3Q 2016 INVESTOR PRESENTATION
INVESTOR PRESENTATION | 3Q 2016 THE SHOPS AT OLD ORCHARD, WEST BLOOMFIELD, MI CORPORATE OVERVIEW AND STRATEGY 2
STRENGTHENED MANAGEMENT TEAM Envisioning the Future of Retail Today DENNIS GERSHENSON GEOFF BEDROSIAN JOHN HENDRICKSON President & Chief Executive Officer Chief Financial Officer Chief Operating Officer 3
CORPORATE OVERVIEW AND STRATEGY We invest in regional dominant multi- We promote operating excellence and anchored, urban-oriented shopping a disciplined approach to capital centers located in first-ring allocation with a focus on long-term submarkets that generate sustainable operating FFO growth and NAV growth. increases in cash flow. We add value through tactical We manage a conservative capital structure and strong balance sheet to and strategic redevelopments that generate solid returns on invested maintain liquidity and flexibility through capital. all economic cycles. 4
FIVE-YEAR PORTFOLIO EVOLUTION Total Number of Properties Wholly-Owned Shopping Centers 66 64 90 58 2010 CURRENT 2010 CURRENT PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO Average Anchors [1] Leased Rate per 94.0% 6 per 2.5 91.5% center center 2010 CURRENT 2010 CURRENT PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO Average Rent per Square Foot [2] $13.92 $9.88 2010 CURRENT PORTFOLIO PORTFOLIO 5 [1] Includes shadow anchors, without shadow anchors the average is 5. [2] Excludes ground leases. As of September 30, 2016.
OUR CURRENT MARKET STRATEGY FOCUSES ON TEN MARKETS FOR BOTH QUALITY AND DIVERSITY Average Household Income for the top 10 Markets: $87,000 Average Population for centers in the top 10 Markets: 201,000 RPT’s Top 10 Markets = 81% of Annualized Base Rent Primarily first-ring top 40 MSA sub- market locations. Strong in-fill markets provide the opportunity for both tactical and strategic redevelopment as tenants look to locate at our centers. Top 10 markets provide the opportunity for future growth supported by strong regional leasing and asset management teams. 6 Note: 5-mile trade area.
OUR TOP TWENTY CENTERS – 56% OF OUR PORTFOLIO ARE REGIONAL DOMINANT AND PROVIDE A SOLID FOUNDATION FOR FUTURE VALUE CREATION 7 [1] Includes shadow anchors. Without shadow anchors, average size is 343,000 square feet and average number of anchors is 8.
INVESTOR PRESENTATION | 3Q 2016 FRONT RANGE VILLAGE, FORT COLLINS, CO PORTFOLIO STRATEGY 8
OUR STRATEGIC FOCUS IS TO INCREASE THE VALUE OF OUR SHOPPING CENTERS • Operating Excellence Objectives: Execute a bottom-line, financially-oriented business model. Produce sustainable FFO Growth of approximately 4 - 5% for the foreseeable future. Generate same-center growth of 3.0% - 4.5%, with redevelopment. Maintain occupancy at near peak level of 95%. • Value Creation Objectives: Continue to execute on value-add redevelopments of $65 - $80 million each year that produce 9% - 10% ROI. Double digit rent increases on new small shop tenancies. Implement tactical and multi-phase strategic redevelopments at our shopping centers to solidify regional dominance. • Capital Recycling: Strategically sell non-core assets to increase portfolio quality and generate capital for strategic investments, including value-add improvements in the core portfolio as well as high-quality acquisitions. 9
WE ARE TRANSFORMING OUR PORTFOLIO THROUGH A DISCIPLINED CAPITAL RECYCLING PROGRAM Criteria Results Acquisitions: Regional dominant centers that Multi-anchor often with market leading grocer and produce sustainable growth in NOI substantial small shop space High barrier-to-entry trade areas Best-in-class retailers provide Typically have value-add opportunities recession resistant cash flow Dispositions: High-quality properties that generate higher NOI and NAV Non-core markets and properties Smaller centers Limited growth opportunities TRANSFORMATION MARKER FIVE YEARS OF DISPOSITIONS FIVE YEARS OF ACQUISITIONS 38 Shopping Centers [1] Number of Properties (including JVs) 34 Shopping Centers Owned GLA 4.8 million square feet 8.5 million square feet Average Rent, psf $10.66 $14.44 [2] Average Household Income $68,000 $87,000 Average Center Size 141,000 square feet 270,000 square feet [2] Total Proceeds/Investment $390 million $1.3 billion [1] Includes joint venture acquisitions. 10 [2] Excludes land leases. As of September 30, 2016.
