1
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
------------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 1-10093
RAMCO-GERSHENSON PROPERTIES TRUST
(Exact name of registrant as specified in its charter)
MARYLAND 13-6908486
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
27600 NORTHWESTERN HIGHWAY, SUITE 200, 48034
SOUTHFIELD, MICHIGAN (Zip code)
(Address of principal executive offices)
248-350-9900
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No __
Number of common shares of beneficial interest ($.01 par value) of the
Registrant outstanding as of September 30, 2000: 7,170,793
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2
INDEX
PAGE NO.
--------
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Consolidated Balance Sheets -- September 30, 2000
(unaudited) and December 31, 1999......................... 3
Consolidated Statements of Income (unaudited) -- Three
Months and Nine Months Ended September 30, 2000 and
1999...................................................... 4
Consolidated Statement of Shareholders' Equity
(unaudited) -- Nine Months Ended September 30, 2000....... 5
Consolidated Statements of Cash Flows (unaudited) -- Nine
Months Ended September 30, 2000 and 1999.................. 6
Notes to Consolidated Financial Statements (unaudited)...... 7
ITEM 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 12
PART II. OTHER INFORMATION
ITEM 4. Exhibits and Reports on Form 8-K............................ 20
2
3
PART I -- FINANCIAL INFORMATION
ITEM 1 -- FINANCIAL STATEMENTS
RAMCO-GERSHENSON PROPERTIES TRUST
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
SEPTEMBER 30, DECEMBER 31,
2000 1999
------------- ------------
(UNAUDITED)
ASSETS
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
Preferred Shares, par value $.01, 10,000 shares authorized;
1,400 Series A convertible shares issued and outstanding,
liquidation values of $35,000............................. 33,829 33,829
Common Shares of Beneficial Interest, par value $.01, 30,000
shares authorized; 7,171 and 7,218 issued and outstanding,
respectively.............................................. 72 72
Additional paid-in capital.................................. 151,295 151,973
Cumulative distributions in excess of net income............ (44,384) (42,426)
-------- --------
Total Shareholders' Equity............................. 140,812 143,448
-------- --------
Total Liabilities and Shareholders' Equity........ $565,488 $550,506
======== ========
See notes to consolidated financial statements.
3
4
RAMCO-GERSHENSON PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
FOR THE THREE FOR THE NINE
MONTHS ENDED MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------ ------------------
2000 1999 2000 1999
---- ---- ---- ----
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..... -- -- (1,264) --
------- ------- ------- -------
Net income.............................................. 2,685 2,678 9,617 8,012
Preferred dividends..................................... (845) (859) (2,515) (2,548)
------- ------- ------- -------
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
======= ======= ======= =======
See notes to consolidated financial statements.
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5
RAMCO-GERSHENSON PROPERTIES TRUST
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(IN THOUSANDS)
(UNAUDITED)
COMMON ADDITIONAL CUMULATIVE TOTAL
PREFERRED STOCK PAR PAID-IN EARNINGS/ SHAREHOLDERS'
STOCK VALUE CAPITAL DISTRIBUTION EQUITY
--------- --------- ---------- ------------ -------------
BALANCE, JANUARY 1, 2000................. $33,829 $72 $151,973 $(42,426) $143,448
Cash distributions declared.............. (9,060) (9,060)
Preferred Shares dividends declared...... (2,515) (2,515)
Purchase and retirement of common
shares................................. (678) (678)
Net income............................... 9,617 9,617
------- --- -------- -------- --------
BALANCE, SEPTEMBER 30, 2000.............. $33,829 $72 $151,295 $(44,384) $140,812
======= === ======== ======== ========
See notes to consolidated financial statements.
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6
RAMCO-GERSHENSON PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
FOR THE NINE MONTHS
ENDED SEPTEMBER 30,
--------------------
2000 1999
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income................................................ $ 9,617 $ 8,012
Adjustments to reconcile net income to net cash flows
provided by operating activities:
Depreciation and amortization........................ 11,004 10,008
Amortization of deferred financing costs............. 319 567
Gain on sale of real estate.......................... (3,420) --
(Earnings) Loss from unconsolidated entities......... (115) 171
Minority interest.................................... 4,270 3,322
Changes in assets and liabilities that provided
(used) cash:
Accounts receivable............................... (2,597) (2,503)
Other assets...................................... (5,890) (3,074)
Accounts payable and accrued expenses............. (64) 1,434
-------- --------
Cash Flows Provided by Operating Activities................. 13,124 17,937
-------- --------
CASH FLOWS USED IN INVESTING ACTIVITIES:
Capital expenditures...................................... (20,370) (34,443)
Proceeds from sale of real estate......................... 4,994 27,851
Payments from (Advances to) unconsolidated entities....... 437 (76)
Investments in unconsolidated entities.................... (1,387) (1,403)
Distributions received from unconsolidated entities....... 191 --
-------- --------
Cash Flows Used in Investing Activities..................... (16,135) (8,071)
-------- --------
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES:
Cash distributions to shareholders........................ (9,080) (9,096)
Cash distributions to operating partnership unit
holders................................................ (3,711) (3,987)
Cash dividends paid on preferred shares................... (2,529) (2,395)
Repayment of credit facility.............................. (20,050) (29,000)
Repayment of unsecured loan............................... (20,000) --
Principal repayments on mortgages payable................. (2,567) (2,297)
Purchase and retirement of common shares.................. (678) --
Payment of deferred financing costs....................... (1,949) (630)
Borrowings on Credit Facility............................. 33,250 17,000
Borrowings on fixed rate mortgage......................... 25,000 --
Borrowings on Construction Loan........................... 3,523 18,801
-------- --------
Cash Flows Provided by (Used in) Financing Activities....... 1,209 (11,604)
-------- --------
Net Decrease in Cash and Cash Equivalents................... (1,802) (1,738)
Cash and Cash Equivalents, Beginning of Period.............. 5,744 4,550
-------- --------
Cash and Cash Equivalents, End of Period.................... $ 3,942 $ 2,812
======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest during the period............... $ 20,712 $ 19,826
======== ========
See notes to consolidated financial statements.
