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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
 
 
Form 10-K
 
     
þ
  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2009
OR
o
  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from          to          
 
Commission file number 1-10093
RAMCO-GERSHENSON PROPERTIES TRUST
(Exact Name of Registrant as Specified in its Charter)
 
     
Maryland   13-6908486
(State or Other Jurisdiction of
Incorporation or Organization)
  (I.R.S. Employer Identification No.)
31500 Northwestern Highway
Farmington Hills, Michigan
(Address of Principal Executive Offices)
  48334
(Zip Code)
 
Registrant’s Telephone Number, Including Area Code: 248-350-9900
 
Securities Registered Pursuant to Section 12(b) of the Act:
 
     
    Name of Each Exchange
Title of Each Class
 
On Which Registered
Common Shares of Beneficial Interest,
$0.01 Par Value Per Share
  New York Stock Exchange
 
Securities Registered Pursuant to Section 12(g) of the Act:
None
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes o     No þ
 
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes o     No þ
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ     No o
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes o     No o
 
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  þ
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
 
Large accelerated filer o Accelerated filer þ Non-accelerated filer o Smaller reporting company o
(Do not check if a smaller reporting company)
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o     No þ
 
The aggregate market value of the common equity held by non-affiliates of the registrant as of the last business day of the registrant’s most recently completed second fiscal quarter (June 30, 2009) was $187,291,865.
 
Number of common shares outstanding as of March 9, 2010: 30,907,087
 
DOCUMENT INCORPORATED BY REFERENCE
 
Portions of the registrant’s proxy statement for the annual meeting of shareholders to be held June 8, 2010 are in incorporated by reference into Part III of this Form 10-K.
 


 

 
TABLE OF CONTENTS
 
                         
   
Item
      Page
 
        1.     Business     2  
          1A.     Risk Factors     7  
          1B.     Unresolved Staff Comments     15  
          2.     Properties     15  
          3.     Legal Proceedings     23  
          4.     Submission of Matters to a Vote of Security Holders     23  
        5.     Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities     24  
          6.     Selected Financial Data     26  
          7.     Management’s Discussion and Analysis of Financial Condition and Results of Operations     27  
          7A.     Quantitative and Qualitative Disclosures About Market Risk     47  
          8.     Financial Statements and Supplementary Data     48  
          9.     Changes in and Disagreements with Accountants on Accounting and Financial Disclosure     48  
          9A.     Controls and Procedures     48  
          9B.     Other Information     51  
        10.     Directors, Executive Officers and Corporate Governance     51  
          11.     Executive Compensation     51  
          12.     Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters     51  
          13.     Certain Relationships and Related Transactions, and Director Independence     52  
          14.     Principal Accountant Fees and Services     52  
        15.     Exhibits and Financial Statement Schedules     52  
                Consolidated Financial Statements and Notes     F-1  
 EX-10.28
 EX-12.1
 EX-21.1
 EX-23.1
 EX-31.1
 EX-31.2
 EX-32.1
 EX-32.2


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Forward-Looking Statements
 
This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements represent our expectations, plans or beliefs concerning future events and may be identified by terminology such as “may,” “will,” “should,” “believe,” “expect,” “estimate,” “anticipate,” “continue,” “predict” or similar terms. Although the forward-looking statements made in this document are based on our good-faith beliefs, reasonable assumptions and our best judgment based upon current information, certain factors could cause actual results to differ materially from those in the forward-looking statements, including: our success or failure in implementing our business strategy; economic conditions generally and in the commercial real estate and finance markets specifically; the cost and availability of capital, which depends in part on our asset quality and our relationships with lenders and other capital providers; our business prospects and outlook; changes in governmental regulations, tax rates and similar matters; our continuing to qualify as a real estate investment trust (“REIT”); and other factors discussed elsewhere in this document and our other filings with the Securities and Exchange Commission (the “SEC”). Given these uncertainties, you should not place undue reliance on any forward-looking statements. Except as required by law, we assume no obligation to update these forward-looking statements, even if new information becomes available in the future.
 
PART I
 
Item 1.   Business
 
General
 
Ramco-Gershenson Properties Trust is a fully integrated, self-administered, publicly-traded Maryland REIT organized on October 2, 1997. The terms “Company,” “we,” “our” or “us” refer to Ramco-Gershenson Properties Trust, the Operating Partnership (defined below) and/or its subsidiaries, as the context may require. Our principal office is located at 31500 Northwestern Highway, Suite 300, Farmington Hills, Michigan 48334. Our predecessor, RPS Realty Trust, a Massachusetts business trust, was formed on June 21, 1988 to be a diversified growth-oriented REIT. In May 1996, RPS Realty Trust acquired the Ramco-Gershenson interests through a reverse merger, including substantially all of the shopping centers and retail properties as well as the management company and business operations of Ramco-Gershenson, Inc. and certain of its affiliates. The resulting trust changed its name to Ramco-Gershenson Properties Trust and Ramco-Gershenson, Inc.’s officers assumed management responsibility. The trust also changed its operations from a mortgage REIT to an equity REIT and contributed certain mortgage loans and real estate properties to Atlantic Realty Trust, an independent, newly formed liquidating REIT. In 1997, with approval from our shareholders, we changed our state of organization by terminating the Massachusetts trust and merging into a newly formed Maryland REIT.
 
We conduct substantially all of our business, and hold substantially all of our interests in our properties, through our operating partnership, Ramco-Gershenson Properties, L.P. (the “Operating Partnership”). The Operating Partnership, either directly or indirectly through partnerships or limited liability companies, holds fee title to all owned properties. As general partner of the Operating Partnership, we have the exclusive power to manage and conduct the business of the Operating Partnership. As of December 31, 2009, we owned approximately 91.4% of the interests in the Operating Partnership.
 
We are a REIT under the Internal Revenue Code of 1986, as amended (the “Code”), and are therefore required to satisfy various provisions under the Code and related Treasury regulations. We are generally required to distribute annually at least 90% of our “REIT taxable income” (as defined in the Code), excluding any net capital gain, to our shareholders. Additionally, at the end of each fiscal quarter, at least 75% of the value of our total assets must consist of real estate assets (including interests in mortgages on real property and interests in other REITs) as well as cash, cash equivalents and government securities. We are also subject to limits on the amount of certain types of securities we can hold. Furthermore, at least 75% of our gross income for the tax year must be derived from certain sources, which include “rents from real property” and interest on loans secured by mortgages on real property. Additionally, 95% of our gross income must be derived from these same sources or from dividends and interest from any source, gains from the sale or other disposition of stock or securities or any combination of the foregoing.


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Certain of our operations, including property management and asset management, are conducted through taxable REIT subsidiaries (each, a “TRS”). A TRS is a C corporation that has not elected REIT status and, as such, is subject to federal corporate income tax. We use the TRS format to facilitate our ability to provide certain services and conduct certain activities that are not generally considered as qualifying REIT activities.
 
Operations of the Company
 
We are a publicly-traded REIT which owns, develops, acquires, manages and leases community shopping centers and one regional mall, in the Midwestern, Southeastern and Mid-Atlantic regions of the United States. At December 31, 2009, we owned interests in 88 shopping centers, comprised of 65 community centers, 21 power centers, one single tenant retail property, and one enclosed regional mall, totaling approximately 19.8 million square feet of gross leaseable area (“GLA”). We and our joint venture partners own approximately 15.3 million square feet of such GLA, with the remaining portion owned by various anchor stores.
 
Shopping centers can generally be organized in five categories: convenience, neighborhood, community, regional and super regional centers. Shopping centers are distinguished by various characteristics, including center size, the number and type of anchor tenants and the types of products sold. Community shopping centers provide convenience goods and personal services offered by neighborhood centers, but with a wider range of soft and hard line goods. The community shopping center may include a grocery store, discount department store, super drug store, and several specialty stores. Average GLA of a community shopping center ranges between 100,000 and 500,000 square feet. A “power center” is a community shopping center that has over 500,000 square feet of GLA and includes several discount anchors of 20,000 or more square feet. These anchors typically emphasize hard goods such as consumer electronics, sporting goods, office supplies, home furnishings and home improvement goods.
 
Strategy
 
We are predominantly a community shopping center company with a focus on managing and adding value to our portfolio of centers that are primarily anchored by grocery stores and/or nationally recognized discount department stores. We believe that centers with a grocery and/or discount component attract consumers seeking value-priced products. Since these products are required to satisfy everyday needs, customers usually visit the centers on a weekly basis. Based on annualized base rents, over 93% of our shopping centers are grocery and/or value-oriented discount department store anchored. Our common anchor tenants include TJ Maxx/Marshalls, Publix, Home Depot, Wal-Mart, Kohl’s, Lowe’s Home Centers, Best Buy, Target, Kroger, Jewel, and Meijer.
 
Our shopping centers are primarily located in major metropolitan areas in the Midwestern, Mid-Atlantic and Southeastern regions of the United States. By focusing our energies on these areas, we have developed a thorough understanding of the unique characteristics of our markets. In both of our primary regions, we have concentrated a number of centers in reasonable proximity to each other in order to achieve efficiencies in management, oversight and purchasing.
 
In our existing centers, we focus on aggressive rental and leasing strategies and the value-added redevelopment of such properties. We strive to increase rental income over time through contractual rent increases and leasing and re-leasing of available space at higher rental levels, while balancing the needs for an attractive and diverse tenant mix. See Item 2, “Properties” for additional information on rental revenue and lease expirations. In addition, we assess each of our centers periodically to identify improvement opportunities and proactively engage in renovation and expansion activities based on tenant demands, market conditions and capital availability. We also recognize the importance of customer satisfaction and spend a significant amount of resources to ensure that our centers have sufficient amenities, appealing layouts and proper maintenance.
 
As opportunities arise and market conditions permit, we may sell mature properties or non-core assets, which have less potential for growth or are not viable for redevelopment. We intend to utilize the proceeds from such sales to reduce outstanding debt, or to fund development and redevelopment activities, or fund selective acquisition opportunities.


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In the third quarter of 2009, the Company’s Board of Trustees completed a review of financial and strategic alternatives announced in the first quarter of 2009. The Company believes it is best positioned going forward to optimize shareholder value through a stand-alone business strategy focused on the following initiatives:
 
  •  De-leverage the balance sheet and strengthen the Company’s financial position by utilizing a variety of measures including reducing debt through the sale of non-core assets, growth in shopping center operating income and other actions, where appropriate
 
  •  Increase real estate value by aggressively leasing vacant spaces and entering into new leases for occupied spaces when leases are about to expire
 
  •  Complete existing redevelopment projects and time future accretive redevelopments in a manner that allows completed projects to positively impact operating income while new projects are undertaken
 
  •  Conservatively acquire shopping centers under the appropriate economic conditions that have the potential to produce superior returns and geographic market diversification
 
Significant Transactions and De-leveraging Activities
 
In December 2009, the Company closed on a new $217 million secured credit facility (the “Credit Facility”) consisting of a $150 million secured revolving credit facility and a $67 million amortizing secured term loan facility. The terms of the Credit Facility provide that the revolving credit facility may be increased by up to $50 million at the Company’s request, dependent upon there being one or more lenders willing to acquire the additional commitment, for a total secured credit facility commitment of $267 million. The secured revolving credit facility matures in December 2012 and bears interest at LIBOR plus 350 basis points with a 2% LIBOR floor. The amortizing secured term loan facility also bears interest at LIBOR plus 350 basis points with a 2% LIBOR floor and requires a $33 million payment by September 2010 and a final payment of $34 million by June 2011. The new Credit Facility amended and restated the Company’s former $250 million unsecured credit facility, which was comprised of a $150 million unsecured revolving credit facility and $100 million unsecured term loan facility.
 
