Maryland | 1-10093 | 13-6908486 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
31500 Northwestern Highway, Suite 300, Farmington Hills, Michigan | 48334 | |||
(Address of principal executive offices) | (Zip Code) |
(d) | Exhibits |
99.1 | Press release of Ramco-Gershenson Properties Trust dated August 1, 2017. |
RAMCO-GERSHENSON PROPERTIES TRUST | |||
Date: | August 1, 2017 | By:/s/ GEOFFREY BEDROSIAN | |
Geoffrey Bedrosian | |||
Executive Vice President, Chief Financial Officer and Secretary |
99.1 | Press release of Ramco-Gershenson Properties Trust dated August 1, 2017. |
• | Net income attributable to common shareholders of $0.05 per diluted share, compared to $0.32 per diluted share for the same period in 2016, reflecting lower gains on land sales during the second quarter of 2017. |
• | Operating Funds from Operations (“Operating FFO”) of $0.35 per diluted share, compared to $0.35 per diluted share for the same period in 2016. |
• | Generated same property NOI growth with redevelopment of 1.1% for the three months ended June 30, 2017, positively impacted by strong minimum rent growth of 2.9% offset by lower comparable recovery income and credit adjustments recognized in the same period in 2016. |
• | Signed 38 comparable leases encompassing 234,503 square feet at a positive leasing spread of 7.1% with an average base rent of $16.53 per square feet. |
• | Posted portfolio leased occupancy of 93.7%, compared to 95.0% for the same period in 2016. |
• | Net income available to common shareholders of $4.4 million, or $0.05 per diluted share, compared to $25.7 million, which included a $19.8 million gain on land sales, or $0.32 per diluted share for the same period in 2016. |
• | Funds from Operations (“FFO”) of $30.4 million, or $0.35 per diluted share, compared to $32.1 million, or $0.36 per diluted share for the same period in 2016. |
• | Operating FFO of $31.0 million, or $0.35 per diluted share, compared to $30.8 million or $0.35 per diluted share for the same period in 2016. |
• | Net income available to common shareholders of $15.9 million, or $0.20 per diluted share, compared to $35.9 million, or $0.45 per diluted share for the same period in 2016. |
• | Funds from Operations (“FFO”) of $61.2 million, or $0.69 per diluted share, compared to $61.8 million, or $0.70 per diluted share for the same period in 2016. |
• | Operating FFO of $61.6 million, or $0.70 per diluted share, compared to $60.4 million or $0.69 per diluted share for the same period in 2016. |
• | Net debt to EBITDA of 7.0X, interest coverage of 3.7X, and fixed charge coverage of 3.0X. Including funds held in escrow of $26.1 million for two asset sales, net debt to EBITDA would have been 6.9X. |
• | Weighted average cost and term of debt of 3.84% and 5.6 years, respectively. |
• | Woodbury Lakes - Woodbury, Minnesota - The Company finalized plans for the expansion and relocation of H&M to a strategic 20,000 square foot store and the addition of 44,000 square foot Alamo Drafthouse Cinema. Construction on the initial phase of this multi-year redevelopment will begin in August of 2017. The project will also feature a newly designed and remerchandised Main Street. Woodbury Lakes is the premier regional retail destination in the eastern Minneapolis/St. Paul area. The cost of the initial phase of the redevelopment is estimated at $22.8 million. |