6
7
RAMCO-GERSHENSON PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION -- The accompanying interim consolidated financial
statements and related notes of the Company are unaudited; however, they have
been prepared in accordance with generally accepted accounting principles for
interim financial reporting, the instructions to Form 10-Q and the rules and
regulations of the Securities and Exchange Commission. Accordingly, certain
information and footnote disclosures normally included in financial statements
prepared under accounting principles generally accepted in the United States of
America have been condensed or omitted pursuant to such rules. The unaudited
interim consolidated financial statements should be read in conjunction with the
audited consolidated financial statements and related notes included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1999. In
the opinion of management, all adjustments (consisting only of normal recurring
adjustments) necessary for a fair presentation of the consolidated financial
statements for the interim periods have been made. The results for interim
periods are not necessarily indicative of the results for a full year.
IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS -- In June 1999, the Financial
Accounting Standards Board (FASB) issued Statement of Financial Standards (SFAS)
No. 133, "Accounting for Derivative Instruments and Hedging Activities", which
establishes accounting and reporting standards for derivative instruments and
hedging activities. It requires that an entity recognize all derivatives as
either assets or liabilities in the statement of financial position and measure
those instruments at fair value. At this time, the Company does not expect the
adoption of SFAS No. 133 to have a material effect on its financial position or
results of operations. The Company will adopt SFAS No. 133 as required for its
first quarterly filing of fiscal year 2001.
RECLASSIFICATIONS -- Certain reclassifications have been made to the 1999
financial statements to conform to the 2000 presentation.
2. ACCOUNTS RECEIVABLE -- NET
Accounts receivable include $9,134 and $7,098 of unbilled straight-line
rent receivables at September 30, 2000 and December 31, 1999 respectively.
3. INVESTMENT IN REAL ESTATE
Investment in real estate consists of the following:
SEPTEMBER 30, 2000 DECEMBER 31, 1999
------------------ -----------------
(UNAUDITED)
Land........................................................ $ 71,529 $ 73,797
Buildings and Improvements.................................. 467,064 462,839
Construction-in-progress.................................... 12,503 6,319
-------- --------
551,096 542,955
Less: accumulated depreciation.............................. (45,089) (35,492)
-------- --------
Investment in real estate -- net............................ $506,007 $507,463
======== ========
4. INVESTMENT IN UNCONSOLIDATED JOINT VENTURE
On September 29, 2000 the Company invested $100 for a 10 percent interest
in a joint venture, Rossford Development LLC. Simultaneously, the Company
contributed to the joint venture, land and construction in progress related to
the construction of Crossroads Center development project, located in Rossford,
Ohio, for a note receivable in the amount of approximately $10,000, which
represented the Company's basis in the development. Therefore, the Company did
not recognize a gain or loss on this transaction. The note receivable
7
8
bears interest at 15 percent, and is included in Equity Investments In and
Advances To Unconsolidated Entities in the Consolidated Balance Sheet at
September 30, 2000. In October 2000, the Company received $2,809 from the joint
venture for payment of the note receivable. The balance of the note receivable
will be collected when the joint venture complies with the various terms of the
mezzanine and construction financing agreements.
Under terms of the joint venture agreement, the Company is responsible for
the development, leasing and management of the project, for which the company
will receive fees. The joint venture agreement includes a provision whereby the
Company has the right to purchase the property during specific time periods.
5. OTHER ASSETS
Other assets are as follows:
SEPTEMBER 30, 2000 DECEMBER 31, 1999
------------------ -----------------
(UNAUDITED)
Leasing costs and other..................................... $12,371 $ 8,924
Prepaid expenses and other.................................. 5,241 3,490
Deferred financing costs.................................... 5,667 3,718
Proposed development and acquisition costs.................. 5,131 5,500
------- -------
28,410 21,632
Less: accumulated amortization.............................. (6,468) (4,766)
------- -------
Other assets -- net......................................... $21,942 $16,866
======= =======
6. MORTGAGES AND NOTES PAYABLE
Mortgages and notes payable consist of the following:
SEPTEMBER 30, 2000 DECEMBER 31, 1999
------------------ -----------------
(UNAUDITED)
Fixed rate mortgages with interest rates ranging from 6.83%
to 8.81% due at various dates through 2008................ $191,765 $169,192
Floating rate mortgages at 75% of the rate of long-term
Capital A rated utility bonds, due January 1, 2010, plus
supplemental interest to equal LIBOR plus 200 basis
points. The effective rate at September 30, 2000 was 7.86%
and at December 31, 1999 was 6.96%........................ 6,860 7,000
Construction loan financing, with an interest rate at LIBOR
plus 200 basis points due December 2002, including renewal
option. The effective rate at September 30, 2000, was
8.62% and at December 31, 1999 was 8.67%. Maximum
borrowings of $18,500..................................... 17,608 15,801
Construction loan financing, with an interest rate at LIBOR
plus 185 basis points due January 2003, including renewal
option. The effective rate at September 30, 2000, was
8.47% and at December 31, 1999 was 8.00%. Maximum
borrowings of $14,000..................................... 13,575 11,859
Unsecured term loan with an interest rate at LIBOR plus 450
basis points, due September, 2003. The effective rate at
September 30, 2000 was 11.16% and at December 31, 1999 was
10.00%.................................................... 25,000 45,000
Credit Facility with an interest rate at LIBOR plus 225
basis points, due September 2003, maximum available
borrowings of $110,000. The effective rate at September
30, 2000 was 8.20%, and at December 31, 1999 was 7.60%.... 101,900 88,700
-------- --------
$356,708 $337,552
======== ========
8
9
The mortgage notes and construction loans are secured by mortgages on
properties that have an approximate net book value of $335,835 as of September
30, 2000. The Credit Facility is secured by mortgages on various properties that
have an approximate net book value of $168,015 as of September 30, 2000.
