Development and Redevelopment Projects Drive Increase in Financial Results
1999 Annual Highlights:
Financial
-- 18.7% Increase in Diluted FFO
-- 11.1% Increase in Total Revenues
-- 6.8% Increase in Diluted FFO per share, to $2.37
-- $1.68 Annual Dividend paid
Operations
-- White Lake MarketPlace Development opens
-- Construction of Auburn Mile Shopping Center begins
-- $125 million Acquisition Joint Venture with Investcorp announced
-- 14 Anchor Tenants Commence Paying Rent, 9.2% above portfolio anchor
rental average
-- 60 Non-Anchor Tenants Commence Paying Rent, 13.1% above portfolio
rental average
-- 54 Non-Anchor Renewals, 9.7% above previous rental rates
-- 6 Redevelopment Projects Completed
-- 5 Redevelopment Projects Commenced
-- 93% Annual Portfolio Occupancy
SOUTHFIELD, Mich., Feb. 15 /PRNewswire/ -- Ramco-Gershenson Properties
Trust (NYSE: RPT) today announced results for the fourth quarter and year
ended December 31, 1999.
For the three months ended December 31, 1999, diluted Funds from
Operations (FFO) increased 8.4 percent, or approximately $580,000, to
$7,505,000, compared with $6,925,000 for the three months ended December 31,
1998. On a per share basis, the increase was 5.1 percent, or $0.03, to $0.62
compared with $0.59 for the same period in 1998. Total revenues increased
2.7 percent or $559,000, to $21,646,000, compared with $21,087,000 for the
same period in 1998.
For the twelve months ended December 31, 1999, diluted FFO increased
18.7 percent, or approximately $4,538,000, to $28,868,000, compared with
$24,330,000 for the twelve months ended December 31, 1998. On a per share
basis, the increase was 6.8 percent, or $0.15, to $2.37 compared with $2.22
for the same period in 1998. Total revenues increased 11.1 percent, or
$8,518,000, to $85,273,000, compared with $76,755,000, for the same period in
1998.
"Our solid performance for the year is attributable to the Company's
commitment to generating internal growth through the redevelopment of core
assets, the selective development of strategically located shopping centers
and the full-year effect of acquisitions made last year," said Dennis
Gershenson, president and chief executive officer. "This year we completed
six major redevelopment projects. We finished our 350,000 square foot White
Lake MarketPlace development project in White Lake, Michigan and commenced
construction of the Auburn Mile, a 650,000 square foot shopping center located
in Auburn Hills, Michigan. In addition, we formed a strategic partnership
with Investcorp International that affords us the opportunity to continue to
acquire value-added assets in a capital constrained market."
Asset Management
Redevelopment of core assets remains at the center of the Company's
business plan and was one of the primary drivers of growth this year. During
1999, the Company completed the following redevelopment projects:
Southfield Plaza, Southfield, Michigan-F & M Drug Store (a division of
Drug Emporium) opened in 30,000 square feet replacing the last portion of the
space previously occupied by Service Merchandise. F & M Drug Store joins
Burlington Coat Factory, also recently expanded, as well as Farmer Jack (a
division of A & P) as anchors for the center.
Clinton Valley Mall, Sterling Heights, Michigan-Office Depot in 30,000
square feet celebrated its grand opening replacing a portion of the space
previously occupied by Montgomery Ward. Additional redevelopment of this
center is planned.
West Oaks II, Novi, Michigan-The first ever two-story JoAnn etc craft
superstore opened in 50,000 square feet. The two-story plan was introduced to
accommodate the conversion of an 11,000 square foot JoAnn Fabric's unit to
their superstore concept. The opening of JoAnn etc completed the first phase
of this redevelopment project.
Northwest Crossing II, Knoxville, Tennessee-The construction of an
OfficeMax in 23,000 square feet was completed this fall. The Company acquired
a three-acre parcel adjacent to our 261,000 square foot Northwest Crossing
shopping center for the expansion, which includes the ability to build an
additional 19,000 square feet of retail space. OfficeMax joins anchors Wal-
Mart, Goody's Family Clothing and Ingles Supermarket.
Jackson West, Jackson, Michigan-Michael's Crafts opened in 21,000 square
feet joining Circuit City, Lowe's Home Improvement and OfficeMax as anchors
for the center.
