Good morning and welcome to the Ramco Gershenson Property Trust Fourth Quarter and Year-End 2015 Earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star, zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ms. Dawn Hendershot, Vice President of Investor Relations. Thank you, Ms. Hendershot, you may begin.

Good morning and thank you for joining us for Ramco Gershenson Property Trust’s fourth quarter and year-end 2015 earnings conference call. With me today are Dennis Gershenson, President and Chief Executive Officer; John Hendrickson, Chief Operating Officer, and Geoff Bedrosian, 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 this 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 the 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 fourth quarter press release. I would now like to turn the call over to Dennis Gershenson for his opening remarks.

Thank you, Dawn. Good morning all. We closed 2015 having made significant progress on a number of our strategic goals. First, we simplified our portfolio structure by acquiring or selling all but three of our joint venture shopping centers. We reasonably expect that these last three assets will be sold over the next 12 to 18 months. Second, our capital recycling program for 2015, which resulted in the sale of approximately $88 million of non-core assets at an average capitalization rate of 6.4%, was centered around our efforts to continually improve our shopping center portfolio’s quality by focusing on the ownership of large multi-anchor centers in high income infill markets which generate above-average rents with best-in-class retailers. Third, as evidence of the success of our ownership of high quality regional destination properties, over the last 18 months we’ve signed 15 anchor leases with retailers who include the likes of Nordstrom Rack, Saks Off 5th, Stein Mart, Dick’s, and DSW to name a few. These anchor additions almost without exception resulted from the construction of new retail space on our shopping center sites, right-sizing existing retailers to accommodate our new anchors, replacing lower performing tenancies, or building additional retail square footage on adjacent land. The signing of long-term leases with this number of new anchors when our anchor occupancy is near at an all-time demonstrates our ability to consistently create additional value at our shopping centers. These additions to our portfolio will open throughout 2016 with an emphasis on the second half of the year, achieving a full-year effect in 2017. Based upon the pending opening of many of these high quality national retailers, we expect the lease-up of in-line space to accelerate and produce even higher rental rates. The simplification of our asset base, the streamlining of our corporate structure,…

Thank you, Dennis. Good morning everyone. To expand on Dennis’ comments about 2015, 2016 and beyond, I want to provide a progress update on three operational areas I have focused on during my first year with the trust: leasing execution, redevelopment velocity, and property operations, and then explain how we believe that we are well positioned to generate sustainable, same center growth over the next five years. First an update on leasing. We finished 2015 at a leased occupancy of 94.6%. Small shop occupancy, which has been a significant focus for us, improved a full 100 basis points during the quarter and finished the year at 87.5%. In addition, consistent with the goals I laid out in [indiscernible] 2015, we have been able to improve the quality of transactions by generating strong [indiscernible] of 9.1% for the year, almost 300 basis points better than 2014, and nearly 70% of new and renewal shop deals included annual increases while having longer fixed terms. We do believe we are in the later innings of this economic expansion and are watching closely as the recent market volatility impacts customer and tenant demand. However, to date we have not seen any change in demand for our space. Our portfolio of high quality, value oriented and [indiscernible] based retailer is continuing to improve and will perform well in any environment. So we expect our leasing momentum to continue into 2016 and drive small shop occupancy an additional 100 to 200 basis points before the end of 2016. We therefore expect to increase overall leased occupancy to 95 to 96% and plan to maintain this occupancy level through 2021. My second area of focus was to generate and execute on a sustained redevelopment pipeline. In 2015, we completed six projects totaling $33 million, yielding approximately 10%.…

Thank you, John, and hello everyone. I’m very happy I made the move to the operating side of the business to a company with which I have a longstanding relationship. I look forward to working with Dennis, John and the rest of the management team to take Ramco to the next level. This is an exciting time for Ramco as we continue to focus on portfolio improvement and balance sheet strength. We have a high quality portfolio of geographically diversified shopping centers with strong tenants, and when combined with our strong and flexible capital structure, the company is positioned to provide long-term cash flow stability and growth to our shareholders. We will continue to improve our balance sheet strength by further unencumbering our mortgage assets, optimizing our cost of capital, and allocating capital to achieve our targeted risk-adjusted returns. So with that, let’s jump into the review of our results. Operating FFO for the quarter was $0.34 per share compared to $0.33 per share in the fourth quarter of 2014. The $0.01 increase was primarily a result of a $0.06 per share increase in cash NOI from operating properties and the net effect of acquisitions and dispositions, offset by $0.05 per share from a higher share count, lower lease termination fees, and higher interest and other expenses. For the full year 2015, operating FFO was $1.39 per share compared to $1.27 in 2014. The increase in FFO per share was driven by a $0.28 increase in cash NOI from our operating properties and the net effect of acquisitions and dispositions, plus a $0.04 increase in gain on land sales and a one-time benefit of $0.02 from G&A expense related to the CFO transition and the reduction of an [indiscernible] accrual. These increases were offset by $0.22 from a higher common…