In August 2000, the Company entered into a $25,000 fixed rate mortgage loan
with Lincoln National Life Insurance Company, secured by ten properties. The
loan is an expansion of an existing mortgage facility that is due January 2006.
The total amount of the obligation is approximately $111,000, with a blended
interest rate of 8.3%.
The Company renewed an unsecured term loan amounting to $25,000, maturing
September 2003. This term loan bears interest between 325 and 450 basis points
over LIBOR, depending on certain debt ratios (11.2% at September 30, 2000). The
Company reduced this term loan by $20,000, utilizing funds from the expansion of
its fixed rate mortgage loan. Under terms of the loan agreement, the Company is
required to make quarterly principal payments commencing in December 2000.
On September 29, 2000, the Company renewed the $110,000 Credit Facility, of
which $101,900 was outstanding as of September 30, 2000. The renewed credit
facility bears interest between 162.5 and 225 basis points over LIBOR depending
on certain debt ratios (effective interest rate of 8.2% at September 30, 2000)
and matures September 2003. The credit facility is secured by mortgages on
various properties and contains financial covenants relating to
liabilities-to-assets ratio, minimum operating coverage ratios and a minimum
equity value. As of September 30, 2000, the Company was in compliance with the
covenant terms.
At September 30, 2000, outstanding letters of credit issued under the
Credit Facility, not reflected in the accompanying consolidated balance sheet,
total approximately $417.
The following table presents scheduled principal payments on mortgages and
notes payable as of September 30, 2000:
YEAR ENDED
DECEMBER 31,
------------
2000 (October 1 -- December 31)............................. $ 6,494
2001........................................................ 6,594
2002........................................................ 25,338
2003........................................................ 137,874
2004........................................................ 4,613
Thereafter.................................................. 175,795
--------
Total.................................................. $356,708
========
7. LEASES
The Company is engaged in the operation of shopping center and retail
properties and leases space to tenants and certain anchors pursuant to lease
agreements. The lease agreements provide for initial terms ranging from 3 to 30
years and, in some cases, for annual rentals which are subject to upward
adjustment based on operating expense levels and sales volume.
9
10
Approximate future minimum rentals under noncancelable operating leases in
effect at September 30, 2000, assuming no new or renegotiated leases nor option
extensions on lease agreements, are as follows:
YEAR ENDED
DECEMBER 31,
------------
2000 (October 1 -- December 31)............................. $ 14,377
2001........................................................ 57,118
2002........................................................ 53,882
2003........................................................ 49,380
2004........................................................ 43,833
Thereafter.................................................. 309,580
--------
Total.................................................. $528,170
========
8. CHANGE IN METHOD OF ACCOUNTING FOR PERCENTAGE RENTAL REVENUE
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 rental
revenue retroactive to January 1, 2000, of approximately $1,264.
The following pro forma amounts reflect the effect of retroactive
application of the change in method of accounting for percentage rents that
would have been made in 1999 had the new method been in effect:
THREE MONTHS NINE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------- ------------------
2000 1999 2000 1999
---- ---- ---- ----
Pro forma amounts assuming the new method of
Accounting is applied retroactively:
Net income (in thousands)................. $2,685 $2,210 $10,881 $ 7,822
Preferred dividends....................... (845) (859) (2,515) (2,548)
------ ------ ------- -------
Net income available to common
shareholders........................... $1,840 $1,351 $ 8,366 $ 5,274
====== ====== ======= =======
Earnings per share:
Basic.................................. $ 0.26 $ 0.19 $ 1.16 $ 0.73
====== ====== ======= =======
Diluted................................ $ 0.26 $ 0.19 $ 1.16 $ 0.73
====== ====== ======= =======
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The effect of the change in method of accounting for percentage rents on
the first and second quarters of 2000 is as follows:
MARCH 31, JUNE 30,
2000 2000
--------- --------
Net income as originally reported........................... $ 3,224 $4,972
Effect of change in method of accounting for percentage
rents..................................................... -- --
------- ------
Income before cumulative effect of a change in accounting
method.................................................... 3,224 4,972
Cumulative effect on prior years of a change in accounting
method.................................................... (1,264) --
------- ------
Net income as restated...................................... $ 1,960 $4,972
======= ======
Basic and diluted earnings per share amounts:
Net income as originally reported......................... $ 0.33 $ 0.57
Effect of change in method of accounting for percentage
rents.................................................. -- --
------- ------
Income before cumulative effect of a change in accounting
method................................................. 0.33 0.57
Cumulative effect on prior years of a change in accounting
method................................................. (0.17) --
------- ------
Net income as restated.................................... $ 0.16 $ 0.57
======= ======
Diluted earnings per share amounts:
Net income as originally reported......................... $ 0.33 $ 0.54
Effect of change in method of accounting for percentage
rents.................................................. -- --
------- ------
Income before cumulative effect of a change in accounting
method................................................. 0.33 0.54
Cumulative effect on prior years of a change in accounting
method................................................. (0.17) --
------- ------
Net income as restated.................................... $ 0.16 $ 0.54
======= ======
9. COMMITMENTS AND CONTINGENCIES
During the third quarter of 1994, the Company held more than 25% of the
value of its gross assets in overnight Treasury Bill reverse repurchase
transactions which the United States Internal Revenue Service (the "IRS") may
view as non-qualifying assets for the purposes of satisfying an asset
qualification test applicable to REITs, based on a Revenue Ruling published in
1977 (the "Asset Issue"). The Company has requested that the IRS enter into a
closing agreement with the Company that the Asset Issue will not impact the
Company's status as a REIT. The IRS has deferred any action relating to the
Asset Issue pending the further examination of the Company's 1991-1995 tax
returns (the "Tax Audit"). Based on developments in the law which have occurred
since 1977, the Company's Tax Counsel, Battle Fowler LLP, has rendered an
opinion that the Company's investment in Treasury Bill repurchase obligations
would not adversely affect its REIT status. However, such opinion is not binding
upon the IRS.
