Developments, Shopping Center Repositionings Continue to Drive
Company's Growth
2000 Annual Highlights:
Financial Information
-- Diluted FFO per share of $2.48
-- 4.6% increase in Diluted FFO per share
-- 8.3% increase in Total Revenues
-- 3.6% increase in Same Center Operating Income
-- $1.68 Annual Dividend paid
Operating Results
-- Auburn Mile Development opens in Auburn Hills, Mich.
-- Construction of Crossroads Centre begins in Rossford, Ohio
-- East Towne Plaza acquired in Madison, Wisconsin
-- 70 new non-anchor leases signed at rental rates 19.9% above portfolio
average
-- 101 non-anchor leases renewed at rental rates 11.3% above prior rental
rates
-- 5 Redevelopment Projects completed
-- 3 Redevelopment Projects announced
-- 93.7% Portfolio Occupancy
SOUTHFIELD, Mich., Feb. 14 /PRNewswire/ -- Ramco-Gershenson Properties
Trust (NYSE: RPT) announced today results for the fourth quarter and year-
ended December 31, 2000.
For the twelve months ended December 31, 2000, diluted Funds from
Operations (FFO) increased 4.4 percent, or approximately $1,258,000, to
$30,126,000, compared with $28,868,000 for the twelve months ended December
31, 1999. On a per share basis, the increase was 4.6 percent, or $0.11, to
$2.48, compared with $2.37 in 1999. Total revenues increased 8.3 percent or
$7,054,000, to $92,327,000, compared with $85,273,000 in 1999.
The increase in FFO for the year-ended December 31, 2000 compared to
December 31, 1999 was the result of the following:
-- Improvement in same-center performance at the Company's core assets.
-- Revenues for development and leasing fees at Crossroads Centre.
-- Rental commencements for tenants at Auburn Mile.
-- The receipt of termination fees from tenants.
-- Gains from the sale of land and land options recorded in 2000.
These increases were partially offset by:
-- The full-year effect of several asset sales, which occurred in 1999
-- Increases in overhead expenses from 1999.
"Our financial and operating results for the year were in line with
expectations. We completed the majority of our business objectives announced
one year ago and have positioned ourselves for a productive year in 2001,"
said Dennis Gershenson, president and chief executive officer. "In 2000, we
completed five redevelopments, started one new development project and
purchased a shopping center as part of our acquisition joint venture. In
addition, we strengthened our financial position by renewing our revolving
line of credit, securing an additional $25 million in long term debt and
reducing our variable rate sub-debt facility."
For the three months ended December 31, 2000, diluted FFO decreased 1.2
percent, or approximately $89,000, to $7,416,000, compared with $7,505,000 for
the three months ended December 31, 1999. On a per share basis, the decrease
was 1.6 percent, or $0.01, to $0.61, compared with $0.62 in 1999. The
decrease in diluted FFO was mainly due to the impact of asset sales and
increased interest costs. Total revenues, for the quarter, increased 12.2
percent or $2,641,000, to $24,287,000, compared with $21,646,000 in 1999.
Development
At year-end, RPT's Auburn Mile development was substantially complete.
The 600,000 square foot shopping center located in Auburn Hills, Michigan is
anchored by Meijer (a grocery/general merchandise retailer), Target and a
JoAnn etc craft superstore. Additional anchors include Best Buy, Costco and
Ethan Allen. The project fronts one mile of the I-75 expressway in
Metropolitan Detroit and is situated directly across from the Great Lakes
Crossing Mall.
Construction of the Company's 650,000 square foot Crossroads Centre
shopping center is proceeding ahead of schedule. Home Depot opened January
2001. It is expected that Target and Giant Eagle Supermarket will open in the
spring. Michael's Crafts and Linens 'N Things are slated to open this summer.
Leases have also been signed with Pet Supplies Plus, Fashion Bug, Bath & Body
Works and Shoe Carnival. In September, the Company entered into an
off-balance sheet joint venture, arranged by Deutsche Bank Securities, Inc.,
to develop Crossroads. RPT acts as the managing member for the Joint Venture
with a 10% interest. Additionally, the Company is responsible for the
development, leasing and management of the project and will receive market
fees for its services.
"We are extremely pleased with the progress being made at Crossroad
Centre," said Dennis Gershenson. "Our joint venture initiative for the
project will provide us the flexibility to pursue similar development projects
in the future."
Asset Management
Redevelopment of core assets continues to be an important part of RPT's
real estate strategy. Constantly improving successful centers and
anticipating tenant issues help the Company's shopping centers maintain a
dominant presence in their markets. These redevelopments involve
accommodating tenants' expansion requirements, responding to the changes in
retailing trends and the desire to continually improve the physical aspect of
the centers. In 2000, the Company completed the following redevelopment
projects at an aggregate cost of $8.5 million, producing an estimated return
on investment of 13.4%:
-- Cox Creek, Florence, Alabama -- RPT completed the re-tenanting of a
vacated Wal-Mart store with the addition of a 30,000 square foot Old
Navy store.