Also in December 2009, the Company amended its secured revolving credit facility for The Towne Center at Aquia, reducing the facility from $40 million to $20 million. The revolving credit facility securing The Town Center at Aquia bears interest at LIBOR plus 350 basis points with a 2% LIBOR floor and matures in December 2010, with two, one-year extension options.
 
In September 2009, the Company successfully completed an equity offering of 12.075 million common shares, which included 1.575 million shares purchased pursuant to an over-allotment option granted to the underwriters. The offering price was $8.50 per common share ($0.01 par value per share) generating net proceeds of $96.2 million. The net proceeds from the equity offering were used to pay down the Company’s outstanding debt.
 
During the third quarter of 2009, the Company sold three unencumbered net leased real estate assets for net proceeds of approximately $27.4 million. The net proceeds from these asset sales were used to pay down the Company’s outstanding debt.
 
Corporate Governance
 
In 2009, the Company’s Board of Trustees made a number of significant best practices corporate governance changes further aligning the Company’s interests with those of its shareholders. These changes included the expansion of the Board with the addition of two outside trustees and the termination of the Company’s Shareholders Rights Plan. The Board also committed to declassify the Board of Trustees by seeking shareholder approval to amend the Company’s declaration of trust at the 2010 Annual Meeting of Shareholders. Furthermore, the roles of Chairman of the Board and Chief Executive Officer were separated with the election of a non-executive Chairman of the Board.
 
Asset Management — Value-added Redevelopment
 
During 2009, the redevelopment projects at certain shopping centers remained a vital part of the Company’s business plan. We continued to identify opportunities within our portfolio to add value. In 2010, the Company plans


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to focus on completing the eight redevelopment projects currently in progress. All of the redevelopment projects have signed leases for the expansion or addition of an anchor or one or more out-lot tenants. At December 31, 2009, the following redevelopment projects were in progress:
 
Wholly-Owned
 
  •  West Allis Towne Centre in West Allis, Wisconsin. Our redevelopment included a completed reconfiguration of the shopping center to accommodate Burlington Coat Factory, which opened in 71,000 square feet in September of 2009. Re-tenanting of small shop retail space is in progress.
 
  •  Holcomb Center in Roswell, Georgia. The Company has signed a lease for a 39,668 square foot Studio Movie Grill. Studio Movie Grill is currently under construction and is expected to open in the second quarter of 2010.
 
  •  Rivertowne Square in Deerfield Beach, Florida. Our redevelopment plans at this center include adding a regional department store, Beall’s, in 60,000 square feet. The Beall’s space is currently under construction.
 
  •  Southbay Shopping Center in Osprey, Florida. Our redevelopment plans include adding a freestanding CVS Pharmacy, relocating tenants and re-tenanting space.
 
Joint Ventures
 
  •  Troy Marketplace in Troy, Michigan is owned by a joint venture in which we have a 30% ownership interest. LA Fitness opened in 45,000 square feet in the space previously occupied by Home Expo. The joint venture plans on re-tenanting the remaining space with additional mid-box uses that have been identified. In addition, construction on a new outlot building is complete and the building is partially leased.
 
  •  The Shops at Old Orchard in West Bloomfield, Michigan is owned by a joint venture in which we have a 30% ownership interest. We have re-tenanted and expanded the space formerly occupied by Farmer Jack. Plum Market, a specialty grocer, opened in 37,000 square feet in May 2009. Re-tenanting the balance of the small shop space and façade and structural improvements are complete. The addition of one or more outlots is in progress.
 
  •  Marketplace of Delray in Delray Beach, Florida is owned by a joint venture in which we have a 30% ownership interest. We have added a Ross Dress For Less in 27,625 square feet, which was delivered in February 2010. In 2009, we reduced the Office Depot space and the added a Dollar Tree. Further redevelopment activity includes re-tenanting small shop retail space which is currently in progress.
 
  •  Collins Pointe Plaza in Cartersville, Georgia is part of a joint venture in which we have a 20% ownership interest. Our redevelopment plans include adding a freestanding CVS Pharmacy which is currently under construction, as well as re-tenanting small shop retail space. Additionally, the Company has a signed lease for the space formerly occupied by a Winn-Dixie store and expects to deliver the space by the second quarter of 2010.
 
We estimate the total project costs of the eight redevelopment projects in process to be $46.0 million. For the four redevelopment projects at our wholly owned, consolidated properties, we estimate project costs of $18.8 million of which $11.1 million had been spent as of December 31, 2009. For the four redevelopment projects at properties held by joint ventures, we estimate off-balance sheet project costs of $27.2 million (our share is estimated to be $7.9 million) of which $17.4 million had been spent as of December 31, 2009 (our share was $5.1 million).
 
While we anticipate redevelopment projects will increase rental revenue upon completion, a majority of the projects required taking some retail space off-line to accommodate the new/expanded tenancies. These measures have resulted in the loss of rents and recoveries from tenants for those spaces removed from our pool of leasable space. Based on the number of value-added redevelopments currently in process, the revenue loss has created a short-term negative impact on net operating income and funds from operations (“FFO”). All of the Company’s redevelopment projects are expected to be substantially complete by the end of 2010.


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Developments
 
Given the dramatic changes in the retail and capital market landscape, the Company is taking a selective and conservative approach to potential developments.
 
At December 31, 2009, the Company had four projects in development or pre-development, for which we have a joint venture partner or intend to seek one or more joint venture partners once appropriate pre-leasing has been completed. These four projects are:
 
The Town Center at Aquia in Stafford, Virginia involves the complete value-added redevelopment of an existing shopping center owned by us and will be completed in phases in response to tenant demand. Phase I was finished with the completion of the first office/retail building on the site, the majority of which is occupied by Northrop Grumman. The office building was approximately 90% leased as of December 31, 2009 and was included in “buildings and improvements” as part of “investment in real estate, net” on the consolidated balance sheets. Future phases may include a residential component and additional retail and office space. The cost of future phases of this project to date as of December 31, 2009 was $38.2 million, which includes our basis in the existing shopping center.
 
Gateway Commons in Lakeland, Florida is planned to be developed as a 375,000 square foot center. The project is located in central Florida in close proximity to a number of our existing centers. The cost to date of this project at December 31, 2009 was $20.3 million, primarily land acquisition costs, excluding two outlot parcels held by a wholly-owned taxable REIT subsidiary.
 
Parkway Shops in Jacksonville, Florida is planned to be developed as a 350,000 square foot shopping center. The project is located in close proximity to our River City Marketplace center in Jacksonville. The cost to date of this project at December 31, 2009 was $14.0 million, primarily land acquisition costs.
 
Hartland Towne Square in Hartland, Michigan is being developed through a joint venture in which we have a 20% ownership interest. In addition, we wholly-own, through taxable REIT subsidiaries, several land parcels that comprise part of this project. Hartland Towne Square is planned to be developed as a power center featuring two major anchors. Meijer, which owns its anchor location in the center, opened a 192,000 square foot discount department superstore in September 2009. The development is expected to also include a 200,000 square foot power center phase, including two to three mid-box national retailers, retail shops, and outlots. We are currently seeking a second anchor for the project. The total project cost to date, excluding land held by our taxable subsidiaries, as of December 31, 2009 was $25.6 million.
 
The Company plans to utilize 2010 to secure necessary entitlements, as well as sign a critical mass of tenants before moving forward with its planned projects. It is the Company’s policy to only start vertical construction on new development projects after the project has received entitlements, significant leasing commitments, construction financing and joint venture partner commitments, if appropriate. In 2010, the Company expects to be active in the entitlement and pre-leasing phases at its planned projects. The Company does not expect to proceed to secure financing and to identify joint venture partners until the entitlement and pre-leasing phases are nearing completion.
 
As of December 31, 2009, we have spent $98.1 million on the four development and pre-development projects.
 
Acquisitions
 
In order to focus on strengthening the Company’s balance sheet, the Company had no significant acquisition activity in 2009. Future acquisition activity will depend upon a number of factors, including market conditions, the availability of capital to the Company, and the prospects for creating value at acquired properties.
 
Joint Ventures
 
In 2009, the Company had no joint venture acquisition or disposition activity. The Company sold certain properties to joint ventures in which we have an ownership interest as noted in “Dispositions” below. In May 2008, a joint venture in which we have a 20% ownership interest acquired the Rolling Meadows Shopping Center in Rolling Meadows, Illinois.


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Dispositions
 
In August 2009, the Company sold Taylor Plaza, a stand-alone Home Depot in Taylor, MI, to a third party for net proceeds of $5.0 million. The Company recognized a gain on the sale of Taylor Plaza of approximately $2.9 million. Income from operations and the gain on the sale of Taylor Plaza are classified in discontinued operations on the consolidated statements of income and comprehensive income for all periods presented.
 
In June 2008, the Company sold Highland Square Shopping Center in Crossville, Tennessee, to a third party for $9.2 million in net proceeds. The transaction resulted in a loss on the sale of $0.4 million, net of minority interest, for the year ended December 31, 2008. Income from operations and the loss on sale in relation to Highland Square are classified in discontinued operations on the consolidated statements of income and comprehensive income for all periods presented.
 
In August 2008, the Company sold the Plaza at Delray shopping center in Delray Beach, Florida, to a joint venture in which it has a 20% ownership interest. In connection with the sale of this center, the Company recognized a gain of $8.2 million, net of taxes, which represents the gain attributable to the joint venture partner’s 80% ownership interest.
 
Competition
 
See page 10 of Item 1A. “Risk Factors” for a description of competitive conditions in our business.
 
Environmental Matters
 
See pages 14-15 of Item 1A. “Risk Factors” for a description of environmental risks for our business.
 
Employment
 
As of December 31, 2009, we had 126 full-time corporate employees and 19 full-time on-site shopping center maintenance personnel. None of our employees is represented by a collective bargaining unit. We believe that our relations with our employees are good.
 
