Greetings and welcome to the Ramco-Gershenson Properties Trust First Quarter 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I’d now like to turn the conference over to your host, Ms. Dawn Hendershot, Vice President, IR and Corporate Communications for Ramco-Gershenson. Thank you. Please go ahead.

Good morning and thank you for joining us for the first quarter 2015 earnings conference call for Ramco-Gershenson Properties Trust. With me today are Dennis Gershenson, President and Chief Executive Officer; and Gregory Andrews, Chief Financial Officer. At this time, management would like me to inform you that certain statements made during this conference call which are not historical, may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Additionally, statements made during the call are made as of the date of this call. Listeners to any replay should understand that the passage of time by itself will diminish the quality of the statements made. Although we believe that expectations reflected in any forward-looking statements are based on reasonable assumptions, factors and risks that could cause actual results to differ from expectations are detailed in the first quarter press release. I’d now like to turn the call over to Dennis Gershenson for his opening remarks.

Thank you, Dawn, and good morning ladies and gentlemen. As with the last 19 quarters, the first 90 days of 2015 have shown healthy growth in same-center NOI at 3.3% and positive comparable leasing spreads of 8.1% including lease renewal increases of 7.4%. These comparable leasing spreads also compare favorably to those generated in Q1 2014 of 5.7%. In the first quarter of this year, we experienced a 40 basis point drop in core lease occupancy. This is due to a number of factors, including the sales of targeted Gaines Marketplace and the Village of Oriole as well as the departure of an undersized anchor tenant from our highly successful Hunter Square, which has created a significant re-leasing opportunity. The last factor is the impact of a drop in shop occupancy resulting from a number of small tenant expirations in Q1 which is typical for the first quarter of the year. What is important to remember about this number is that not only do we have re-lease these spaces and consistently drive our small shop occupancy even higher. But these departures create the opportunity to refresh our tenant mix with new and exciting retailers at healthy rental increases. Shop occupancy at the end of the quarter was 87.4%. For each 1% increase in shop occupancy or 49,000 square feet at our average rental rates for these tenants of $20.34, we will generate an additional $1 million in new base rental income. In addition to this quarter’s successful operating and financial metrics, what is not immediately apparent from the press release and supplement is the continuing transformation occurring at our core portfolio as we focus on those improvements that improve the quality of our centers and generate the greatest returns including expansions, redevelopments and retenantings. At both Harvest Junction in Colorado…

Thank you, Dennis. Good morning, everyone. Let me start by discussing our balance sheet. During the first quarter, we used the rally and reach to raise a modest sum of equity. Specifically, we received $17.1 million in gross proceeds from the sale of approximately 885,000 shares of common stock under our at-the-market or ATM program. Related average price was $19.29 per share. We also raise capital through dispositions receiving $5.3 million from the sale of land at Gaines Marketplace and $8.3 million from the sale of Village at Oriole Plaza, a shopping center that was owned in our joint venture with Clarion. Proceeds from these transactions were used as follows: $10 million to pay down our line of credit balance, $7 million to reduce our accounts payable and accruals, and $12 million to fund development and redevelopment costs. Our balance sheet remains strong. At quarter end, our net debt to adjusted EBITDA ratio was unchanged at 5.9x and our fixed charge coverage ratio improved to 3.2x. Both of these ratios are comfortably in the middle of the range for investment grade REITs. We ended the quarter with $349 million available under our $350 million line of credit. Related average term to maturity of our debt is 6.3 years and our fixed rate debt represents 97% of the total. Both of these measures reflect our propensity to have predictable interest costs and debt with longer rather than shorter duration. As I noted last quarter, we expect to pay off mortgage debt of approximately $112 million measured at our pro rata share over the remainder of the year using proceeds from future unsecured financing. The debt markets in all forms remain accommodating and our credit is strong. We will update you with our progress later this year. Now let me turn to…

Thank you. At this time, we will be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Todd Thomas with KeyBanc Capital Markets. Please proceed with your question.

Hi. Good morning. Dennis -- and first question you talked about the shop occupancy rate a bit. I was just curious where do you think the shop leasing or shop occupancy you can get to over time when you think about the portfolio today and how long do it and it will take to sort of achieve that level?

Hi, Todd. I’d say that a reasonable number is somewhere between 92% and 94% for shop occupancy, easy for you to say. And I think you're probably talking 24 months. We continue to be in a very good environment to everybody always talked about the lack of new construction, but if you look at our portfolio, we are almost exclusively infield shopping centers. And as I’ve mentioned with a number of very exciting announcements we’re going to make over the next several quarters relative to adding vis-à-vis some retenanting of our shopping centers. That should not only increase what was already significant tenant interest, but it will drive even further the rentals that we’re going to be able to achieve as we fill up those spaces.

