Market Overview

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

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FARMINGTON HILLS, Mich., Feb. 20, 2018 (GLOBE NEWSWIRE) -- Ramco-Gershenson Properties Trust (NYSE:RPT) today announced its financial and operating results for the three and twelve months ended December 31, 2017.

FOURTH QUARTER FINANCIAL AND OPERATING RESULTS:

  • Net income available to common shareholders of $0.24 per diluted share, compared to $0.07 per diluted share for the same period in 2016.
  • Funds from Operations ("FFO") of $0.30 per diluted share, compared to $0.33 per diluted share for the same period in 2016.
  • Operating Funds from Operations ("Operating FFO") of $0.31 per diluted share, compared to $0.34 per diluted share for the same period in 2016.
  • Generated same property NOI growth with redevelopment of 2.3% for the three months ended December 31, 2017.
  • Sold $101.4 million of non-core shopping centers.
  • Signed 40 comparable leases encompassing 206,502 square feet at a positive leasing spread of 8.9% with an annualized base rent ("ABR") of $14.47 per square feet, including seven new leases with an ABR of $18.06 per square feet and positive leasing spread of 16.8%.
  • Increased ABR to $15.16 per square foot, excluding ground leases, compared to $14.20 for the same period in 2016.

2017 FULL-YEAR HIGHLIGHTS: 

  • Generated same-center NOI growth with redevelopment of 2.4% for the twelve months ended December 31, 2017. 
  • Signed 186 comparable leases encompassing 1,073,197 square feet at a positive leasing spread of 8.8%, including 24 new leases with an ABR of $19.38 per square feet and positive leasing spread of 18.0%.
  • Acquired one dynamic town center and one urban in-fill property for a purchase price totaling $168.3 million.
  • Sold $225.7 million of non-core shopping centers.
  • Completed approximately $15.5 million in redevelopment projects.
  • Posted portfolio leased occupancy of 93.3%, compared to 94.4% for the same period in 2016, primarily the result of bankruptcy closures in 2017.
  • Reduced Michigan rental exposure to 20.0% of total ABR.

"In 2017, we completed the sale of $226 million of non-core properties diversifying our portfolio in strategic non-coastal markets,"  said Dennis Gershenson, President and Chief Executive Officer.  "In 2018, our focus is on operating fundamentals, including growing occupancy, increasing our portfolio ABR and completing in-process redevelopment projects to maximize the value of our rebalanced portfolio."

FINANCIAL RESULTS:

For the three months ended December 31, 2017:

  • Net income available to common shareholders of $19.2 million, or $0.24 per diluted share, compared to $5.2 million, or $0.07 per diluted share for the same period in 2016. 
  • FFO of $26.5 million, or $0.30 per diluted share, compared to $29.1 million, or $0.33 per diluted share for the same period in 2016.
  • Operating FFO of $27.7 million, or $0.31 per diluted share, compared to $29.5 million or $0.34 per diluted share for the same period in 2016. 

For the twelve months ended December 31, 2017:

  • Net income available to common shareholders of $62.4 million, or $0.78 per diluted share, compared to $53.0 million, or $0.66 per diluted share for the same period in 2016. 
  • FFO of $118.6 million, or $1.34 per diluted share, compared to $118.7 million, or $1.35 per diluted share for the same period in 2016.
  • Operating FFO of $119.6 million, or $1.36 per diluted share, compared to $119.9 million or $1.36 per diluted share for the same period in 2016. 

BALANCE SHEET METRICS AND CAPITAL MARKETS ACTIVITY:

  • Net debt to annualized proforma adjusted EBITDA of 6.7X, interest coverage of 3.6X, and fixed charge coverage of 3.0X.

INVESTMENT ACTIVITY:
Dispositions

During the fourth quarter, the Company sold four shopping centers which are not part of the Company's long-term portfolio strategy, at a gross sales price of $101.4 million. The properties sold are:

  • Millennium Park Livonia, Michigan, a 273,000 square foot power center anchored by Meijer (shadow), Costco (shadow), The Home Depot, Marshalls, Michaels and Five Below;
  • Village Plaza, Lakeland, Florida, a 158,000 square foot center anchored by Hobby Lobby, Big Lots and Party City;
  • Liberty Square, Wauconda, Illinois, a 107,000 square foot Jewel-Osco anchored center; and
  • Rolling Meadows, Rolling Meadows, Illinois, a 134,000 square foot Jewel-Osco anchored center.

