FARMINGTON HILLS, MI—Ramco-GershensonTrust has acquired its partner Lion Venture LP’s 70 percent ownership interest in 12 shopping centers in Michigan and Florida for $151.9 million in cash and assumption of $104.9 million of debt.
Ramco-Gershenson had already owned a 30 percent share in the Ramco/Lion Venture LP. The centers are anchored by grocery and/or value-oriented retailers. At the end of 2012, leased occupancy for the 2.2 million- sq.-ft. portfolio was 91.3 percent and annualized base rent was $14.07 per square foot. The top three tenants, based on annualized base rents for the centers, are Bed, Bath & Beyond, TJX Cos. and LA Fitness. In 2012, the 12 shopping centers generated net operating income of approximately $27 million, which equates to a capitalization rate of 7.4 percent on the aggregate asset value of $366.8 million.
Dennis Gershenson, president and CEO of the trust, says in a statement that the purchase reflects the firm’s focus on growing its portfolio of large, market dominant shopping centers in strong metropolitan trade areas. He says the trust plans to continue to sell non-core shopping centers, including a number of Michigan properties, as it executes on its strategy of upgrading its shopping center portfolio with a concentration on metropolitan.
“The completion of this transaction will increase our assets by more than 25 percent while achieving an attractive risk-adjusted return,” Gershenson says. “Our familiarity with the properties, the strength of their tenancies and demographic profiles, and the potential for future upside were all considerations in entering into this agreement.”
The Florida centers include the 263,721-sq.-ft. Mission Bay Plaza in Boca Raton, the 238,901-sq.-ft. Marketplace of Delray in Delray Beach, the 167,280-sq.-ft. Cypress Point in Clearwater, the 152,973-sq.-ft. West Broward in Plantation, the 146,755-sq.-ft. Village Plaza in Lakeland, the 109,761-sq.-ft. Vista Plaza and the 92,979-sq.-ft. Treasure Coast Commons in Jensen Beach and the 90,116-sq.-ft. Cocoa Commons in Cocoa.
The Michigan centers include 354,323-sq.-ft. Hunter’s Square here, the 217,754-sq.-ft. Troy Marketplace in Troy and the 96,994-sq.-ft. Shops at Old Orchard in West Bloomfield.
Ramco-Gershenson will still continue the Ramco/Lion partnership for three remaining properties. Clarion Partners is a partner in the 70 percent ownership. Clarion and Ramco-Gershenson have confirmed desire to acquire up to $350 million of additional shopping centers over the next several years through the existing joint venture.