Ramco-Gershenson Properties Trust ( RPT ), a real estate investment trust (REIT), recently announced its decision to offer 5.5 million shares to enhance its liquidity position. The company also decided to grant the underwriters a 30-day option to purchase up to an additional 825,000 shares to cover the over-allotment options.
Ramco-Gershenson intends to use the net proceeds from the offering to repay debt under its revolving credit facility and to fund a portion of the proposed acquisition of four shopping centers located in Colorado, Missouri and Wisconsin.
Ramco-Gershenson reported first quarter 2012 fund from operations (FFO) of $10.8 million or 26 cents per share compared with $10.1 million or 25 cents per share in the year-earlier quarter. Fund from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
At March 31, 2012, the company's ratio of net debt to total market capitalization was 45.1%, compared with 52.2% in the year-earlier quarter. At quarter end, the company had $19 million of outstanding borrowings under its $175 million unsecured revolving line of credit.
Based in Farmington Hills, Michigan, Ramco-Gershenson primarily owns and manages shopping centers in targeted markets in the Eastern and Midwestern regions of the United States. At March 31, 2012, the company's portfolio consisted of 80 shopping centers and one office building totaling approximately 14.9 million square feet of gross leasable area.
Ramco-Gershenson currently retains a Zacks #2 Rank, which translates into a short-term Buy rating. We have a long-term Outperform recommendation on the stock. One of its competitors, Kimco Realty Corporation ( KIM ) carries a Zacks #3 Rank, which implies a short-term Hold rating.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.