Exhibit 99.1
Ramco-Gershenson Properties Trust
Reports Results for Third Quarter 2007
FARMINGTON HILLS, Mich.--(BUSINESS WIRE)--Oct. 23,
2007--Ramco-Gershenson Properties Trust (NYSE:RPT) announced today
results for the third quarter ended September 30, 2007.
Financial Information for the Third Quarter 2007:
-- Diluted FFO per share of $0.66, an increase of 4.8%
-- Diluted FFO of $14.1 million
-- Total revenues of $37.8 million
-- Diluted EPS from continuing operations of $0.15
Company Highlights for the Third Quarter 2007:
-- Acquired Nora Plaza in Indianapolis, IN and Old Orchard
shopping center in West Bloomfield, MI through joint ventures
-- Identified new development in central Florida
-- Commenced three additional value-added redevelopment projects
-- Increased same center net operating income by 2.3%
-- Opened 20 new non-anchor stores, 19.5% over portfolio rental
averages
-- Renewed 21 non-anchor leases, 11.6% over prior rental rates
Financial Results
For the three months ended September 30, 2007, diluted Funds from
Operations (FFO) increased 4.4% to $14.1 million compared with $13.5
million for the three months ended September 30, 2006. On a per share
basis, diluted FFO increased 4.8% to $0.66, compared with $0.63 in
2006. Total revenues decreased 2.6% to $37.8 million, compared to
$38.8 million in 2006, as a result of transferring assets to a number
of the Company's joint ventures. Income from continuing operations for
the quarter was $3.3 million, or $0.15 per diluted share, compared to
$4.5 million, or $0.17 per diluted share in 2006, as a result of
decrease in the gains on sale of real estate assets.
For the nine months ended September 30, 2007, diluted FFO
increased 1.7% to $41.3 million compared with $40.6 million for the
nine months ended September 30, 2006. On a per share basis, diluted
FFO increased 2.1% to $1.92, compared with $1.88 in 2006. Total
revenues increased 1.1% to $115.1 million, compared to $113.8 million
in 2006. Income from continuing operations was $38.2 million, or $1.96
per diluted share, compared to $13.5 million, or $0.51 per diluted
share in 2006. Income from continuing operations was positively
impacted by a $26.7 million (net of minority interest) gain on the
sale of real estate assets in 2007.
"I am pleased to report positive earnings and solid operational
results for the quarter," said Dennis Gershenson, President and Chief
Executive Officer. "The Company continues to source acquisitions for
its joint ventures and during the quarter we completed our $450
million commitment with ING Clarion. Our development pipeline now
includes four projects that are all moving through the entitlement
process. We are very enthusiastic about the value-added redevelopment
opportunities in our core portfolio and have identified 14 additional
projects, which will commence throughout the remainder of 2007 and
into 2008. Our goal is to continue to execute a business plan this
year and next that generates long-term growth and maximizes
shareholder value."
Operating Highlights
Joint Venture Acquisitions
During the quarter, the Company acquired the Old Orchard shopping
center in West Bloomfield, Michigan, as part of its joint venture with
ING Clarion. Old Orchard is a 95,000 square foot shopping center
previously anchored by a 54,000 square foot Farmer Jack (A & P)
Supermarket. The center's location in an affluent, densely populated
trade area creates a unique opportunity to completely redevelop the
property. The purchase of this asset plus the redevelopment capital
anticipated for the center will fill the $450 million commitment for
the ING Clarion joint venture, which was formed in December 2004.
Additional acquisitions for this joint venture will be subject to the
approval of the partnership on an asset by asset basis.
During the quarter, the Company also acquired Nora Plaza in
Indianapolis, Indiana, through a newly formed joint venture with
Heitman LLC. Nora Plaza is a 264,000 square foot community shopping
center anchored by Wild Oats Natural Marketplace, Marshalls and
Target, a shadow anchor. Ramco-Gershenson holds a 7% interest in the
joint venture.
Development
As previously announced, the Company is in various stages of
development on a number of new projects, each located at major highway
interchanges in metropolitan markets:
-- The Town Center at Aquia in Stafford, Virginia (a suburb of
Washington D.C.), involves the complete demolition of an
existing 200,000 square foot shopping center currently owned
by the Company and the development of a 730,000 square foot
mixed-use complex, including retail, entertainment and office
as well as approximately 350 residential units. The Company is
nearing completion on the construction of the first
retail/office building on the site. Northrop Grumman has
signed a lease to occupy 49,000 square feet or approximately
half of the office building and will take possession of its
space in the fourth quarter of 2007. The total project cost is
estimated at $165 million.