-- West Oaks II, Novi, Michigan -- Kohl's completed the expansion of their
store to 90,000 square feet. A Jared Jewelers was added to the center
by expanding a free-standing outlot building.
-- Madison Center, Madison Heights, Michigan -- Kmart expanded its
existing 83,000 square foot store to a 143,000 square feet Super Kmart.
The Company completely renovated the balance of the shopping center,
which is 98% leased.
-- Jackson Crossing, Jackson, Michigan -- This 638,000 square foot
shopping center was expanded to include a new 30,000 square foot Best
Buy store.
-- Conyers Crossing, Conyers, Georgia -- A Hobby Lobby craft superstore in
55,000 square feet replaced a vacated Upton's department store.
The Company enters 2001 with three redevelopments in progress. Publix
Supermarket is expanding their stores at the Company's Sunshine Plaza and
Lantana shopping centers. At RPT's Roseville Plaza shopping center, a portion
of the center has been demolished to accommodate a new 135,000 square foot
Wal-Mart. All three repositionings will be complete in 2001.
Leasing
During the year, the Company opened 70 non-anchor stores, at an average
base rent of $13.05 per square foot, which represents a 19.9% increase above
the portfolio average. The Company also renewed 101 non-anchor leases, 11.3%
above prior rental rates. Additionally, the Company signed 5 new anchor
leases and renewed 7 others. Approximately 93.7% of the gross leasable area
for the portfolio was leased at year-end.
Acquisitions/Dispositions
In April, the Company acquired East Town Plaza shopping center in Madison,
Wisconsin through a joint venture. The 209,000 square foot shopping center
was purchased for $16.5 million. Anchors at the center include JoAnn Fabrics,
Burlington Coat Factory, Marshall's and Borders Books. Under the terms of the
joint venture agreement, RPT received an acquisition fee for the property and
continues to receive asset management, property management and leasing fees.
Also during April, the Company closed on the sale of a net lease building
adjacent to its Tel-Twelve shopping center in Southfield, Michigan. The sale
price was approximately $5 million, producing a gain on sale of $3.4 million.
In January 2001, the Company sold White Lake MarketPlace, a 350,000 square
foot community shopping center located in White Lake, Michigan. The shopping
center was sold for approximately $20 million, which represents a
capitalization rate of 9.1%. The proceeds from the sale were used to pay off
the existing construction loan of $13.6 million as well as $6.2 million on the
Company's revolving line of credit.
In order to provide for the Company's capital needs, RPT will continue to
selectively sell assets. The Company expects to announce further sales in
2001.
Finance
In September, the Company renewed its secured $110 million revolving
credit facility with a consortium of banks led by Fleet National Bank.
Pricing on the renewed line of credit is LIBOR plus a margin of 162.5 to 225
basis points, depending on the Company's leverage ratios. In addition, the
Company closed on $25 million in fixed rate long term debt financing with
Lincoln National Life Insurance Company in August. The loan is an expansion
of existing mortgage facilities with Lincoln National at a blended interest
rate of 8.3%. Also during the year, the Company renewed $25 million of its
$45 million unsecured sub-debt loan with Fleet National Bank. This obligation
bears interest at LIBOR plus a margin of 325 to 450 basis points, depending on
the Company's total leverage. The original loan was reduced by $20 million by
utilizing funds from the expansion of the financing with Lincoln National.
Total market capitalization as of December 31, 2000 was approximately
$510 million. At year-end, fixed rate loans accounted for approximately 60%
of RPT's outstanding debt with an average maturity of 5.4 years and an average
interest rate of 7.9%. The weighted average interest rate on the Company's
variable rate debt was 9.0%. EBITDA interest rate coverage ratios were 1.93
and 2.20 for the quarter and year-end, respectively.
Share Repurchase
In March of 2000, RPT initiated a common stock repurchase program. Since
that time, the Company has purchased 93,100 common shares at an average price
of $13.99 per share. At year-end 7,128,893 common shares were outstanding.
Dividend
The Company paid a cash dividend on its common stock of $0.42 per share on
January 16, 2001 to shareholders of record as of December 31, 2000, which
represents a payout of approximately 68.9% of FFO for the quarter. The annual
dividend amounted to $1.68 per share, of which 19.71% was a return of capital
and 17.86% was a capital gain. The FFO payout ratio improved to 67.7% for the
year, compared with 70.9% for year-ended December 31, 1999.
