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

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FARMINGTON HILLS, Mich., Oct. 31, 2017 (GLOBE NEWSWIRE) -- Ramco-Gershenson Properties Trust (NYSE:RPT) today announced its financial and operating results for the three and nine months ended September 30, 2017.

THIRD QUARTER FINANCIAL AND OPERATING RESULTS:

  • Net income available to common shareholders of $0.33 per diluted share, compared to $0.15 per diluted share for the same period in 2016, reflecting higher gains on real estate sales during the third quarter of 2017.
  • Operating Funds from Operations ("Operating FFO") of $0.34 per diluted share, compared to $0.34 per diluted share for the same period in 2016.
  • Generated same property NOI growth with redevelopment of 1.4% for the three months ended September 30, 2017, positively impacted by strong minimum rent growth of 2.7%, offset by higher expenses net of recovery income as compared to the same period in 2016.
  • Sold $98 million in non-core properties, including five Michigan shopping centers.
  • Posted portfolio leased occupancy of 93.0%, compared to 94.2% for the same period in 2016.
  • Signed 38 comparable leases encompassing 193,561 square feet at a positive leasing spread of 12.3% with an average base rent of $20.67 per square feet.
  • Increased ABR to $14.49 per square foot, compared to $13.71 for the same period in 2016.

"We executed on a number of our priorities during the third quarter. We posted strong leasing results characterized by double-digit rental increases, reduced leverage by selling Michigan assets and further strengthened the balance sheet by renewing and extending our line of credit, lengthening our average debt maturity to over six years," said Dennis Gershenson, President and Chief Executive Officer. "For the remainder of the year, we will remain focused on delivering our stated operating and financial objectives."

FINANCIAL RESULTS:

For the three months ended September 30, 2017:

  • Net income available to common shareholders of $27.3 million, which included $24.5 million gain on real estate sales, or $0.33 per diluted share, compared to $11.9 million, which included $9.4 million gain on real estate sales, or $0.15 per diluted share for the same period in 2016. 
  • Funds from Operations ("FFO") of $30.1 million, or $0.35 per diluted share, compared to $27.8 million, or $0.32 per diluted share for the same period in 2016.
  • Operating FFO of $29.6 million, or $0.34 per diluted share, compared to $30.0 million or $0.34 per diluted share for the same period in 2016. 

For the nine months ended September 30, 2017:

  • Net income available to common shareholders of $43.1 million, or $0.54 per diluted share, compared to $47.7 million, or $0.60 per diluted share for the same period in 2016. 
  • FFO of $92.0 million, or $1.04 per diluted share, compared to $89.6 million, or $1.02 per diluted share for the same period in 2016.
  • Operating FFO of $91.9 million, or $1.04 per diluted share, compared to $90.4 million or $1.03 per diluted share for the same period in 2016. 

BALANCE SHEET METRICS AND CAPITAL MARKETS ACTIVITY:

  • Net debt to EBITDA improved to 6.6X, interest coverage of 3.6X, and fixed charge coverage of 3.0X.
  • Closed on a new $350.0 million revolving credit facility priced at LIBOR plus 135 basis points.

INVESTMENT ACTIVITY:

Dispositions

The Company sold five Michigan shopping centers for $89.6 million. The Company also sold a Walgreen's Data Center in Mount Prospect, Illinois for $6.2 million, as well as the final parcel at Auburn Mile in Auburn Hills, Michigan for $1.0 million.

Year-to-date the Company has sold seven non-core Michigan properties for a total of $118.1 million.

Redevelopment

The Company purchased a 0.4 acre outparcel at Troy Marketplace in Troy, Michigan for $0.9 million as part of a strategic $11.2 million, 27,000 square foot street retail/restaurant expansion along the heavily traveled 16 Mile Road corridor just north of I-75.  Recently signed leases, at an average base rent of $40.00 per square foot, include:

  • First Watch - An award-winning, made-to-order breakfast, brunch and lunch venue centered on unique and fresh offerings.
  • Menchie's Frozen Yogurt - America's yogurt destination, featuring healthful, delicious yogurt options in a fun, down-to-earth atmosphere.
  • MOD Pizza - Specializing in artisan-style pizzas and salads superfast - all at a great value. 

