~COMMITTED TO QUALITY Investor Presentation January 2012
Committed to Quality • Ramco-Gershenson is a leading shopping center REIT focused on the ownership of high-quality shopping centers in top metropolitan markets. • The Company’s assets primarily consist of large, multiple -anchor shopping centers and market dominant supermarket centers. • The Company’s business plan is centered on three key areas: • Increasing the quality of its income stream through the lease-up of existing vacancies and the replacement of underperforming tenancies with leading national retailers as well as pursuing opportunities to add value through redevelopment. • Acquiring high-quality properties in metropolitan markets with capital recycled from the disposition of non-core assets. • Maintaining a strong balance sheet that promotes financial flexibility. 2
2011 Accomplishments All of the Company’s 2011 achievements support the Company’s commitment to quality: Improved the core portfolio leased occupancy rate to 93.5% at year-end. Signed fourteen mid-box leases with national retailers including Bed, Bath & Beyond, buy buy Baby, Marshalls, Ross Dress for Less, 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 center in South Carolina, at an average cap rate of 7.0% Entered the St. Louis, Missouri market acquiring two market-dominant shopping centers with an aggregate purchase price of $77 million, at an average cap rate of 7.4%. Closed over $400 million in financing, including $100 million of convertible preferred stock at 7.25%, $130 million in unsecured term loans, and a new $175 million unsecured line of credit. Increased the pool of unencumbered assets to $550 million, compared to less than $100 in 2010. 3
Our Properties
Focus on Metropolitan Markets • 80% of the Company’s total annualized base rents come from 10 of the top MSA’s in the U.S . [1] • The Company’s top MSA shopping centers have an average trade area Milwaukee Metro Detroit population of 66,217 and an average Chicago household income of $83,191. [2] Indianapolis Columbus • Centers in our top MSAs are primarily: St. Louis • Large, multiple-anchor shopping centers with approximately 225,000 square feet and average 3 anchors Atlanta per center. [3] • Market-dominant supermarket Jacksonville anchored centers producing above Tampa/Sarasota average sales of $445 per square Ft. Lauderdale/P. Beach foot. Top 10 Market 1 MSA per US Census Bureau. Annualized base rents reported at 100%. 5 2 Based on a three-mile trade area. 3 Includes anchor-owned space.
Focus on High-Quality Properties: Large, Multiple-Anchor Shopping Centers The Company’s shopping center portfolio includes multiple -anchor properties: • 87% of shopping centers in our top markets are anchored by two or more national retailers. [1] • Characteristics of our multiple-anchor shopping centers: • Located in metropolitan markets with high barriers to entry. • Dominant locations at major intersections. • Diversified tenant mix of value oriented retailers. • Proven strong NOI growth potential. 1 Based on Annualized Base Rents as of September 30, 2011, for those properties in the 6 Company’s top ten markets.
Focus on High-Quality Properties: Market Dominant Supermarket Centers The Company’s shopping center portfolio also includes market dominant grocery -anchored properties: • 50% of shopping centers in our top markets are anchored by the leading supermarket in their respective trade areas. [1][2] • Characteristics of our market dominant supermarket shopping centers: • High average annual sales of $445 per square foot. • Top supermarket tenants such as Publix, Kroger, Jewel-Osco, Meijer and Whole Foods. • Typically part of a multiple-anchor center. 1 Based on Annualized Base Rents as of September 30, 2011, for those centers in the 7 Company’s top ten markets. 2 Includes centers with one or more anchor and anchor-owned space.
Focus on Diverse, Creditworthy Tenants % of Annualized Credit Rating Number of Base Rental Top Ten Tenants S&P/Moody's (1) Leases Revenue • The Company continually evaluates its roster of top T.J. Maxx/Marshalls A/A3 23 4.4% tenants and proactively manages its retail exposure. Home Depot BBB+/A3 3 2.0% • Recently Kmart dropped off the Dollar Tree NR/NR 31 1.9% Company’s top ten tenant list. Publix Super Market NR/NR 8 1.8% • The Company is able to capitalize on strong retailer OfficeMax B-/B1 11 1.8% relationships to replace underperforming tenants with Jo-Ann Fabrics B2/B 6 1.7% those that have long-term growth potential. Burlington Coat Factory NR/NR 5 1.5% • The Company’s portfolio is well - PETsMART BB/NR 7 1.5% balanced between national and regional tenancies. Local Bed Bath & Beyond/buybuy Baby BBB+/NR 6 1.5% tenants represent less than 20% of the overall tenant profile. Best Buy BBB-/Baa2 5 1.4% 1 Source: Latest tenant filings per CreditRiskMonitor for the quarter ended September 30, 2011. 8 Includes the combined wholly -owned and joint venture portfolio.