• | Front Range Village - Fort Collins (Denver MSA), Colorado - The Company initiated its Phase I site densification project, which will include 15,000 square feet of premium service and restaurant space, numerous placemaking improvements, and a new TruFit fitness center in 28,000 square feet. Phase I is expected to cost $11.4 million with a projected stabilization in the second quarter of 2018. |
RAMCO-GERSHENSON PROPERTIES TRUST | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
(In thousands, except per share amounts) | |||||||
June 30, 2017 | December 31, 2016 | ||||||
ASSETS | |||||||
Income producing properties, at cost: | |||||||
Land | $ | 415,694 | $ | 374,889 | |||
Buildings and improvements | 1,853,221 | 1,757,781 | |||||
Less accumulated depreciation and amortization | (368,292 | ) | (345,204 | ) | |||
Income producing properties, net | 1,900,623 | 1,787,466 | |||||
Construction in progress and land available for development or sale | 68,853 | 61,224 | |||||
Real estate held for sale | 13,837 | 8,776 | |||||
Net real estate | 1,983,313 | 1,857,466 | |||||
Equity investments in unconsolidated joint ventures | 2,798 | 3,150 | |||||
Cash and cash equivalents | 4,798 | 3,582 | |||||
Restricted cash and escrows | 31,819 | 11,144 | |||||
Accounts receivable, net | 25,842 | 24,016 | |||||
Acquired lease intangibles, net | 76,328 | 72,424 | |||||
Other assets, net | 93,645 | 89,716 | |||||
TOTAL ASSETS | $ | 2,218,543 | $ | 2,061,498 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Notes payable, net | 1,197,414 | 1,021,223 | |||||
Capital lease obligation | 1,066 | 1,066 | |||||
Accounts payable and accrued expenses | 53,982 | 57,357 | |||||
Acquired lease intangibles, net | 67,237 | 63,734 | |||||
Other liabilities | 6,294 | 6,800 | |||||
Distributions payable | 19,654 | 19,627 | |||||
TOTAL LIABILITIES | 1,345,647 | 1,169,807 | |||||
Commitments and Contingencies | |||||||
Ramco-Gershenson Properties Trust ("RPT") Shareholders' Equity: | |||||||
Preferred shares, $0.01 par, 2,000 shares authorized: 7.25% Series D Cumulative Convertible Perpetual Preferred Shares, (stated at liquidation preference $50 per share), 1,849 shares issued and outstanding as of June 30, 2017 and December 31, 2016 | $ | 92,427 | $ | 92,427 | |||
Common shares of beneficial interest, $0.01 par, 120,000 shares authorized, 79,345 and 79,272 shares issued and outstanding as of June 30, 2017 and December 31, 2016, respectively | 793 | 793 | |||||
Additional paid-in capital | 1,159,197 | 1,158,430 | |||||
Accumulated distributions in excess of net income | (401,179 | ) | (381,912 | ) | |||
Accumulated other comprehensive income | 1,074 | 985 | |||||
TOTAL SHAREHOLDERS' EQUITY ATTRIBUTABLE TO RPT | 852,312 | 870,723 | |||||
Noncontrolling interest | 20,584 | 20,968 | |||||
TOTAL SHAREHOLDERS' EQUITY | 872,896 | 891,691 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 2,218,543 | $ | 2,061,498 |
RAMCO-GERSHENSON PROPERTIES TRUST | ||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||
Three Months | Six Months | |||||||||||||||
Ended June 30, | Ended June 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
REVENUE | ||||||||||||||||
Minimum rent | $ | 50,797 | $ | 48,554 | $ | 100,234 | $ | 96,950 | ||||||||
Percentage rent | 225 | 138 | 463 | 440 | ||||||||||||
Recovery income from tenants | 14,841 | 16,032 | 31,732 | 32,778 | ||||||||||||
Other property income | 1,126 | 914 | 2,232 | 1,872 | ||||||||||||
Management and other fee income | 73 | 245 | 226 | 355 | ||||||||||||
TOTAL REVENUE | 67,062 | 65,883 | 134,887 | 132,395 | ||||||||||||
EXPENSES | ||||||||||||||||
