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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, 1998
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 Identification
of incorporation or organization) Number)
27600 Northwestern Highway, Suite 200, Southfield, Michigan 48034
- ----------------------------------------------------------- -----
(Address of principal executive offices) (Zip code)
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, 1998: 7,123,638
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Index
Part I. Financial Information Page No.
Item 1. Financial Statements
Consolidated Balance Sheets - September 30, 1998 (unaudited) and December 31, 1997............. 3
Consolidated Statements of Operations (unaudited) - Three Months and Nine Months Ended
September 30, 1998 and 1997............................................................... 4
Consolidated Statement of Shareholders' Equity (unaudited) - Nine Months Ended
September 30, 1998........................................................................ 5
Consolidated Statements of Cash Flows (unaudited)- Nine Months Ended
September 30, 1998 and 1997............................................................... 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 6. Exhibits and Reports on Form 8-K............................................................... 19
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PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
RAMCO-GERSHENSON PROPERTIES TRUST
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
September 30, December 31,
1998 1997
------------- -------------
(unaudited)
ASSETS
Investment in real estate - net (Note 2) .................... $ 495,340 $ 458,294
Accounts receivable - net ................................... 7,057 6,035
Equity investments in and advances to unconsolidated
entities .................................................... 5,765 6,421
Cash and cash equivalents ................................... 4,743 5,033
Other assets - net (Note 3) ................................. 12,702 8,899
--------- ---------
Total Assets ............................................. $ 525,607 $ 484,682
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Mortgages and notes payable (Note 4) ........................ $ 325,696 $ 295,618
Distributions payable ....................................... 4,784 4,348
Accounts payable and accrued expenses ....................... 13,880 13,145
Due to related entities ..................................... 1,377 1,325
--------- ---------
Total Liabilities .......................................... 345,737 314,436
Minority Interest ............................................. 46,324 42,282
Commitments and Contingencies (Note 7) ........................ - -
SHAREHOLDERS' EQUITY ..........................................
Preferred Shares, par value $.01, 10,000 shares
authorized; 867 and 467 Series A convertible shares issued
and outstanding, $21,666 and $11,666 liquidation value ..... 20,527 11,147
Common Shares of Beneficial Interest, par value $.01, 30,000
shares authorized; 7,124 and 7,123 issued and outstanding .. 71 71
Additional paid-in capital .................................. 150,523 150,513
Cumulative distributions in excess of net income ............ (37,575) (33,767)
--------- ---------
Total Shareholders' Equity .................................... 133,546 127,964
--------- ---------
Total Liabilities and Shareholders' Equity ................. $ 525,607 $ 484,682
========= =========
See notes to consolidated financial statements.
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RAMCO-GERSHENSON PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
1998 1997 1998 1997
REVENUES ------ ------ ------ ------
Minimum rents...................................... $ 13,693 $ 9,304 $ 40,134 $ 27,220
Percentage rents................................... 46 341 798 1,123
Recoveries from tenants ........................... 5,058 4,677 14,321 13,273
Interest and other income.......................... 166 139 415 595
-------- -------- -------- --------
Total Revenues................................ 18,963 14,461 55,668 42,211
-------- -------- -------- --------
EXPENSES
Real estate taxes.................................. 1,761 1,551 5,208 4,560
Recoverable operating expenses..................... 3,246 2,970 9,213 8,444
Depreciation and amortization...................... 3,059 1,999 8,935 5,692
Other operating.................................... 183 179 598 722
General and administrative......................... 1,400 1,108 4,349 3,583
Interest expense................................... 6,444 3,476 18,688 9,588
-------- -------- -------- --------
Total Expenses................................ 16,093 11,283 46,991 32,589
-------- -------- -------- --------
Operating income ...................................... 2,870 3,178 8,677 9,622
Loss from unconsolidated entities...................... 65 85 228 240
-------- -------- -------- --------
Income before minority interest........................ 2,805 3,093 8,449 9,382
Minority interest...................................... 810 806 2,372 2,500
-------- -------- -------- --------
Net income............................................. 1,995 2,287 6,077 6,882
Preferred dividends.................................... (345) - (908) -
-------- -------- -------- --------
Net income available to common shareholders............ $ 1,650 $ 2,287 $ 5,169 $ 6,882
======== ======== ======== ========
Basic earnings per share............................... $0.23 $0.32 $0.73 $0.97
======== ======== ======== ========
Diluted earnings per share............................. $0.23 $0.32 $0.72 $0.96
======== ======== ======== ========
Weighted average shares outstanding:
Basic.............................................. 7,124 7,123 7,123 7,123
======== ======== ======== ========
Diluted............................................ 7,144 7,159 7,162 7,145
======== ======== ======== ========
See notes to consolidated financial statements.