Available Information
 
All reports we electronically file with, or furnish to, the SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to such reports, are available on our website at www.rgpt.com, as soon as reasonably practicable after we electronically file such reports with, or furnish those reports to, the SEC. Our Corporate Governance Guidelines, Code of Business Conduct and Ethics and Board of Trustees’ committee charters also are available at the same location on our website.
 
Shareholders may request free copies of these documents from:
 
Ramco-Gershenson Properties Trust
Attention: Investor Relations
31500 Northwestern Highway, Suite 300
Farmington Hills, MI 48334
 
Item 1A.   Risk Factors
 
You should carefully consider each of the risks and uncertainties described below and elsewhere in this Annual Report on Form 10-K, as well as any amendments or updates reflected in subsequent filings with the SEC. We believe these risks and uncertainties, individually or in the aggregate, could cause our actual results to differ materially from expected and historical results and could materially and adversely affect our business operations, results of operations and financial condition. Further, additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our results and business operations.


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Business Risks
 
Recent disruptions in the financial markets could affect our ability to obtain financing for development or redevelopment of our properties and other purposes on reasonable terms and have other adverse effects on us and the market price of our common shares.
 
The United States financial and credit markets have recently experienced significant price volatility, dislocations and liquidity disruptions, which have caused market prices of many financial instruments to fluctuate substantially and the spreads on prospective debt financings to widen considerably. These circumstances have materially impacted liquidity in the financial markets, making terms for certain financings less attractive, and in some cases have resulted in the unavailability of financing.
 
Continued uncertainty in the stock and credit markets may negatively impact our ability to access additional financing for development and redevelopment of our properties and other purposes at reasonable terms, which may negatively affect our business. It may also be more difficult or costly for us to raise capital through the issuance of our common shares or preferred shares. The disruptions in the financial markets may have a material adverse effect on the market value of our common shares and other adverse effects on us and our business. In addition, there can be no assurance that the actions of the U.S. government, U.S. Federal Reserve, U.S. Treasury and other governmental and regulatory bodies for the purpose of stabilizing the financial markets will achieve the intended effects or that such actions will not result in adverse market developments.
 
The recent global economic and financial market crisis has had and may continue to have a negative effect on our business and operations.
 
The recent global economic and financial market crisis has caused, among other things, a general tightening in the credit markets, lower levels of liquidity, increases in the rates of default and bankruptcy, lower consumer and business spending, and lower consumer net worth, all of which has had and may continue to have a negative effect on our business, results of operations, financial condition and liquidity. Many of our tenants and vendors have been severely affected by the current economic turmoil. Current or potential tenants and vendors may no longer be in business, which could lead to reduced demand for our shopping centers, reduced operating margins, and increased tenant payment delays or defaults. We are also limited in our ability to reduce costs to offset the results of a prolonged or severe economic downturn given certain fixed costs associated with our operations, difficulties if we overstrained our resources, and our long-term business approach that necessitates we remain in position to respond when market conditions improve.
 
The timing and nature of any recovery in the credit and financial markets remains uncertain, and there can be no assurance that market conditions will improve in the near future or that our results will not be materially and adversely affected. Such conditions make it very difficult to forecast operating results, make business decisions and identify and address material business risks. The foregoing conditions may also impact the valuation of certain long-lived or intangible assets that are subject to impairment testing, potentially resulting in impairment charges which may be material to our financial condition or results of operations.
 
Adverse market conditions and tenant bankruptcies could adversely affect our revenues.
 
The economic performance and value of our real estate assets are subject to all the risks associated with owning and operating real estate, including risks related to adverse changes in national, regional and local economic and market conditions. Our current properties are located in 13 states in the Midwestern, Southeastern and Mid-Atlantic regions of the United States. The economic condition of each of our markets may be dependent on one or more industries. An economic downturn in one of these industries may result in a business downturn for existing tenants, and as a result, these tenants may fail to make rental payments, decline to extend leases upon expiration, delay lease commencements or declare bankruptcy. In addition, we may have difficulty finding new tenants during economic downturns.
 
Any tenant bankruptcies, leasing delays or failure to make rental payments when due could result in the termination of the tenant’s lease and could cause material losses to us and adversely impact our operating results, unless we are able to re-let the vacant space or negotiate lease cancellation income. If our properties do not generate


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sufficient income to meet our operating expenses, including future debt service, our business and results of operations would be adversely affected.
 
The retail industry has experienced some financial difficulties during the past few years and certain local, regional and national retailers have filed for protection under bankruptcy laws. Any bankruptcy filings by or relating to one of our tenants or a lease guarantor is likely to delay our efforts to collect pre-bankruptcy debts and could ultimately preclude full collection of these sums. If a lease is assumed by the tenant in bankruptcy, all pre-bankruptcy balances due under the lease must be paid to us in full. However, if a lease is rejected by a tenant in bankruptcy, we would have only a general unsecured claim for damages. Any unsecured claim we hold may be paid only to the extent that funds are available and only in the same percentage as is paid to all other holders of unsecured claims. It is possible that we may recover substantially less than the full value of any unsecured claims we hold, if at all, which may adversely affect our operating results and financial condition.
 
If any of our anchor tenants becomes insolvent, suffers a downturn in business or decides not to renew its lease, it may adversely impact our business at such center. In addition, a lease termination by an anchor tenant or a failure of an anchor tenant to occupy the premises could result in lease terminations or reductions in rent by some of our non-anchor tenants in the same shopping center pursuant to the terms of their leases. In that event, we may be unable to re-let the vacated space.
 
Similarly, the leases of some anchor tenants may permit them to transfer their leases to other retailers. The transfer to a new anchor tenant could cause customer traffic in the retail center to decrease, which would reduce the income generated by that retail center. In addition, a transfer of a lease to a new anchor tenant could also give other tenants the right to make reduced rental payments or to terminate their leases with us.
 
Concentration of our credit risk could reduce our operating results.
 
Several of our tenants represent a significant portion of our leasing revenues. As of December 31, 2009, we received 4.0% of our annualized base rent from TJ Maxx/Marshalls, 3.0% of our annualized base rent from Publix and 2.1% of our annualized base rent from OfficeMax. No other tenant represented at least 2% of our total annualized base rent. The concentration in our leasing revenue from a small number of tenants creates the risk that, should these tenants experience financial difficulties, our operating results could be adversely affected.
 
REIT distribution requirements limit our available cash.
 
As a REIT, we are subject to annual distribution requirements which limit the amount of cash we retain for other business purposes, including amounts to fund our growth. We generally must distribute annually at least 90% of our REIT taxable income, excluding any net capital gain, in order for our distributed earnings not to be subject to corporate income tax. We intend to make distributions to our shareholders to comply with the requirements of the Code. However, differences in timing between the recognition of taxable income and the actual receipt of cash could require us to sell assets or borrow funds on a short-term or long-term basis to meet the 90% distribution requirement.
 
Our redevelopment projects may not yield anticipated returns, which would adversely affect our operating results.
 
A key component of our business strategy is exploring redevelopment opportunities at existing properties within our portfolio and in connection with property acquisitions. To the extent that we engage in these redevelopment activities, they will be subject to the risks normally associated with these projects, including, among others, cost overruns and timing delays as a result of the lack of availability of materials and labor, the failure of tenants to commit or live up to their commitments, weather conditions, and other factors outside of our control. Any substantial unanticipated delays or expenses could adversely affect the investment returns from these redevelopment projects and adversely impact our operating results.


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We face competition for the acquisition and development of real estate properties, which may impede our ability to grow our operations or may increase the cost of these activities.
 
We compete with many other entities for the acquisition of retail shopping centers and land that is appropriate for new developments, including other REITs, private institutional investors and other owner-operators of shopping centers. These competitors may increase the price we pay to acquire properties or may succeed in acquiring those properties themselves. In addition, the sellers of properties we wish to acquire may find our competitors to be more attractive buyers because they may have greater resources, may be willing to pay more, or may have a more compatible operating philosophy. In particular, larger REITs may enjoy significant competitive advantages that result from, among other things, a lower cost of capital. In addition, the number of entities and the amount of funds competing for suitable properties may increase. This would increase demand for these properties and therefore increase the prices paid for them. If we pay higher prices for properties or are unable to acquire suitable properties at reasonable prices, our ability to grow may be adversely affected.
 
Competition may affect our ability to renew leases or re-let space on favorable terms and may require us to make unplanned capital improvements.
 
We face competition from similar retail centers within the trade areas in which our centers operate to renew leases or re-let space as leases expire. Some of these competing properties may be newer and better located or have a better tenant mix than our properties, which would increase competition for customer traffic and creditworthy tenants. We may not be able to renew leases or obtain replacement tenants as leases expire, and the terms of renewals or new leases, including the cost of required renovations or concessions to tenants, may be less favorable to us than current lease terms. Increased competition for tenants may also require us to make capital improvements to properties which we would not have otherwise planned to make. In addition, we and our tenants face competition from alternate forms of retailing, including home shopping networks, mail order catalogues and on-line based shopping services, which may limit the number of retail tenants that desire to seek space in shopping center properties generally and may decrease revenues of existing tenants. If we are unable to re-let substantial amounts of vacant space promptly, if the rental rates upon a renewal or new lease are significantly lower than expected, or if reserves for costs of re-letting prove inadequate, then our earnings and cash flows will decrease.
 
We may be restricted from re-letting space based on existing exclusivity lease provisions with some of our tenants.
 
In a number of cases, our leases contain provisions giving the tenant the exclusive right to sell clearly identified types of merchandise or provide specific types of services within the particular retail center or limit the ability of other tenants to sell that merchandise or provide those services. When re-letting space after a vacancy, these provisions may limit the number and types of prospective tenants suitable for the vacant space. If we are unable to re-let space on satisfactory terms, our operating results would be adversely impacted.
 
We hold investments in joint ventures in which we do not control all decisions, and we may have conflicts of interest with our joint venture partners.
 
As of December 31, 2009, 33 of our shopping centers were partially owned by non-affiliated partners through joint venture arrangements, none of which we have a controlling interest in. We do not control all decisions in our joint ventures and may be required to take actions that are in the interest of the joint venture partners but not our best interests. Accordingly, we may not be able to favorably resolve any issues which arise, or we may have to provide financial or other inducements to our joint venture partners to obtain such resolution.
 
Various restrictive provisions and rights govern sales or transfers of interests in our joint ventures. These may work to our disadvantage because, among other things, we may be required to make decisions as to the purchase or sale of interests in our joint ventures at a time that is disadvantageous to us.
 
Bankruptcy of our joint venture partners could adversely affect us.
 
We could be adversely affected by the bankruptcy of one of our joint venture partners. The profitability of shopping centers held in a joint venture could also be adversely affected by the bankruptcy of one of our joint


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venture partners if, because of certain provisions of the bankruptcy laws, we were unable to make important decisions in a timely fashion or became subject to additional liabilities.
 
Rising operating expenses could adversely affect our operating results.
 