-- Hartland Towne Square in Hartland Township, Michigan, is being
developed as a 550,000 square foot open-air power center,
strategically located an equal commuting distance between four
major business centers in the state. The Meijer discount
department store chain has committed to build a 192,000 square
foot superstore at the shopping center. Ramco-Gershenson is
currently in negotiations with a major home improvement
operator as the second anchor for the project. Plans also
include at least three mid-box national retailers as well as a
number of outlots. An entertainment component is also being
considered for the development. The project is currently in
the governmental approval stage and site work is expected to
commence within the next 120 days. The project is being
developed through a joint venture and is expected to cost $50
million.
-- Northpointe Town Center in Jackson, Michigan, is being
developed in a power/town center format and will encompass
approximately 575,000 square foot of retail, entertainment and
office space. Negotiations are currently underway with a
number of national anchor retailers for the shopping center.
The project is on schedule for ground breaking in the spring
of 2008. The site is located at two expressway interchanges in
close proximity to two other successful Ramco-Gershenson
properties. The overwhelming tenant demand at these existing
centers was the driving force for an additional shopping
center in the market. The total project cost is estimated at
$70 million.
During the quarter, the Company made substantial progress on one
additional development. The project is located in central Florida in
close proximity to a number of the Company's existing shopping
centers. The planned development will encompass approximately 300,000
square feet of retail space in a traditional power center format. The
estimated project cost is $45 million.
Also during the quarter, the Company completed the sale of a 2.5
acre parcel adjacent to its River City Marketplace in Jacksonville,
Florida, to a joint venture of which the Company is a partner.
Ramco-Gershenson will develop and lease the parcel earning market fees
for its services. After this sale, only four outlots and 13,000 square
feet of in-line space, in a project encompassing over 900,000 square
feet, remain to be leased at the property.
Redevelopment
During the quarter, the Company commenced three additional
value-added redevelopment projects. Two of the projects are at
shopping centers purchased this year through the Company's ING Clarion
joint venture. At the Old Orchard shopping center in West Bloomfield,
Michigan, a complete shopping center revitalization including the
retenanting of a 54,000 square foot anchor space previously occupied
by a Farmer Jack (A & P) Supermarket is currently underway. At Cocoa
Commons in Cocoa Beach, Florida, construction has begun for 15,000
square foot of additional small shop space, doubling the amount
currently available at the center. The third project at Holcomb Center
in Roswell, Georgia, involves the retenanting of a vacant 40,000
square foot A & P Supermarket. Facade and structural improvements will
accompany the retenanting at this wholly-owned asset.
At September 30, 2007, including the projects mentioned above, the
Company was actively redeveloping seven shopping centers impacting
approximately 415,000 square feet with a total estimated project cost
of $34.7 million. In addition, the Company has identified 14 new
value-added redevelopment projects at Company owned or joint venture
assets, which should commence over the next 15 months.
Leasing
During the third quarter, for both core and joint venture
properties, 20 new non-anchor stores opened in 63,134 square feet, at
an average base rent of $18.77 per square foot, an increase of 19.5%
over portfolio average rents. In addition, 21 non-anchor leases were
renewed impacting 83,947 square feet, at an average base rent of
$14.95 per square foot, an increase of 11.6% over prior rental rates.
Same center property operating income for the quarter increased 2.3%.
At September 30, 2007, the portfolio was 93.7% occupied.
Debt and Market Capitalization
Total debt at quarter-end was approximately $676.4 million with an
average interest rate of 6.1% and an average maturity of 52 months. Of
that total, $557.2 million was fixed rate debt and $119.2 million was
variable rate debt. As of September 30, 2007, debt to market
capitalization was 49.4% and total capitalization approximated $1.4
billion.
Preferred Share Redemption/Dividend
Subsequent to quarter-end, the Company announced that it will
redeem all of its outstanding 9.5% Series B cumulative convertible
preferred shares of beneficial interest, (NYSE:RPT.PRB) on November
12, 2007. The 1,000,000 Series B preferred shares will be redeemed at
$25.00 per share, plus accrued and unpaid dividends.
On October 2, 2007, the Company paid a third quarter common share
dividend of $0.4625 per share and a third quarter dividend of $0.5938
per Series B cumulative redeemable preferred share for the period of
July 1, 2007 through September 30, 2007, to shareholders of record on
September 20, 2007.
Earnings Guidance/Conference Call
The Company expects 2007 annual diluted FFO per share to be
between $2.61 and $2.69. In addition, the Company expects earnings per
diluted common share to be between $2.10 and $2.20.
Management considers funds from operations, also known as "FFO" to
be an appropriate supplemental measure of financial performance for a
REIT. Please see the reconciliation of funds from operations to net
income later in this press release.