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RAMCO-GERSHENSON PROPERTIES TRUST
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(in thousands)
(Unaudited)
Preferred Stock Common Stock Additional Cumulative Total
--------------- ------------ Paid-In Earnings/ Shareholders'
Shares Amount Shares Amount Capital Distribution Equity
------ ------ ------ ------ ------- ------------ ------
Balance at January 1, 1998........ 467 $11,147 7,123 $71 $150,513 $(33,767) $127,964
Cash distributions declared......... (9,885) (9,885)
Issuance of preferred shares........ 400 9,380 9,380
Exercise of stock options........... 1 10 10
Net income for the Nine Months Ended
September 30, 1998................ 6,077 6,077
--- ------- ----- --- -------- -------- --------
Balance at September 30, 1998....... 867 $20,527 7,124 $71 $150,523 $(37,575) $133,546
=== ======= ===== === ======== ======== ========
See notes to consolidated financial statements.
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RAMCO-GERSHENSON PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
For the Nine Months
Ended September 30
1998 1997
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 6,077 $ 6,882
Adjustments to reconcile net income to net cash flows
Provided by operating activities:
Depreciation and amortization .................................... 8,935 5,692
Amortization of deferred financing costs ......................... 804 153
Loss from unconsolidated entities ................................ 228 240
Minority interest................................................. 2,372 2,500
Changes in assets and liabilities that provided (used) cash:
Accounts receivable.......................................... (1,022) (1,289)
Other assets ................................................ (5,187) (4,286)
Accounts payable and accrued expenses ....................... 1,171 8
------- --------
Total adjustments ................................................ 7,301 3,018
------- --------
Cash Flows Provided by Operating Activities ........................ 13,378 9,900
------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Real estate acquired ............................................. (24,838) (21,048)
Advances from (to) unconsolidated entities ....................... 428 (623)
------- --------
Cash Flows Used In Investing Activities ............................ (24,410) (21,671)
------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions to shareholders ............................... (9,885) (8,976)
Cash distributions to operating partnership unit holders ......... (3,603) (3,311)
Purchase of operating partnership units .......................... - (1,416)
Repayment of Credit Facility ..................................... (3,700) (2,430)
Principal repayments on mortgages payable ........................ (3,992) (1,398)
Payment of deferred financing costs .............................. (370) (613)
Borrowings on Credit Facility .................................... 22,600 28,463
Net proceeds from issuance of Preferred Shares ................... 9,380 -
Net advances from related entities ............................... 52 318
Net proceeds from exercise of stock options ...................... 10 -
Refund of deferred financing costs ............................... 250 -
------- --------
Cash Flows Provided by Financing Activities......................... 10,742 10,637
------- --------
Net Decrease in Cash and Cash Equivalents .......................... (290) (1,134)
Cash and Cash Equivalents, Beginning of Period ..................... 5,033 3,541
------- --------
Cash and Cash Equivalents, End of Period ........................... $ 4,743 $ 2,407
======= ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest during the period ...................... $17,591 $ 9,070
======= ========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Acquisition of Aquia Towne Center:
Debt assumed ............................................. $15,170 -
Value of OP units issued ................................. 5,273 -
See notes to consolidated financial statements.
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RAMCO-GERSHENSON PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unaudited)
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation - The accompanying interim 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
generally accepted accounting principles have been condensed or omitted pursuant
to such rules. The unaudited interim financial statements should be read in
conjunction with the audited financial statements and related notes included in
the Company's Annual Report on Form 10-K for the year ended December 31, 1997.
In the opinion of management, all adjustments (consisting only of normal
recurring adjustments) necessary for a fair presentation of the 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 May 1998, the Emerging Issues
Task Force of the Financial Accounting Standards Board reached a consensus on
Issue No. 98-9, "Accounting for Contingent Rent in Interim Financial Periods".
This statement establishes standards for when the lessor can recognize
contingent rental income that is based on future specified targets within the
lessor's fiscal year. The consensus requires that contingent rental income in
interim periods should be deferred until the specified target that results in
contingent rental income is achieved. The impact of adopting this consensus was
to decrease percentage rents by approximately $300 or $0.03 per share for the
three months and the nine months ended September 30, 1998.
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 130, "Reporting Comprehensive Income",
and SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information". Readers are referred to the "Impact of Recent Accounting
Pronouncements" section of the Company's 1997 Form 10-K for further discussion.
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities". This Statement
requires companies to record derivatives on the balance sheet as assets and
liabilities, measured at fair value. Gains or losses resulting from changes in
the values of those derivatives would be accounted for depending on the use of
the derivative and whether it qualifies for hedge accounting. Management has not
determined the impact of the Statement on the Company's financial statements.
This Statement is effective for fiscal year beginning after June 15, 1999, with
earlier adoption encouraged. The Company will adopt this accounting standard as
required by January 1, 2000.
Reclassifications - Certain reclassifications have been made to the 1997
financial statements in order to conform with the 1998 presentation.
2. REAL ESTATE
The Company's real estate consists of the following:
September 30, 1998 December 31, 1997
------------------ -----------------
(unaudited)
Land $ 63,545 $ 57,075
Buildings and Improvements 451,506 414,115
Construction-in- progress 3,443 2,023
-------- ---------
518,494 473,213
Less: accumulated depreciation (23,154) (14,919)
-------- ---------
Investment in real estate - net $495,340 $458,294
======== ========
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REAL ESTATE ACQUISITIONS
In May 1998 the Company acquired Southbay Fashion Center, a 96,700 square foot
community center located in Sarasota, Florida, for approximately $6,000. In
September 1998 the Company acquired Conyers Crossing, a 166,600 square foot
community shopping center located in Conyers, Georgia for approximately $7,490.