OUR 2016 CAPITAL RECYCLING PROGRAM The Company is strategically reducing its non-core centers in Michigan. • Goal Michigan 20-25% of total ABR • Oakland County portfolio is 20% of ABR valued at 6.0% cap rate • Avg. HH Income of $95,000 • Avg. Population of 194,000 2016 Dispositions – Income Generating Properties Avg. HH Property Location Sale Price Owned GLA Population Income Fairlane Dearborn, $20,333,000 157,225 $45,149 119,756 Meadows MI Lakeshore Norton $27,750,000 342,991 $61,500 20,809 Marketplace Shores, MI Livonia Plaza Livonia, MI $19,800,000 137,391 $79,660 82,610 Troy Towne Troy, OH $12,400,000 144,485 $61,506 24,343 The Company continues to Center selectively dispose of non-core centers in non-strategic Aquia Office Stafford $11,781,000 99,402 $115,571 54,011 markets – reinvesting proceeds Building County, VA in higher-quality assets and Centre at Woodstock, high-return redevelopments. $16,000,000 86,748 $87,925 53,001 Woodstock GA Kissimmee Kissimmee, $1,358,000 115,586 $50,491 42,760 West FL River Crossing New Port $12,500,000 62,038 $52,428 52,142 Centre Richey, FL Total $121,922,000 1,145,866 $69,279 56,179 11
Strategic High-Quality Acquisition CENTENNIAL SHOPS (EDINA, MN) High-quality shopping center in dense, affluent metropolitan market location: Highly-desirable sub-market of Minneapolis, Minnesota. Average 5-Mile Household Income: $118,000. Average 5-Mile Population: 170,000. Strong internal growth of 3-5% Anchors operate only store in Minneapolis Market 12
Strategic High-Quality Acquisition CENTENNIAL SHOPS (EDINA, MN) 13
WE BELIEVE MULTI-ANCHOR, URBAN-ORIENTED CENTERS PROVIDE BOTH STABILITY AND GROWTH MULTI-ANCHOR METRIC COMMUNITY SHOPPING CENTERS Scale >35 Acres and >350,000 Square Feet Credit Quality >85% of ABR from National and Regional Tenants Anchor Exposure Minimal Risk from Loss of a Single Anchor Growth Opportunities Expansion and Densification Opportunities Merchandise Mix Dynamic Draw Regional 14
OUR CENTERS ARE PREDOMINANTLY ANCHORED BY LEADING GROCERS AS WELL AS NECESSITY BASED AND VALUE RETAILERS Single Grocery Anchor Center 4 Centers 1% – Single Anchor Center 1 Center 3% Multi-Anchor without Multi-Anchor with 28% Grocery Component Grocery Component 68% 22 Centers 38 Centers Multi-anchor centers provide convenience, variety and flexibility for the consumer as well as stability for the shopping center. 15 Note: Percentage of center type of total annualized base rent.
MARKET LEADING GROCERY TENANTS of our ABR comes from Multi- 68% Anchor Shopping Centers with a Grocery Component % of ABR National 34% Regional 24% Specialty 13% TOTAL GROCERY – INCLUDING SINGLE ANCHOR 71% Strong grocer sales = $499 per square foot Shadow anchor grocers shows confidence and commitment to the shopping center site. 16 Note: Percentage of center type of total annualized base rent.
OUR DIVERSIFIED TENANT LINE-UP IS WELL-POSITONED TO BENEFIT FROM E-COMMERCE EXPANSION Internet Choosing best-in-class Brick and Neutral Mortar concepts with Omni-channel 38% platform is essential. Restaurant & Entertainment 4% 8% Internet Service Compatible 23% Grocery 55% Fitness & Spa Apparel & Accessories 12% Home & Furniture Sports & Hobbies 12% Health & 14% Beauty Pet Stores Internet Other Exposure 11% 7% 6% 2% 4% 3% Electronics & Office 1% Books & Cards 17 Note: Percentage of rent from each category to total annualized base rent.
OUR TOP TENANT ROSTER REPRESENTS A STRONG LINE-UP OF BEST-IN-CLASS NATIONAL RETAILERS 18
OUR FOUR-POINT MANAGEMENT PHILOSOPHY POSITIONS OUR CENTERS FOR SUCCESS IN A DYNAMIC RETAIL LANDSCAPE 19
INVESTOR PRESENTATION | 3Q 2016 WOODBURY LAKES, WOODBURY, MN GROWTH STRATEGY 20
WE WILL CONTINUE TO GROW NAV BY MAXIMIZING THE POTENTIAL OF OUR SHOPPING CENTER PORTFOLIO RPT’s 20 Largest Properties = >50% of ABR / Avg. cap rate of ~6.0% Provide the greatest opportunity for tactical and strategic value-add redevelopment. Future acquisitions will include centers Properties with long-term growth that support our goal profiles, strong demographics and of creating unique embedded value-add redevelopment places with regional draws in top opportunities markets. = 25% - 35% of ABR Non-core, lower-growth, Going forward, the fully-valued Company plans to properties selectively sell centers $122 million sold YTD – = 10% - 15% Net sales of $90 million as part of its of ABR comprehensive growth and value creation strategy. 21 21
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