Company sold or placed under contract four Michigan shopping centers for $69.3 million. The Company also sold a Walgreen's Data Center in Mount Prospect, Illinois for $6.2 million.

The Michigan Properties sold, or placed under contract, are:

Clinton Valley, Sterling Heights, 205,000 square feet anchored by Hobby Lobby and Office Depot
Gaines Marketplace, Gaines Township, 60,000 square feet anchored by Staples
New Towne Plaza, Canton, 193,000 square feet anchored by Kohl's and JoAnn
Roseville Plaza, Roseville, 77,000 square feet anchored by Marshalls and Dollar Tree

Year-to-date the Company has sold or placed under contract to sell, seven non-core properties for a total of $104.0 million, including six Michigan shopping centers for a total of $97.8 million.

Redevelopment

At June 30, 2017, the Company's active redevelopment pipeline consisted of 9 projects with an estimated total cost of $86.5 million, which are expected to stabilize over the next two years at a weighted average return on cost of between 9% - 10%.

The Company's redevelopment pipeline includes the following strategic new projects:

  • Woodbury Lakes - Woodbury, Minnesota - The Company finalized plans for the expansion and relocation of H&M to a strategic 20,000 square foot store and the addition of 44,000 square foot Alamo Drafthouse Cinema.  Construction on the initial phase of this multi-year redevelopment will begin in August of 2017.  The project will also feature a newly designed and remerchandised Main Street.   Woodbury Lakes is the premier regional retail destination in the eastern Minneapolis/St. Paul area.  The cost of the initial phase of the redevelopment is estimated at $22.8 million.
  • Front Range Village - Fort Collins (Denver MSA), Colorado - The Company initiated its Phase I site densification project, which will include 15,000 square feet of premium service and restaurant space, numerous placemaking improvements, and a new TruFit fitness center in 28,000 square feet. Phase I is expected to cost $11.4 million with a projected stabilization in the second quarter of 2018.

DIVIDEND:

In the second quarter, the Company declared a regular cash dividend of $0.22 per common share for the period April 1, 2017 through June 30, 2017 and a Series D convertible perpetual preferred share dividend of $0.90625 per share for the same period.  The dividends were paid on July 3, 2017 to shareholders of record as of June 20, 2017.

GUIDANCE:
The Company has affirmed its 2017 Operating FFO guidance of $1.34 to $1.38 per diluted share and its same-property with redevelopment NOI growth guidance of 2.5% to 3.5%.

CONFERENCE CALL/WEBCAST:

Ramco-Gershenson Properties Trust will host a live broadcast of its second quarter conference call on Wednesday, August 2, 2017 at 1:00 p.m. eastern time, to discuss its financial and operating results as well as its 2017 guidance.  The live broadcast will be available on-line at www.rgpt.com and www.investorcalendar.com and also by telephone at (877) 407-9205, no pass code needed.  A replay will be available shortly after the call on the aforementioned websites (for ninety days) or by telephone at (877) 481-4010, (Conference ID: 15997) through August 9, 2017.

SUPPLEMENTAL MATERIALS:

The Company's quarterly financial and operating supplement is available on its corporate web site at www.rgpt.com.  If you wish to receive a copy via email, please send requests to dhendershot@rgpt.com.

ABOUT RAMCO-GERSHENSON PROPERTIES TRUST:

Ramco-Gershenson Properties Trust (NYSE:RPT) is a premier, national publicly-traded shopping center real estate investment trust (REIT) based in Farmington Hills, Michigan.  The Company's primary business is the ownership and management of regional dominant and urban-oriented, infill shopping centers in key growth markets in the 40 largest metropolitan markets in the United States.  At June 30, 2017, the Company owned interests in and managed a portfolio of 64 shopping centers, one property held for sale and two joint venture properties. At June 30, 2017, the Company's consolidated portfolio was 93.7% leased.  Ramco-Gershenson is a fully-integrated qualified REIT that is self-administered and self-managed. For additional information about the Company please visit www.rgpt.com or follow Ramco-Gershenson on Twitter @RamcoGershenson and facebook.com/ramcogershenson/.

This press release may contain forward-looking statements that represent the Company's expectations and projections for the future. Management of Ramco-Gershenson believes the expectations reflected in any forward-looking statements made in this press release are based on reasonable assumptions. Certain factors could occur that might cause actual results to vary, including deterioration in national economic conditions, weakening of real estate markets, decreases in the availability of credit, increases in interest rates, adverse changes in the retail industry, our continuing ability to qualify as a REIT and other factors discussed in the Company's reports filed with the Securities and Exchange Commission.

 
 
RAMCO-GERSHENSON PROPERTIES TRUST
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
         
    June 30, 2017   December 31, 2016
     
ASSETS        
Income producing properties, at cost:        
Land   $ 415,694     $ 374,889  
Buildings and improvements   1,853,221     1,757,781  
Less accumulated depreciation and amortization   (368,292 )   (345,204 )
Income producing properties, net   1,900,623     1,787,466  
Construction in progress and land available for development or sale   68,853     61,224  
Real estate held for sale   13,837     8,776  
Net real estate   1,983,313     1,857,466  
Equity investments in unconsolidated joint ventures   2,798     3,150  
Cash and cash equivalents   4,798     3,582  
Restricted cash and escrows   31,819     11,144  
Accounts receivable, net   25,842     24,016  
Acquired lease intangibles, net   76,328     72,424  
Other assets, net   93,645     89,716  
TOTAL ASSETS   $ 2,218,543     $ 2,061,498  
         
LIABILITIES AND SHAREHOLDERS' EQUITY        
Notes payable, net   1,197,414     1,021,223  
Capital lease obligation   1,066     1,066  
Accounts payable and accrued expenses   53,982     57,357  
Acquired lease intangibles, net   67,237     63,734  
Other liabilities   6,294     6,800  
Distributions payable   19,654     19,627  
TOTAL LIABILITIES   1,345,647     1,169,807  
         
Commitments and Contingencies        
         
Ramco-Gershenson Properties Trust ("RPT") Shareholders' Equity:        
Preferred shares, $0.01 par, 2,000 shares authorized: 7.25% Series D Cumulative Convertible Perpetual Preferred Shares, (stated at liquidation preference $50 per share), 1,849 shares issued and outstanding as of June 30, 2017 and December 31, 2016   $ 92,427     $ 92,427  
Common shares of beneficial interest, $0.01 par, 120,000 shares authorized, 79,345 and 79,272 shares issued and outstanding as of  June 30, 2017 and December 31, 2016, respectively   793     793  
Additional paid-in capital   1,159,197     1,158,430  
Accumulated distributions in excess of net income   (401,179 )   (381,912 )
Accumulated other comprehensive income   1,074     985  
TOTAL SHAREHOLDERS' EQUITY ATTRIBUTABLE TO RPT   852,312     870,723  
Noncontrolling interest   20,584     20,968  
TOTAL SHAREHOLDERS' EQUITY   872,896     891,691  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 2,218,543     $ 2,061,498  


   
   
RAMCO-GERSHENSON PROPERTIES TRUST  
CONSOLIDATED STATEMENTS OF OPERATIONS  
(In thousands, except per share amounts)  
               
    Three Months   Six Months  
    Ended June 30,   Ended June 30,  
   
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