Real estate tax expense | 10,730 | 11,132 | 21,723 | 21,441 | ||||||||||||
Recoverable operating expense | 6,431 | 6,672 | 14,039 | 14,751 | ||||||||||||
Non-recoverable operating expense | 1,242 | 564 | 2,390 | 1,957 | ||||||||||||
Depreciation and amortization | 23,335 | 22,714 | 46,152 | 46,561 | ||||||||||||
Acquisition costs | — | 4 | — | 63 | ||||||||||||
General and administrative expense | 6,372 | 5,683 | 12,823 | 11,288 | ||||||||||||
Provision for impairment | 820 | — | 6,537 | — | ||||||||||||
TOTAL EXPENSES | 48,930 | 46,769 | 103,664 | 96,061 | ||||||||||||
OPERATING INCOME | 18,132 | 19,114 | 31,223 | 36,334 | ||||||||||||
OTHER INCOME AND EXPENSES | ||||||||||||||||
Other expense, net | (424 | ) | 198 | (735 | ) | (150 | ) | |||||||||
Gain on sale of real estate | — | 19,799 | 11,375 | 26,324 | ||||||||||||
Earnings from unconsolidated joint ventures | 55 | 109 | 141 | 218 | ||||||||||||
Interest expense | (11,486 | ) | (11,376 | ) | (22,285 | ) | (22,678 | ) | ||||||||
Other gain on unconsolidated joint ventures | — | 215 | — | 215 | ||||||||||||
INCOME BEFORE TAX | 6,277 | 28,059 | 19,719 | 40,263 | ||||||||||||
Income tax provision | (25 | ) | (39 | ) | (53 | ) | (101 | ) | ||||||||
NET INCOME | 6,252 | 28,020 | 19,666 | 40,162 | ||||||||||||
Net income attributable to noncontrolling partner interest | (147 | ) | (659 | ) | (462 | ) | (956 | ) | ||||||||
NET INCOME ATTRIBUTABLE TO RPT | 6,105 | 27,361 | 19,204 | 39,206 | ||||||||||||
Preferred share dividends | (1,675 | ) | (1,675 | ) | (3,350 | ) | (3,350 | ) | ||||||||
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS | $ | 4,430 | $ | 25,686 | $ | 15,854 | $ | 35,856 | ||||||||
EARNINGS PER COMMON SHARE | ||||||||||||||||
Basic | $ | 0.05 | $ | 0.32 | $ | 0.20 | $ | 0.45 | ||||||||
Diluted | $ | 0.05 | $ | 0.32 | $ | 0.20 | $ | 0.45 | ||||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | ||||||||||||||||
Basic | 79,344 | 79,233 | 79,322 | 79,214 | ||||||||||||
Diluted | 79,529 | 86,027 | 79,525 | 79,413 |
RAMCO-GERSHENSON PROPERTIES TRUST | |||||||||||||||
FUNDS FROM OPERATIONS | |||||||||||||||
(In thousands, except per share data) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net income | $ | 6,252 | $ | 28,020 | $ | 19,666 | $ | 40,162 | |||||||
Net income attributable to noncontrolling partner interest | (147 | ) | (659 | ) | (462 | ) | (956 | ) | |||||||
Preferred share dividends | (1,675 | ) | (1,675 | ) | (3,350 | ) | (3,350 | ) | |||||||
Net income available to common shareholders | 4,430 | 25,686 | 15,854 | 35,856 | |||||||||||
Adjustments: | |||||||||||||||
Rental property depreciation and amortization expense | 23,275 | 22,671 | 46,033 | 46,478 | |||||||||||
Pro-rata share of real estate depreciation from unconsolidated joint ventures | 79 | 81 | 152 | 163 | |||||||||||
Gain on sale of depreciable real estate | — | (18,473 | ) | (11,190 | ) | (24,747 | ) | ||||||||
Gain on sale of joint venture depreciable real estate (1) | — | (26 | ) | — | (26 | ) | |||||||||
Provision for impairment on income-producing properties | 820 | — | 6,537 | — | |||||||||||
Other gain on unconsolidated joint ventures (2) | — | (215 | ) | — | (215 | ) | |||||||||
FFO available to common shareholders | 28,604 | 29,724 | 57,386 | 57,509 | |||||||||||
Noncontrolling interest in Operating Partnership (1) | 147 | 659 | 462 | 956 | |||||||||||
Preferred share dividends (assuming conversion) (2) | 1,675 | 1,675 | 3,350 | 3,350 | |||||||||||