At September 30, 2017, the Company's active redevelopment pipeline consisted of 8 projects with an estimated total cost of $76.1 million, which are expected to stabilize over the next two years at an estimated weighted average return on cost of between 9% - 10%.

DIVIDEND:

In the third quarter, the Company declared a regular cash dividend of $0.22 per common share for the period July 1, 2017 through September 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 October 2, 2017 to shareholders of record as of September 20, 2017.

GUIDANCE:

The Company has narrowed its 2017 Operating FFO guidance to $1.35 to $1.37 per diluted share and its same-property with redevelopment NOI growth guidance of 2.5% to 3.0%.  Its previous FFO and same-property guidance was $1.34 to $1.38, per diluted share and 2.5% to 3.5%, respectively.

CONFERENCE CALL/WEBCAST:

Ramco-Gershenson Properties Trust will host a live broadcast of its third quarter conference call on Wednesday, November 1, 2017 at 10:00 a.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: 20271) through November 8, 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.

INVESTOR DAY:

The Company will be hosting an Investor Day in New York City on December 11, 2017.  Please register for the event HERE.

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 September 30, 2017, the Company owned interests in and managed a portfolio of 60 shopping centers and two joint venture properties. At September 30, 2017, the Company's consolidated portfolio was 93.0% 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.

Company Contact:
Dawn L. Hendershot, Senior Vice President Investor Relations and Public Affairs
31500 Northwestern Highway, Suite 300
Farmington Hills, MI 48334
dhendershot@rgpt.com
(248) 592-6202


RAMCO-GERSHENSON PROPERTIES TRUST
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
       
  September 30, 2017   December 31, 2016
   
ASSETS      
Income producing properties, at cost:      
Land   $ 409,863     $ 374,889  
Buildings and improvements 1,790,464     1,757,781  
Less accumulated depreciation and amortization (345,432 )   (345,204 )
Income producing properties, net 1,854,895     1,787,466  
Construction in progress and land available for development or sale 56,099     61,224  
Real estate held for sale     8,776  
Net real estate 1,910,994     1,857,466  
Equity investments in unconsolidated joint ventures 2,734     3,150  
Cash and cash equivalents 4,781     3,582  
Restricted cash and escrows 5,256     11,144  
Accounts receivable, net 25,459     24,016  
Acquired lease intangibles, net 71,785     72,424  
Other assets, net 92,042     89,716  
TOTAL ASSETS   $ 2,113,051     $ 2,061,498  
       
LIABILITIES AND SHAREHOLDERS' EQUITY      
Notes payable, net   $ 1,081,510     $ 1,021,223  
Capital lease obligation 1,066     1,066  
Accounts payable and accrued expenses 55,090     57,357  
Acquired lease intangibles, net 65,633     63,734  
Other liabilities 9,273     9,893  
Distributions payable 19,666     19,627  
TOTAL LIABILITIES 1,232,238     1,172,900  
       
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 September 30, 2017 and December 31, 2016     92,427       92,427  
Common shares of beneficial interest, $0.01 par, 120,000 shares authorized, 79,366 and 79,272 shares issued and outstanding as of  September 30, 2017 and December 31, 2016, respectively 794     793  
Additional paid-in capital 1,160,054     1,158,430  
Accumulated distributions in excess of net income (394,516 )   (384,934 )
Accumulated other comprehensive income 1,265     985  
TOTAL SHAREHOLDERS' EQUITY ATTRIBUTABLE TO RPT 860,024     867,701  
Noncontrolling interest 20,789     20,897  
TOTAL SHAREHOLDERS' EQUITY 880,813     888,598  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 2,113,051     $ 2,061,498  


   
RAMCO-GERSHENSON PROPERTIES TRUST  
CONSOLIDATED STATEMENTS OF OPERATIONS  
(In thousands, except per share amounts)  
             
  Three Months   Nine Months  
  Ended September 30,   Ended September 30,  
  2017   2016   2017   2016  
REVENUE                
Minimum rent $ 49,736     $ 47,591     $ 149,970     $
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