Dennis Gershenson, president and CEO of Ramco-Gershenson Properties Trust (NYSE: RPT), joined REIT.com for a CEO Spotlight video interview at REITWorld 2015: NAREIT’s Annual Convention for All Things REIT at the Wynn Las Vegas.
Ramco-Gershenson owns and manages multi-anchor shopping centers primarily in about a dozen of the largest metropolitan markets in the United States.
Gershenson said the company sold $66 million in assets through the third quarter of 2015, and it intends to sell another $40 million through the first quarter of 2016. In terms of redeploying those funds, Gershenson explained that the company has a “very significant” tactical and strategic value-add redevelopment program in place.
Ramco-Gershenson is adding between 12 and 14 new anchors in order to take out underperforming retailers and right-size existing retailers, Gershenson said. In turn, that space is being used to put in “new, exciting, credit-worthy retailers,” he said.
Furthermore, Ramco-Gershenson is densifying its centers by developing so-called pad sites, which are freestanding parcels of land located in the front of a larger shopping center. Gershenson said these changes will add “the latest concepts” to its shopping centers and help its ancillary retailers.
Meanwhile, Gershenson expressed confidence that the location of its assets and its solid anchor base enable the company to implement rental rate increases.
“We find ourselves in a very enviable position of significantly increasing rental rates,” he said. Through the end of the third quarter, the average increase for renewals and new leases was in the high single digits, Gershenson said.
Looking ahead, he said the company expects to maintain and even boost rent increases.
“We’re very bullish about our shopping centers because we own the larger shopping centers that are more of a regional destination,” Gershenson said. Furthermore, the majority of Ramco-Gershenson tenants are either national or regional, “so we are much more insulated against risk of an economic downturn or retail problems,” he added.