In connection with the spin-off of Atlantic, Atlantic has assumed all
liability arising out of the Tax Audit and the Asset Issue, including
liabilities for interest and penalties and attorney fees relating thereto. In
connection with the assumption of such potential liabilities, Atlantic and the
Company have entered into a tax agreement which provides that the Company (under
the direction of its Continuing Trustees), and not Atlantic, will control,
conduct and effect the settlement of any tax claims against the Company relating
to the Tax Audit and the Asset Issue. Accordingly, Atlantic will not have any
control as to the timing of the resolution or disposition of any such claims.
The Company and Atlantic also received an opinion from Special Tax Counsel,
Wolf, Block, Schorr and Solis-Cohen LLP, that, to the extent there is a
deficiency in the Company's taxable income arising out of the IRS examination
and provided the Company timely makes a deficiency dividend (i.e., declares and
pays a distribution which is permitted to relate back to the year for which each
deficiency was determined to satisfy the requirement that the REIT distribute 95
percent of its
11
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taxable income), the classification of the Company as a REIT for the taxable
years under examination would not be affected. Under the tax agreement referred
to above, Atlantic has agreed to reimburse the Company for the amount of any
deficiency dividend so made. If notwithstanding the above-described opinions of
legal counsel, the IRS successfully challenged the status of the Company as a
REIT, its status could be adversely affected. If the Company lost its status as
a REIT, the Company believes that it will be able to re-elect REIT status for
the taxable year beginning January 1, 1999.
The IRS agent conducting the examination has issued his examination report
with respect to the tax issues raised in the Tax Audit, including the Asset
Issue (collectively, the "Tax Issues"). The report sets forth a number of
positions which the examining agent has taken with respect to the Company's
taxes for the years that are subject to the Tax Audit, which the Company
believes are not consistent with applicable law and regulations of the IRS.
Based on the report, the Company could be liable for up to $45.4 million in
combined taxes, penalties and interest through November 15, 2000. The IRS
examination report notes, however, that the Company is eligible to avoid
termination of its REIT status for certain of the years under audit if the
Company makes a deficiency distribution to its shareholders. A deficiency
dividend would be deductible by the Company, thereby reducing its liability for
federal income tax. The proposed adjustments to taxable income would require the
Company to pay a deficiency dividend to its current shareholders resulting in
combined taxes, penalties, interest and deficiency dividends of approximately
$46.8 million as of November 15, 2000.
As noted above, pursuant to a Tax Agreement between Atlantic and the
Company, Atlantic assumed all liability arising out of the Tax Audit and Tax
Issues, including the payment of the deficiency dividend. Based on the amount of
Atlantic's net assets, as disclosed in its most recent quarterly report on Form
10-Q for the period ended June 30, 2000, the Company does not believe that the
ultimate resolution of the Tax Issues will have a material adverse effect on the
financial position, results of operations or cash flows of the Company. The
issuance of the revenue agent's report constitutes only the first step in the
IRS administrative process for determining whether there is any deficiency in
the Company's tax liability for the years at issue and any adverse determination
by the examining agent is subject to administrative appeal within the IRS and,
thereafter, to judicial review. As noted above, the agent's report sets forth a
number of positions, which the Company and its legal counsel believe are not
consistent with applicable law and regulations of the IRS. The Company filed an
administrative appeal challenging the findings contained in the IRS agent's
examination report on April 30, 1999.
In December 1999, the Board of Trustees approved the repurchase, at
management's discretion, of up to $10 million of the Company's common stock. The
program allows the Company to repurchase its common stock from time to time in
the open market and/or in negotiated transactions. During the nine months ended
September 30, 2000, the Company purchased and retired 47,200 shares of the
Company's common stock under this program at a cost of $678.
In connection with the development and expansion of various shopping
centers as of September 30, 2000, the Company has entered into agreements for
the expansion or renovation of shopping centers of approximately $2,500.
ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(Dollars in Thousands, except per Share and per Unit amounts)
The following discussion and analysis of the financial condition and
results of operations should be read in conjunction with the Consolidated
Financial Statements of the Company, including the respective notes thereto
which are included in this Form 10-Q.