FFO available to common shareholders and dilutive securities | $ | 30,426 | $ | 32,058 | $ | 61,198 | $ | 61,815 | |||||||
Gain on sale of land | — | (1,326 | ) | (185 | ) | (1,577 | ) | ||||||||
Severence expense | 554 | 80 | 567 | 80 | |||||||||||
Acquisition costs | — | 4 | — | 63 | |||||||||||
OPERATING FFO available to common shareholders and dilutive securities | $ | 30,980 | $ | 30,816 | $ | 61,580 | $ | 60,381 | |||||||
Weighted average common shares | 79,344 | 79,233 | 79,322 | 79,214 | |||||||||||
Shares issuable upon conversion of Operating Partnership Units (1) | 1,917 | 1,936 | 1,917 | 1,969 | |||||||||||
Dilutive effect of restricted stock | 185 | 206 | 203 | 199 | |||||||||||
Shares issuable upon conversion of preferred shares (2) | 6,685 | 6,588 | 6,685 | 6,588 | |||||||||||
Weighted average equivalent shares outstanding, diluted | 88,131 | 87,963 | 88,127 | 87,970 | |||||||||||
FFO available to common shareholders and dilutive securities per share, diluted | $ | 0.35 | $ | 0.36 | $ | 0.69 | $ | 0.70 | |||||||
Operating FFO available to common shareholders and dilutive securities per share, diluted | $ | 0.35 | $ | 0.35 | $ | 0.70 | $ | 0.69 | |||||||
Dividend per common share | $ | 0.22 | $ | 0.21 | $ | 0.44 | $ | 0.42 | |||||||
Payout ratio - Operating FFO | 62.9 | % | 60.0 | % | 62.9 | % | 60.9 | % | |||||||
(1) | The total noncontrolling interest reflects OP units convertible 1:1 into common shares. |
(2) | Series D convertible preferred shares are paid annual dividends of $6.7 million and are currently convertible into approximately 6.7 million shares of common stock. They are dilutive only when earnings or FFO exceed approximately $0.25 per diluted share per quarter and $1.00 per diluted share per year. The conversion ratio is subject to adjustment based upon a number of factors, and such adjustment could affect the dilutive impact of the Series D convertible preferred shares on FFO and earning per share in future periods. |
Reconciliation of net income available to common shareholders to Same Property NOI | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net income available to common shareholders | $ | 4,430 | $ | 25,686 | $ | 15,854 | $ | 35,856 | |||||||
Preferred share dividends | 1,675 | 1,675 | 3,350 | 3,350 | |||||||||||
Net income attributable to noncontrolling partner interest | 147 | 659 | 462 | 956 | |||||||||||
Income tax provision | 25 | 39 | 53 | 101 | |||||||||||
Interest expense | 11,486 | 11,376 | 22,285 | 22,678 | |||||||||||
Earnings from unconsolidated joint ventures | (55 | ) | (109 | ) | (141 | ) | (218 | ) | |||||||
Gain on sale of real estate | — | (19,799 | ) | (11,375 | ) | (26,324 | ) | ||||||||
Gain on remeasurment of unconsolidated joint venture | — | (215 | ) | — | (215 | ) | |||||||||
Other expense, net | 424 | (198 | ) | 735 | 150 | ||||||||||
Management and other fee income | (73 | ) | (245 | ) | (226 | ) | (355 | ) | |||||||
Depreciation and amortization | 23,335 | 22,714 | 46,152 | 46,561 | |||||||||||
Acquisition costs | — | 4 | — | 63 | |||||||||||
General and administrative expenses | 6,372 | 5,683 | 12,823 | 11,288 | |||||||||||
Provision for impairment | 820 | — | 6,537 | — | |||||||||||
Amortization of lease inducements | 44 | 112 | 88 | 206 | |||||||||||
Amortization of acquired above and below market lease intangibles, net | (1,149 | ) | (822 | ) | (2,108 | ) | (1,557 | ) | |||||||
Lease termination fees | — | — | (33 | ) | (68 | ) | |||||||||
Straight-line ground rent expense | 70 | — | 141 | — | |||||||||||
