Dennis Gershenson, president and CEO of Ramco-Gershenson Properties Trust (NYSE: RPT), joined REIT.com for a CEO Spotlight video interview during REITWeek 2015: NAREIT’s Investor Forum, held in New York.
Ramco-Gershenson owns and manages large, multi-anchor shopping centers in metropolitan markets within the United States.
Gershenson observed that occupancy levels for its core portfolio are particularly robust at this time, averaging about 95.5 percent.
“The world has changed from 2009, 2010, when you were desperate for a tenant. Now we have two, three, four people interested in our locations,” he said.
Gershenson added that occupancy levels in its small tenant space is about 87 percent, while properties with less than 3,000 square feet are about 83 percent occupied. “Those are the very high rent payers,” he observed. “We can average in the mid-to-high twenties (dollars) per square foot, so we can really drive rental rates with that space that’s available.”
Meanwhile, Gershenson said the company is reaping the rewards from creating a high quality portfolio, which attracts tenants such as Stein Mart, Nordstrom Rack and Saks Fifth Avenue OFF 5th. “The anchors are truly appreciating our shopping centers and they are paying up for that experience,” he said.
Gershenson also pointed out that in light of the difficulties in making acquisitions, the company is focused on value-add improvements at its properties. The company has averaged between $50 million to $75 million a year on improvements, he said, achieving about a 10 percent return on the investment.
“We’re very focused on making as many value-add improvements to our centers as we can. These opportunities continue to proliferate as we take a very hard look at our portfolio,” he said.