CAPITAL RESOURCES AND LIQUIDITY
The Company generated $13,124 in cash flows from operating activities for
the nine months ended September 30, 2000 and used $16,135 to fund investing
activities. Development of three shopping centers and improvements to existing
properties used $20,370 and additional investments in two joint ventures used
$1,387 during the nine months ended September 30, 2000. Proceeds from the sale
of real estate provided $4,994
12
13
during the period. Financing activities provided $1,209 during the nine months
ended September 30, 2000. Borrowings on a mortgage loan provided $25,000,
borrowings on the Credit Facility provided $13,200, net of repayments of
$20,050, during the nine months ended September 30, 2000 and borrowing on
construction loans provided $3,523. Cash distributions to shareholders, holders
of operating partnership units and dividends paid to preferred shareholders
amounted to $15,320.
The Company's mortgages and notes payable amounted to $356,708 at September
30, 2000, with a weighted average interest rate of 8.3%. The debt consists of
ten loans secured by various properties, plus two construction loans, one
unsecured term loan and the Credit Facility, as defined below. Nine of these
mortgage loans amounting to $191,765 have maturities ranging from 2000 to 2008,
monthly payments which include regularly scheduled amortization, and have fixed
interest rates ranging between 6.83% to 8.81%. One of the mortgage loans,
evidenced by tax free bonds, amounting to $6,860 secured by Oakbrook Square
Shopping Center, matures in 2010, and carries a floating interest rate equal to
75% of the new issue long term Capital A rated utility bonds, plus interest to
the lender sufficient to cause the lender's overall yield on its investment in
the bonds to be equal to 200 basis points over their applicable LIBOR rate (7.9%
at September 30, 2000).
In August 2000, the Company entered into a $25,000 fixed rate mortgage loan
with Lincoln National Life Insurance Company, secured by ten properties. The
loan is an expansion of an existing mortgage facility that is due January 2006.
The total amount of the obligation is approximately $111,000, with a blended
interest rate of 8.3%. The Company used $20,000 of the proceeds to reduce the
unsecured variable rate term loan and the remainder was used to pay for capital
expenditures and other working capital requirements.
The Company has an $18,500 construction loan to finance the Auburn Mile
shopping center development located in Auburn Hills, Michigan. The loan carries
an interest rate of 200 basis points over LIBOR, an effective interest rate of
8.6% at September 30, 2000 and matures December 2000. At the Company's option,
the loan can be converted to a 2-year term loan. Approximately $17,600 has been
borrowed as of September 30, 2000.
The Company has a $14,000 construction loan to finance the White Lake
MarketPlace shopping center development. The loan carries an interest rate of
185 basis points over LIBOR, an effective rate of 8.5% at September 30, 2000,
and matures January 2001. At the Company's option, the loan can then be
converted to a 2-year term loan. Approximately $13,600 has been borrowed at
September 30, 2000.
It is the Company's intention to exercise its option to convert the
above-mentioned construction loans to two-year term loans.
The Company renewed an unsecured term loan amounting to $25,000, maturing
September 2003. This term loan bears interest between 325 and 450 basis points
over LIBOR, depending on certain debt ratios (11.2% at September 30, 2000). The
Company reduced this term loan by $20,000, utilizing funds from the expansion of
its fixed rate mortgage loan. Under terms of the loan agreement, the Company is
required to make quarterly principal payments commencing in December 2000.
On September 29, 2000, the Company renewed the $110,000 Credit Facility, of
which $101,900 was outstanding as of September 30, 2000. The renewed credit
facility bears interest between 162.5 and 225 basis points over LIBOR depending
on certain debt ratios (effective interest rate of 8.2% at September 30, 2000)
and matures September 2003. The credit facility is secured by mortgages on
various properties and contains financial covenants relating to
liabilities-to-assets ratio, minimum operating coverage ratios and a minimum
equity value. As of September 30, 2000, the Company was in compliance with the
covenant terms.
Outstanding letters of credit issued under the Credit Facility amounted to
$417 at September 30, 2000.
The Company used proceeds from the borrowings under the Credit Facility,
mortgage loan and the construction loans to finance the development of the
above-mentioned properties and to pay for other capital expenditures.
Based on the debt and the market value of equity, the Company's debt to
total market capitalization (debt plus market value equity) ratio was 66.5% at
September 30, 2000.
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The interest rate swap agreement that limited the Company's exposure to
increases in interest rates on $75,000 of its floating debt expired on October
2, 2000 and has not been renewed. The Company will continue to evaluate the
economic benefits of swap agreements as a method of managing its interest rate
risks.
In April 2000, the Company contributed $1,287 to RPT/INVEST, L.L.C., an
unconsolidated joint venture, in connection with the acquisition of East Town
Plaza shopping center located in Madison, Wisconsin. In September 2000, the
Company invested $100 in an unconsolidated joint venture, Rossford Development,
LLC.
The properties in which Ramco-Gershenson Properties, L.P. (the "Operating
Partnership"), owns an interest and which are accounted for on the equity method
of accounting are subject to non-recourse mortgage indebtedness. At September
30, 2000, the pro rata share of non-recourse mortgage debt on the unconsolidated
properties (accounted for on the equity method) was $14,548 with a weighted
average interest rate of 8.6%.
The Company's current capital structure includes property specific
mortgages, two construction loans, the unsecured term loan, the Credit Facility,
Series A Preferred Shares, Common Shares and a minority interest in the
Operating Partnership. Currently, the minority interest in the Operating
Partnership represents the 29.1% ownership in the Operating Partnership which,
may under certain conditions, be exchanged for approximately 2.9 million Common
Shares.
