Dennis Gershenson, president and CEO of Ramco-Gershenson Properties Trust (NYSE: RPT), joined REIT.com for a CEO Spotlight video interview during REITWeek 2014: NAREIT’s Investor Forum, held in New York. Ramco-Gershenson owns and manages multi-anchor shopping centers in strategic metropolitan markets throughout the eastern, Midwestern and central United States.
The company owns 79 shopping centers, and Gershenson said sales have held steady for the majority of retailers at its centers. However, he also pointed out that flat sales haven’t deterred retail companies, such as Dick’s Sporting Goods, Hobby Lobby and T.J. Maxx, from expanding in an effort to boost their sales.
That expansion is benefitting the company, which is already sitting at 96 percent occupancy in its portfolio, according to Gershenson. The high occupancy rate allows the company to be more selective in the leases it signs, Gershenson said. Furthermore, Gershenson pointed out that with multiple retailers vying for the same locations, the competition is generating higher rents.
Regarding expanding its own portfolio, Gershenson said his company has been “very active” in terms of development and redevelopment efforts. Ramco-Gershenson currently has $100 million in redevelopments underway.
“We have done a very good job of redeveloping existing assets taking vacant space and either combining it or moving tenants around to make room for new and exciting retail concepts,” he said.
Staying on top of emerging retail concepts is a key attribute of any successful shopping center owner. Gershenson said that when it comes to larger shifts in the retail industry, the biggest changes often come from gradual movements.
“We are an evolutionary business, not a revolutionary business,” he said. “Therefore, what you’re seeing is a natural progression in the retailing industry.”
The latest “game changer” in the retail sector is the continued rise of e-commerce, which is producing some “creative destruction” in the retail business, according to Gershenson.
“Those really savvy retailers that understand multichannel concepts are indeed adapting the best of the Internet to their brick-and-mortar approach,” he said. “Those who don’t get it will fall by the wayside.”