Third Quarter Highlights:
Financial Information
-- Diluted FFO per share of $0.61
-- 3.4% increase on a per share basis
-- 3.5% increase in Diluted FFO
-- $0.42 per share regular quarterly dividend declared September 6, 2000
Operating Results
-- $110 million Revolving Credit Facility renewed with Fleet National
Bank
-- $20 million reduction in Sub-Debt Facility with Fleet National Bank
-- $25 million Long Term Financing secured with Lincoln National Life
Insurance Company
-- Joint Venture agreement signed for 650,000 square foot Crossroads
Centre development
-- First Phase of Auburn Mile development opens in Auburn Hills, Michigan
-- Publix Supermarket expansion planned for Lantana Shopping Center in
Lantana, Florida
-- Average rental rates for new store openings 12.3% above portfolio
average
SOUTHFIELD, Mich., Oct 18 /PRNewswire/ -- Ramco-Gershenson Properties
Trust (NYSE: RPT) announced today results for the third quarter and nine
months ended September 30, 2000.
For the three months ended September 30, 2000, diluted Funds from
Operations (FFO) increased 3.5 percent, or approximately $251,000, to
$7,409,000, compared with $7,158,000 for the three months ended September 30,
1999. On a per share basis, the increase was 3.4 percent, or $0.02, to $0.61
compared with $0.59 in 1999. Total revenues increased 2.6 percent or
$540,000, to a total of $21,634,000, compared with $21,094,000 in 1999.
For the nine months ended September 30, 2000, diluted Funds from
Operations (FFO) increased 6.3 percent, or approximately $1,348,000, to
$22,710,000, compared with $21,362,000 for the nine months ended September 30,
1999. On a per share basis, the increase was 6.3 percent, or $0.11, to $1.87
compared with $1.76 in 1999. Total revenues increased 6.9 percent or
$4,413,000, to a total of $68,040,000, compared with $63,627,000 in 1999.
"We are pleased with our operating results for the quarter," said Dennis
Gershenson, president and chief executive officer. "We completed and closed
three financing agreements, formed a joint venture partnership for the
development of the Crossroads Centre shopping center and opened a substantial
portion of our Auburn Mile development. We also completed three redevelopment
projects and commenced one, which should impact FFO as early as the fourth
quarter."
Financing Activities
The Company renewed its secured $110 million revolving credit facility
with Fleet National Bank. Pricing on the renewed revolver is LIBOR plus a
margin of 162.5 to 225 basis points, depending on the Company's leverage
ratios. The extended facility has a term of three years and will be used to
fund the Company's business plan.
RPT also closed on $25 million in fixed rate long term debt financing with
Lincoln National Life Insurance Company. The loan is an expansion of existing
mortgage facilities with Lincoln National. Ten of the Company's properties
that serve as collateral for the loans were reappraised following
redevelopment and releasing of a number of these assets. The combined total
obligation stands at $111 million with a blended interest rate of 8.3%.
Additionally this quarter, the Company renewed $25 million of a
$45 million unsecured term loan with Fleet National Bank. The term loan bears
interest at LIBOR plus a margin of 325 to 450 basis points, depending on the
Company's total leverage. RPT reduced the term loan by $20 million utilizing
funds from the expansion of its loan with Lincoln National.
Development
In September, the Company entered into an off-balance sheet joint venture,
arranged by Deutsche Bank Securities, Inc., to develop its Crossroads Center
in Rossford, Ohio. Ramco will act as the managing member for the Joint
Venture with a 10% interest. Additionally, Ramco will be responsible for the
development, leasing and management of the project and receive market fees for
its services. Construction financing will be provided by Huntington Bank and
mezzanine financing by Bankers Trust Company. Construction of the 650,000
square foot center is currently proceeding on schedule. The project is to be
anchored by Home Depot, Target and Giant Eagle. Additional anchors include
Michael's Crafts and Linens 'N Things. A number of outlots are planned for
restaurants and other destination uses. A spring 2001 grand opening is
anticipated.
RPT also celebrated the opening of the first phase of the Auburn Mile, a
650,000 shopping center located in Auburn Hills, Michigan in September.
Anchor tenants Meijer (a grocery/general merchandise retailer), Target and
JoAnn etc craft superstore are currently in operation. Best Buy, Costco and
Ethan Allen are expected to open later this fall.
Asset Management
During the quarter, RPT completed three major redevelopment projects.
-- Madison Center, Madison Heights, Michigan - Kmart replaced a
preexisting 83,000 square foot store with a 143,000 square feet Super
Kmart. A complete facade renovation was also completed as part of
the expansion project.
-- West Oaks II, Novi, Michigan - Kohl's department store expanded their
store by 20,000 square feet. The 90,000 square foot two-story
redevelopment was completed in July.
-- Cox Creek, Florence, Alabama - RPT completed the re-tenanting of a
vacated Wal-Mart store with the addition of Old Navy.
The Company also signed a lease for the expansion of the Publix
Supermarket at its Lantana shopping center. The expanded Publix will replace
an existing 39,000 square foot facility with a 61,000 square foot store. An
exterior renovation of the center is also planned.
At quarter end, RPT had five redevelopment projects under construction at
an aggregate cost of $11 million. When complete, it is estimated that they
will produce total returns in excess of 12%.
Leasing
In the third quarter, the Company opened 15 non-anchor stores, at an
average base rent of $12.14 per square foot, which represents a 12.3% increase
above the portfolio average. Approximately 93.4% of the gross leasable area
for the portfolio was leased at quarter end.
Dividend
The Company paid a cash dividend on its common stock of $0.42 per share on
October 17, 2000 to shareholders of record on September 30, 2000. The
dividend is equivalent to an annualized dividend of $1.68 per share.