As of September 30, 2000, Operating Partnership Units ("OP Units") issued
are exchangeable for Common Shares of the Company on a one-for-one basis. The
Company, as sole general partner of the Operating Partnership, has the option to
settle exchanged OP Units in cash based on the current trading price of the
Company's Common Shares. Assuming the exchange of all limited partnership
interests in the Operating Partnership, there would be outstanding approximately
10,116 Common Shares with a market value of approximately $149,840 at September
30, 2000 (based on the closing price of $14.813 per share on September 30,
2000).
The principal uses of the Company's liquidity and capital resources are for
acquisitions, development, including expansion and renovation programs, debt
repayment, distributions and repurchase of its common stock. To maintain its
qualification as a real estate investment trust under the Internal Revenue Code
of 1986, as amended (the "Code"), the Company is required to distribute to its
shareholders at least 95% of its "Real Estate Investment Trust Taxable Income"
as defined in the Code.
The Company anticipates that the combination of the availability under the
Credit Facility, construction loans, the sale of existing properties and, and
potential new debt will satisfy its expected working capital requirements
through at least the next 12 months. The Company anticipates adequate liquidity
for the foreseeable future to fund future developments, expansions,
repositionings, and to continue its currently planned capital programs, to
repurchase up to $10 million of the Company's common stock and to make
distributions to its shareholders in accordance with the Code's requirements
applicable to REIT's. Although the Company believes that the combination of
factors discussed above will provide sufficient liquidity, no such assurance can
be given.
COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 2000 TO NINE MONTHS ENDED
SEPTEMBER 30, 1999
Total revenues for the nine months ended September 30, 2000 increased by
6.9%, or $4,413, to $68,040 as compared to $63,627 for the nine months ended
September 30, 1999. The increase is primarily due to $3,420 gain on sale of real
estate during April 2000. Minimum rents increased 0.3%, or $152, to $44,965 for
the nine months ended September 30, 2000 as compared to $44,813 for the same
period in 1999. The sale of Chester Springs and Rivertowne Square in August 1999
to RPT/Invest, L.L.C. and the disposition of Commack (Toys R Us) and Trinity
Corners Shopping Center in December 1999 accounted for a reduction in minimum
rent of $2,968 for the nine months ended September 30, 2000. Development
projects at White Lake MarketPlace and Auburn Mile contributed $3,116 to minimum
rent when compared to the nine months ended September 30, 1999.
Recoveries from tenants decreased $458, or 2.8% to $16,141 for the nine
months ended September 30, 2000 as compared to $16,599 for the nine months ended
September 30, 1999. The decrease is attributable to
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the dispositions of the four properties in the second half of 1999 and the
redevelopment of Roseville Plaza, currently in progress, that displaced four
tenants during the construction period. The recovery ratio decreased to 96.4%
from 97.8% for the nine months ended September 30, 1999.
For the nine months ended September 30, 2000, percentage rents decreased
$84 to $1,585, as compared to $1,669 for the nine months ended September 30,
1999. The decrease is the result of the change in accounting method for
percentage rents. Interest and other income increased from $546 for the nine
months ended September 30, 1999 to $1,929. Lease termination fees were $1,090
greater in the nine months ended September 30, 2000 when compared to the same
period in 1999 and gain on sale of land options during the nine months ended
September 30, 2000, accounted for $242 of the increase.
Total expenses for the nine months ended September 30, 2000 increased by
$882, to $53,004, from $52,122 for the nine months ended September 30, 1999. The
increase was due to a $221 decrease in total recoverable expenses, including
real estate taxes, a $648 decrease in general and administrative expenses, a
$155 decrease in other operating expenses, offset by a $996 increase in
depreciation and amortization and a $910 increase in interest expense.
Depreciation and amortization expense increased $996, or 10.0%, to $11,004
as compared to $10,008 for the nine months ended September 30, 1999.
Depreciation and amortization for White Lake MarketPlace contributed $212 to the
increase and depreciation expense related to renovations made to various
properties during 1999 accounted for the balance of the increase. Other
operating expense decreased from $1,250 for the nine months ended September 30,
1999 to $1,095 for the same period in 2000. The decrease is primarily due to
lower bad debt expense included in other operating expenses for the nine months
ended September 30, 2000 when compared to the same period of 1999.
Interest expense increased $910, from $19,215 to $20,125 for the nine
months ended September 30, 2000. The 4.7% increase is the result of higher
interest rates on variable rate debt for the nine months ended September 30,
2000, increased borrowings on the Credit Facility and increased borrowings on
the construction loans used to finance White Lake MarketPlace and the Auburn
Mile developments.
The increase in minority interest is the result of higher income before
minority interest for the nine months ended September 30, 2000 when compared to
the nine months ended September 30, 1999. Minority interest represents a 29.1%
share of income before minority interest of the operating partnership for the
nine months ended September 30, 2000 and 29.0% for the nine months ended
September 30, 1999.
COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 2000 TO THREE MONTHS ENDED
SEPTEMBER 30, 1999
Total revenues increased $540, or 2.6%, from $21,094 for the three months
ended September 30, 1999 to $21,634 for the three months ended September 30,
2000.
Minimum rents for the three months ended September 30, 2000 increased $428,
or 2.9% to $15,218 from $14,790 for the three months ended September 30, 1999.
