Joint Venture with Investcorp Signed; Michaels celebrates Grand Opening At
Jackson West
Third Quarter Highlights:
Financial
-- Diluted FFO per share of $0.59
-- 11.2% increase in Total Revenues
-- 21.9% increase in Diluted FFO, 9.3% increase on a per share basis
-- $0.42 per share regular quarterly dividend declared on
September 8, 1999
Operations
-- Acquisition Joint Venture with Investcorp signed
-- OfficeMax at Northwest Crossing II Opens
-- Michaels Celebrates Grand Opening at Jackson West
-- Kmart lease signed at Madison Center
-- Non-anchor space renewals 9.9% above previous rental rates
SOUTHFIELD, Mich., Oct. 21 /PRNewswire/ -- Ramco-Gershenson Properties
Trust (NYSE: RPT) announced today results for the third quarter ended
September 30, 1999.
For the three months ended September 30, 1999, diluted Funds from
Operations (FFO) increased 21.9 percent, or approximately $1,287,000, to
$7,158,000, compared with $5,871,000 for the three months ended September 30,
1998. On a per share basis, the increase was 9.3 percent, or $0.05, to
$0.59 compared with $0.54 for the same period in 1998. Total revenues
increased 11.2 percent or $2,131,000, to $21,094,000, compared with
$18,963,000 for the same period in 1998.
For the nine months ended September 30, 1999, diluted FFO increased
22.7 percent, or approximately $3,957,000, to $21,362,000, compared with
$17,405,000 for the nine months ended September 30, 1998. On a per share
basis, the increase was 8.0 percent, or $0.13, to $1.76 compared with
$1.63 for the same period in 1998. Total revenues increased 14.3 percent, or
$7,959,000, to $63,627,000, compared with $55,668,000 for the same period in
1998.
"We are pleased to report a strong quarter of growth," said Dennis
Gershenson, president and chief executive officer. "We are on track with the
execution of our business plan, which continues to be reflected in our
improved numbers. Redevelopment of our core assets remains at the heart of
our business strategy, and will be one of the primary drivers of FFO growth.
Our acquisition Joint Venture with Investcorp and the delivery of our White
Lake MarketPlace development will position us for increased financial results
as early as year end."
Asset Management
During the quarter, Michael's Crafts celebrated their grand opening at our
Jackson West shopping center in Jackson, Mich. The 21,000 square foot craft
superstore joins Circuit City, Lowe's and OfficeMax as anchors for the center.
Redevelopment of our West Oaks II shopping center in Novi, Mich. is well
underway. The conversion of an 11,000 square foot JoAnn Fabrics store to a
two-level JoAnn etc craft superstore of 50,000 square feet has been completed
and turned over to the tenant. The expansion of the Kohl's department store
from 70,000 to 90,000 square feet is slated to commence in November. The
redevelopment project is scheduled to be complete June of 2000.
An expansion and redevelopment of the Madison Center in Madison Heights,
Mich. is being announced as part of this Press Release. Kmart is converting
its existing 83,000 square foot store to a 143,000 square foot Super Kmart.
Construction commenced this month. The new store is slated to open in the
spring of next year. As part of the agreement with Kmart, Ramco secured the
right to expand the center by an additional 25,000 square feet. Ramco is
presently negotiating with national retailers for this location.
Development
Development activities for the quarter included the completion of a 23,500
square foot OfficeMax at the Trust's Northwest Crossing II shopping center.
The site is immediately adjacent to RPT's 261,000 square foot Northwest
Crossing center in Knoxville, Tenn., and joins anchors Goody's Family
Clothing, Ingels Market and Wal-Mart.
Construction continues at RPT's 650,000 square foot Auburn Mile
development located in Auburn Hills, Mich. During the quarter, pads were
delivered to Meijer and Target. Both stores are currently under construction.
Agreements are being negotiated for an electronic superstore, office supply, a
fabric superstore and several restaurants for the remaining space. The center
is on schedule for a summer 2000 grand opening.
RPT's 350,000 square foot White Lake MarketPlace development in White Lake
Township, Mich. is substantially completed. Wal-Mart opened this quarter in
approximately 130,000 square feet. Scheduled for fourth quarter openings are
anchor tenants, Farmer Jack (A&P) and Office Max as well as Fashion Bug and
Bath & Body Works.