The Company also acquired Aquia Towne Center, a 238,000 square foot shopping
center, located in Stafford County, Virginia. The purchase price was comprised
of $1,430 in cash, issuance of 239,697 operating partnership units with a fair
value of $5,273, and the assumption of a $15,170 existing mortgage. The mortgage
note matures in March 2008 and has an interest rate of 7.39% (Note 4).
The acquisitions have been accounted for using the purchase method of accounting
and, accordingly, the assets and liabilities have been included in the
consolidated balance sheet based upon their respective fair market values.
3. OTHER ASSETS
Other assets are as follows:
September 30, 1998 December 31, 1997
------------------ -----------------
(unaudited)
Leasing costs and other $ 9,741 $ 5,845
Deferred financing costs 2,926 2,806
Proposed development and acquisition costs 2,505 1,214
-------- --------
15,172 9,865
Less: accumulated amortization (2,470) (966)
-------- --------
Other assets - net $ 12,702 $ 8,899
======== ========
4. MORTGAGES AND NOTES PAYABLE
MORTGAGES AND NOTES PAYABLE CONSIST OF THE FOLLOWING:
September 30, 1998 December 31, 1997
------------------ -----------------
(unaudited)
Fixed rate mortgages with interest rates ranging from 6.83% to
8.50% at September 30, 1998 and 6.83% to 8.75% at December 31, 1997,
due at various dates through 2008.................................................... $173,208 $162,030
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, 1998 was 7.41% and at December 31, 1997 was 7.33%...................... 7,000 7,000
Unsecured term loan, with an interest rate at LIBOR plus
275 basis points, due May 1, 1999. The effective rate at
September 30, 1998 and December 31, 1997 was 9.38% and
8.75%, respectively.................................................................. 45,000 45,000
Credit Facility, with an interest rate at LIBOR plus 162.5 basis
points at September 30, 1998 and December 31, 1997 due
May 1999, maximum available borrowings of $110,000. The
effective rate at September 30, 1998 and December 31, 1997 was
7.39% and 7.66%, respectively........................................................ 100,488 81,588
-------- --------
$325,696 $295,618
======== ========
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The mortgage notes are secured by mortgages on properties that have an
approximate net book value of $274,730 and $276,619 as of September 30, 1998 and
December 31, 1997, respectively. The Credit Facility is secured by mortgages on
various properties that have an approximate net book value of $181,596 and
$172,970 as of September 30, 1998 and December 31, 1997, respectively.
At September 30, 1998, outstanding letters of credit issued under the Credit
Facility, not reflected in the accompanying consolidated balance sheet, total
approximately $836.
The following table presents scheduled principal payments on mortgages and notes
payable as of September 30, 1998:
Year ended December 31,
1998 (October 1 - December 31) $ 769
1999 148,667
2000 8,336
2001 3,245
2002 3,442
Thereafter 161,237
--------
Total $325,696
========
During August 1998 the Company executed an interest rate swap agreement to limit
the Company's exposure to increases in interest rates on its floating rate debt.
The notional amount of the agreement was $75,000. Based on rates currently in
effect under the Company's Credit Facility, the agreement provides for a fixed
rate of 7.425% through October 2000. In conjunction with this agreement, the
Company terminated, at no cost, the two interest rate collar agreements
previously in place. These terminated agreements consisted of a $75,000
agreement through May 1, 1999 which had a cap at 8.375% and a floor of 7.125%,
and a $50,000 agreement for the period May 1999 to October 2000 which had a cap
at 8.375% and a floor of 7.225%. The Company is exposed to credit loss in the
event of non-performance by the other parties to the interest rate swap
agreement, however; the Company does not anticipate non-performance by the
counter party.
5. 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.
Approximate future minimum rentals under noncancelable operating leases in
effect at September 30, 1998, assuming no new or renegotiated leases nor option
extensions on lease agreements, are as follows:
Year ended December 31,
1998 (July 1 - December 31) $ 12,898
1999 48,933
2000 44,647
2001 39,720
2002 35,713
Thereafter 235,872
--------
Total $417,783
========
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6. PRO FORMA FINANCIAL INFORMATION
During 1997, the Company acquired properties with an aggregate cost of
approximately $147,700. The acquisitions were accounted for as purchases and,
accordingly, results of operations were included in the consolidated financial
statements since the various dates of acquisitions.