[Operator instructions] Our first question comes from the line of Todd Thomas of Keybanc Capital Markets. Please proceed with your question.

Hi, thanks. Good morning. Just given some of the anchor leasing that you discussed and the expected acceleration in small shops following leasing, John, you mentioned the small shop lease rate, you’re expecting to increase 100 to 200 basis points in ’16. Is that the peak for non-anchor leasing in the portfolio, or is there still some upside to 90% or higher?

Hey Todd, good question. It’s hard to know exactly where we can take the portfolio because it’s a fairly new portfolio for us over the last five years, but I certainly think there would be a little bit more upside. I wouldn’t expect there would be much beyond - who knows, but it could be maybe another 100 to 200 basis points, but that’s certainly going to be what we’d try to push it to.

Okay. I think I missed some of the commentary around the higher year-over-year operating expenses in the quarter. What drove the increase specifically, and then what gives you confidence that expenses will be flat year-over-year in ’16, if I heard you correctly on that?

Right, yes. So what I was specifically referring to, Todd, was controllable operating expenses, which excluded real estate taxes and snow and so forth, and insurance. So I think what you’re seeing and the increase year-over-year is actually the real estate taxes. For controllable operating expenses, we were flat, actually slightly down, and that again we expect to be able to drive that, remain flat really just from focus from our property management staff and being able to still leverage vendors.

Okay, and then just in terms of the disposition activity that you’re assuming, how much f the $100 million to $125 million do you have visibility for at this time, assuming that you’ve identified which assets you’d like to sell? What’s the timing look like, and is anything on the market today?

Hi Todd, it’s Dennis. At the moment, we are working with a number of brokerage teams as we’re positioning several of these assets for sale. We’ve identified the centers that we’re interested in selling. What’s important to understand is we’re not selling the type of shopping centers that are distressed. These are all extremely well leased shopping centers. We have maximized the value. We don’t see a lot of value-add redevelopment upside to them, and so it’s either that or they really don’t fit in our picture for the long term. So you will see assets sold, maybe one or two in the second quarter, but an emphasis in the second half of the year. But we feel very comfortable that we are going to be successful in these dispositions, as evidenced by the sale of our Troy, Ohio shopping center in the first quarter. Interestingly, this is in a secondary market, it has a shadow anchor Wal-Mart to it, and we achieved a cap rate in the high 6’s, so we’re off to a very good start on our dispositions and expect that to continue.

Do you think you can achieve a similar cap rate for all the 2016 dispositions? I think you said a 6.4% cap rate was what was achieved on the $88 million sold in ’15. Is sort of a mid-6 cap rate the right range to think about for the ’16 sales?

Well, I’d answer that question two ways. The first is that as in Geoff’s remarks, we will be focused on selling more of the out-state Michigan assets, and so we probably assume that the capitalization rate on that probably will be on average somewhere in the mid to slightly higher 7 range. That will be balanced with--and what you have to understand is a number of the dispositions, leaving the Michigan sales aside, is with all of these anchor lease signings and the redevelopment schedule we have, rather than raising equity we’re going to be funding this through the capital recycling program, so it’s entirely possible that we have a number of very strong shopping centers that, say, are only supermarket anchored. That’s not part of our long-term plan, and at least in 2015, those were selling in the mid to high 5’s. So what we’re really talking about as far as a capitalization rate is something that will be an average of all of those. So I would assume that unlike maybe a 6.4, we’re probably talking somewhere in the 7’s.

Okay, great. Thank you.

That’s longwinded, but I hope that answers that your question.

Certainly very helpful. Appreciate it, thank you.

