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Ramco-Gershenson Provides Year-End 2010 Earnings Update and Details on Its 2011 Guidance and Business Plan

^{Published on 2011-01-25 14:55:29 - Market Wire}
 

FARMINGTON HILLS, Mich.--([ BUSINESS WIRE ])--Ramco-Gershenson Properties Trust(NYSE:RPT) announced today an update to its 2010 FFO guidance. The Company expects 2010 FFO, excluding gains related to the purchase of Merchantsa™ Square and a loss on early extinguishment of debt (detailed below) as well as previously recorded impairment charges, to be at the lower end of its previous guidance range of $1.05 to $1.10 per diluted share.

The updated FFO guidance primarily reflects a provision for credit loss of $0.7 million, or $0.02 per diluted share, related to the bankruptcy of A&P in the fourth quarter of 2010. Subsequent to its bankruptcy filing, A&P rejected its three leases in the Companya™s portfolio. In two of the three spaces, a supermarket is currently operating and is either obligated under an existing lease or is expected to execute a new lease.

In the fourth quarter, the Company expects to record a bargain purchase gain of approximately $9.8 million related to the acquisition of Merchantsa™ Square, a 360,000 square foot shopping center shadow-anchored by Marsh Supermarkets and located in Carmel, Indiana. In conjunction with the transaction, the Company also expects to recognize a previously deferred gain of $1.8 million. In addition, the Company expects to record a loss on early extinguishment of debt of approximately $0.2 million associated with the early payoff of an above market interest rate note in order to facilitate the anticipated sale of a shopping center.

2011 Guidance and Business Plan:

The Company is providing FFO guidance for the full-year 2011 of $0.90 to $1.00 per diluted share based upon the following:

• An increase in total portfolio leased occupancy by year-end 2011 to between 91% and 92%.
• A decrease in property net operating income of approximately $0.7 million due to the bankruptcy of A&P.
• Consolidated same-center net operating income growth, excluding the impact of A&P, of 1.0% to (1.0%).
• A decrease in non-cash straight-line rental income of approximately $1.0 million, due primarily to the maturity of a number of leases where cash rent now exceeds GAAP rent.
• Lease termination fees and gains on land sales approximately unchanged from 2010 amounts.
• G&A expense within a range of $17.0 to $18.0 million, a decrease from expected 2010 G&A expense of $18.3 million.
• The elimination of a loss allocation to the non-controlling partner at the Hartland Towne Square development, which amounted to approximately $1.9 million in 2010, as the result of the Companya™s acquisition of its partnera™s interest.
• The sale of three shopping centers to be completed during the first quarter of 2011. Net proceeds to the Company of approximately $25 million to $30 million will be used to repay short-term bank borrowings.

The Companya™s 2011 FFO guidance, which excludes non-cash impairment charges or write-offs of deferred financing costs, does not reflect contributions from any potential acquisitions nor does it anticipate new income derived from development/redevelopment projects.

To achieve its stated goals of generating sustainable earnings growth and creating long-term value for its shareholders, the Company will continue to focus on a number of core objectives:

• Increasing occupancy through higher tenant retention levels and greater leasing velocity.
• Improving the quality of our shopping center portfolio through selective redevelopments with attractive risk-adjusted returns.
• Strengthening the balance sheet by replacing short-term borrowings with long term loans and paying off debt with proceeds from asset sales.
• Acquiring high quality shopping centers that promote geographic diversity with market dominant anchors and strong trade area demographic characteristics.
• Pursuing actions necessary to initiate the development of one new center.
• Generating incremental cash through land sales or the contribution or assets to joint venture partnerships.

The Company will provide further details on guidance as part of its earnings conference call scheduled for February 15, 2011.

ABOUT RAMCO-GERSHENSON PROPERTIES TRUST

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. At September 30, 2010, the Company owned and managed a portfolio of 88 shopping centers, with approximately 20.0 million square feet of gross leaseable area, of which 15.4 million is owned by the Company or its joint ventures. The shopping centers are located in Michigan, Florida, Georgia, Ohio, Wisconsin, Tennessee, Indiana, New Jersey, Virginia, South Carolina, Maryland and Illinois. For additional information regarding Ramco-Gershenson Properties Trust visit the Company's website at [ www.rgpt.com ].

This press release contains forward-looking statements with respect to the operation of certain of the Trusta™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, the ongoing U.S. recession, the existing global credit and financial crisis and other changes in general economic and real estate conditions, changes in the interest rate environment and the availability of financing, adverse changes in the retail industry, our continuing to qualify as a REIT and other factors discussed in the Trusta™s reports filed with the Securities and Exchange Commission.