The following pro forma financial data have been presented as if the
acquisitions had occurred on January 1, 1997:
Three Months Ended Nine Months Ended
September 30, 1997 September 30, 1997
------------------ ------------------
Revenues..................................................................... $18,603 $55,414
======= =======
Net Income................................................................... $ 2,302 $ 6,964
======= =======
Basic Earnings per Share..................................................... $ 0.33 $ 0.98
======= =======
Diluted Earnings per Share................................................... $ 0.32 $ 0.98
======= =======
7. COMMITMENTS AND CONTINGENCIES
Substantially all of the properties have been subjected to Phase I environmental
audits. Such audits have not revealed nor is management aware of any
environmental liability that management believes would have a material adverse
impact on the Company's financial position or results of operations. Management
is unaware of any instances in which it would incur significant environmental
costs if any or all of the properties were sold, disposed of or abandoned.
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 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 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.
Although the IRS agent conducting the examination has not issued his final
examination report with respect to the tax issues raised in the Tax Audit,
including the Asset Issue (collectively, the "Tax Issues"), the Company has
received a preliminary draft of the examining agent's report. The draft 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. If the final report were issued in its current form, the liability of
Atlantic to indemnify the Company may be substantial. The Continuing Trustees of
the Company are engaged in ongoing discussions with the examining agent and his
supervisors with regard to the positions set forth in the draft report. There
can be no assurance that, after conclusion of discussions
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with such agent and his supervisors regarding the draft report, the examining
agent will not issue the proposed report in the form previously delivered to the
Company (or another form). 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, pursuant to the tax agreement between Atlantic and the Company,
Atlantic has assumed all liability arising out of the Tax Audit and the Tax
Issues. Based on the amount of Atlantic's assets, as disclosed in its Annual
Report on Form 10-K for the year ended December 31, 1997, and its Quarterly
Report on Form 10-Q for the period ended June 30, 1998, 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.
During July 1997 Montgomery Ward ("Wards") a tenant at three of the Company's
properties, (Tel-Twelve Mall, Clinton Valley Mall and Shoppes of Lakeland),
filed for protection under Chapter 11 of the Bankruptcy Code. In October 1997,
Wards issued a list of anticipated store closings which included the stores at
the Company's Clinton Valley Mall. This location consists of a 101,200 square
foot department store and a 7,480 square foot TBA store (Tires, Batteries and
Automotive). The Company was notified in March 1998 that Wards rejected the
lease. On an annual basis, Wards paid, in the aggregate, approximately $1,000 in
base rent and operating and real estate tax expense reimbursements for the
Clinton Valley Mall. The Company has leased 30,900 square feet of the former
department store and rental income is expected to commence during the first
quarter of 1999.
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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 $13,378 in cash flows from operating activities and
$10,742 in cash flows from financing activities for the nine months ended
September 30, 1998. These combined cash flows of $24,120 were used to fund
$24,410 of investing activities which were primarily the acquisition of real
estate assets.
The Company's mortgages and notes payable amounted to $325,696 at September 30,
1998, with a weighted average interest rate of 7.84%. The debt consists of nine
loans secured by various properties, one unsecured term loan, and the Credit
Facility which is secured by various properties. Eight of the mortgage loans
amounting to $173,208 have maturities ranging from 2000 to 2008, monthly
payments which include regularly scheduled amortization, and have fixed interest
rates ranging between 6.83% to 8.50%. One of the mortgage loans, evidenced by
tax free bonds, amounting to $7,000 secured by Oak Brook Square Shopping Center
is non-amortizing, 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
(7.41% at September 30, 1998). Another mortgage loan with an interest rate of
8.75%, matured in June 1998.
In connection with the acquisition of Aquia Towne Center shopping center, the
Company assumed an existing $15,170 mortgage loan. The loan matures in March
2008 and has an interest rate of 7.39%. In addition, Ramco-Gershenson
Properties, L.P. (the "Operating Partnership"), the Company's operating
partnership, issued 239,697 OP Units valued at approximately $5,300.
Variable rate debt accounted for $152,488 of outstanding debt with a weighted
average interest rate of 7.98%. Variable rate debt accounted for approximately
46.8% of the Company's total debt and 29.8% of its total capitalization. The
Company has an interest rate protection agreement in place relative to $75,000
of floating rate debt as discussed below. After taking into account the impact
of converting the variable rate debt into fixed rate debt by use of the interest
rate swap agreement discussed below, the Company's variable rate debt would
account for approximately 23.8% of the Company's total debt and 15.1% of its
total capitalization.
The Company has an unsecured term loan amounting to $45,000, maturing May 1999,
which may under certain circumstances be extended to October 2000 at the
election of the Operating Partnership. This term loan bears interest between 250
and 275 basis points over LIBOR, depending on certain debt ratios (9.38% at
September 30, 1998).
The Company currently has a $110,000 Credit Facility, of which $100,488 was
outstanding as of September 30, 1998. This Credit Facility bears interest
between 137.5 and 162.5 basis points over LIBOR depending on certain debt ratios
(weighted average 7.39% interest rate at September 30, 1998) and matures May
1999. The maturity date may under certain circumstances be extended to October
2000 at the election of the Operating Partnership. The credit facility is
secured by mortgages on various properties and contains financial covenants
relating to liabilities-to-asset ratio, minimum operating coverage ratios and a
minimum equity value. As of September 30, 1998 the Company was in compliance
with the covenant terms. At September 30, 1998, outstanding letters of credit
issued under the credit facility total $836.