The Company's total shopping center dispositions for the year totaled $225.7 million. 

Redevelopment

At December 31, 2017, the Company's active redevelopment pipeline consisted of seven projects with an estimated total cost of $73.7 million, which are expected to stabilize in 2018 at an estimated weighted average return on cost of between 9% - 10%.

FINANCING ACTIVITY:

The Company closed a $75.0 million private placement of senior unsecured notes in December 2017.  The notes were issued in three tranches with terms of 5, 10, and 12 years and a weighted average interest rate of 4.46%.  Proceeds were used to pay off two mortgages totaling $36.7 million with an average interest rate of 4.64% as well as for general corporate purposes.

In addition, during the quarter, the Company amended and repriced its $75.0 million term loan due 2021.  The transaction reduced the loan's interest rate by 35 basis points for the remainder of the term.

DIVIDEND:

In the fourth quarter, the Company declared a regular cash dividend of $0.22 per common share for the period October 1, 2017 through December 31, 2017 and a Series D convertible perpetual preferred share dividend of $0.90625 per share for the same period.  The dividends were paid on January 2, 2018 to shareholders of record as of December 20, 2017.  During the year, the Company declared dividends of $0.88 per common share. The Operating FFO payout ratio for the full year was 64.7%.

GUIDANCE:

The Company affirmed its 2018 FFO and Operating FFO guidance of $1.31 to $1.37 per share, as well as certain other key assumptions:

  • Same Property NOI growth including redevelopment of 2.25% to 3.75%.
  • Redevelopment Expenditures of $40.0 to $50.0 million.
  • Year End Physical Occupancy of 93% - 94%.
         
Measure   Low   High
Cash NOI   $1.99   $2.02
Non-cash adjustments   0.08   0.08
General and administrative   (0.26)   (0.24)
Interest expense   (0.50)   (0.49)
Total Operating FFO   $1.31   $1.37
         

CONFERENCE CALL/WEBCAST:

Ramco-Gershenson Properties Trust will host a live broadcast of its fourth quarter conference call on Wednesday, February 21, 2018 at 10:00 a.m. eastern time, to discuss its financial and operating results as well as its 2018 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: 23919) through February 28, 2018.

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 December 31, 2017, the Company owned interests in and managed a portfolio of 56 shopping centers and three joint venture properties. At December 31, 2017, the Company's consolidated portfolio was 93.3% 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)
       
  December 31, 2017
  December 31, 2016
            (as revised)  
ASSETS      
Income producing properties, at cost:      
Land $ 397,935     $ 374,889  
Buildings and improvements 1,732,844     1,757,781  
Less accumulated depreciation and amortization (351,632 )   (345,204 )
Income producing properties, net 1,779,147     1,787,466  
Construction in progress and land available for development or sale 58,243     61,224  
Real estate held for sale     8,776  
Net real estate 1,837,390     1,857,466  
Equity investments in unconsolidated joint ventures 3,493     3,150  
Cash and cash equivalents 8,081     3,582  
Restricted cash and escrows 4,810     11,144  
Accounts receivable, net 26,145     24,016  
Acquired lease intangibles, net 59,559     72,424  
Other assets, net 90,916     89,716  
TOTAL ASSETS $ 2,030,394     $ 2,061,498  
       
LIABILITIES AND SHAREHOLDERS' EQUITY      
Notes payable, net $ 999,215     $ 1,021,223  
Capital lease obligation 1,022     1,066  
Accounts payable and accrued expenses 56,750     57,357  
Acquired lease intangibles, net 60,197     63,734  
Other liabilities 8,375     9,893  
Distributions payable 19,666     19,627  
TOTAL LIABILITIES 1,145,225     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 December 31, 2017 and 2016, respectively 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 December 31, 2017 and 2016, respectively 794     793  
Additional paid-in capital 1,160,862     1,158,430  
Accumulated distributions in excess of net income (392,619 )   (384,934 )
Accumulated other comprehensive income 2,858     985  
TOTAL SHAREHOLDERS' EQUITY ATTRIBUTABLE TO RPT 864,322     867,701  
Noncontrolling interest 20,847     20,897  
TOTAL SHAREHOLDERS' EQUITY 885,169     888,598  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 2,030,394     $ 2,061,498  
   
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