Ramco-Gershenson Properties Trust CEO Discusses Q3 2010 Results - Earnings Call Transcript

Ramco-Gershenson Properties Trust CEO Discusses Q3 2010 Results - Earnings Call Transcript
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Ramco-Gershenson Properties Trust (



Q3 2010 Earnings Conference Call

October 27, 2010 9 AM ET


Dawn Hendershot – IR

Dennis Gershenson – President and CEO

Greg Andrews – CFO, EVP - Finance, Secretary

Tom Litzler – EVP, Development and New Business Initiatives


Rich Moore – RBC Capital Markets

Vincent Chao – Deutsche Bank

Ben Yang – Keefe, Bruyette & Woods

Nathan Isbee – Stifel Nicolaus

Michael Sullivan

Tayo Okusanya – Jeffries & Company



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» Ramco-Gershenson Properties Trust Q3 2009 Earnings Call Transcript

Greetings, and welcome to the Ramco-Gershenson Properties Trust third quarter 2010 conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow a formal presentation.

(Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Dawn Hendershot, Director of Investor Relations for Ramco-Gershenson. Thank you, you may begin.

Dawn Hendershot

Good morning, and thank you for joining us for Ramco-Gershenson Properties Trust third quarter conference call. At this time, management would like me to inform you that certain statements made during this conference call which are not historical, may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although, Ramco-Gershenson believes the expectations reflected in any forward-looking statements are based on reasonable assumption, it can give no assurance that its expectations will be attained. Factors and risks that could cause actual results to differ from expectations are detailed in the press release and from time-to-time in the company’s filings with the SEC. Additionally, we want to let everyone know that the information and statements made during the call are made as of the date of this call. Listeners to any replay should understand that the passage of time by itself will diminish the quality of the statements made.

I would now like to introduce Dennis Gershenson, President and Chief Executive Officer and Gregory Andrews, Chief Financial Officer, both of whom will be presenting prepared remarks this morning. Also with us today are Thomas Litzler, Executive Vice President of Development; Michael Sullivan, Senior Vice President of Asset Management; and Catherine Clark, Senior Vice President of Acquisitions.

At this time, I’d like to turn over the call to Dennis for his opening remarks.

Dennis Gershenson

Thank you, Dawn. Good morning ladies and gentlemen. We’re pleased you could join us. Our third quarter results continue to add as a progress we’ve experienced since the beginning of the year in all aspects of our business. Our operating metrics have shown steady, positive improvements. We made additional major strides in filling anchor vacancies as well as terminating and replacing under-performing major retail penalties. Also, during the quarter, we reactivated our acquisition program and made significant progress on our developing sites. Even the non-cash impairment charge which we have taken this quarter relates to advances we’ve made with anchored tenants and partners in finalizing land prices for sales agreement at our four developments.

Further, our leasing activities in the month of October, not only builds upon our achievements in the first nine months of the year but indicate that we will be more successful in advancing our operating metrics than the goals we set at the beginning of 2010. Although, the leasing progress we have made year-to-date indicates a sense of optimism on the part of national and local tenancies, we recognized that the economy is still in a fragile state with the holiday season looming large. Therefore, we tamper our enthusiasm for the balance of 2010 and ‘11 with the conservative mindset we’ve maintained over the last 12 months.

Let me take a moment to frame for you the progress we’ve made in filling our larger vacancies and replacing under-performing retailers since the start of 2010. During the first nine months of the year, we have signed 11 anchor leases, accounting for over 300,000 square feet. Of that number, four mid-box leases were executed in the third quarter. Today, we’re announcing that we anticipate signing at least four additional national anchor tenant agreements, totaling over a 100,000 square feet in the last 90 days of 2010. Thus, in total, we would have added at least 15 new destination oriented mid-box retailers to our tenant mix in 2010.

Of this number, we take pride in the fact that while a substantial portion of our focus has been to fill existing large format vacancies, we have also vent our efforts as good stewards of our portfolio, to analyze our existing major tenants performance, and at work with those retailers who no longer produce the sales volumes that qualify their locations as successful stores. We coordinated terminating their tenancies with the signing of new and exciting replacement users at approximately the same rent.

Examples of these efforts include replacing Albertsons at Mission Bay in Delray Beach, Florida with Golfsmith and Fresh Market. Also, we replaced OfficeMax at our West Oaks Shopping Center in Novi, Michigan with Old Navy, achieving not only the addition of the soft goods retailer, but also reducing our exposure to the office sector. And today, we’re announcing that we signed a lease with DSW Shoe Warehouse and approximately 20,000 square feet at our new town plaza center in Canton, Michigan, replacing a number of oversized, underperforming, ancillary tenants.

It’s important to remember as we relate this progress in improving our occupancy and tenant mix that it can take from 9 to 18 months between execution and opening for a larger format stores. Understanding this timeframe is especially important when we announce that we are replacing an existing tenant when considering our same seller statistics.

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