Acquisitions-Joint Venture Formed
On August 30, 1999 RPT entered into a Joint Venture with an affiliate of
Investcorp International, Inc. The purpose of the Joint Venture is to acquire
existing shopping centers totaling $125 million. The focus will be on centers
greater than 100,000 square feet, in the Mid-West, Mid-Atlantic and Northeast
United States that present value-added opportunities. At closing, the Joint
Venture acquired Chester Springs Shopping Center in Chester, N.J. and
Rivertowne Square in Deerfield Beach, Fla. from RPT for an aggregate purchase
price of $31 million. Proceeds were used by Ramco to reduce the Trust's
leverage providing capital for development and redevelopment projects as well
as other corporate uses.
"In this capital constrained market we have pursued creative ways to
generate value for our shareholders," said Dennis Gershenson. "The formation
of this Joint Venture will provide the vehicle to execute our acquisition plan
of purchasing accretive properties with value-enhancement potential that
should provide a superior return on investment."
Outlook
"As we near the end of 1999, we remain enthusiastic about our development
and redevelopment program," said Dennis Gershenson. "Those initiatives
undertaken this year should deliver excellent returns well into next year."
Ramco-Gershenson Properties Trust has a portfolio of 56 shopping centers,
with approximately 10.6 million square feet of gross leasable area, located in
Michigan, Ohio, Wisconsin, New York, New Jersey, Maryland, Virginia, North
Carolina, South Carolina, Tennessee, Georgia, Alabama and Florida.
Headquartered in Southfield, Mich., 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)
(Unaudited)
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
9/30/99 9/30/98 9/30/99 9/30/98
REVENUES
Minimum rents $14,790 $13,693 $44,813 $40,134
Percentage rents 510 46 1,669 798
Recoveries from
tenants 5,670 5,058 16,599 14,321
Interest and other
income 124 166 546 415
Total Revenues 21,094 18,963 63,627 55,668
EXPENSES
Real estate taxes 2,019 1,761 6,005 5,208
Recoverable operating
expenses 3,768 3,246 10,963 9,213
Depreciation and
amortization 3,356 3,059 10,008 8,935
Other operating 188 183 739 598
General and
administrative 1,682 1,400 5,192 4,349
Interest expense 6,276 6,444 19,215 18,688
Total Expenses 17,289 16,093 52,122 46,991
Operating income 3,805 2,870 11,505 8,677
Loss from
unconsolidated entities 21 65 171 228
Income before minority
interest 3,784 2,805 11,334 8,449
Minority Interest 1,106 810 3,322 2,372
Net income $2,678 $1,995 $8,012 $6,077
Net income available
to common
shareholders $1,819 $1,650 $5,464 $5,169
Basic earnings
per share $0.25 $0.23 $0.76 $0.73
Diluted earnings
per share $0.25 $0.23 $0.76 $0.72
Weighted average
shares outstanding
Basic 7,218 7,124 7,218 7,123
Diluted 7,218 7,144 7,218 7,162
Funds from Operations(A)
Basic
Funds from
Operations $6,299 $5,526 $18,814 $16,497
FFO weighted average
number of shares
outstanding(B) 10,170 10,010 10,170 9,931
Funds from Operations
per share $0.62 $0.55 $1.85 $1.66
Diluted
Funds from
Operations $7,158 $5,871 $21,362 $17,405
FFO weighted average
number of shares
outstanding(C) 12,170 10,831 12,171 10,681
Funds from Operations
per share $0.59 $0.54 $1.76 $1.63
Ramco-Gershenson Properties Trust
Consolidated Balance Sheets
(In thousands)
September 30, December 31,
1999 1998
(unaudited)
ASSETS
Investment in real estate, net $507,302 $509,844
Cash and cash equivalents 2,812 4,550
Accounts receivable, net 12,367 9,864
Equity investments in and advances
to unconsolidated entities 12,231 5,896
Other assets, net 11,486 14,250
Total Assets $546,198 $544,404
LIABILITIES AND SHAREHOLDERS' EQUITY
Mortgages and notes payable $332,752 $328,248
Distributions payable 5,130 5,244
Accounts payable and accrued expenses 16,669 15,235
Total Liabilities 354,551 348,727
Minority Interest 48,137 48,535
Commitments and Contingencies -- --
Shareholders' Equity 143,510 147,142
Total Liabilities and
Shareholders' Equity $546,198 $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, 248-350-9900, or fax, 248-350-9925, both of
Ramco-Gershenson Properties Trust
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