Summary
"During 2000, Ramco-Gershenson and the balance of the real estate industry
were seriously impacted by continual increases in borrowing costs. We are
pleased that we were still able to execute our business plan and hit our
targeted FFO projections. Our primary disappointment involved our inability
to locate sufficient, quality shopping centers at appropriate prices to
fulfill our acquisition objectives. Rather than make purchases that did not
fit our criteria, we refocused our efforts into our other two disciplines;
asset management and development, to achieve our financial targets."
"As we approach our business plan for 2001, we remain focused on
generating internal growth through the improvement of core assets. We will
continue to concentrate on developing new centers with credit worthy tenants
in metropolitan markets, as well as seek to selectively acquire shopping
centers tenanted by anchors who are less susceptible to economic influences.
We will fund capital needs through the sale of assets and the financing of
individual centers at today's advantageous interest rates. These actions will
also allow us to reduce our exposure to variable rate debt, pay down our most
expensive obligations and repurchase our common stock which is presently at a
significant discount to net asset value. We feel that as a result of these
actions our prospects for this year are very good. We are assuming a
favorable economic environment in 2001 and expect to grow Funds from
Operations between 4%-6%," concluded Dennis Gershenson.
RPT will host a live broadcast of its 4th Quarter/Year-End conference call
on February 14, 2001 at 10:30 a.m. eastern time. The live broadcast will be
available online at http://www.ramcogershenson.com and
http://www.streetevents.com and also by telephone at 800-982-3472 (no passcode
needed). A replay will be available shortly after the call on the
aforementioned Websites (for ninety days) or by telephone at 888-266-2086,
passcode 4893035 (for one week).
Supplemental financial information is available via e-mail by sending
requests to dgarcia@ramco-gershenson.com and is also available at the investor
section of our Web page.
Ramco-Gershenson Properties Trust has a portfolio of 55 shopping centers,
with approximately 11.5 million square feet of gross leasable area, located in
Michigan, Ohio, Wisconsin, New Jersey, Maryland, Virginia, North Carolina,
South Carolina, Tennessee, Georgia, Alabama and Florida. Headquartered in
Southfield, Michigan, the Trust is a fully integrated, self-administered,
publicly-traded real estate investment trust (REIT) which owns, develops,
acquires, manages and leases community shopping centers, regional malls and
single tenant retail properties, nationally.
This press release contains forward-looking statements with respect to the
operation of certain of the Trust's properties. Management of Ramco-
Gershenson believes the expectations reflected in the forward-looking
statements made in this document are based on reasonable assumptions. Certain
factors could occur that might cause actual results to vary. These include
general economic conditions, the strength of key industries in the cities in
which the Trust's properties are located, the performance of the Trust's
tenants at the Trust's properties and elsewhere, and other factors discussed
in the Trust's reports filed with the Securities and Exchange Commission.
Ramco-Gershenson Properties Trust
Operating Results
(In thousands, except per share amounts)
Three Three
Months Months Year Year
Ended Ended Ended Ended
12/31/00 12/31/99 12/31/00 12/31/99
REVENUES (Unaudited)(Unaudited)
Minimum rents $15,263 $14,966 $60,228 $59,779
Percentage rents 160 368 1,745 2,037
Recoveries from tenants 7,743 4,887 23,884 21,486
Gain on sale of real estate 375 974 3,795 974
Interest and other income 746 451 2,675 997
Total Revenues 24,287 21,646 92,327 85,273
EXPENSES
Real estate taxes 3,737 1,805 9,449 7,810
Recoverable operating expenses 4,069 3,428 15,104 14,391
Depreciation and amortization 4,270 3,303 15,274 13,311
Other operating 365 169 1,460 1,418
General and administrative 1,487 1,282 5,520 5,964
Interest expense 7,631 6,206 27,756 25,421
Total Expenses 21,559 16,193 74,563 68,315
Operating income 2,728 5,453 17,764 16,958
Earnings (Loss) from
unconsolidated entities 83 (33) 198 (204)
Income before minority interest 2,811 5,420 17,962 16,754
Minority interest 672 1,593 4,942 4,915
Net income before cumulative
effect of change in accounting
principle 2,139 3,827 13,020 11,839
Cumulative effect of change
in accounting principle(A) -- -- (1,264) --
Net income $ 2,139 $3,827 $ 11,756 $ 11,839
Net income available to common
shareholders $ 1,294 $2,968 $ 8,396 $8,432
Basic and diluted earnings per
share before cumulative effect
of change in accounting
principle:
Basic $0.18 $0.41 $1.34 $1.17
Diluted $0.18 $0.41 $1.34 $1.17
Basic and diluted earnings per