The Company used proceeds from the borrowings under the Credit Facility, the
assumption of the existing mortgage on Aquia Towne Center, the issuance of
$10,000 of Series A Preferred Shares and the issuance of 239,697 OP Units with a
fair value of approximately $5,300 to finance the acquisitions of Southbay
Fashion Center, Conyers Crossing and Aquia Towne Center, the development of
White Lake MarketPlace, the repayment of a mortgage loan in June 1998, and to
pay for other capital expenditures.
During August 1998, the Company executed an interest rate swap agreement to
limit the Company's exposure to increases in interest rates on its floating rate
debt. The notional amount of the agreement was $75,000. Based on rates currently
in effect under the Company's Credit Facility, the agreement provides for a
fixed rate of 7.425% through October 2000. In conjunction with this agreement,
the Company terminated, at no cost, the two interest rate collar agreements
previously in place. These terminated agreements consisted of a $75,000
agreement through May 1, 1999 which had a cap at 8.375% and a floor of 7.125%,
and a $50,000
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agreement for the period May 1999 to October 2000 which had a cap
at 8.375% and a floor of 7.225%. The Company is exposed to credit loss in the
event of non-performance by the other parties to the interest rate swap
agreement, however; the Company does not anticipate non-performance by the
counter parties.
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 63.6% at
September 30, 1998. On a pro forma basis, if the full MSAM/Kimco equity
investment were infused, the debt to total market capitalization would be 61.1%
at September 30, 1998.
The two properties in which the Operating Partnership owns an interest and are
accounted for on the equity method of accounting are subject to non-recourse
mortgage indebtedness. At September 30, 1998, the pro rata share of non-recourse
mortgage debt on the unconsolidated properties (accounted for on the equity
method) was $6,215 with a weighted average interest rate of 9.14%.
In October, 1997, the Company entered into an agreement with certain clients
advised by Morgan Stanley Asset Management, Inc. ("MSAM"), and Kimco Realty
Corporation ("Kimco") pursuant to which such entities agreed to invest up to an
aggregate of $35,000 in the Operating Partnership. The equity investment
involves the issuance of up to 1.4 million Series A Convertible Preferred
Shares, ("Series A Preferred Shares") issued by the Company at a price of $25.00
per share. The Series A Preferred Shares are convertible, under certain
circumstances, into Common Shares of the Company at a conversion price of $17.50
per Common Share. The initial investment of $11,667 was made in October 1997. An
additional investment of $10,000 was made in September 1998. The remaining
commitment of $13,333 may be drawn by through February 28, 1999 and may be used
to help fund strategic acquisitions, retenanting or redevelopment activities, or
to reduce outstanding debt. The dividend rate on the Series A Preferred Shares
is expected to equal the dividend rate presently being paid to the Company's
common shareholders.
After the closing of this transaction, the MSAM clients are required to purchase
19.4% of the first $50,000 in a follow-on public offering of the Company's
Common Shares at the offering price less the underwriter's fees, commissions,
and discounts per share. Upon consummation of such public offering, all
outstanding Series A Preferred Shares will be exchanged into Common Shares of
the Company, at a conversion price of $17.50 per share, which conversion price
is subject to adjustment in certain circumstances.
The Company's current capital structure includes property specific mortgages,
the unsecured term loan, the Credit Facility, Series A Preferred Shares, Common
Shares and minority interest in the Operating Partnership. Minority interest
increased to 29.9%, from 26.5% at December 31, 1997. The increase to minority
interest resulted from the OP Units assumed to be issued in conjunction with the
earnout calculation for the Jackson Crossing shopping center, and the issuance
of 239,697 OP Units in connection with the acquisition of Aquia Towne Center.
The minority interest computation assumes the issuance of an additional 238,965
OP Units to the Ramco Group relative to increases in net operating income at the
Jackson Crossing shopping center. The computation is subject to due diligence
procedures and to Board of Director approval. Currently, the minority interest
in the Operating Partnership represents the 29.9% ownership in the Operating
Partnership which may, under certain conditions, be exchanged for approximately
3,042,185 Common Shares.
The OP Units owned by the Ramco Principals are subject to lock-up agreements
which provide that the Units cannot be transferred, except under certain
conditions until November 1998. In addition, the 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
exchange such Units for cash based on the current trading price of the Common
Shares. Assuming the exchange of all limited partnership interests in the
Operating Partnership, there would be outstanding approximately 10,170,443
Common Shares with a market value of approximately $166,592 at September 30,
1998 (based on the closing price of $16.38 per share on September 30, 1998).
In July 1998, the Company commenced the construction of its newest development,
White Lake MarketPlace, a 350,000 square foot community shopping center, located
in the metro Detroit area. Management anticipates this $15,500 development will
be funded utilizing the Credit Facility, other borrowings, and/or the remaining
$13,333 MSAM/Kimco equity commitment for Series A Preferred Shares, or the
issuance of equity securities or warrants under the Company's shelf registration
statement.