Leasing and Asset Management Initiatives
Adding High-Quality National Retailers In 2011, the Company continued to improve the quality of its shopping center portfolio by filling mid- box vacancies and replacing at risk tenancies with high-quality national retailers. • Signed 14 new mid-box leases with national, credit-quality tenants including; Bed, Bath & Beyond, buy buy Baby, Marshalls, Michaels, PetSmart, DSW Shoe Warehouse, and LA Fitness. • Proactively responded to Border’s pending bankruptcy by releasing two of three stores to national credit anchors. • L eased 9 of 11 vacancies created by the bankruptcy of Linens ‘N Things and Circuit City. • Generating creative solutions to accommodate mid-box anchors desire for smaller format stores. • All mid-box retailers signed in 2010 and 2011 will be in occupancy by the end of 2012 achieving full year income in 2013. 2011 2010 Number of new mid-box leases signed 14 23 Unleased mid-boxes [1] 8 15 Dark and Paying Anchors [1] 4 9 1 Based on the Company’s forecasted information through December 31, 2011. 10
Aggressive Leasing Efforts Producing Results Asset Management has implemented changes to drive occupancy and NOI: • Implemented new short-form lease reducing cost and time spent on lease documentation. • Compressed the timeline from securing tenant interest through execution to store opening . • Initiated program of fixed CAM charges with annual increases. Improving Operating Metrics 3Q2011 Statistics 2010 Statistics Renewal Retention Rate 81% 75.7% Renewal Leasing Spreads 2.0% -6.0% Leased Occupancy 92.8% 91.0% Same Center NOI 0.7% -1.6% 11
Capital Recycling
Pursuing Quality through Capital Recycling Dispositions: • Identified $25-50 million of non-core properties to be sold in 2012. • Sales will generate capital for investment in high-quality centers in target markets. • Recycling program goals include improving portfolio quality and diversifying into strong markets. Acquisition Criteria: • Multiple-anchor or market dominant supermarket anchored centers. • In-fill locations with high average household incomes. • Opportunities to drive additional income and value. 13
Town & Country High-Quality Acquisition Town and County (St. Louis), Missouri Acquisition Highlights: • Market dominant shopping center constructed in 2008. • Anchored by Whole Foods, one of only two Whole Foods in the metropolitan area. Shadow-anchored by Target. • Affluent trade area with 3 mile population of 65,772 and average household incomes of $115,790. • Lease-up and mid-box pad opportunity. • Second acquisition of market-dominant, grocery-anchored center in Pad St. Louis market. Opportunity 14
Value-Added Redevelopment and Development
Redevelopment and Development Opportunities Redevelopment • Two redevelopments are currently under construction: • A new Whole Foods (35,000 sf) at Shops on Lane in Arlington, OH, which is also anchored by Bed, Bath & Beyond. • A new LA Fitness (45,000 sf) at Peachtree Hill in Duluth, GA, which is also anchored by Kroger. • Additional redevelopments that are in the planning stages will add value by using excess land, reconfiguring vacant space, and bringing best-in-class retailers to our centers. Development • Development projects in Jacksonville and Lakeland are currently being pre-leased. Construction will take place in phases tied to substantially pre-leasing anchor stores. • Efforts are underway to sell various parcels of land marked-to-market at approximately $23 million. 16
Shops on Lane Avenue In Process Redevelopment Upper Arlington (Columbus), Ohio • Dominant, upscale shopping center in Demographics (3 mile): close proximity to The Ohio State University is being expanded to meet the Population 116,585 HH Income $64,239 needs of a growing trade area. • Scheduled Completion Approximately doubling the size of Date: September 2012 Whole Foods to new prototype store while eliminating 10,000 square feet of unproductive small shop space. • Upon completion, the Whole Foods/Bed, Bath & Beyond anchored shopping center will be 100% occupied. 17
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