share after cumulative effect
of change in accounting
principle:
Basic $0.18 $0.41 $1.17 $1.17
Diluted $0.18 $ 0.41 $1.17 $1.17
Weighted average shares
outstanding:
Basic 7,151 7,218 7,186 7,218
Diluted 7,151 7,218 7,187 7,218
Ramco-Gershenson Properties Trust
Calculation of Funds from Operations(B)
(In thousands, except per share data)
(Unaudited)
Three Three
Months Months Year Year
Ended Ended Ended Ended
12/31/00 12/31/99 12/31/00 12/31/99
Net Income $2,139 $3,827 $11,756 $11,839
Add:
Depreciation and amortization
expense 4,356 3,310 15,584 13,339
Cumulative effect of change in
accounting principle -- -- 1,264 --
Gain of sale of undepreciated land 249 -- -- --
Minority Interest in partnership 672 1,593 4,942 4,915
Less:
Gain on sale of real estate -- (1,225) (3,420) (1,225)
Funds from Operations-diluted 7,416 7,505 30,126 28,868
Less:
Preferred share dividends 845 859 3,360 3,407
Funds from Operations-basic $6,571 $6,646 $26,766 $25,461
Funds from Operations per share:
Diluted $0.61 $ 0.62 $2.48 $2.37
Basic $0.65 $ 0.65 $2.64 $2.50
Basic weighted average shares
outstanding(C) 10,096 10,169 10,131 10,170
Convertible Preferred shares and
options 2,000 2,000 2,001 2,000
Diluted weighted average shares
outstanding(D) 12,096 12,169 12,132 12,170
Ramco-Gershenson Properties Trust
Consolidated Balance Sheets
(In thousands)
December 31, 2000 December 31, 1999
ASSETS
Investment in real estate, net $ 509,629 $ 507,463
Cash and cash equivalents 2,939 5,744
Accounts receivable, net 15,954 12,791
Equity investments in and advances
to unconsolidated entities 9,337 7,642
Other assets, net 22,425 16,866
Total Assets $ 560,284 $ 550,506
LIABILITIES AND SHAREHOLDERS' EQUITY
Mortgages and notes payable $ 354,008 $ 337,552
Distributions payable 5,076 5,127
Accounts payable and accrued expenses 15,355 15,983
Total Liabilities 374,439 358,662
Minority Interest 47,301 48,396
Commitments and Contingencies -- --
Shareholders' Equity 138,544 143,448
Total Liabilities and Shareholders'
Equity $ 560,284 $ 550,506
(A) In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial
Statements" (SAB 101), which among other topics, requires that real
estate companies should not recognize contingent percentage rents
until the specified target that triggers this type of income is
achieved. The Company had previously recorded percentage rents
throughout the year based on rent estimated to be due from the tenant.
The Company has elected to adopt the provisions of SAB 101 as of April
1, 2000. The cumulative effect of such adoption is a reduction in
percentage rents retroactive to January 1, 2000, of approximately
$1,264,000.
(B) Management generally considers Funds from Operations ("FFO") to be one
measure of financial performance of an Equity REIT. The Trust has
adopted the most recent National Association of Real Estate Investment
Trusts ("NAREIT") definition of FFO, which was amended effective
January 1, 2000. Under the NAREIT definition, FFO represents income
before minority interest, excluding "extraordinary" items, as defined
under generally accepted accounting principles, gains on sale of
property, plus real estate related depreciation and amortization
(excluding amortization of financing costs), and after adjustment for
unconsolidated partnerships and joint ventures. This clarification of
the definition of FFO did not change amount previously reported for
1999.
FFO does not represent cash generated from operating activities in
accordance with generally accepted accounting principles and should
not be considered an alternative to net income as an indication of
the Trust's performance or to cash flows from operating activities as
a measure of liquidity or the ability to pay distributions.
Furthermore, while net income and cash generated from operating,
investing and financing activities, determined in accordance with
generally accepted accounting principles, consider capital
expenditures which have been and will be incurred in the future, the
calculation of FFO does not.
(C) Represents the weighted average total shares outstanding, assuming the
redemption of all operating partnership units for common shares.
(D) Represents the weighted average total shares outstanding, assuming the
redemption of all operating partnership units for common shares, the
conversion of convertible preferred shares to common shares, and
dilutive stock options.
For more information on Ramco-Gershenson Properties Trust via facsimile at
no cost, simply dial 1-800-PRO-INFO and enter the company code RPT or visit
our Website @ http://www.ramcogershenson.com .
SOURCE Ramco-Gershenson Properties Trust
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Related links:
http://www.ramcogershenson.com
CONTACT:
Dennis Gershenson, President & CEO, or
Richard Smith, CFO, both of Ramco-Gershenson, 248-350-9900, or
fax, 248-350-9925
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