Okay. And then in terms of acquisitions, I mean, it sounds like you are really focusing more on some of the redevelopments, finding opportunities to create value within the existing portfolio. Just curious so whether you are still active in the acquisition market and what we should sort of think about in terms of deal volumes throughout the balance of the year here?

Well Todd, we haven’t really given any guidance for acquisitions. We certainly have reviewed a number of opportunities. Cap rates continued to be aggressive. We do like to acquire shopping centers where we can add value. I think if you look at a number of the centers that we’ve purchased to which we’ve added value, the seller probably thought that these were pretty well built out and that they would maximize the ability to do something with the assets. So I’d like to think that it’s our experience in the industry that allows us to add additional value maybe where others don’t see it. So we’re going to be very selective in the centers that we buy and we’re obviously very conscious of our cost of money. So I think you will see acquisitions unfold throughout the rest of the year, but I'm just not in a position really to try and quantify that at this juncture.

Okay. And then, just last question, I was just wondering if you had an update on back filling, Mike Sullivan’s role. It sounded like last quarter that you’re contemplating either back filling his responsibilities with someone from -- within the organization to sort of just handle his responsibilities or maybe also bringing someone in that could be helpful on a broader basis for the organization, any update on timing or thoughts at this point?

I’d say two things. The first is that as far as Mike’s position specifically, we have some very confident people in asset management. There will be some changes made in that area with some promotions that we’re going to divide up the asset management function into several different categories, but relative to additions to the organization, look for an announcement in the very near future as far as executives in the company are concerned.

Okay. That's helpful. Thank you.

Thank you. Our next question comes from the line of R.J. Milligan with Robert W. Baird. Please proceed with your question.

Hey, guys. Good morning.

Hi, R.J.

Dennis, I want to follow-up on Todd’s question about acquisitions. If you look back in the markets where have been buying over the past two years, how far do you think cap rates have compressed since you purchased those assets?

I think that you're probably talking somewhere in the vicinity of 50 basis points. Cap rates in Colorado as well as in Metropolitan, Chicago were relatively aggressive to begin with, after saying that we haven’t purchased anything with a 5 in front of it. And I think it would have to be an awful compelling acquisition with very significant upside in order to even take a look at something like that. We’ve bid in the past on a number of projects that are propping into the buys and we just backed off from continuing to bid on those assets. So I think somewhere between 6 and 6.5, I think is the area that we’re now playing in.

Okay, thanks. And so, if you flip that over to the disposition side, where do you seeing in terms of demand for the types of assets that you’re looking to sell, maybe specifically for some of the assets, I guess, you look to reduce exposure in Michigan and are you seeing increasing private equity interest in the types of assets that you maybe looking to dispose of?

There again -- then for the last 18 months or so some very significant interest in either secondary markets or even tertiary markets as far as private capital is concerned. Michigan is beginning to gain traction as far as sales are concerned and a number of these transactions have been prized in the low 7s. So we are beginning to see some real traction in Michigan and so for price visibility I think that becomes very important. As far as the center that we’re selling, the centers like the Village of Oriole and others that would be sold maybe later this year include some higher quality -- certainly high-quality assets that are going at reasonably low cap rates as well as some centers that just don't fit our definition of what we want to own going forward that are probably in the mid to high 7s.

Great, Dennis. Thanks. That’s helpful.

Thank you. Our next question comes from the line of Vincent Chao with Deutsche Bank. Please proceed with your question.

Hi. Good morning, guys. Just wanted to go back to the Community First initiative that you talked about Dennis. Can you just tell us a little bit about sort of how things are -- I mean, I understand the division there, but what specifically is changing from your guy’s perspective and how you’re doing business to implement that initiative? And what percentage of your centers do you think is really you can apply to? It doesn’t seem like every power center out there would necessarily be able to fit into that mould?

It’s a good question, Vince. First of all, if you remember we defined the majority of our centers is what we call community centers. So therefore the word community in part just imply, connecting with the community. If it’s strictly a commodity center, then that -- those assets will probably be the last centers that we really apply this Community First concept to. We have a, not an insignificant number of what we call hybrid centers which not only have commodity, but specialty retailing as a part of it. So you're probably talking about initially 20% to 25% of the portfolio that we have already rolled this initiative out for and we are looking at anywhere from another 15% to 20% that we will rollout in ’15 and ’16. So we're really very excited about it and we look forward and it will be a number of pages in our road show that you can access online as well as spend time with us, talking about it, the success we are already experiencing here in drawing people to the shopping center is really quite staggering.