Summary
"Management continues to be dedicated to the redevelopment of core assets
and capitalizing on other growth prospects that exist within our portfolio.
This strategy has historically produced excellent returns on our investment in
addition to strengthening each center's position within its market. We also
remain committed to the development of new shopping centers and are in the
process of exploring several opportunities. Given the Company's capital
structure, we chose to pursue an off-balance sheet joint venture for our
Crossroads development. This will allow the Company to build a quality asset,
earn market fees for our services and pursuant to the terms of our agreement
have the option to acquire the asset for our portfolio upon stabilization.
In addition, our business plan was to acquire well-located shopping
centers with value added potential. Last year we executed a joint venture
agreement to acquire properties in selected markets. We believed that this
would afford us the opportunity to remain active in the acquisition arena
while earning market fees for our services. We spent the first three quarters
of this year seeking assets that met our investment criteria and purchased one
center in April of 2000. Other than the one acquisition, we were unable to
find shopping centers that we felt were properly priced, thus we have not met
our acquisition goals for 2000. Although, we continue to pursue our
acquisition strategy, we cannot provide any assurance that additional centers
will be secured that qualify for purchase. While, the Company has not
generated the acquisition fees that we had projected this year, management
sought solutions to augment income," said Dennis Gershenson.
Ramco-Gershenson Properties Trust has a portfolio of 56 shopping centers,
with approximately 11.6 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 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
Consolidated Statements of Income
(In thousands, except per share amounts)
(Unaudited)
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
9/30/00 9/30/99 9/30/00 9/30/99
REVENUES
Minimum rents $15,218 $14,790 $44,965 $44,813
Percentage rents 197 510 1,585 1,669
Recoveries from tenants 5,496 5,670 16,141 16,599
Gain on sale of real estate - - 3,420 -
Interest and other income 723 124 1,929 546
Total Revenues 21,634 21,094 68,040 63,627
EXPENSES
Real estate taxes 1,929 2,019 5,712 6,005
Recoverable operating
expenses 3,858 3,768 11,035 10,963
Depreciation and amortization 3,774 3,356 11,004 10,008
Other operating 426 502 1,095 1,250
General and administrative 1,129 1,368 4,033 4,681
Interest expense 6,998 6,276 20,125 19,215
Total Expenses 18,114 17,289 53,004 52,122
Operating income 3,520 3,805 15,036 11,505
Earnings (Loss) from
unconsolidated entities 31 ( 21) 115 (171)
Income before minority interest 3,551 3,784 15,151 11,334
Minority interest 866 1,106 4,270 3,322
Net income before cumulative
effect of change in
accounting principle 2,685 2,678 10,881 8,012
Cumulative effect of change
in accounting principle(A) - - (1,264) -
Net income $ 2,685 $ 2,678 $ 9,617 $ 8,012
Net income available to
common shareholders $ 1,840 $ 1,819 $ 7,102 $ 5,464
Basic and diluted earnings
per share before cumulative
effect of change in
accounting principle:
Basic $0.26 $0.25 $1.16 $0.76
Diluted $0.26 $0.25 $1.16 $0.76
Basic and diluted earnings
per share after cumulative
effect of change in
accounting principle:
Basic $0.26 $0.25 $0.99 $0.76
Diluted $0.26 $0.25 $0.99 $0.76
Weighted average shares
outstanding:
Basic 7,179 7,218 7,197 7,218
Diluted 7,188 7,218 7,200 7,218
Ramco-Gershenson Properties Trust
Calculation of Funds from Operations(B)
(In thousands, except per share data)
(Unaudited)
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
9/30/00 9/30/99 9/30/00 9/30/99
Net Income $2,685 $2,678 $9,617 $8,012
Add:
Depreciation and
amortization expense 3,858 3,374 11,228 10,028
Cumulative effect of
change in accounting
principle - - 1,264 -
Minority Interest in
partnership 866 1,106 4,270 3,322
Less:
Gain on sale of real estate - - (3,669) -
Funds from Operations-diluted 7,409 7,158 22,710 21,362
Less:
Preferred share dividends 845 859 2,515 2,548
Funds from Operations-basic $6,564 $6,299 $20,195 $18,814
Funds from Operations per share:
Diluted $0.61 $ 0.59 $1.87 $1.76
Basic $0.65 $ 0.62 $1.99 $1.85
Basic weighted average
shares outstanding(C) 10,124 10,170 10,142 10,170
Convertible Preferred
shares and options 2,009 2,000 2,003 2,001
Diluted weighted average
shares outstanding(D) 12,133 12,170 12,145 12,171
Ramco-Gershenson Properties Trust
Consolidated Balance Sheets
(In thousands)
Sept. 30, Dec. 31,
2000 1999
ASSETS (unaudited)
Investment in real estate, net $ 506,007 $ 507,463
Cash and cash equivalents 3,942 5,744
Accounts receivable, net 14,462 12,791
Equity investments in and
advances to unconsolidated entities 19,135 7,642
Other assets, net 21,942 16,866
Total Assets $ 565,488 $ 550,506
LIABILITIES AND SHAREHOLDERS' EQUITY
Mortgages and notes payable $ 356,708 $ 337,552
Distributions payable 5,093 5,127
Accounts payable and accrued expenses 15,008 15,983
Total Liabilities 376,809 358,662
Minority Interest 47,867 48,396
Commitments and Contingencies --- ---
Shareholders' Equity 140,812 143,448
Total Liabilities and Shareholders' Equity $ 565,488 $ 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-Gershensen Properties Trust
 back to top
Related links:
http://www.ramcogershenson.com
CONTACT:
Dennis Gershenson, President & CEO, or
Richard Smith, CFO, both of Ramco-Gershenson Properties Trust,
248-350-9900, or fax, 248-350-9925
|