The principal uses of the Company's liquidity and capital resources are for
acquisitions, development, including expansion and renovation programs, and debt
repayment. 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, potential new borrowings relative to the acquired properties
and development properties, construction loans, the remaining MSAM/Kimco equity
commitment for Series A
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Preferred Shares, joint ventures, and potential future offering of securities
under the shelf registration statement will provide adequate liquidity for the
foreseeable future to fund future acquisitions, developments, expansions,
repositionings, and to continue its currently planned capital programs 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.
During July 1997 Wards, a tenant at three of the Company's properties,
Tel-Twelve Mall, Clinton Valley Mall and Shoppes of Lakeland, filed for
protection under Chapter 11 of the Bankruptcy Code. In October 1997, Wards
issued a list of anticipated store closings which included the stores at the
Company's Clinton Valley Mall. This location consists of a 101,200 square foot
department store and a 7,480 square foot TBA store (Tires, Batteries and
Automotive). The Company was notified in March 1998 that Wards rejected the
lease. On an annual basis, Wards paid, in the aggregate, approximately $1,000 in
base rent and operating and real estate tax expense reimbursement for the
Clinton Valley Mall. The Company has leased 30,900 square feet of the former
department store and rental income is expected to commence during the first
quarter of 1999.
The Company recognizes that Year 2000 issues may have an impact on its business,
operations and financial condition. The Company has completed an assessment of
its Year 2000 readiness with respect to all of its information technology ("IT")
systems and is currently addressing the reliability and condition of its non-IT
systems. These assessments will continue to be updated as additional information
becomes available and as new concerns are identified.
The Company's IT systems generally consist of file servers, operating systems,
application programs and workstations that utilize purchased and customized
systems. The Company continues to evaluate the Year 2000 compliance status of
each vendor and believes that its existing systems or planned upgrades during
1998 will be Year 2000 compliant. Implementation and upgrades of non-Year 2000
compliant systems will not result in significant additional cost to the Company.
The Company's non-IT systems which may be subject to Year 2000 issues are
facility related and encompass areas such as HVAC systems, elevators, security,
lighting, telecommunications, electrical, plumbing, fire and sprinkler controls.
The Company is currently addressing the potential impact of Year 2000 in these
areas and has not identified any instances where Year 2000 issues will require
material costs to repair or replace any of these systems.
The significant risks to the Company in the event that Year 2000 issues are not
identified and corrected could cause delays or errors in processing financial
and operation information while non-IT system problems could result in forced
closure of certain facilities which could limit the efficient operation of the
Company's properties.
While the Company believes its planning and remediation efforts are adequate to
address its Year 2000 concerns, there can be no guarantee that the systems of
other companies on which the Company's systems and operations rely will be
converted on a timely basis and will not have a material effect on the Company.
COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 1998 TO NINE MONTHS ENDED
SEPTEMBER 30, 1997.
Total revenues for the nine months ended September 30, 1998 increased by 31.9%,
or $13,457, to $55,668 as compared to $42,211 for the nine months ended
September 30, 1997. The increase was a result of a $12,914 increase in minimum
rents, a $1,048 increase in recoveries from tenants, offset by a $325 decrease
in percentage rents and a $180 decrease in interest and other income.
Minimum rents increased 47.4%, or $12,914, to $40,134 for the nine months ended
September 30, 1998 as compared to $27,220 for the nine months ended September
30, 1997. Recoveries from tenants increased 7.9%, or $1,048, to $14,321 as
compared to $13,273 for the nine months ended September 30, 1997. These
increases are primarily attributable to the acquisition of the Madison, Pelican
and Village Lakes shopping centers effective May, June and December 1997,
respectively, and the acquisition of the Southeast Portfolio on October 30,
1997. The operating results for the nine months ended September 30, 1998 include
the impact of these acquisitions for the full nine months in 1998, while the
results for the nine months ended September 30, 1997 included the impact of four
months for the Madison acquisition, three months for the Pelican acquisition and
no impact from the other acquisitions. The recovery ratio for the nine months
ended September 30, 1998 decreased to 99.3% as compared to 102.1% for the nine
months ended September 30, 1997.
The decrease in percentage rent is primarily the result of the Company adopting
consensus Issue No. 98-9, "Accounting for Contingent Rent in Interim Periods".
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Interest and other income decreased 30.3%, or $180, to $415 as compared to $595
for the nine months ended September 30, 1997. This decrease was primarily
attributable to non-recurring tenant lease buyouts in 1997.
Total expenses for the nine months ended September 30, 1998 increased by 44.2%,
or $14,402, to $46,991 as compared to $32,589 for the nine months ended
September 30, 1997. The increase was due to a $1,417 increase in total
recoverable expenses, including real estate taxes and recoverable operating
expenses, a $3,243 increase in depreciation and amortization, a $124 decrease in
other operating expenses, a $766 increase in general and administrative
expenses, and a $9,100 increase in interest expense.