Our properties are subject to increases in real estate and other tax rates, utility costs, insurance costs, repairs and maintenance and administrative expenses. Our current properties and any properties we acquire in the future may be subject to rising operating expenses, some or all of which may be out of our control. If any property is not fully occupied or if revenues are not sufficient to cover operating expenses, then we could be required to expend funds for that property’s operating expenses. In addition, while most of our leases require that tenants pay all or a portion of the applicable real estate taxes, insurance and operating and maintenance costs, renewals of leases or future leases may not be negotiated on these terms, in which event we will have to pay those costs. If we are unable to lease properties on a basis requiring the tenants to pay all or some of these costs, or if tenants fail to pay such costs, it could adversely affect our operating results.
 
The illiquidity of our real estate investments could significantly impede our ability to respond to adverse changes in the performance of our properties, which could adversely impact our financial condition.
 
Because real estate investments are relatively illiquid, our ability to promptly sell one or more properties in our portfolio in response to changing economic, financial and investment conditions is limited. The real estate market is affected by many factors, such as general economic conditions, availability of financing, interest rates and other factors, including supply and demand, that are beyond our control. We cannot predict whether we will be able to sell any property for the price and other terms we seek, or whether any price or other terms offered by a prospective purchaser would be acceptable to us. We also cannot predict the length of time needed to find a willing purchaser and to complete the sale of a property. We may be required to expend funds to correct defects or to make improvements before a property can be sold, and we cannot assure you that we will have funds available to correct those defects or to make those improvements. These factors and any others that would impede our ability to respond to adverse changes in the performance of our properties could significantly adversely affect our financial condition and operating results.
 
If we suffer losses that are not covered by insurance or that are in excess of our insurance coverage limits, we could lose invested capital and anticipated profits.
 
Catastrophic losses, such as losses resulting from wars, acts of terrorism, earthquakes, floods, hurricanes, tornadoes or other natural disasters, pollution or environmental matters, generally are either uninsurable or not economically insurable, or may be subject to insurance coverage limitations, such as large deductibles or co-payments. Although we currently maintain “all risk” replacement cost insurance for our buildings, rents and personal property, commercial general liability insurance and pollution and environmental liability insurance, our insurance coverage may be inadequate if any of the events described above occurred to, or caused the destruction of, one or more of our properties. Under that scenario, we could lose both our invested capital and anticipated profits from that property.
 
Capitalization Risks
 
We have substantial debt obligations, including variable rate debt, which may impede our operating performance and put us at a competitive disadvantage.
 
Required repayments of debt and related interest can adversely affect our operating performance. As of December 31, 2009, we had $552.6 million of outstanding indebtedness, of which $93.5 million bore interest at a variable rate. At December 31, 2009, we had the ability to borrow an additional $56.7 million under our existing secured revolving credit facility and to increase the availability under our secured revolving credit facility by up to $50 million under the terms of the Credit Facility. Increases in interest rates on our existing indebtedness would increase our interest expense, which could adversely affect our cash flow and our ability to pay dividends. For example, if market rates of interest on our variable rate debt outstanding as of December 31, 2009 increased by 1.0%, the increase in interest expense on our existing variable rate debt would decrease future earnings and cash flows by approximately $0.9 million annually.


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The amount of our debt may adversely affect our business and operating results by:
 
  •  requiring us to use a substantial portion of our funds from operations to pay interest, which reduces the amount available for dividends and working capital;
 
  •  placing us at a competitive disadvantage compared to our competitors that have less debt;
 
  •  making us more vulnerable to economic and industry downturns and reducing our flexibility to respond to changing business and economic conditions;
 
  •  limiting our ability to borrow more money for operations, working capital or to finance acquisitions in the future; and
 
  •  limiting our ability to refinance or repay debt obligations when they become due.
 
The global economic crisis has exacerbated these risks.
 
Subject to compliance with the financial covenants in our borrowing agreements, our management and Board have discretion to increase the amount of our outstanding debt at any time. We could become more highly leveraged, resulting in an increase in debt service costs that could adversely affect our cash flow and the amount available for distribution to our shareholders. If we increase our debt, we may also increase the risk of default on our debt.
 
Capital markets are currently experiencing a period of dislocation and instability, which has had and could continue to have a negative impact on the availability and cost of capital.
 
The general disruption in the U.S. capital markets has impacted the broader financial and credit markets and reduced the availability of debt and equity capital for the market as a whole. These conditions could persist for a prolonged period of time or worsen in the future. Our ability to access the capital markets may be restricted at a time when we would like, or need, to access those markets, which could have an impact on our flexibility to react to changing economic and business conditions. The resulting lack of available credit, lack of confidence in the financial sector, increased volatility in the financial markets and reduced business activity could materially and adversely affect our business, financial condition, results of operations and our ability to obtain and manage our liquidity. In addition, the cost of debt financing and the proceeds of equity financing may be materially adversely impacted by these market conditions.
 
Credit market developments may reduce availability under our credit agreements.
 
Due to the current volatile state of the credit markets, there is risk that lenders, even those with strong balance sheets and sound lending practices, could fail or refuse to honor their legal commitments and obligations under existing credit commitments, including but not limited to: extending credit up to the maximum permitted by a credit facility, allowing access to additional credit features and otherwise accessing capital and/or honoring loan commitments. If our lender(s) fail to honor their legal commitments under our Credit Facility, it could be difficult in the current environment to replace our credit facility on similar terms. Although we believe that our operating cash flow, access to capital markets and existing credit facilities will give us the ability to satisfy our liquidity needs for at least the next 12 months, the failure of any of the lenders under our credit facility may impact our ability to finance our operating or investing activities.
 
Because we must annually distribute a substantial portion of our income to maintain our REIT status, we will continue to need additional debt and/or equity capital to grow.
 
In general, we must annually distribute at least 90% of our REIT taxable income, excluding net capital gain, to our shareholders to maintain our REIT status. As a result, those earnings will not be available to fund acquisition, development or redevelopment activities. We have historically funded acquisition, development and redevelopment activities by:
 
  •  retaining cash flow that we are not required to distribute to maintain our REIT status;
 
  •  borrowing from financial institutions;


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  •  selling assets that we do not believe present the potential for significant future growth or that are no longer compatible with our business plan;
 
  •  selling common shares and preferred shares; and
 
  •  entering into joint venture transactions with third parties.
 
We expect to continue to fund our development and redevelopment activities and any acquisition activities we determine to conduct, in this way. Our failure to obtain funds from these sources could limit our ability to grow, which could have a material adverse effect on the value of our securities.
 
Our financial covenants may restrict our operating or acquisition activities, which may adversely impact our financial condition and operating results.
 
The financial covenants contained in our mortgages and debt agreements reduce our flexibility in conducting our operations and create a risk of default on our debt if we cannot continue to satisfy them. The mortgages on our properties contain customary negative covenants such as those that limit our ability, without the prior consent of the lender, to further mortgage the applicable property or to discontinue insurance coverage. In addition, if we breach covenants in our debt agreements, the lender can declare a default and require us to repay the debt immediately and, if the debt is secured, can ultimately take possession of the property securing the loan.
 
In particular, our outstanding Credit Facility contains customary restrictions, requirements and other limitations on our ability to incur indebtedness, including limitations on the ratio of total liabilities to assets and minimum fixed charge coverage and tangible net worth ratios. Our ability to borrow under our Credit Facility is subject to compliance with these financial and other covenants. We rely in part on borrowings under our Credit Facility to finance acquisition, development and redevelopment activities and for working capital. If we are unable to borrow under our Credit Facility or to refinance existing indebtedness, our financial condition and results of operations would likely be adversely impacted.
 
Mortgage debt obligations expose us to increased risk of loss of property, which could adversely affect our financial condition.
 
Incurring mortgage debt increases our risk of loss because defaults on indebtedness secured by properties may result in foreclosure actions by lenders and ultimately our loss of the related property. We have entered into mortgage loans which are secured by multiple properties and contain cross-collateralization and cross-default provisions. Cross-collateralization provisions allow a lender to foreclose on multiple properties in the event that we default under the loan. Cross-default provisions allow a lender to foreclose on the related property in the event a default is declared under another loan. For federal income tax purposes, a foreclosure of any of our properties would be treated as a sale of the property for a purchase price equal to the outstanding balance of the debt secured by the mortgage. If the outstanding balance of the debt secured by the mortgage exceeds our tax basis in the property, we would recognize taxable income on foreclosure but would not receive any cash proceeds.
 
Tax Risks
 
Our failure to qualify as a REIT would result in higher taxes and reduced cash available for our shareholders.
 
We believe that we currently operate in a manner so as to qualify as a REIT for federal income tax purposes. Our continued qualification as a REIT will depend on our satisfaction of certain asset, income, investment, organizational, distribution, shareholder ownership and other requirements on a continuing basis. Our ability to satisfy the asset requirements depends upon our analysis of the fair market values of our assets, some of which are not susceptible to a precise determination, and for which we will not obtain independent appraisals. In addition, our compliance with the REIT income and asset requirements depends upon our ability to manage successfully the composition of our income and assets on an ongoing basis. Moreover, the proper classification of an instrument as debt or equity for federal income tax purposes may be uncertain in some circumstances, which could affect the application of the REIT qualification requirements. Accordingly, there can be no assurance that the IRS will not


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contend that our interests in subsidiaries or other issuers constitute a violation of the REIT requirements. Moreover, future economic, market, legal, tax or other considerations may cause us to fail to qualify as a REIT.
 
If we were to fail to qualify as a REIT in any taxable year, we would be subject to federal income tax, including any applicable alternative minimum tax, on our taxable income at regular corporate rates, and distributions to shareholders would not be deductible by us in computing our taxable income. Any such corporate tax liability could be substantial and would reduce the amount of cash available for distribution to our shareholders, which in turn could have an adverse impact on the value of, and trading prices for, our common shares. Unless entitled to relief under certain Code provisions, we also would be disqualified from taxation as a REIT for the four taxable years following the year during which we ceased to qualify as a REIT.
 
We have been the subject of IRS examinations for prior years. With respect to the IRS examination of our taxable years ended December 31, 1991 through December 31, 1995, we entered into a closing agreement with the IRS on December 4, 2003. Pursuant to the terms of the closing agreement, we agreed, among other things, to pay deficiency dividends, and we consented to the assessment and collection of tax deficiencies and to the assessment and collection of interest on such tax deficiencies and deficiency dividends. All amounts assessed by the IRS to date have been paid. We have advised the relevant taxing authorities for the state and local jurisdictions where we conducted business during the taxable years ended December 31, 1991 through December 31, 1995 of the terms of the closing agreement. We believe that our exposure to state and local tax, penalties, interest and other miscellaneous expenses will not exceed $1.0 million as of December 31, 2009. It is our belief that any liability for state and local tax, penalties, interest and other miscellaneous expenses that may exist with respect to the taxable years ended December 31, 1991 through December 31, 1995 will be covered under a Tax Agreement that we entered into with Atlantic Realty Trust (“Atlantic”) and/or Kimco SI 1339, Inc. (formerly known as SI 1339, Inc.), its successor in interest. However, no assurance can be given that Atlantic or Kimco SI, 1339, Inc. will reimburse us for future amounts paid in connection with our taxable years ended December 31, 1991 through December 31, 1995. See Note 21 of the Notes to the Consolidated Financial Statements in Item 8.
 
