GlobeSt.com UPDATE: Ramco-Gershenson Says Financials Are Up

FARMINGTON HILLS, MI-It took a while, but a local REIT reported its first quarter earnings Monday, and virtually all of the arrows were pointing up. Farmington Hills-based Ramco-Gershenson Properties Trust, which operates 80 shopping centers, said Funds from Operations climbed to $11.9 million in the first quarter, a 9.1% increase over last year. Same center operating incomes, occupancy rates and new lease contracts all showed increases.

It was welcomed news for Ramco, which has been in the spotlight throughout the last couple of months. It delayed its first quarter earnings announcements by about a month after its former auditing agency decided not to renew its relationship with the REIT. Lastweek, the company announced the IRS was challenging its REIT status for the years 1996-2004, based on a 1996 transaction.

Net income for the REIT for the first three months of the year was $4.9 million, compared with $4.4 million in 2004. “Our most notable accomplishment for the quarter was the purchase of six shopping centers for $218 million as part of our partnership with the Clarion Lion Properties Fund, completing over $265 million in planned acquisitions identified last year,” said Dennis Gershenson, president and CEO.

Four of the six Clarion Lion centers are located along the gold coast of Florida in close proximity to a number of properties currently owned by the company. The other two shopping centers are located in metropolitan Detroit’s Oakland County.

During the quarter, the company opened 18 new non-anchor stores at an average base rent of $17.58 per sf, an increase of 22.6% over portfolio average rents. The company also renewed 46 non-anchor leases, at an average base rent of $12.92, an increase of 5.9% over prior rental rates. At quarter end, the portfolio was 92.6% leased, compared to 89.5% in 2004. “Tenant interest in our shopping centers remains strong as evidenced by the rents achieved in both new leases and lease renewals and the positive strides made on our three development projects,” Gershenson said.

“We are especially pleased to have increased our quarterly dividend by 4.2% for our shareholders during the quarter, confident in our ability to meet our future projected earnings and growth objectives,” he said.