Ramco-Gershenson will host a live broadcast of its third quarter
conference call on Wednesday, October 24, 2007, at 10:00 a.m. eastern
time, to discuss its financial results. The live broadcast will be
available online at www.rgpt.com and www.streetevents.com and also by
telephone at (866) 202-4683, passcode 82236307. A replay will be
available shortly after the call on the aforementioned websites (for
ninety days) or by telephone at (888) 286-8010, passcode 76829975 (for
one week).
Supplemental financial information is available via e-mail by
sending requests to dhendershot@rgpt.com and is also available at the
investor section of our web page.
Ramco-Gershenson Properties Trust, headquartered in Farmington
Hills, Michigan, is a fully integrated, self-administered,
publicly-traded real estate investment trust (REIT), which owns,
develops, acquires, manages and leases community shopping centers,
regional malls and single tenant retail properties, nationally. The
Trust owns interests in 86 shopping centers totaling approximately
19.2 million square feet of gross leasable area in Michigan, Florida,
Georgia, Ohio, Wisconsin, Tennessee, Indiana, New Jersey, Virginia,
South Carolina, North Carolina, and Maryland. For further information
on Ramco-Gershenson Properties Trust visit the Trust's website at
www.rgpt.com.
This press release contains forward-looking statements with
respect to the operation of certain of the Trust's properties.
Management of Ramco-Gershenson believes the expectations reflected in
the forward-looking statements made in this press release are based on
reasonable assumptions. Certain factors could occur that might cause
actual results to vary. These include general economic conditions, the
strength of key industries in the cities in which the Trust's
properties are located, the performance of the Trust's tenants at the
Trust's properties and elsewhere and other factors discussed in the
Trust's reports filed with the Securities and Exchange Commission.
RAMCO-GERSHENSON PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(In thousands, except per share amounts)
(Unaudited)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
-------------------- -------------------
2007 2006 2007 2006
---------- -------- --------- ---------
REVENUES:
Minimum rents $ 24,102 $25,328 $ 72,870 $ 75,113
Percentage rents 117 225 525 610
Recoveries from tenants 10,452 10,738 32,921 30,920
Fees and management income 1,132 1,312 5,162 4,073
Other income 1,949 1,212 3,625 3,092
---------- -------- --------- ---------
Total revenues 37,752 38,815 115,103 113,808
---------- -------- --------- ---------
EXPENSES:
Real estate taxes 5,072 5,025 15,304 14,793
Recoverable operating
expenses 5,968 6,000 18,225 17,236
Depreciation and
amortization 8,132 8,105 24,600 24,058
Other operating 770 1,263 2,044 2,882
General and administrative 4,043 3,328 10,950 10,724
Interest expense 9,887 11,767 31,649 33,326
---------- -------- --------- ---------
Total expenses 33,872 35,488 102,772 103,019
---------- -------- --------- ---------
Income from continuing
operations before gain (loss)
on sale of real estate
assets, minority interest and
earnings from unconsolidated
entities 3,880 3,327 12,331 10,789
Gain (loss) on sale of real
estate assets (107) 1,204 31,269 2,937
Minority interest (1,177) (877) (7,212) (2,549)
Earnings from unconsolidated
entities 688 864 1,806 2,356
---------- -------- --------- ---------
Income from continuing
operations 3,284 4,518 38,194 13,533
---------- -------- --------- ---------
Discontinued operations, net
of minority interest:
Gain (loss) on sale of real
estate assets - (28) - 926
Income from operations - 9 - 402
---------- -------- --------- ---------
Income (loss) from
discontinued operations - (19) - 1,328
---------- -------- --------- ---------
Net income 3,284 4,499 38,194 14,861
Preferred stock dividends (593) (1,664) (2,863) (4,991)
Loss on redemption of
preferred shares - - (35) -
---------- -------- --------- ---------
Net income available to common
shareholders $ 2,691 $ 2,835 $ 35,296 $ 9,870
========== ======== ========= =========
Basic earnings per common
share:
Income from continuing
operations $ 0.15 $ 0.17 $ 2.00 $ 0.51
Income from discontinued
operations - - - 0.08
---------- -------- --------- ---------
Net income $ 0.15 $ 0.17 $ 2.00 $ 0.59
========== ======== ========= =========
Diluted earnings per common
share:
Income from continuing
operations $ 0.15 $ 0.17 $ 1.96 $ 0.51
Income from discontinued
operations - - - 0.08
---------- -------- --------- ---------
Net income $ 0.15 $ 0.17 $ 1.96 $ 0.59
========== ======== ========= =========
Basic weighted average common