Okay. Thanks for that. And I guess just maybe going back to comment about the executive changes that are -- expecting announcement relatively soon. I think the question was to just on Michael Sullivan’s position, but the response sort of maybe think that there was more than just that role that’s been contemplated. Is that -- am I missing something or are you specifically referring to Michael's position?

I’d rather ask you to wait a few days. There is expected an announcement in a couple of days and I think you'll get clarity on this issue when you make the announcement.

Yes, thanks. Okay.

Sorry, I can’t go in further than that.

No, no, understood. And just maybe one last question [indiscernible] around you a little bit, but obviously there has been some M&A in this space here recently. I'm just curious what your thoughts are -- just in general about continued M&A activity in the shopping center space as we move forward this year?

Well, we certainly have seen over the last nine months or so some very interesting news concerning a variety of public companies both mall and strip center at least in our sector. It really indicates that both public and private buyers really recognize the value of quality shopping center portfolio, especially people such as Blackstone. So I think what it says to us if it really validate what we're doing, how we are proceeding, and how we are investing our money and so we are very pleased that indeed the shopping center sector is front [ph] with center and that I think that people should then begin to appreciate the type of cap rates that should be applied basically across the strip center sector.

Okay. Thanks, Dennis. I appreciate it.

Thank you. [Operator Instructions] Our next question comes from the line of Chris Lucas with Capital One Securities. Please proceed with your question.

Good morning, guys. Just a follow-up on the question related to the acquisitions environment. I guess, Dennis, if you might provide a little bit of trends on the competition, is that changed at all over, say the last year you’re seeing different players winning bids that you’re not or what’s going on there?

I’d say that when we have been competing for the highest quality assets, the pension fund and pension fund advisors are the ones who are consistently moving in and beating us out on those. We have not in the assets that we’ve looked at ever really lost out to a competitive REIT. So I think that the private money is the most aggressive bidder for these assets, but you have to appreciate that when we're looking at an asset that may have a little bit of hair on it, which means that it has some work to occur. Then the field narrows significantly and the institutional buyers and the private buyers have a lot less interest at reasonably aggressive cap rates.

Okay, great. Thank you. And then, is it relates to the shops base and thanks for the commentary early on your remark. I was just wondering whether was -- was there any strategic tenant move outs or are there any specific tenant issues like Radio Shack that you would maybe classified less seasonal that impacted the results?

Well, I mean first of all, we have to remember that invariably in the words of Mill Cooper [ph], there were always bankruptcies that are occurring in any industry and retailing is no exception. We had 15 locations for Radio Shack. At the present time, we only have six that are either not assigned, lease is executed or in negotiation. Those six account for only 13,000 square feet and the average size is just over 2,000 square feet. The average rental is right around $17.50 and leaving aside under 10,000 square feet where our average rental rate is $20.34. Once you get down in to the 2,000 square foot spaces you’re talking about mid to high 20s and because we’ve been able to demonstrate how well we’ve been able to re-lease these spaces, we’re -- it really has a significant opportunity to drive our rental rates.

Okay, great. And then, as it relates to Community First, I guess, I was just wondering is there any incremental G&A costs or investment or headcount change that we should be thinking about as it relates to that program?

As a matter of fact, we see no increase in headcount. What we’ve done in the state especially where we’ve rolled this out is we’ve managers at a number of the shopping centers that we’ve acquired who have the talents to be able to oversee the activities that we’re rolling out. We’ve got offices in a number of those centers as well as regional offices so that we are going to be able and remember I referenced online. So we're going to be able between the offices we have and your access to our shopping center sites online to benefit from the various activities that we have. And again, I look forward to spending sometime with you to talk about our walking program, our baby boot camp, our variety of onsite activities that really are bringing a significant number of residents out to the shopping center as after they participate in those things, then they go and shop. And we are also as part of some of those promotions giving out gift certificates. Again, this will be funded in significant part either in partnership with our retailers and the supermarkets as well as the movie theatres et cetera as well as our general retailers.

Great. Thanks a lot, guys.

Thank you. [Operator Instructions] End of Q&A

Well, to the extent that there are no more questions, once again I thank you all for your interest and your attention. We could not be more excited about the balance of the year. And we look forward to meeting with a number of you and for the rest we will talk to you in approximately 90 days. Have a good day.