Our next question comes from the line of Vineet Khanna with Capital One Securities. Please proceed with your question.

Hi, good morning. Thanks for taking my questions. Just following along on some of the disposition guidance, can you just talk about the depth of the buyer pool for the assets you’re looking to sell this year, the ones that you sold in the latter half of last year and early ’16?

Sure, hi Vineet. What’s happening in the pool of buyers is that the majority of the centers we sold that did not fall into the A-quality assets were sold to either private REITs or private buyers. If you’ve been following the CMBS market, spreads have widened some. I think a lot of potential buyers are waiting for a little more clarity, because I think that those spreads probably will come down if everybody can get--hopefully when we hear from the Fed some type of normalcy as far as interest rates are concerned. So the majority of the assets that we will sell in 2016 will be to the private buyers. We have seen some diminution in the number of private buyers in that pool, but still, the people that we have dealt with in 2014-2015 that we can count on, who put in a bid, who we will know will close, are still out there and are still reasonably active.

Okay, and then just quickly on disposition guidance, does that include any JV dispositions this year?

There will be one JV disposition this year, I believe, but it falls into an asset where we only really have a 7% interest, so it will not have any significant impact on our numbers.

And just to be clear that the 100 to 125 does not include the JV dispositions in that number.

Okay, all right. Thank you. Then Geoff, you’ve been in the CFO position for a couple of weeks now. Can you give us sort of your initial takeaways and if there are any plans to make any changes to the finance and accounting functions, or really the company’s balance sheet strategy?

I think like I said in my remarks, there’s not going to be any change in strategy at all. I think the objective is to make the balance sheet stronger and nimble and flexible, so from that standpoint, nothing is really going to change. I think it’s going to be good to have a different set of eyes as it relates to optimizing cost of capital and allocating it, but other than that, I think the team is in place. We’ve gotten integrated very quickly, like you said, over a couple of weeks, but it’s a good team and we’ll move forward with that team.

Okay, great. Last question from me - can you guys just talk about any changes to the watch list over the past couple of months?

I’ll start with that - it’s John Hendrickson. Obviously the Sports Authority is a focus right now, but we only have the four locations and we feel pretty comfortable that they’ll be an at least near-term keeper for the company. Then obviously we’re still keeping an eye on--there’s been no change, but we’re keeping an eye on the office sector, which we continue to try to narrow down, reduce our exposure there because that’s still in question. But beyond that, I’m not sure there’s anything more from a concern on our point that’s different.

Okay, great. Thank you.

Our next question comes from the line of Craig Schmidt with Bank of America. Please proceed with your question.

Thanks. What would your fourth quarter same store NOI be without the re-tenanting effort?

This is John Hendrickson. Without the shift in--the change in occupancy from a small shop standpoint, I can’t say that we’ve really looked at it that way, so I can’t give you a direct answer on that.

Okay, and then in terms of some of the new small shop leasing that you’re hoping to do in 2016, what would you say the breakout is of services that help - beauty, restaurants, versus those that sell retail goods?

Yes, it’s interesting. We continue to see--you know, I think everyone has seen still a significant amount of food and service. Food, I think last year was close to 30% of our new leasing, and service was also a big piece of that, probably 20 to 25%. Then, the rest would be really [indiscernible].

Okay, thanks.

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

Hey, good morning everyone. Just going back to the dispositions for a second here, you mentioned, Dennis, the disruption in the CMBS market, which we’ve all been watching. I guess you also said that you expect a lot of the asset sales to be back half weighted. Is that really just a function of the CMBS markets today disrupting the markets and people not really willing to buy today, or is there an opportunity to pull those forward sooner?

Well, absolutely there is an opportunity to pull them forward. When you’re talking about somewhere between $100 million and $125 million, and because these shopping centers are nice and stable, you have a dynamic pull between locking something up early and enjoying the benefits of these assets for a greater part of the year. We don’t see anything happening with our assets, and our acquisition-disposition people obviously keep their finger on the pulse of what’s happening with the buyer pool, so I think our preference is to move these dispositions closer to certainly the second half of the year to maintain their benefit to the overall portfolio as far as income is concerned. But we will indeed--all of these assets, all of the information that’s necessary to put them in a position to be sold is all there and available now, and we will be working with the brokers. In addition to Troy, Ohio, we do have keyed up two additional assets that more likely than not will close in the first half of the year, but once again, I think that we’ll be as opportunistic in our sales as possible based upon their value, their contribution to the portfolio. In a perfect world, we’d love to tie them to the dollars that we need as we move through the capital improvements that we’re doing. The last thing I’d want is I have cash sitting on the balance sheet waiting for those dollars to be spent.