Even if we qualify as a REIT, we may be subject to various federal income and excise taxes, as well as state and local taxes.
 
Even if we qualify as a REIT, we may be subject to federal income and excise taxes in various situations, such as if we fail to distribute all of our REIT taxable income. We also will be required to pay a 100% tax on non-arm’s length transactions between us and a TRS (described below) and on any net income from sales of property that the IRS successfully asserts was property held for sale to customers in the ordinary course. Additionally, we may be subject to state or local taxation in various state or local jurisdictions, including those in which we transact business. The state and local tax laws may not conform to the federal income tax treatment. Any taxes imposed on us would reduce our operating cash flow and net income.
 
Legislative or other actions affecting REITs could have a negative effect on us.
 
The rules dealing with federal income taxation are constantly under review by persons involved in the legislative process and by the IRS and the United States Treasury Department. Changes to tax laws, which may have retroactive application, could adversely affect our shareholders or us. We cannot predict how changes in tax laws might affect our shareholders or us.
 
We are subject to various environmental laws and regulations which govern our operations and which may result in potential liability.
 
Under various Federal, state and local laws, ordinances and regulations relating to the protection of the environment (“Environmental Laws”), a current or previous owner or operator of real estate may be liable for the costs of removal or remediation of certain hazardous or toxic substances disposed, stored, released, generated, manufactured or discharged from, on, at, onto, under or in such property. Environmental Laws often impose such liability without regard to whether the owner or operator knew of, or was responsible for, the presence or release of such hazardous or toxic substance. The presence of such substances, or the failure to properly remediate such substances when present, released or discharged, may adversely affect the owner’s ability to sell or rent such


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property or to borrow using such property as collateral. The cost of any required remediation and the liability of the owner or operator therefore as to any property is generally not limited under such Environmental Laws and could exceed the value of the property and/or the aggregate assets of the owner or operator. Persons who arrange for the disposal or treatment of hazardous or toxic substances may also be liable for the cost of removal or remediation of such substances at a disposal or treatment facility, whether or not such facility is owned or operated by such persons. In addition to any action required by Federal, state or local authorities, the presence or release of hazardous or toxic substances on or from any property could result in private plaintiffs bringing claims for personal injury or other causes of action.
 
In connection with ownership (direct or indirect), operation, management and development of real properties, we have the potential to be liable for remediation, releases or injury. In addition, Environmental Laws impose on owners or operators the requirement of ongoing compliance with rules and regulations regarding business-related activities that may affect the environment. Such activities include, for example, the ownership or use of transformers or underground tanks, the treatment or discharge of waste waters or other materials, the removal or abatement of asbestos-containing materials (“ACMs”) or lead-containing paint during renovations or otherwise, or notification to various parties concerning the potential presence of regulated matters, including ACMs. Failure to comply with such requirements could result in difficulty in the lease or sale of any affected property and/or the imposition of monetary penalties, fines or other sanctions in addition to the costs required to attain compliance. Several of our properties have or may contain ACMs or underground storage tanks; however, we are not aware of any potential environmental liability which could reasonably be expected to have a material impact on our financial position or results of operations. No assurance can be given that future laws, ordinances or regulations will not impose any material environmental requirement or liability, or that a material adverse environmental condition does not otherwise exist.
 
Item 1B.   Unresolved Staff Comments.
 
None.
 
Item 2.   Properties.
 
For all tables in this Item 2, Annualized Base Rental Revenue is equal to December 2009 base rental revenue multiplied by 12.
 
The properties in which we own interests are located in 13 states throughout the Midwestern, Southeastern and Mid-Atlantic regions of the United States as follows:
 
                                 
          Annualized Base
             
    Number of
    Rental Revenue At
    Company
    Total
 
State
  Properties     December 31, 2009     Owned GLA     GLA  
 
Michigan
    34     $ 62,592,647       6,497,054       8,870,507  
Florida
    25       47,904,401       4,365,294       5,048,475  
Georgia
    9       8,162,139       1,210,177       1,210,177  
Ohio
    7       11,799,140       1,164,196       1,872,275  
Illinois
    2       3,538,044       293,490       293,490  
Indiana
    2       4,401,680       419,045       622,845  
Tennessee
    2       1,131,241       124,453       332,398  
Wisconsin
    2       3,359,550       514,140       647,135  
Maryland
    1       1,552,750       251,511       251,511  
New Jersey
    1       2,653,545       224,153       224,153  
North Carolina
    1       252,771       69,721       69,721  
South Carolina
    1       468,813       33,791       241,236  
Virginia
    1       2,531,940       138,509       138,509  
                                 
Total
    88     $ 150,348,661       15,305,534       19,822,432  
                                 
 
The above table includes 33 properties owned by joint ventures in which we have an ownership interest and are reflected at 100%.


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Our properties, by type of center, consist of the following:
 
                                 
          Annualized Base
             
    Number of
    Rental Revenues At
    Company
    Total
 
Type of Tenant
  Properties     December 31, 2009     Owned GLA     GLA  
 
Community shopping centers
    65     $ 86,557,503       9,269,670       10,403,768  
Power centers
    21       60,107,342       5,614,166       8,742,724  
Single tenant retail properties
    1       277,453       22,930       22,930  
Enclosed regional mall
    1       3,406,363       398,768       653,010  
                                 
Total
    88     $ 150,348,661       15,305,534       19,822,432  
                                 
 
See Note 24 of the Notes to the Consolidated Financial Statements in Item 8 for a description of the encumbrances on each property. Additional information regarding the Properties is included in the Property Schedule on the following pages.


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Portfolio
Property Summary
As of December 31, 2009
 
                                                                                                                 
              Year Constructed /
                                                                       
              Acquired / Year of
    Number
    Total Shopping Center GLA:                                    
              Latest Renovation
    of
    Anchors:                 Company Owned GLA     Annualized Base Rent      
Property
  Location   Ownership %     or Expansion(1)     Units     Non-Company Owned     Company Owned     Total Anchor GLA     Non-Anchor GLA     Total     Total     Leased     Occupancy     Total     PSF     Anchors[2]
 
Wholly-Owned Portfolio
                                                                                                               
Florida
                                                                                                               
Coral Creek Shops
  Coconut Creek, FL     100 %     1992/2002/NA       33               42,112       42,112       67,200       109,312       109,312       100,487       91.9 %   $ 1,519,245     $ 15.12     Publix
Lantana Shopping Center
  Lantana, FL     100 %     1959/1996/2002       22               61,166       61,166       62,444       123,610       123,610       117,268       94.9 %     1,241,795       10.59     Publix
Naples Towne Centre
  Naples, FL     100 %     1982/1996/2003       14       32,680       102,027       134,707       32,680       167,387       134,707       128,018       95.0 %     782,707       6.11     Goodwill [3], Save-A-Lot, Bealls
Pelican Plaza
  Sarasota, FL     100 %     1983/1997/NA       26               35,768       35,768       57,389       93,157       93,157       78,502       84.3 %     785,068       10.00     Linens ’N Things [6]
River City Marketplace
  Jacksonville, FL     100 %     2005/2005/NA       70       342,501       323,907       666,408       221,445       887,853       545,352       530,150       97.2 %     8,391,824       15.83     Wal-Mart [3], Lowe’s[3], Bed Bath & Beyond, Best Buy, Gander Mountain, Michaels, OfficeMax, PETsMART, Ross Dress For Less, Wallace Theaters, Ashley Furniture HomeStore
River Crossing Centre
  New Port Richey, FL     100 %     1998/2003/NA       16               37,888       37,888       24,150       62,038       62,038       58,538       94.4 %     709,291       12.12     Publix
Sunshine Plaza
  Tamarac, FL     100 %     1972/1996/2001       28               146,409       146,409       89,317       235,726       235,726       223,181       94.7 %     1,918,129       8.59     Publix, Old Time Pottery
The Crossroads
  Royal Palm Beach, FL     100 %     1988/2002/NA       35               42,112       42,112       77,980       120,092       120,092       103,910       86.5 %     1,602,765       15.42     Publix
Village Lakes Shopping Center
  Land O’ Lakes, FL     100 %     1987/1997/NA       24               125,141       125,141       61,355       186,496       186,496       181,246       97.2 %     1,111,977       6.14     Sweet Bay, Wal-Mart[4]
                                                                                                                 
Total/Average
                        268       375,181       916,530       1,291,711       693,960       1,985,671       1,610,490       1,521,300       94.5 %   $ 18,062,802     $ 11.87      
                                                                                                                 
Georgia
                                                                                                               
Centre at Woodstock
  Woodstock, GA     100 %     1997/2004/NA       14               51,420       51,420       35,328       86,748       86,748       69,660       80.3 %   $ 788,379     $ 11.32     Publix
Conyers Crossing
  Conyers, GA     100 %     1978/1998/NA       15               138,915       138,915       31,560       170,475       170,475       170,475       100.0 %     958,471       5.62     Burlington Coat Factory, Hobby Lobby
Horizon Village
  Suwanee, GA     100 %     1996/2002/NA       22               47,955       47,955       49,046       97,001       97,001       84,002       86.6 %     878,201       10.45     Publix [4]
Mays Crossing
  Stockbridge, GA     100 %     1984/1997/2007       20               100,244       100,244       37,040       137,284       137,284       128,584       93.7 %     836,435       6.50     ApplianceSmart Factory Outlet [4], Big Lots, Dollar Tree
Promenade at Pleasant Hill
  Duluth, GA     100 %     1993/2004/NA       34               199,555       199,555       82,076       281,631       281,631       245,244       87.1 %     1,763,839       7.19     Farmers Home Furniture, Old Time Pottery, Publix
                                                                                                                 
Total/Average
                        105             538,089       538,089       235,050       773,139       773,139       697,965       90.3 %   $ 5,225,325     $ 7.49      
                                                                                                                 
