Investor Presentation February/March 2012 For the period ended December 31, 2011.
Committed to Quality • Ramco-Gershenson is a leading shopping center REIT focused on the ownership of high-quality shopping centers in major metropolitan markets. • The Company’s assets primarily consist of large, multiple -anchor shopping centers and market dominant supermarket centers. • Our business plan is centered on three key objectives: • Increasing the quality of our income stream through the lease-up of existing vacancies and the replacement of underperforming tenancies with leading national retailers as well as the pursuit of opportunities to add value through redevelopment. • Acquiring high-quality properties in metropolitan markets with capital recycled from the disposition of lesser quality, non-core assets. • Maintaining a strong balance sheet that promotes financial flexibility. 2 •
Major Accomplishments in 2011 All of the Company’s 2011 achievements support our commitment to quality: Improved the core portfolio leased occupancy rate to 93.5% at year-end, compared to 91.0% at the end of 2010. Signed 14 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. Increased same-center net operating income by 1.4%. 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 high-quality, market-dominant shopping centers with an aggregate purchase price of $77 million, at an average cap rate of 7.5%. 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. Improved debt to EBITA to 7.0x, compared to 8.5x in 2010. 3
Our Properties and Markets
Focused on Metropolitan Markets • 80% of the Company’s total annualized base rents come from ten leading MSA markets. [1] • The Company’s centers in these markets have an average trade area population of 66,217 and an average household Milwaukee Metro Detroit income of $83,191. [2] Chicago • The centers in these markets are Indianapolis Columbus primarily: St. Louis • Large, multiple-anchor shopping centers with approximately 225,000 square feet and average over 2 anchors per center. [3] Atlanta • Market-dominant supermarket anchored centers producing above average sales of $445 per square Jacksonville foot. Tampa/Sarasota • Have an average leased occupancy Ft. Lauderdale/P. Beach rate of 93.7%. Ramco’s top markets. 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.
A Focus on High-Quality Properties: Large, Multiple-Anchor Shopping Centers The Company’s shopping centers are predominantly 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. • Positioned at dominant retail intersections. • Diversified tenant mix of value oriented, destination retailers. • Resilient to market downturns with multiple-anchor tenancies, while providing catalyst for strong NOI growth potential. 1 Based on Annualized Base Rents as of December 31, 2011, for those properties in the 6 Company’s top ten markets.
A 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 include Publix, Kroger, Jewel-Osco, Meijer, and Whole Foods. • Typically part of a shopping center that has at least one additional anchor tenant. 1 Based on Annualized Base Rents as of December 31, 2011, for those centers in the 7 Company’s top ten markets. 2 Includes centers with one or more anchor and anchor-owned space.
Promoting Diverse, Credit-Quality Tenants % of Annualized Credit Rating Number of Base Rental Top Ten Tenants S&P/Moody's [1] Leases Revenue • The Company continually evaluates its tenant roster and T.J. Maxx/Marshalls A/A3 23 4.4% 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 capitalizes on its strong retailer relationships to OfficeMax B-/B1 11 1.7% replace underperforming tenants with national credits Jo-Ann Fabrics B2/B 6 1.6% 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 with national and regional tenancies. Local Bed Bath & Beyond/buy buy Baby BBB+/NR 6 1.4% 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 December 31, 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, terminating and refilling dark but paying retailers, and replacing at risk tenants 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’ 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 effect in 2013. 2011 2010 Number of new mid-box leases signed 14 23 Unleased mid-boxes 8 15 Dark and Paying Anchors 4 9 10
Mission Bay Plaza Re-Anchoring Case Study Boca Raton, FL Albertsons • Mission Bay is a 260,000 square foot dominant, multiple- anchored shopping center that commands average base rents of approximately $21.00 per square foot. • Re-anchoring project involved the replacement of a vacated Toys “R” Us Albertson’s store with Golfsmith and The Fresh Market. LA Fitness • The value-add project also included the signing of a new 20 year land lease with TD Bank. • Signed over 20,000 square feet Office Max of small shop space in tandem with the re-anchoring project. • Center is currently 93.0% leased. 11
Marketplace of Delray Re-Anchoring Case Study Delray Beach, FL Vacant Local Anchors • The Marketplace of Delray is a 230,000 square foot dominant, multiple-anchored shopping Office Depot center in a large and affluent trade area. • Value-add re-anchoring project included the downsizing of Office Depot to their newest Beall’s format. Outlet • Downsizing allowed for the Winn-Dixie addition of Dollar Tree and Ross Dress for Less. • Signed over 15,000 square feet of small shop space in tandem with re-anchoring project. 12
Ramp-Up in Leasing Efforts Producing Results In 2011, Ramco-Gershenson was successful in improving efficiencies in its lease process : • 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. The Company’s commitment to an aggressive leasing effort produced improved operating results: Improving Operating Metrics Year-End 2011 Year-End 2010 Leasing Velocity 2,029,980 SF 2,461,752 SF Average Base Rent, per square foot $11.32 $10.98 Renewal Retention Rate 82% 75% Renewal Leasing Spreads 1.5% -6.0% Comparable Lease Spreads [1] 1.4% n/a Leased Occupancy 93.5% 91.0% Same Center NOI 1.4% -1.6% 1 For spaces vacant less than 12 months. 13
Capital Recycling
Enhancing 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 the Company’s trade area demographic profile and portfolio quality as well as reducing the concentration in its top two markets by diversifying into strong markets. Acquisition Criteria: • Metropolitan, in-fill locations with high average household incomes. • Multiple-anchor or market dominant supermarket anchored centers. • Opportunities to drive additional income and value. 15
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