Amortization of acquired ground lease intangibles | 6 | — | 12 | — | |||||||||||
Straight-line rental income | (378 | ) | (331 | ) | (1,188 | ) | (810 | ) | |||||||
NOI | 47,179 | 46,229 | 93,421 | 91,662 | |||||||||||
NOI from Other Investments | (3,769 | ) | (3,310 | ) | (6,301 | ) | (6,745 | ) | |||||||
Same Property NOI with Redevelopment | 43,410 | 42,919 | 87,120 | 84,917 | |||||||||||
NOI from Redevelopment (1) | (6,107 | ) | (5,186 | ) | (11,995 | ) | (10,528 | ) | |||||||
Same Property NOI without Redevelopment | $ | 37,303 | $ | 37,733 | $ | 75,125 | $ | 74,389 | |||||||
(1) The NOI from Redevelopment adjustments represent 100% of the NOI related to Deerfield Towne Center, Hunter’s Square, Woodbury Lakes and West Oaks, and a portion of the NOI related to specific GLA at Spring Meadows, The Shoppes at Fox River II, The Shops on Lane Avenue, Mission Bay, River City Marketplace and Town & Country for the periods presented. Because of the redevelopment activity, the center or specific space is not considered comparable for the periods presented and adjusted out of Same Property NOI with Redevelopment in arriving at Same Property NOI without Redevelopment. | |||||||||||||||
Three Months Ended June 30, | |||||||
2017 | 2016 | ||||||
Reconciliation of net income to proforma adjusted EBITDA | |||||||
Net income | $ | 6,252 | $ | 28,020 | |||
Gain on sale of real estate | — | (19,799 | ) | ||||
Depreciation and amortization | 23,335 | 22,714 | |||||
Provision for impairment | 820 | — | |||||
Severance expense | 554 | 80 | |||||
(Gain) on sale of joint venture real estate | — | (26 | ) | ||||
Gain on remeasurement of unconsolidated joint ventures | — | (215 | ) | ||||
Interest expense | 11,486 | 11,376 | |||||
Income tax provision | 25 | 39 | |||||
Acquisition costs | — | 4 | |||||
Adjusted EBITDA | 42,472 | 42,193 | |||||
Proforma adjustments (1) | — | (1,461 | ) | ||||
Proforma adjusted EBITDA | $ | 42,472 | $ | 40,732 | |||
Annualized proforma adjusted EBITDA | $ | 169,888 | $ | 162,928 | |||
Reconciliation of Notes Payable, net to Net Debt | |||||||
Notes payable, net | $ | 1,197,414 | $ | 1,026,418 | |||
Unamortized premium | (4,537 | ) | (6,025 | ) | |||
Deferred financing costs, net | 3,379 | 3,777 | |||||
Notional debt | 1,196,256 | 1,024,170 | |||||
Capital lease obligation | 1,066 | 1,108 | |||||
Cash and cash equivalents | (4,798 | ) | (4,369 | ) | |||
Net debt | $ | 1,192,524 | $ | 1,020,909 | |||
Reconciliation of interest expense to total fixed charges | |||||||
Interest expense | $ | 11,486 | $ | 11,376 | |||
Preferred share dividends | 1,675 | 1,675 | |||||
Scheduled mortgage principal payments | 782 | 915 | |||||
Total fixed charges | $ | 13,943 | $ | 13,966 | |||
Net debt to annualized proforma adjusted EBITDA(2) | 7.0X | 6.3X | |||||
Interest coverage ratio (Adjusted EBITDA / interest expense) | 3.7X | 3.7X | |||||
Fixed charge coverage ratio (Adjusted EBITDA / fixed charges) | 3.0X | 3.0X | |||||
(1) 2Q16 excludes EBITDA of $1.0 million from dispositions and approximately $0.5 million of insurance settlement proceeds and miscellaneous income. The proforma adjustments treat the activity as if they occurred at the start of each quarter. | |||||||
(2) 2Q17 does not include $26.1 million of disposition proceeds deposited in a 1031 escrow account at June 30, 2017. The consolidated net debt to annualized proforma adjusted EBITDA would have been 6.9X after adjusting for the $26.1 million. |