Michigan
                                                                                                               
Auburn Mile, The
  Auburn Hills, MI     100 %     2000/1999/NA       7       533,659       64,298       597,957       26,238       624,195       90,536       90,536       100.0 %   $ 944,457     $ 10.43     Best Buy [3], Target [3], Meijer [3], Costco [3], Jo-Ann, Staples
Beacon Square
  Grand Haven, MI     100 %     2004/2004/NA       16       103,316             103,316       51,387       154,703       51,387       45,932       89.4 %     771,331       16.79     Home Depot [3]
Clinton Pointe
  Clinton Twp., MI     100 %     1992/2003/NA       14       112,876       65,735       178,611       69,595       248,206       135,330       123,280       91.1 %     1,201,151       9.74     OfficeMax, Sports Authority, Target [3]
Clinton Valley
  Sterling Heights, MI     100 %     1985/1996/2009       10               50,852       50,852       45,348       96,200       96,200       83,324       86.6 %     518,170       6.22     Hobby Lobby
Clinton Valley Mall
  Sterling Heights, MI     100 %     1977/1996/2002       8               55,175       55,175       44,106       99,281       99,281       99,281       100.0 %     1,628,581       16.40     Office Depot, DSW Shoe Warehouse
Eastridge Commons
  Flint, MI     100 %     1990/1996/2001       16       117,777       117,972       235,749       51,704       287,453       169,676       163,322       96.3 %     1,596,012       9.77     Farmer Jack (A&P) [4], Office Depot[4], Target [3], TJ Maxx
Edgewood Towne Center
  Lansing, MI     100 %     1990/1996/2001       17       227,193       23,524       250,717       62,233       312,950       85,757       72,722       84.8 %     814,230       11.20     OfficeMax, Sam’s Club [3], Target [3]
Fairlane Meadows
  Dearborn, MI     100 %     1987/2003/NA       23       201,300       56,586       257,886       80,922       338,808       137,508       120,223       87.4 %     1,615,197       13.44     Best Buy, Citi Trends, Target [3], Burlington Coat Factory [3]
Fraser Shopping Center
  Fraser, MI     100 %     1977/1996/NA       8               32,384       32,384       39,163       71,547       71,547       51,335       71.8 %     299,648       5.84     Oakridge Market
Gaines Marketplace
  Gaines Twp., MI     100 %     2004/2004/NA       15               351,981       351,981       40,188       392,169       392,169       387,669       98.9 %     1,642,974       4.24     Meijer, Staples, Target


17


Table of Contents

 
                                                                                                                 
              Year Constructed /
                                                                       
              Acquired / Year of
    Number
    Total Shopping Center GLA:                                    
              Latest Renovation
    of
    Anchors:                 Company Owned GLA     Annualized Base Rent      
Property
  Location   Ownership %     or Expansion(1)     Units     Non-Company Owned     Company Owned     Total Anchor GLA     Non-Anchor GLA     Total     Total     Leased     Occupancy     Total     PSF     Anchors[2]
 
Hoover Eleven
  Warren, MI     100 %     1989/2003/NA       47               153,810       153,810       130,960       284,770       284,770       235,230       82.6 %     2,914,308       12.39     Kroger, Marshalls, OfficeMax
Jackson Crossing
  Jackson, MI     100 %     1967/1996/2002       64       254,242       222,192       476,434       176,576       653,010       398,768       369,633       92.7 %     3,406,363       9.22     Kohl’s, Sears [3], Target [3], TJ Maxx, Toys “R” Us, Best Buy, Bed Bath & Beyond, Jackson 10 Theater
Jackson West
  Jackson, MI     100 %     1996/1996/1999       5               194,484       194,484       15,837       210,321       210,321       190,838       90.7 %     1,357,418       7.11     Lowe’s, Michaels, OfficeMax
Kentwood Towne Centre
  Kentwood, MI     77.88 %     1988/1996//NA       17       101,909       122,887       224,796       58,265       283,061       181,152       158,952       87.7 %     987,766       6.21     Hobby Lobby, OfficeMax, Rooms Today [3]
Lake Orion Plaza
  Lake Orion, MI     100 %     1977/1996/NA       9               126,195       126,195       14,878       141,073       141,073       136,073       96.5 %     527,281       3.87     Hollywood Super Market, Kmart
Lakeshore Marketplace
  Norton Shores, MI     100 %     1996/2003/NA       21       126,800       258,638       385,438       89,015       474,453       347,653       337,142       97.0 %     2,577,690       7.65     Barnes & Noble, Dunham’s, Elder-Beerman, Hobby Lobby, T J Maxx, Toys “R” Us, Target[3]
Livonia Plaza
  Livonia, MI     100 %     1988/2003/NA       20               93,380       93,380       43,042       136,422       136,422       123,378       90.4 %     1,287,187       10.43     Kroger, TJ Maxx
Madison Center
  Madison Heights, MI     100 %     1965/1997/2000       15               167,830       167,830       59,258       227,088       227,088       183,957       81.0 %     1,168,960       6.35     Kmart
New Towne Plaza
  Canton Twp., MI     100 %     1975/1996/2005       17               126,425       126,425       62,798       189,223       189,223       172,298       91.1 %     1,698,051       9.86     Kohl’s, Jo-Ann
Oak Brook Square
  Flint, MI     100 %     1982/1996/NA       20               79,744       79,744       72,629       152,373       152,373       143,773       94.4 %     1,227,216       8.54     TJ Maxx, Hobby Lobby
Roseville Towne Center
  Roseville, MI     100 %     1963/1996/2004       9               206,747       206,747       40,221       246,968       246,968       246,968       100.0 %     1,702,773       6.89     Marshalls, Wal-Mart, Office Depot[4]
Shoppes at Fairlane Meadows
  Dearborn, MI     100 %     2007/NA/NA       8                           19,925       19,925       19,925       15,197       76.3 %     365,540       24.05      
Southfield Plaza
  Southfield, MI     100 %     1969/1996/2003       14               128,339       128,339       37,660       165,999       165,999       164,649       99.2 %     1,335,486       8.11     Burlington Coat Factory, Marshalls, Staples
Tel-Twelve
  Southfield, MI     100 %     1968/1996/2005       21               479,869       479,869       43,542       523,411       523,411       520,411       99.4 %     5,589,278       10.74     Best Buy, DSW Shoe Warehouse, Lowe’s, Meijer, Michaels, Office Depot, PETsMART
West Oaks I
  Novi, MI     100 %     1979/1996/2004       8               213,717       213,717       30,270       243,987       243,987       243,987       100.0 %     2,384,688       9.77     Best Buy, DSW Shoe Warehouse, Gander Mountain, Home Goods, Michaels, OfficeMax
West Oaks II
  Novi, MI     100 %     1986/1996/2000       30       221,140       90,753       311,893       77,201       389,094       167,954       166,979       99.4 %     2,865,700       17.16     Value City Furniture [3], Bed Bath & Beyond [3], Marshalls, Toys “R” Us[3], Kohl’s[3], Jo-Ann
                                                                                                                 
Total/Average
                        459       2,000,212       3,483,517       5,483,729       1,482,961       6,966,690       4,966,478       4,647,089       93.6 %   $ 42,427,457     $ 9.13      
                                                                                                                 
North Carolina
                                                                                                               
Ridgeview Crossing
  Elkin, NC     100 %     1989/1997/1995       7               58,581       58,581       11,140       69,721       69,721       69,721       100.0 %   $ 252,771     $ 3.63     Belk Department Store, Ingles Market
                                                                                                                 
Total/Average
                        7             58,581       58,581       11,140       69,721       69,721       69,721       100.0 %   $ 252,771     $ 3.63      
                                                                                                                 
Ohio
                                                                                                               
Crossroads Centre
  Rossford, OH     100 %     2001/2001/NA       22       126,200       244,991       371,191       99,054       470,245       344,045       332,505       96.6 %   $ 2,987,079     $ 8.98     Home Depot, Target [3], Giant Eagle, Michaels, T J Maxx
OfficeMax Center
  Toledo, OH     100 %     1994/1996/NA       1               22,930       22,930             22,930       22,930       22,930       100.0 %     277,453       12.10     OfficeMax
Rossford Pointe
  Rossford, OH     100 %     2006/2005/NA       6               41,077       41,077       6,400       47,477       47,477       45,877       96.6 %     452,339       9.86     PETsMART, Office Depot[4]
Spring Meadows Place
  Holland, OH     100 %     1987/1996/2005       28       384,770       110,691       495,461       101,126       596,587       211,817       191,401       90.4 %     2,121,920       11.09     Dick’s Sporting Goods [3], Best Buy [3], Kroger [3], Target [3], Ashley Furniture, OfficeMax, PETsMART, T J Maxx, Sam’s Club[3], Big Lots[3]
Troy Towne Center
  Troy, OH     100 %     1990/1996/2003       18       197,109       86,584       283,693       58,026       341,719       144,610       141,110       97.6 %     879,214       6.23     Wal-Mart[3], Kohl’s
                                                                                                                 
Total/Average
                        75       708,079       506,273       1,214,352       264,606       1,478,958       770,879       733,823       95.2 %   $ 6,718,005     $ 9.15      
                                                                                                                 

18


Table of Contents

 
                                                                                                                 
              Year Constructed /
                                                                       
              Acquired / Year of
    Number
    Total Shopping Center GLA:                                    
              Latest Renovation
    of
    Anchors:                 Company Owned GLA     Annualized Base Rent      
Property
  Location   Ownership %     or Expansion(1)     Units     Non-Company Owned     Company Owned     Total Anchor GLA     Non-Anchor GLA     Total     Total     Leased     Occupancy     Total     PSF     Anchors[2]
 
South Carolina
                                                                                                               
Taylors Square
  Taylors, SC     100 %     1989/1997/2005       13       207,445             207,445       33,791       241,236       33,791       28,048       83.0 %   $ 468,813     $ 16.71     Wal-Mart[3]
                                                                                                                 
Total/Average
                        13       207,445             207,445       33,791       241,236       33,791       28,048       83.0 %   $ 468,813     $ 16.71      
                                                                                                                 
Tennessee
                                                                                                               
Northwest Crossing
  Knoxville, TN     100 %     1989/1997/NA       10       207,945       66,346       274,291       29,933       304,224       96,279       94,779       98.4 %   $ 810,523     $ 8.55     Wal-Mart[3], Ross Dress for Less, HH Gregg
Northwest Crossing II
  Knoxville, TN     100 %     1999/1999/NA       2               23,500       23,500       4,674       28,174       28,174       28,174       100.0 %     320,719       11.38     OfficeMax
                                                                                                                 
Total/Average
                        12       207,945       89,846       297,791       34,607       332,398       124,453       122,953       98.8 %   $ 1,131,241     $ 9.20      
                                                                                                                 
Wisconsin
                                                                                                               
East Town Plaza
  Madison, WI     100 %     1992/2000/2000       18       132,995       144,685       277,680       64,274       341,954       208,959       185,551       88.8 %   $ 1,702,503     $ 9.18     Burlington Coat Factory, Marshalls, Jo-Ann, Borders, Toys “R” Us[3], Shopko[3]
                                                                                                                 
Total/Average
                        18       132,995       144,685       277,680       64,274       341,954       208,959       185,551       88.8 %   $ 1,702,503     $ 9.18      
                                                                                                                 