Development projects at White Lake MarketPlace and Auburn Mile contributed
$1,132 to minimum rent for the three months ended September 30, 2000. The four
properties disposed of during the second half of 1999 accounted for a reduction
in minimum rent of $715 during the three months ended September 30, 2000.
Recoveries from tenants decreased 3.1%, or $174 to $5,496 from $5,670 for
the three months ended September 30, 1999. The recovery ratio for the three
months ended September 30, 2000 decreased to 95.0% as compared to 98.0% for the
comparable quarter ended September 30, 1999. The decrease in this ratio is
primarily the result of the dispositions of the four properties in the second
half of 1999 and the redevelopment of Roseville Plaza, currently in progress,
that displaced four tenants during the construction period.
Percentage rents decreased $313, to $197 for the quarter ended September
30, 2000 as compared to $510 for the three months ended September 30, 1999. The
61.4% decrease is primarily due to the result of the change in method in which
the Company accounts for these revenues. Interest and other income increased
from $124 for the three months ended September 30, 1999 to $723 for the same
quarter of 2000. The increase
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is principally due to $578 additional lease termination fees in the three months
ended September 30, 2000 when compared to the same period in 1999.
Total expenses for the three months ended September 30, 2000 increased by
$825, or 4.8%, to $18,114 as compared to $17,289 for the three months ended
September 30, 1999. The increase was due to a $418 increase in depreciation and
amortization, a decrease of $76 in other operating expenses, an increase of $722
in interest expense and a decrease of $239 in general and administrative
expenses.
Depreciation and amortization increased by 12.5%, or $418, to $3,774 as
compared to $3,356 for the three months ended September 30, 1999. This increase
is primarily due to renovation projects completed in the second half of 1999.
Other operating expenses decreased $76, or 15.1%, to $426 for the three
months ended September 30, 2000 as compared to $502 for the three months ended
September 30, 1999. The decrease includes a $23 decrease in bad debt expense for
the three months ended September 30, 2000 when compared to the same quarter
ended September 30, 1999.
Interest expense increased $722, from $6,276 to $6,998 for the three months
ended September 30, 2000. The 11.5% increase is principally due to increased
borrowings on the Credit Facility and the interest expense on the construction
loan for the Auburn Mile development included in the three months ended
September 30, 2000.
The decrease in minority interest is the result of lower income before
minority interest for the three months ended September 30, 2000 when compared to
1999.
GENERAL AND ADMINISTRATIVE
Following is a breakdown of the general and administrative expenses shown
in the financial statements:
THREE MONTHS NINE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------- ----------------
2000 1999 2000 1999
---- ---- ---- ----
Management fees............................................. $ 335 $ 687 $1,072 $1,457
Leasing and development fees................................ 565 99 1,030 336
Gain on sale of real estate................................. -- -- 249 --
Other revenues.............................................. 212 188 672 612
Leasing/Development cost reimbursements..................... 639 545 1,871 1,740
------ ------ ------ ------
Total revenues......................................... 1,751 1,519 4,894 4,145
------ ------ ------ ------
Employee expenses........................................... 1,492 1,517 4,785 4,435
Office and other expenses................................... 291 410 1,095 1,290
Depreciation and amortization............................... 237 22 205 181
------ ------ ------ ------
Total expenses......................................... 2,020 1,949 6,085 5,906
------ ------ ------ ------
Operating partnership cost reimbursement expenses........... 269 430 1,191 1,761
------ ------ ------ ------
Operating partnership administrative expenses............... 684 742 2,322 2,255
------ ------ ------ ------
Shopping center level general and administrative expenses... 176 196 520 665
------ ------ ------ ------
Total general and administrative expenses.............. $1,129 $1,368 $4,033 $4,681
====== ====== ====== ======
Total general and administrative expenses decreased $648 for the nine
months ended September 30, 2000 when compared to the nine months ended September
30, 1999. Total revenues increased $749, including a gain on sale of real estate
of $249. Management fees decreased $385, principally as a result of $307 joint
venture acquisition fee included in the nine months ended in 1999. Leasing fees
revenue increased $694 for the nine months ended September 30, to $1,030 from
$336 for the same period of 1999. This increase was due to $499 of development
and leasing fees related to the Rossford Development LLC joint venture and the
East
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Towne Acquisition fees of $165. The increase in revenue was offset by an
increase in total expenses of $179. Employee expenses increased $350 in the nine
months ended September 30, 2000, primarily due to increases in overall salaries
and fringe benefits.
Under terms of a cost reimbursement agreement, acquisition, development,
management and leasing fees earned for services provided by an unconsolidated
entity are used to offset general and administrative expenses of the Company.
These fees are not necessarily earned consistently over time since these types
of fees are based on measurements related to specific transactions and are
dependent on the availability of space to lease or develop at the centers. The
net cost reimbursement to be charged as general and administrative expense to
the Company is dependent on the ability of the unconsolidated entity to continue
to earn acquisition, development, management and leasing fees to third party
entities.
ECONOMIC CONDITIONS
Substantially all of the leases at the Company's properties provide for
tenants to pay their pro rata share of operating expenses, including common area
maintenance and real estate taxes, thereby reducing the Company's exposure to
increases in operating expenses resulting from inflation. Many of the tenants'
leases contain provisions designed to lessen the impact of inflation. Such
provisions include the ability to receive percentage rentals based on a tenant's
gross sales, which generally increase as prices rise, and/or escalation clauses,
which generally increase rental rates during the terms of the leases. In
addition, many of the leases are for terms of less than ten years, which may
enable the Operating Partnership to replace existing leases with new leases at a
higher base and/or percentage rentals if rents of the existing leases are below
the then existing market rate.