shares outstanding 18,469 16,569 17,642 16,698
========== ======== ========= =========
Diluted weighted average
common shares outstanding 18,520 16,621 18,544 16,739
========== ======== ========= =========
COMPREHENSIVE INCOME
Net income $ 3,284 $ 4,499 $ 38,194 $ 14,861
Other comprehensive income:
Unrealized gain (loss) on
interest rate swaps (727) (1,005) (530) 190
---------- -------- --------- ---------
Comprehensive income $ 2,557 $ 3,494 $ 37,664 $ 15,051
========== ======== ========= =========
RAMCO-GERSHENSON PROPERTIES TRUST
CALCULATION OF FUNDS FROM OPERATIONS (1)
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
2007 2006 2007 2006
--------- -------- --------- --------
Net Income $ 3,284 $ 4,499 $ 38,194 $14,861
Add:
Depreciation and amortization
expense 9,192 8,713 27,445 25,838
Minority interest in
partnership:
Continuing operations 1,222 877 7,212 2,549
Discontinued operations - - - 69
Less:
Loss (gain) on sale of real
estate (2) 1,017 (25) (29,797) (25)
Discontinued operations, gain
(loss) on sale of real estate,
net of minority interest - 28 - (926)
--------- -------- --------- --------
Funds from operations 14,715 14,092 43,054 42,366
Less:
Series B Preferred Stock
dividends (593) (593) (1,781) (1,781)
--------- -------- --------- --------
Funds from operations available
to common shareholders $14,122 $13,499 $ 41,273 $40,585
========= ======== ========= ========
Weighted average equivalent
shares outstanding, diluted 21,439 21,439 21,464 21,557
========= ======== ========= ========
Funds from operations available
to common shareholders per
diluted share $ 0.66 $ 0.63 $ 1.92 $ 1.88
========= ======== ========= ========
(1) Management considers funds from operations, also known as "FFO,"
an appropriate supplemental measure of the financial performance of
an equity REIT. Under the NAREIT definition, FFO represents income
before minority interest, excluding extraordinary items, as defined
under accounting principles generally accepted in the United States
of America ("GAAP"), gains on sales of depreciable property, plus
real estate related depreciation and amortization (excluding
amortization of financing costs), and after adjustments for
unconsolidated partnerships and joint ventures. FFO should not be
considered an alternative to GAAP net income as an indication of our
performance. We consider FFO as a useful measure for reviewing our
comparative operating and financial performance between periods or to
compare our performance to different REITs. However, our computation
of FFO may differ from the methodology for calculating FFO utilized
by other real estate companies, and therefore, may not be comparable
to these other real estate companies.
(2) Excludes gain on sale of undepreciated land of $1,472 in 2007 and
$2,911 in 2006.
RAMCO-GERSHENSON PROPERTIES TRUST
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
September 30, December 31,
2007 2006
------------- ------------
(Unaudited)
ASSETS
Investment in real estate, net $ 916,901 $ 897,975
Cash and cash equivalents 7,662 11,550
Restricted cash 9,664 7,772
Accounts receivable, net 34,736 33,692
Equity investments in and advances to
unconsolidated entities 79,020 75,824
Other assets, net 39,073 38,057
------------- ------------
Total Assets $1,087,056 $1,064,870
============= ============
LIABILITIES
Mortgages and notes payable $ 676,383 $ 676,225
Accounts payable and accrued expenses 36,036 26,424
Distributions payable 10,478 10,391
Capital lease obligation 7,504 7,682
------------- ------------
Total Liabilities 730,401 720,722
Minority Interest 42,653 39,565
SHAREHOLDERS' EQUITY
Preferred Shares of Beneficial Interest,
par value $0.01, 10,000 shares
authorized:
9.5% Series B Cumulative Redeemable
Preferred Shares; 1,000 shares issued
and outstanding, liquidation value of
$25,000 23,804 23,804
7.95% Series C Cumulative Convertible
Preferred Shares; 1,889 shares issued
and 1,888 shares outstanding and
liquidation value of $53,808, as of
December 31, 2006 - 51,714
Common Shares of Beneficial Interest, par
value $0.01, 45,000 shares authorized;
18,469 and 16,580 issued and outstanding
as of September 30, 2007 and December
31, 2006, respectively 185 166
Additional paid-in capital 386,824 335,738
Accumulated other comprehensive income
(loss) (283) 247
Cumulative distributions in excess of net
income (96,528) (107,086)
------------- ------------
Total Shareholders' Equity 314,002 304,583
------------- ------------
Total Liabilities and Shareholders'
Equity $1,087,056 $1,064,870
============= ============
CONTACT: Ramco-Gershenson Properties Trust
Dennis Gershenson, President & CEO
or Richard Smith, CFO, 248-350-9900
FAX: 248-350-9925