Wholly-Owned Subtotal/Average
                        957       3,631,857       5,737,521       9,369,378       2,820,389       12,189,767       8,557,910       8,006,450       93.6 %   $ 75,988,916     $ 9.49      
                                                                                                                 
Wholly-Owned — Under Redevelopment:
                                                                                                               
Rivertowne Square
  Deerfield Beach, FL     100 %     1980/1998/NA       16               90,173       90,173       46,474       136,647       136,647       128,547       94.1 %   $ 1,138,496     $ 8.86     Beall’s Outlet, Winn-Dixie
Southbay Shopping Center
  Osprey, FL     100 %     1978/1998/NA       19               31,700       31,700       65,090       96,790       96,790       77,765       80.3 %     607,287       7.81     Beall’s Clearance Store
Holcomb Center
  Roswell, GA     100 %     1986/1996/NA       25               39,668       39,668       67,385       107,053       107,053       20,584       19.2 %     204,985       9.96      
The Towne Center at Aquia[5]
  Stafford, VA     100 %     1989/1998/NA       17               86,184       86,184       52,325       138,509       138,509       126,863       91.6 %     2,531,940       19.96     Northrop Grumman, Regal Cinemas
West Allis Towne Centre
  West Allis, WI     100 %     1987/1996/NA       27               179,818       179,818       125,363       305,181       305,181       251,050       82.3 %     1,657,047       6.60     Burlington Coat Factory, Kmart, Office Depot
                                                                                                                 
Total/Average
                        104             427,543       427,543       356,637       784,180       784,180       604,809       77.1 %   $ 6,139,755     $ 10.15      
                                                                                                                 
Wholly-Owned Total/Average
                        1061       3,631,857       6,165,064       9,796,921       3,177,026       12,973,947       9,342,090       8,611,259       92.2 %   $ 82,128,670     $ 9.54      
                                                                                                                 
Joint Venture Portfolio at 100%
                                                                                                               
Florida
                                                                                                               
Cocoa Commons
  Cocoa, FL     30 %     2001/2007/NA       23               51,420       51,420       38,696       90,116       90,116       76,920       85.4 %   $ 940,309     $ 12.22     Publix
Cypress Point
  Clearwater, FL     30 %     1983/2007/NA       22               103,085       103,085       64,195       167,280       167,280       146,853       87.8 %     1,746,669       11.89     Burlington Coat Factory, The Fresh Market
Kissimmee West
  Kissimmee, FL     7 %     2005/2005/NA       17       184,600       67,000       251,600       48,586       300,186       115,586       110,386       95.5 %     1,343,687       12.17     Jo-Ann, Marshalls,Target [3]
Martin Square
  Stuart, FL     30 %     1981/2005/NA       14               291,432       291,432       39,673       331,105       331,105       301,735       91.1 %     1,856,101       6.15     Home Depot, Kmart, Staples
Mission Bay Plaza
  Boca Raton, FL     30 %     1989/2004/NA       56               159,147       159,147       113,719       272,866       272,866       259,680       95.2 %     4,949,658       19.06     Albertsons, LA Fitness Sports Club, OfficeMax, Toys “R” Us
Plaza at Delray, The
  Delray Beach, FL     20 %     1979/2004/NA       48               193,967       193,967       137,529       331,496       331,496       255,868       77.2 %     3,977,614       15.55     Books-A-Million, Marshalls, Publix, Regal Cinemas, Staples
Shenandoah Square
  Davie, FL     40 %     1989/2001/NA       43               42,112       42,112       81,534       123,646       123,646       115,516       93.4 %     1,794,987       15.54     Publix
Shoppes of Lakeland
  Lakeland, FL     7 %     1985/1996/NA       22       123,400       122,441       245,841       66,447       312,288       188,888       157,072       83.2 %     1,861,295       11.85     Michaels, Ashley Furniture, Target [3]
Treasure Coast Commons
  Jensen Beach, FL     30 %     1996/2004/NA       3               92,979       92,979             92,979       92,979       92,979       100.0 %     1,154,920       12.42     Barnes & Noble, OfficeMax, Sports Authority
Village of Oriole Plaza
  Delray Beach, FL     30 %     1986/2005/NA       39               42,112       42,112       113,640       155,752       155,752       151,272       97.1 %     2,107,810       13.93     Publix
Village Plaza
  Lakeland, FL     30 %     1989/2004/NA       25               64,504       64,504       82,251       146,755       146,755       114,372       77.9 %     1,442,485       12.61     Staples
Vista Plaza
  Jensen Beach, FL     30 %     1998/2004/NA       9               87,072       87,072       22,689       109,761       109,761       81,347       74.1 %     1,067,602       13.12     Bed Bath & Beyond, Michaels

19


Table of Contents

 
                                                                                                                 
              Year Constructed /
                                                                       
              Acquired / Year of
    Number
    Total Shopping Center GLA:                                    
              Latest Renovation
    of
    Anchors:                 Company Owned GLA     Annualized Base Rent      
Property
  Location   Ownership %     or Expansion(1)     Units     Non-Company Owned     Company Owned     Total Anchor GLA     Non-Anchor GLA     Total     Total     Leased     Occupancy     Total     PSF     Anchors[2]
 
West Broward Shopping Center
  Plantation, FL     30 %     1965/2005/NA       19               81,801       81,801       74,435       156,236       156,236       151,242       96.8 %     1,571,483       10.39     Badcock, National Pawn Shop, Save-A-Lot, US Postal Service
                                                                                                                 
Total/Average
                        340       308,000       1,399,072       1,707,072       883,394       2,590,466       2,282,466       2,015,242       88.3 %   $ 25,814,622     $ 12.81      
                                                                                                                 
Georgia
                                                                                                               
Paulding Pavilion
  Hiram, GA     20 %     1995/2006/NA       13               60,509       60,509       24,337       84,846       84,846       78,196       92.2 %   $ 1,201,349     $ 15.36     Sports Authority, Staples
Peachtree Hill
  Duluth, GA     20 %     1986/2007/NA       35               87,411       87,411       63,461       150,872       150,872       98,120       65.0 %     1,106,524       11.28     Kroger
                                                                                                                 
Total/Average
                        48             147,920       147,920       87,798       235,718       235,718       176,316       74.8 %   $ 2,307,873     $ 13.09      
                                                                                                                 
Illinois
                                                                                                               
Market Plaza
  Glen Ellyn, IL     20 %     1965/2007/1996       35               66,079       66,079       96,975       163,054       163,054       154,974       95.0 %   $ 2,291,508     $ 14.79     Jewel Osco, Staples
Rolling Meadows
  Rolling Meadows, IL     20 %     1956/2008/1995       18               83,230       83,230       47,206       130,436       130,436       102,107       78.3 %     1,246,536       12.21     Jewel Osco
                                                                                                                 
Total/Average
                        53             149,309       149,309       144,181       293,490       293,490       257,081       87.6 %   $ 3,538,044     $ 13.76      
                                                                                                                 
Indiana
                                                                                                               
Merchants’ Square
  Carmel, IN     20 %     1970/2004/NA       48       80,000       69,504       149,504       209,503       359,007       279,007       239,171       85.7 %   $ 2,595,632     $ 10.85     Marsh [3], Cost Plus, Hobby Lobby
Nora Plaza
  Indianapolis, IN     7 %     1958/2007/2002       25       123,800       57,713       181,513       82,325       263,838       140,038       135,554       96.8 %     1,806,048       13.32     Target [3], Marshalls, Whole Foods
                                                                                                                 
Total/Average
                        73       203,800       127,217       331,017       291,828       622,845       419,045       374,725       89.4 %   $ 4,401,680     $ 11.75      
                                                                                                                 
Maryland
                                                                                                               
Crofton Centre
  Crofton, MD     20 %     1974/1996/NA       18               196,570       196,570       54,941       251,511       251,511       223,655       88.9 %   $ 1,552,750     $ 6.94     Basics/Metro, Kmart, Gold’s Gym
                                                                                                                 
Total/Average
                        18             196,570       196,570       54,941       251,511       251,511       223,655       88.9 %   $ 1,552,750     $ 6.94      
                                                                                                                 
Michigan
                                                                                                               
Gratiot Crossing
  Chesterfield, MI     30 %     1980/2005/NA       15               122,406       122,406       43,138       165,544       165,544       150,586       91.0 %   $ 1,317,840     $ 8.75     Jo-Ann, Kmart
Hunter’s Square
  Farmington Hills, MI     30 %     1988/2005/NA       37               194,236       194,236       163,066       357,302       357,302       349,601       97.8 %     5,878,292       16.81     Bed Bath & Beyond, Borders, Loehmann’s, Marshalls, T J Maxx
Millennium Park
  Livonia, MI     30 %     2000/2005/NA       14       352,641       241,850       594,491       39,524       634,015       281,374       242,550       86.2 %     3,196,275       13.18     Home Depot, Marshalls, Michaels, PETsMART, Costco[3], Meijer[3]
Southfield Plaza Expansion
  Southfield, MI     50 %     1987/1996/2003       11                           19,410       19,410       19,410       12,410       63.9 %     203,584       16.40      
West Acres Commons
  Flint, MI     40 %     1998/2001/NA       14               59,889       59,889       35,200       95,089       95,089       82,489       86.7 %     1,033,485       12.53     VG’s Food Center
Winchester Center
  Rochester Hills, MI     30 %     1980/2005/NA       16               224,356       224,356       89,309       313,665       313,665       313,665       100.0 %     4,379,577       13.96     Borders, Dick’s Sporting Goods, Linens ’N Things [6], Marshalls, Michaels, PETsMART
                                                                                                                 
Total/Average
                        107       352,641       842,737       1,195,378       389,647       1,585,025       1,232,384       1,151,301       93.4 %   $ 16,009,053     $ 13.91      
                                                                                                                 
New Jersey
                                                                                                               
Chester Springs Shopping Center
  Chester, NJ     20 %     1970/1996/1999       41               81,760       81,760       142,393       224,153       224,153       194,320       86.7 %   $ 2,653,545     $ 13.66     Shop-Rite Supermarket, Staples
                                                                                                                 
Total/Average
                        41             81,760       81,760       142,393       224,153       224,153       194,320       86.7 %   $ 2,653,545     $ 13.66      
                                                                                                                 
Ohio
                                                                                                               
Olentangy Plaza
  Columbus, OH     20 %     1981/2007/1997       41               116,707       116,707       114,800       231,507       231,507       215,899       93.3 %   $ 2,282,182     $ 10.57     Eurolife Furniture, Marshalls, MicroCenter, Sunflower Market[4]
The Shops on Lane Avenue
  Upper Arlington, OH     20 %     1952/2007/2004       40               46,574       46,574       115,236       161,810       161,810       151,399       93.6 %     2,798,954       18.49     Bed Bath & Beyond, Whole Foods
                                                                                                                 
Total/Average
                        81             163,281       20163,281       230,036       393,317       393,317       367,298       93.4 %   $ 5,081,136     $ 13.83      
                                                                                                                 