Edgewood Square, North Augusta, South Carolina-Bi-Lo Grocery expanded
their supermarket by 16,000 square feet.
Redevelopment projects presently underway include:
West Oaks II, Novi, Michigan-Kohl's department store is expanding their
facility by 20,000 square feet. The two-story addition is scheduled to be
complete this summer.
Madison Center, Madison Heights, Michigan-Kmart is converting its existing
83,000 square foot store to a 143,000 square foot Super Kmart. As part of the
redevelopment plan, the Company has secured the right to both expand the
center by an additional 25,000 square feet and add an outlot. Negotiations
with national retailers are underway.
Roseville Plaza, Roseville, Michigan-An expansion and redevelopment of
this center is in progress. A lease for a 135,000 square foot Wal-Mart store
has been executed. A portion of the center will be demolished to make way for
the Wal-Mart. As part of the redevelopment, CVS Drug is relocating and
expanding their store. Wal-Mart is scheduled to open in the spring of 2001.
Cox Creek Plaza, Florence, Alabama-A lease has been signed with Old Navy
for a 30,000 square foot store, replacing the last third of the space vacated
by Wal-Mart. Old Navy will join Toys R Us and Goody's Family Clothing as
anchors for this center.
Jackson Crossing, Jackson, Michigan-A lease has been signed for the
addition of a 30,000 square foot Best Buy store. Best Buy will join Sears and
Kohl's department stores, as well as Target and Toys R Us, as anchors for this
650,000 square foot center. Opening of Best Buy is expected for Christmas
2000.
Leasing
The Company also generated internal growth through its focus on the
leasing of vacant space and increasing rents on renewals of existing
tenancies. Leasing efforts for the year included 54 non-anchor renewals at
rental rates 9.7 percent above those previously being paid. In addition, the
Company signed 60 new non-anchor leases at rental rates 13.1 percent above
average portfolio rates. Notably, the Company signed a significant number of
anchor leases in 1999, which will impact individual center's net operating
income in 2000 and 2001.
Development
During the year the Company completed its White Lake MarketPlace shopping
center located in White Lake, Michigan. This 350,000 square foot shopping
center is anchored by Wal-Mart, Home Depot, OfficeMax and Farmer Jack (a
division of A & P).
The Company also commenced construction on the Auburn Mile, a 650,000
square foot shopping center located in Auburn Hills, Michigan. When complete,
this center will front one full mile of the I-75 expressway and will be part
of one of the most significant growth corridors in the greater Detroit
Metropolitan area. Anchor tenants include Meijer,Target and JoAnn etc, all
currently under construction. A summer 2000 grand opening is planned.
Acquisitions/Dispositions
In August, the Company signed a $125 million Joint Venture agreement with
an affiliate of Investcorp International, Inc. The Joint Venture will acquire
shopping centers that include value-added opportunities located primarily in
the Midwest and Northeast. The first two acquisitions by the Joint Venture
were the Company's Chester Springs shopping center in Chester, New Jersey and
Rivertowne Square in Deerfield Beach, Florida, representing a combined
purchase price of approximately $31 million. The remainder of the
acquisitions are expected to be identified in 2000.
As part of its strategy to generate capital, the Company sold two non-core
assets in December. A free-standing Toys R Us located in Commack, New York
was sold for $3.6 million. In addition, the Company sold Trinity Corners, a
50,000 square foot neighborhood shopping center located in Pound Ridge, New
York for $2.8 million.
Dividend
The Company paid a cash dividend on its common stock of $0.42 per share on
January 18, 2000 to shareholders of record on December 31, 1999 for an
annualized dividend of $1.68 per share, of which 34.1 percent was a return of
capital. This represents an improvement in the FFO payout ratio to
70.9 percent, compared with 75.7 percent for the same period last year.
Outlook
"Our business plan for the year 2000 includes growth through the
management and repositioning of our core assets, the acquisition of value-
added centers as part of the joint venture and the development of a new
shopping center," said Dennis Gershenson. "I am encouraged that at the start
of the new millenium, the marketplace has come to realize that bricks and
mortar retailing and e-commerce can coexist and thrive, complementing each
other to provide a beneficial shopping experience for the consumer. I look
forward to the challenges and opportunities the new year will present for both
Ramco-Gershenson and the retailing industry as a whole."