Total recoverable expenses, including real estate taxes and recoverable
operating expenses, increased by 10.9%, or $1,417, to $14,421 as compared to
$13,004 for the nine months ended September 30, 1997, depreciation and
amortization increased by 57.0%, or $3,243, to $8,935 as compared to $5,692 for
the nine months ended September 30, 1997, and other operating expenses decreased
17.2%, or $124 to $598 as compared to $722 for the nine months ended September
30, 1998. General and administrative expenses increased 21.4%, or $766, to
$4,349 as compared to $3,583 for the nine months ended September 30, 1997. The
increase in recoverable expenses of $1,417, depreciation and amortization of
$3,243, and interest expense of $9,100, are due to the acquisition of the
Southeast Portfolio and the other property acquisitions in 1997 and acquisitions
and capital expenditures in 1998.
The minority interest of $2,372 for the nine months ended September 30, 1998
represents a 28.1% share of income before minority interest of the operating
partnership compared to a 26.7% share of income before minority interest, or
$2,500 for the nine months ended September 30, 1997. The increase in the
percentage share of income is due to the increase in OP Units assumed to be
issued in connection with the earnout calculation for the Jackson Crossing
shopping center and the issuance of 239,697 OP Units related to the Aquia Towne
Center acquisition.
COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 1998 TO THREE MONTHS ENDED
SEPTEMBER 30, 1997
Total revenues for the three months ended September 30, 1998 increased 31.1%, or
$4,502, to $18,963 as compared to $14,461 for the three months ended September
30, 1997. The increase was a result of a $4,389 increase in minimum rents, a
$381 increase in recoveries from tenants, a $27 increase in interest and other
income, offset by a $295 decrease in percentage rents.
Minimum rents increased 47.2%, or $4,389, to $13,693 for the three months ended
September 30, 1998 as compared to $9,304 for the three months ended September
30, 1997. Recoveries from tenants increased 8.2%, or $381, to $5,058 as compared
to $4,677 for the three months ended September 30, 1997. These increases are
primarily attributable to the acquisition of the Southeast Portfolio on October
30, 1997. The operating results for the three months ended September 30, 1998
included the impact of these acquisitions for the full three months in 1998,
along with the acquisitions of Southbay Fashion Center, effective May 1998. The
results for the three months ended September 30, 1997 did not included the
impact of Village Lakes and the Southeast Portfolio. The recovery ratio for the
three months ended September 30, 1998 decreased to 101.0% as compared to 103.5%
for the three months ended September 30, 1997.
The decrease in percentage rent is primarily the result of the Company adopting
consensus Issue No. 98-9, "Accounting for Contingent Rent in Interim Periods".
Total expenses for the three months ended September 30, 1998 increased by 42.6%,
or $4,810, to $16,093 as compared to $11,283 for the three months ended
September 30, 1997. The increase was due to a $486 increase in total recoverable
expenses, including real estate taxes and recoverable operating expenses, a
$1,060 increase in depreciation and amortization, a $4 increase in other
operating expenses, a $292 increase in general and administrative expenses, and
a $2,968 increase in interest expense.
Total recoverable expenses, including real estate taxes and recoverable
operating expenses, increased by 10.7%, or $486, to $5,007 as compared to $4,521
for the three months ended September 30, 1997, depreciation and amortization
increased 53.0%, or $1,060, to $3,059 as compared to $1,999 for the three months
ended September 30, 1997, and other operating expenses increased 2.2%, or $4, to
$183 as compared to $179 for the three months ended September 30, 1997. The
increase in recoverable expenses of $486, depreciation and amortization of
$1,060, and interest expense of $2,968, are due to the acquisition of the
Southeast Portfolio and the other property acquisitions in 1997 and acquisitions
and other capital expenditures in 1998.
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The loss from unconsolidated entities decreased 23.5%, or $20, to $65 for the
three months ended September 30, 1998 as compared to a loss of $85 for the three
months ended September 30, 1997.
The minority interest of $810 for the three months ended September 30, 1998
represents a 28.9% share of income before minority interest of the operating
partnership compared to a 26.1% share of income before minority interest, or
$806 for the three months ended September 30, 1997. The increase in the
percentage share of income is due to an increase in OP Units assumed to be
issued in connection with the earnout calculation for the Jackson Crossing
shopping center and the issuance of 239,697 OP Units related to the Aquia Towne
Center acquisition.
GENERAL AND ADMINISTRATIVE
Following is a breakdown of the general and administrative expenses shown in the
financial statements (unaudited):
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
---- ---- ---- ----
Management Fees.............................................. $ 234 $ 264 $ 686 $ 778
Leasing, Brokerage and Development Fees 5 142 147 269
Other Revenues............................................... 216 98 561 410
Leasing/Development Cost Reimbursements 391 357 1,395 952
------ ------ ------ ------
Total Revenues................................ 846 861 2,789 2,409
------ ------ ------ ------
Employee Expenses............................................ 1,213 1,038 3,687 3,033
Office and Other Expenses.................................... 315 252 1,112 873
Depreciation and Amortization................................ 67 60 195 183
------ ------ ------ ------
Total Expenses................................ 1,595 1,350 4,994 4,089
------ ------ ------ ------
Operating Partnership Cost Reimbursement Expenses............ 749 489 2,205 1,680
------ ------ ------ ------
Operating Partnership Administrative Expenses................ 539 524 1,811 1,604
------ ------ ------ ------
Shopping Center Level General and Administrative Expenses.... 112 95 333 299
------ ------ ------ ------
Total General and Administrative Expenses.................... $1,400 $1,108 $4,349 $3,583
====== ====== ====== ======
The increase in general and administrative expenses, when compared to the nine
months ended September 30, 1997 is primarily due to general salary increases,
including an increase in headcount incurred subsequent to the third quarter of
1997 and an increase in state and local tax expense.
