Ramco-Gershenson Properties Trust
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:
2012 FFO Guidance
- 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.
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.