The retail industry has experienced some financial difficulties during the
past few years and certain local, regional and national retailers have filed for
protection under bankruptcy laws. If this trend should continue, the Company's
future earnings performance could be negatively impacted.
SENSITIVITY ANALYSIS
The Company has exposure to interest rate risk on its debt obligations.
Based on the Company's interest in debt and interest rates in effect at
September 30, 2000, a 0.25 percent increase in interest rates would decrease
earnings and cash flows by approximately $413. A 0.25 percent decrease in
interest rates would increase earnings and cash flows by approximately $413.
FUNDS FROM OPERATIONS
Management generally considers funds from operations ("FFO") to be one
measure of financial performance of an equity REIT. It has been presented to
assist investors in analyzing the performance of the Company and to provide a
relevant basis for comparison to other REITs.
The Company 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, cumulative effects of accounting changes, gains
on sales of property, plus real estate related depreciation and amortization
(excluding amortization of financing costs), and after adjustments for
unconsolidated partnerships and joint ventures. This clarification of the
definition did not change amounts previously reported in 1999.
Therefore, 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 Company's
performance or to cash flows from operating activities as a measure of liquidity
or of 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.
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The following table illustrates the calculation of FFO for the three months
and nine months ended September 30, 2000, and 1999:
THREE MONTHS NINE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------ ------------------
2000 1999 2000 1999
---- ---- ---- ----
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
======= ======= ======= =======
Weighted average equivalent shares outstanding: (1)
Basic................................................. 10,124 10,170 10,142 10,170
======= ======= ======= =======
Diluted............................................... 12,133 12,170 12,145 12,171
======= ======= ======= =======
Supplemental disclosure:
Straight-line rental income........................... $ 961 $ 472 $ 2,652 $ 1,587
======= ======= ======= =======
Amortization of management contracts and covenants not
to compete......................................... $ 56 $ 124 $ 168 $ 371
======= ======= ======= =======
- -------------------------
(1) For basic FFO, represents the weighted average total shares outstanding,
assuming the redemption of all Operating Partnership Units for Common
Shares. For diluted FFO, represents the weighted average total shares
outstanding, assuming the redemption of all Operating Partnership Units for
Common Shares, the Series A Preferred Shares converted to Common Shares, and
the common shares issuable under the treasury stock method upon exercise of
stock options.
CAPITAL EXPENDITURES
During the nine months ended September 30, 2000, the Company spent
approximately $9,616 on revenue generating capital expenditures including tenant
allowances, leasing commissions paid to third-party brokers, legal costs
relative to lease documents, capitalized leasing, land acquisition costs and
construction costs. These types of costs generate a return through rents from
tenants over the term of their leases. Revenue enhancing capital expenditures,
including expansions, renovations or repositionings, were approximately $9,776.
Revenue neutral capital expenditures, such as roof and parking lot repairs,
which are anticipated to be recovered from tenants, amounted to approximately
$635.
FORWARD LOOKING STATEMENTS
This Form 10-Q contains forward-looking statements with respect to the
operation of certain of the Company's properties. Management of the Company
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 Company's
properties are located, the performance of the Company's tenants at the
Company's properties and elsewhere, and other factors discussed in this report
and the Company's reports filed with the Securities and Exchange Commission.
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PART II -- OTHER INFORMATION
ITEM 4 -- EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
See Exhibit Index immediately preceding the exhibits.
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the quarter ending September
30, 2000.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed in its behalf by the
undersigned thereunto duly authorized.
RAMCO-GERSHENSON PROPERTIES TRUST
Date: November 13, 2000 By: /s/ DENNIS E. GERSHENSON
----------------------------------------------------
Dennis E. Gershenson
President and Trustee
(Chief Executive Officer)
Date: November 13, 2000 By: /s/ RICHARD J. SMITH
----------------------------------------------------
Richard J. Smith
Chief Financial Officer
(Principal Accounting Officer)
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
10.1 Amended, Restated and Consolidated Mortgage dated August 25,
2000 between Ramco-Gershenson Properties, L.P., (the
"Operating Partnership"), and The Lincoln National Life
Insurance Company.
10.2 Second Amendment to Mortgage dated August 25, 2000 made by
the Operating Partnership in connection with the Operating
Partnership's $25,000,000 borrowing arrangement.
10.3 Form of Note dated August 25, 2000 made by the Operating
Partnership, as Maker, in connection with the Operating
Partnership's $25,000,000 borrowing arrangement.
10.4 Third Amended and Restated Master Revolving Credit Agreement
dated as of September 29, 2000 among the Operating
Partnership, as Borrower, the Trust, as Guarantor and Fleet
National Bank and the other Banks which may become parties
to the loan agreement, and Fleet National Bank, as Agent.
10.5 Form of Third Amended and Restated Note dated September 29,
2000 made by the Operating Partnership, in connection with
the Operating Partnership's $110,000,000 borrowing
arrangement.
10.6 First Amended and Restated Unsecured Term Loan Agreement
dated September 29, 2000 among the Operating Partnership, as
Borrower and Ramco-Gershenson Properties Trust, as
Guarantor, and Fleet National Bank and other Banks which may
become parties to this agreement, and Fleet National Bank,
as Agent.
10.7 Note dated September 29, 2000 in the principal amount of
$25,000,000 made by the Operating Partnership, as Borrower,
in favor of Fleet National Bank and other Banks.
27.1 Financial Data Schedule.