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 effective on January
1, 1996. Under the NAREIT definition, FFO represents income (loss) before
minority interest (computed in accordance with generally accepted accounting
principles), excluding gains (losses) from debt restructuring and sales of
property, plus real estate related depreciation and amortization (excluding
amortization of financing costs), and after adjustments for unconsolidated
partnerships and joint ventures.
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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.
The following table illustrates the calculation of FFO for the three months and
nine months ended September 30, 1998, and 1997 (unaudited):
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
---- ---- ---- ----
Net Income $ 1,995 $ 2,287 $ 6,077 $ 6,882
Add: Depreciation and amortization.................. 3,066 1,999 8,956 5,692
Add: Minority interest in partnership............... 810 806 2,372 2,500
------- ------- ------- -------
Funds from operations - diluted........................... $ 5,871 $ 5,092 $17,405 15,074
Less: Preferred share dividends..................... (345) - (908) -
------- ------- ------- -------
Funds from operations - basic............................. $ 5,526 $ 5,092 $16,497 $15,074
======= ======= ======= =======
Weighted average equivalent shares outstanding (1)
Basic................................................ 10,010 9,691 9,931 9,721
======= ======= ======= =======
Diluted.............................................. 10,831 9,727 10,681 9,743
======= ======= ======= =======
Supplemental disclosure:
Straight-line rental income.......................... 662 304 1,413 1,337
======= ======= ======= =======
Amortization of management contracts and covenants
not to compete.................................. $ 124 $ 124 $ 372 $ 372
======= ======= ======= =======
(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, 1998, the Company spent approximately
$5,838 on revenue generating capital expenditures including tenant allowances,
leasing commissions paid to third-party brokers, legal costs relative to lease
documents, and capitalized leasing 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 $3,022. Revenue neutral capital expenditures,
such as roof and parking lot repairs which are anticipated to be recovered from
tenants, amounted to approximately $2,152.
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IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS
In May 1998, the Emerging Issues Task Force of the Financial Accounting
Standards Board reached a consensus on Issue No. 98-9, "Accounting for
Contingent Rent in Interim Financial Periods". This statement establishes
standards for when the lessor can recognize contingent rental income that is
based on future specified targets within the lessor's fiscal year. The consensus
requires that contingent rental income in interim periods should be deferred
until the specified target that results in contingent rental income is achieved.
This impact of adopting this consensus was to decrease percentage rents by
approximately $300 or $0.03 per share for the three months and the nine months
ended September 30, 1998.
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 130, "Reporting Comprehensive Income",
and SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information". Readers are referred to the "Impact of Recent Accounting
Pronouncements" section of the Company's 1997 Annual Report to Shareholders for
further discussion.
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities". This Statement
requires companies to record derivatives on the balance sheet as assets and
liabilities, measured at fair value. Gains or losses resulting from changes in
the values of those derivatives would be accounted for depending on the use of
the derivative and whether it qualifies for hedge accounting. Management has not
determined the impact of the Statement on the Company's financial statements.
This Statement is effective for fiscal year beginning after June 15, 1999, with
earlier adoption encouraged. The Company will adopt this accounting standard as
required by January 1, 2000.
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 6 - 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, 1998.
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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 10, 1998 By: /s/ Dennis E. Gershenson
--------------------------------
Dennis E. Gershenson
President and Trustee
(Chief Executive Officer)
Date: November 10, 1998 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 Promissory Note dated as of February 27, 1998 in the
principal face amount of $15,225,000.00 made by A.T.C., L.L.C.
in favor of GMAC Commercial Mortgage Corporation.
10.2 Deed of Trust and Security Agreement dated as of February 27,
1998 by A.T.C., L.L.C. to Lawyers Title Insurance Company for
the benefit of GMAC Commercial Mortgage Corporation relating
to a $415,225,000.00 loan.
10.3 Assignment and Assumption Agreement dated as of October 8,
1998 among A.T.C., L.L.C., Ramco Virginia Properties, L.L.C.,
A.T. Center, Inc., Ramco-Gershenson Properties Trust and
LaSalle National Bank, as trustee for the registered holders
of GMAC Commercial Mortgage Securities, Inc. Mortgage
Pass-Through Certificates.
10.4 Exchange Rights Agreement dated as of September 4, 1998
between Ramco-Gershenson Properties Trust, and A.T.C., L.L.C.
27.1 Financial Data Schedule
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