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Ramco-Gershenson Properties Trust(NYSE:RPT) today provided an update on its 2011 accomplishments and announced its 2012 funds from operations (FFO) guidance.
In 2011, the Company made significant progress on its business plan, including:
Improved core portfolio leased occupancy rate to 93.5%.
Signed fourteen mid-box leases with national retailers including Bed, Bath & Beyond, buy buy Baby, Marshalls, Michaels, PetSmart, DSW Shoe Warehouse, and LA Fitness.
Sold four non-core shopping centers for a total of $58 million, including the fourth quarter sale of Taylors Square, the Company’s only asset in South Carolina.
Entered the St. Louis, Missouri market acquiring two market-dominant shopping centers at a total cost of $77 million.
Closed over $400 million in financing, including $100 million through the issuance of convertible preferred stock at 7.25%, $130 million in unsecured term loans, and a new $175 million unsecured line of credit.
Increased its unencumbered pool of assets to approximately $550 million, compared to less than $100 million in 2010.
“We are pleased with our accomplishments in 2011 including the performance of our shopping centers, the initiation of a capital recycling program and the substantial improvement in our balance sheet,” said Dennis Gershenson, President and CEO of Ramco-Gershenson Properties Trust. “We begin 2012 with a continued commitment to quality focused on increasing the occupancy of our shopping centers by leasing to healthy, creditworthy tenants and acquiring high-quality shopping centers matched with the disposition of non-core assets. We also remain committed to maintaining a strong balance sheet that promotes financial flexibility.”
Fourth Quarter 2011 Update
Following a fourth quarter 2011 review of its assets, the Company identified a number of income-producing properties and land parcels available for sale. As previously announced, the Company anticipates disposing of approximately $25 million to $50 million of non-core assets in 2012 and expects to reinvest the proceeds into high-quality shopping centers. Also in the fourth quarter, the Company determined that the fair value of its equity investments in unconsolidated joint ventures is lower than the carrying value. As a result, the Company expects to report a non-cash impairment charge of $39.0 million in the fourth quarter of 2011. The charge breaks down as follows:
Non-core properties slated for disposition - $16.3 million.
Land held for sale - $11.5 million.
Equity investments in unconsolidated joint ventures - $11.2 million.
2012 FFO Guidance
The Company is providing FFO guidance for the full-year 2012 of $0.94 to $1.02 per diluted share. The 2012 guidance is based on the following key assumptions:
Core portfolio leased occupancy of between 93% - 94%.
An increase in same-center net operating income of 1.0% - 2.0%.
Management and leasing fees of approximately $3.0 million.
General and administrative expenses of approximately $19.0 million.
Gains on land sales of $1.0 million to $2.0 million.
Acquisitions of $25 million to $50 million, funded with a like amount of dispositions.
The Company’s 2012 FFO guidance excludes any potential transaction costs and gains or losses on extinguishment of debt.