Right, okay. Maybe going back to the same store performance for 2015, it seemed like it came in a little bit lighter than the outlook provided last quarter. It seemed like as of last quarter, the number was fairly well baked, given the commencements that were expected. Was the delta really just the real estate taxes that you mentioned, John, or was there something else that caused it to come in a little bit below the 2.5 to 3% range?

Well, the taxes definitely was an impact. Obviously the fourth quarter, we were working against a tough comp, really related to in the fourth quarter we had a large credit related to an insurance claim that offset bad debt. If you eliminated [indiscernible] for 2014 over working ops versus a bad debt number in fourth quarter ’15, that was in the normal range. If you eliminated that, if you eliminated the bad debt impact altogether, it would have adjusted the fourth quarter [indiscernible] about 120 basis points, so obviously that was definitely a tough comp.

Got it, okay. Then just thinking about the 3 to 4% for ’16 inclusive of redevelopments versus the 3.9 in 2015, I guess given the amount of anchor tenants that are coming online, I know that’s back half weighted but it seems like that should be a pretty good tailwind for you, as well as getting a full year of the 2015 redevelopments and you’ve got additional redevelopments in ’16 coming online, as well as the ancillary income target of growth of $500,000, it just seems like you could be a little bit higher. I’m just trying to see if I’m missing something or maybe I’m not factoring in some drag up front in the first half.

I think there is a couple things you have to keep in mind. One is the fact that all of those items are really back loaded - a small shop occupancy gain, anchor leasing, rent starts, ancillary income will all be really back loaded. We also have issues--remember, as we execute new redevelopments that we start online, new redevelopments end up dragging you down a little bit. The new--the stuff you place in service obviously outweighs that, but that also needs to be part of the thinking. So at the end of the day, it should be setting us up well for 2017 growth [indiscernible].

Got it, okay. Okay, thanks.

Our next question comes from the line of Michael Mueller with JP Morgan. Please proceed with your question.

Thanks, hi. On guidance, what exactly is baked in there for acquisitions? I think the commentary in the release was something like opportunistic, but does that mean there’s anything in there or nothing in there?

Mike, it’s Geoff. There is nothing baked in on the acquisition side. It’s purely opportunistic and case-by-case.

Okay. Then John, the ancillary income, can you just run through some examples of what you’re looking at to do to generate that incremental income?

Sure. I mean really, it’s focused on a large swath of opportunities, mostly stuff in common areas either from further sales in the parking lot to advertising revenue to your [indiscernible] revenue. It’s a focus we haven’t historically done as a company. We’ve kind of left it to leasing to focus on--the same leasing team doing a permanent leasing with a focus on in-line specialty leasing, ancillary income leasing, but we didn’t really focus on common area opportunities. So it’s really a scenario that I think there’s some significant upside to get us more in line with what this kind of portfolio should be able to generate.

If I could add, Michael, when I talk about the different ideas vis-à-vis both for John and Geoff, when John came with the company, the lion’s share, as John has just mentioned, of that ancillary income came from temporary leasing of some of the anchor spaces or retail space that worked within line. At Federal Realty, they had a very aggressive ancillary income program, and John has brought a number of those ideas over with him, so we’re going to have a focus and move that focus off of the leasing people and into asset management, so we expect to jumpstart that in the areas that John outlined.

Got it, okay. That was it. Thank you.

Our next question comes from the line of Floris van Dijkum with Boenning & Scattergood. Please proceed with your question.

Great, thanks. Good morning. Wanted to ask a question on the operating expense recovery ratio, which dropped. I think you alluded to the fact that it was largely due to an increase in property tax. Is that correct?

Well, the recovery rate biggest impact would be because of occupancy being different, being lower for the year. [Indiscernible] the net impact--I mean, the increase in operating expenses was really driven by real estate taxes.

