Standing Alone
Oct 1, 2009 12:00 PM
Ramco-Gershenson opts to remain independent.
In the latest development in an eventful year for Ramco-Gershenson Properties Trustm the firm opted to remain a stand-alone entity after reviewing its strategic and financial alternatives.
The Farmington Hills, Mich.-based REIT will continue its efforts to deleverage and cut back on development activities as it continues to pay dividends in cash and plans to raise equity in an upcoming $84 million issuance. On the financing front, Ramco-Gershenson has received commitments for a new secured credit facility totaling $250 million from nine banks.
Jason Lail, a senior real estate analyst with Charlottesville, Va.-based SNL Financial, lauded the firm for taking advantage of the current favorable environment for REITs to reduce its leverage. At the end of the second quarter, the firm's debt-to-total-market capitalization stood at 75 percent — above the median 56 percent for all North American REITs. The moves it announced will make a significant dent in that figure, according to Lail.
“Certainly delevering is a primary concern,” Lail says. “The secured line is good news for its ability to access credit in the short term. The nice thing about this is that we keep waiting for all the troubled assets to be sold off. And this positions the firm to be in the pool when those deals occur.”
In a move that could have long-term implications, Ramco-Gershenson's board of trustees has added a “poison pill provision,” which terminates the company's shareholder rights plan, effective immediately. The board elected Stephen Blank as nonexecutive chairman. Dennis Gershenson will continue to serve as the company's CEO and president.
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