Ramco-Gershenson Properties Trust has a portfolio of 54 shopping centers,
with approximately 10.6 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 Company is a fully integrated, self-administered,
publicly-traded real estate investment trust (REIT). The Trust owns,
develops, acquires and manages 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.
FINANCIAL RESULTS
Ramco-Gershenson Properties Trust
Operating Results
(In thousands, except per share amounts)
Three Three
Months Months Year Year
Ended Ended Ended Ended
12/31/99 12/31/98 12/31/99 12/31/98
REVENUES (Unaudited) (Unaudited)
Minimum rents $14,966 $14,725 $59,779 $54,859
Percentage rents 368 740 2,037 1,538
Recoveries from tenants 4,887 5,279 21,486 19,600
Gain on sales of real estate 974 -- 974 --
Interest and other income 451 343 997 758
Total Revenues 21,646 21,087 85,273 76,755
EXPENSES
Real estate taxes 1,805 2,146 7,810 7,354
Recoverable operating expenses 3,428 3,550 14,391 12,763
Depreciation and amortization 3,303 3,254 13,311 12,189
Other operating 169 292 1,418 1,092
General and administrative 1,282 1,401 5,964 5,548
Interest expense 6,206 6,708 25,421 25,396
Total Expenses 16,193 17,351 68,315 64,342
Operating income 5,453 3,736 16,958 12,413
Loss from unconsolidated entities 33 76 204 304
Income before minority interest 5,420 3,660 16,754 12,109
Minority Interest 1,593 1,079 4,915 3,451
Net income 3,827 2,581 11,839 8,658
Dividends on Preferred Shares 859 706 3,407 1,614
Net income available to common
shareholders $2,968 $1,875 $8,432 $7,044
Basic earnings per share $0.41 $0.26 $1.17 $0.99
Diluted earnings per share $0.41 $0.26 $1.17 $0.98
Weighted average shares outstanding
Basic 7,218 7,158 7,218 7,133
Diluted 7,218 7,158 7,218 7,165
Funds from Operations(A)
Basic
Funds from Operations $6,646 $6,219 $25,461 $22,716
FFO weighted average number of
shares outstanding(B) 10,169 10,170 10,170 9,991
Funds from Operations
per share $0.65 $0.61 $2.50 $2.27
Diluted
Funds from Operations $7,505 $6,925 $28,868 $24,330
FFO weighted average number
of shares outstanding(C) 12,169 11,806 12,170 10,967
Funds from Operations
per share $0.62 $0.59 $2.37 $2.22
Ramco-Gershenson Properties Trust
Consolidated Balance Sheets
(In thousands)
December 31, December 31,
1999 1998
ASSETS
Investment in real estate, net $507,463 $509,844
Cash and cash equivalents 5,744 4,550
Accounts receivable, net 12,791 9,864
Equity investments in and advances to
unconsolidated entities 7,642 5,896
Other assets, net 16,866 14,250
Total Assets $550,506 $544,404
LIABILITIES AND SHAREHOLDERS' EQUITY
Mortgages and notes payable $337,552 $328,248
Distributions payable 5,127 5,244
Accounts payable and accrued expenses 15,983 15,235
Total Liabilities 358,662 348,727
Minority Interest 48,396 48,535
Commitments and Contingencies --- ---
Shareholders' Equity 143,448 147,142
Total Liabilities and Shareholders'
Equity $550,506 $544,404
(A) 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 effective
on January 1, 1996. Under the NAREIT definition, FFO represents
income (loss) before minority interest (computed in accordance with
generally accepted accounting principles -- "GAAP"), excluding gains
(losses) from debt restructuring and sales of property, plus real
estate related depreciation and amortization (excluding amortization
of financing costs), and after adjustment for unconsolidated
partnerships and joint ventures. Therefore, FFO does not represent
cash generated from operating activities in accordance with GAAP 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 GAAP, consider capital expenditures which have been
and will be incurred in the future, the calculation of FFO does not.
(B) Represents the weighted average total shares outstanding, assuming
the redemption of all operating partnership units for common shares.
(C) 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.
SOURCE Ramco-Gershenson Properties Trust
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CONTACT:
Dennis Gershenson, President & CEO, or
Richard Smith, CFO, both of Ramco-Gershenson Properties Trust,
248-350-9900, or Fax, 248-350-9925
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