Okay, if I look at your stuff, though, your typical occupancy actually changed by 10 basis points during the year, but it seems what you’re suggesting is it’s mostly due to the increase in real estate taxes, or am I missing something?

If you’re looking at from a same center standpoint, the occupancy is 60--

Sixty basis points, that’s correct, and that caused the--that was the biggest reason why there was a 2% drop in expense ratio?

Yes, I think there was a 50 basis point drop in the recovery ratio.

Okay, that’s correct. Sorry.

So they’re basically in line.

Yes, okay. Sorry. And then I guess the other thing is can you maybe talk us through what the upside is on your temp tenancies? I think you mentioned there was 46 temporary tenancies, three anchor tenancies. Are you moving also from an operational perspective some of those temp tenancies to property management as opposed to leasing, or is that--how are you addressing the temp to perm potential?

Well obviously from an ancillary income standpoint, we’re only focused on continuing to generate as much as we can from an [indiscernible] standpoint and utilizing vacant anchor spaces and small shop spaces from an in-line retail standpoint. I think what you’re referencing is tenants who are currently month to month might be showing up on our rollover schedule. Those are really--they’re not temporary tenants, those are actually just permanent tenants who are month to month, who are still working through either renewals or they haven’t left yet. So the important thing is to a point that you raise is we are definitely--one opportunity we do have here is to use temporary leasing as a potential incubator, especially for a tenancy that’s a good local operators who could be great from a merchandising [indiscernible] as we reposition some of these properties, so that will be still something that we expand. As we expand the ancillary income program, that will be part of it.

Thanks.

Once again, if you would like to ask a question, please press star, one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. Our next question comes from the line of Collin Mings with Raymond James. Please proceed with your question.

Good morning, guys. First question from me is the 4 to 5% FFO growth in the prepared remarks that you were referencing as far as over the next few years. Maybe I missed this, but what type of disposition activity is factored into that forecast, looking beyond 2016?

I think that it will be certainly more modest than what we’re talking about for 2016. A lot of it will have to do again with matching whether it’s acquisitions and dispositions or significant capital expenditures for redevelopment, because as we continue to narrow our focus on the types of shopping centers that we want to own, and I know we’ve talked to you consistently about our 20 largest shopping centers which continue to keep on giving, account for slightly over 50% of our NOI. So that’s our focus, and we’ll be selective in our dispositions. Again, without saying it’s 10% or 5% or 15%, we’ll be much more focused going forward because again these are all really very good assets in being selective in how we approach it and what the use of proceeds will be.

Okay, thanks Dennis. Maybe just along those lines, can you maybe just update us--I know you’ve talked in the past about maybe potentially exploring some mixed use opportunities on some of those higher quality assets. Just maybe update us on how that process is moving along.

Well, you have to begin with the fact that our primary focus is as a shopping center owner. At Deerfield, we have approximately 78,000 to 80,000 square feet of office that existed when we bought the shopping center. We have had studies done--sorry, at Front Range. We have had studies done concerning the depth of the office market there. If you look at some of the site plans that we’ve put together specifically at Front Range, you can see that over the long term, we are planning additional buildings, and some of those additional buildings can include office. But we will be very conservative in that approach, especially if we’re going to consider building any office, it would have to be significantly pre-leased. But because we own these larger shopping centers, the whole concept of live-work-play has become more and more an element in people’s lives, especially for the millennials, and we believe that the Front Ranges, the Deerfields, et cetera fall into those kinds of categories. So we’ll be selective in what we do, but we certainly are open to the possibility.

Okay, thanks Dennis. Just one last one from me, just looking ahead to 2017. You have a pretty significant mortgage coming due on River City Marketplace. Any initial thoughts on how you plan to address that?

I think it’s safe to say that we’ll be very proactive in attacking the maturities that we can sooner rather than later, given where interest rates are, so it’s definitely on my radar screen and on our radar screen as a company.

Okay, great. Thanks guys.

There are no further questions at this time. I would like to turn the floor back over to Dennis Gershenson for closing comments.

Ladies and gentlemen, as always, we appreciate your interest, your attention, and we look forward to speaking to you in less than 90 days. We are very bullish about this year and our activities, and we look forward to talking to you at the end of the first quarter. Thanks again.

This concludes today’s teleconference. You may disconnect your lines at this time, and thank you for your participation.