JV Subtotal/Average at 100%
                        761       864,441       3,107,866       3,972,307       2,224,218       6,196,525       5,332,084       4,759,938       89.3 %   $ 61,358,703     $ 12.89      
                                                                                                                 

20


Table of Contents

 
                                                                                                                 
              Year Constructed /
                                                                       
              Acquired / Year of
    Number
    Total Shopping Center GLA:                                    
              Latest Renovation
    of
    Anchors:                 Company Owned GLA     Annualized Base Rent      
Property
  Location   Ownership %     or Expansion(1)     Units     Non-Company Owned     Company Owned     Total Anchor GLA     Non-Anchor GLA     Total     Total     Leased     Occupancy     Total     PSF     Anchors[2]
 
Joint Venture Under Redevelopment:
                                                                                                               
Marketplace of Delray
  Delray Beach, FL     30 %     1981/2005/NA       48               107,190       107,190       131,711       238,901       238,901       181,525       76.0 %     2,281,194       12.57     Office Depot, Winn-Dixie
Collins Pointe Plaza
  Cartersville, GA     20 %     1987/2006/NA       18               46,358       46,358       47,909       94,267       94,267       35,225       37.4 %   $ 423,956     $ 12.04      
Troy Marketplace
  Troy, MI     30 %     2000/2005/NA       12       20,600       193,360       213,960       28,813       242,773       222,173       168,678       75.9 %     3,009,291       17.84     Golfsmith, LA Fitness, Nordstom Rack, PETsMART, REI [3]
The Shops at Old Orchard
  W. Bloomfield, MI     30 %     1972/2007/NA       17               36,044       36,044       39,975       76,019       76,019       68,769       90.5 %     1,146,846       16.68     Plum Market
                                                                                                                 
Total/Average
                        95       20,600       382,952       403,552       248,408       651,960       631,360       454,197       71.9 %   $ 6,861,287     $ 15.11      
                                                                                                                 
JV Total/Average at 100%
                        856       885,041       3,490,818       4,375,859       2,472,626       6,848,485       5,963,444       5,214,135       87.4 %   $ 68,219,991     $ 13.08      
                                                                                                                 
PORTFOLIO
                                                                                                               
TOTAL/AVERAGE
                        1917       4,516,898       9,655,882       14,172,780       5,649,652       19,822,432       15,305,534       13,825,394       90.3 %   $ 150,348,661     $ 10.87      
                                                                                                                 
 
 
[1] Represents year constructed/acquired/year of latest renovation or expansion by either the Company or the former Ramco Group, as applicable.
 
[2] We define anchor tenants as single tenants which lease 19,000 square feet or more at a property.
 
[3] Non-Company owned anchor space
 
[4] Tenant closed — lease obligated.
 
[5] The Town Center at Aquia is considered a development project by the Company.
 
[6] Tenant closed in bankruptcy, though leases are guaranteed by CVS.

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Table of Contents

 
Tenant Information
 
The following table sets forth, as of December 31, 2009, information regarding space leased to tenants which, individually account for 2% or more of total annualized base rental revenue from our properties:
 
                                         
            % of Total
       
    Total
  Annualized
  Annualized
  Aggregate
  % of Total
    Number of
  Base Rental
  Base Rental
  GLA Leased
  Company
Tenant
  Stores   Revenue   Revenue   by Tenant   Owned GLA
 
TJ Maxx / Marshalls
    20     $ 5,941,987       4.0 %     636,154       4.2 %
Publix
    12       4,534,891       3.0 %     574,794       3.8 %
OfficeMax
    12       3,083,183       2.1 %     273,720       1.8 %
 
Included in the 12 Publix locations listed above is one location (representing 47,955 square feet of GLA) which is leased to but not currently occupied by Publix, although Publix remains obligated under the lease agreement, which expires in 2016.
 
The following table sets forth the total GLA leased to anchors (defined as tenants occupying at least 19,000 square feet), leased to retail (non-anchor) tenants, and available space, in the aggregate, as of December 31, 2009:
 
                                 
          % of Total
             
    Annualized
    Annualized
          % of Total
 
    Base Rental
    Base Rental
    Company
    Company
 
Type of Tenant
  Revenue     Revenue     Owned GLA     Owned GLA  
 
Anchor
  $ 75,335,334       50.1 %     9,167,287       59.9 %
Retail (non-anchor)
    75,013,327       49.9 %     4,658,107       30.4 %
Available
                1,480,140       9.7 %
                                 
Total
  $ 150,348,661       100.0 %     15,305,534       100.0 %
                                 
 
The following table sets forth the total GLA leased to national, local and regional tenants, in the aggregate, as of December 31, 2009:
 
                                 
          % of Total
             
    Annualized
    Annualized
    Aggregate
    % of Total
 
    Base Rental
    Base Rental
    GLA Leased
    Company Owned
 
Type of Tenant
  Revenue     Revenue     by Tenant     GLA Leased  
 
National
  $ 101,091,814       67.2 %     9,372,159       67.8 %
Local
    28,160,544       18.7 %     1,892,105       13.7 %
Regional
    21,096,303       14.1 %     2,561,130       18.5 %
                                 
Total
  $ 150,348,661       100.0 %     13,825,394       100.0 %
                                 


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The Company has historically renewed over 70% of expiring leases in the past 10 years. The following table sets forth lease expirations for the next five years and thereafter at our properties assuming that no renewal options are exercised:
 
                                                 
                        % of Total
        Average
      % of Total
      Leased
        Annualized Base
  Annualized
  Annualized
  Leased
  Company
        Rental Revenue per
  Base Rental
  Base Rental
  Company
  Owned GLA
    Number of
  square foot as of
  Revenue as of
  Revenue as of
  Owned GLA
  Under
    Leases
  12/31/09 Under
  12/31/09 Under
  12/31/09 Under
  Expiring
  Expiring
Lease Expiration
  Expiring   Expiring Leases   Expiring Leases   Expiring Leases   (in square feet)   Leases
 
2010
    244     $ 10.73     $ 11,218,639       7.5 %     1,045,230       7.6 %
2011
    291       12.61       18,593,707       12.4 %     1,474,552       10.7 %
2012
    276       12.23       18,166,862       12.1 %     1,485,537       10.7 %
2013
    215       12.00       19,564,551       13.0 %     1,630,464       11.8 %
2014
    173       9.32       14,753,379       9.8 %     1,582,899       11.5 %
Thereafter
    329       10.30       68,051,523       45.3 %     6,606,712       47.8 %
 
Item 3.   Legal Proceedings.
 
There are no material pending legal or governmental proceedings, or to our knowledge, threatened legal or governmental proceedings, against or involving us or our properties.
 
Item 4.   Submission of Matters to a Vote of Security Holders.
 
None.


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PART II
 
Item 5.   Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
 
Market Information — Our common shares are currently listed and traded on the New York Stock Exchange (“NYSE”) under the symbol “RPT”. On March 9, 2010, the closing price of our common shares on the NYSE was $11.04.
 
SHAREHOLDER RETURN PERFORMANCE GRAPH
 
The following line graph sets forth the cumulative total return on a $100 investment (assuming the reinvestment of dividends) in each of the Company’s common stock, the NAREIT Equity Index, the MSCI US REIT Index and the S&P 500 Index, for the period December 31, 1999 through December 31, 2009. The stock price performance shown is not necessarily indicative of future price performance.
 
Comparison of Cumulative Total Return
 
(PERFORMANCE GRAPH)
 
                                                                                         
    Period Ending
Index   12/31/99   12/31/00   12/31/01   12/31/02   12/31/03   12/31/04   12/31/05   12/31/06   12/31/07   12/31/08   12/31/09
Ramco-Gershenson Properties Trust
    100.00       114.99       158.15       212.20       327.18       396.35       348.37       528.16       314.80       100.67       171.96  
                                                                                         
NAREIT Equity
    100.00       126.37       143.97       149.47       204.98       269.70       302.51       408.57       344.46       214.50       274.54  
                                                                                         
S&P 500
    100.00       90.90       80.09       62.39       80.29       89.02       93.40       108.15       114.09       71.88       90.90  
                                                                                         
MSCI US REIT (RMS)
    100.00       126.81       143.08       148.30       202.79       266.64       298.99       406.39       338.05       209.69       269.68  
                                                                                         


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The following table shows high and low closing prices per share for each quarter in 2009 and 2008:
 
                 
    Share Price
Quarter Ended
  High   Low
 
March 31, 2009
  $ 7.16     $ 3.88  
June 30, 2009
    11.60       6.01  
September 30, 2009
    10.82       8.41  
December 31, 2009
    9.94       7.82  
                 
March 31, 2008
  $ 24.04     $ 19.48  
June 30, 2008
    23.09       20.54  
September 30, 2008
    23.75       18.77  
December 31, 2008
    21.49       3.72  
 
Holders — The number of holders of record of our common shares was 1,769 at March 9, 2010. A substantially greater number of holders are beneficial owners whose shares of record are held by banks, brokers and other financial institutions.
 
Dividends — We declared the following cash distributions per share to our common shareholders for the years ended December 31, 2009 and 2008:
 
                 
    Dividend
   
Record Date
  Distribution   Payment Date
 
March 20, 2009
  $ 0.2313       April 1, 2009  
June 20, 2009
  $ 0.2313       July 1, 2009  
September 20, 2009
  $ 0.1633       October 1, 2009  
December 20, 2009
  $ 0.1633       January 4, 2010  
 
                 
    Dividend
   
Record Date
  Distribution   Payment Date
 
March 20, 2008
  $ 0.4625       April 1, 2008  
June 20, 2008
  $ 0.4625       July 1, 2008  
September 20, 2008
  $ 0.4625       October 1, 2008  
December 20, 2008
  $ 0.2313       January 5, 2009  
 
Under the Code, a REIT must meet certain requirements, including a requirement that it distribute annually to its shareholders at least 90% of its REIT taxable income, excluding net capital gain. Distributions paid by us are at the discretion of our Board and depend on our actual net income available to common shareholders, cash flow, financial condition, capital requirements, the annual distribution requirements under REIT provisions of the Code and such other factors as the Board deems relevant.
 
We have a Dividend Reinvestment Plan (the “DRP”) which allows our common shareholders to acquire additional common shares by automatically reinvesting cash dividends. Shares are acquired pursuant to the DRP at a price equal to the prevailing market price of such common shares, without payment of any brokerage commission or service charge. Common shareholders who do not participate in the DRP continue to receive cash distributions, as declared.
 
For information on the Company’s equity compensation plans as of December 31, 2009, refer to Item 12 of Part III of this filing.


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Item 6.   Selected Financial Data (in thousands, except per share data and number of properties).
 
The following table sets forth our selected consolidated financial data and should be read in conjunction with the Consolidated Financial Statements and Notes to the Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations included elsewhere in this report.
 
                                         
    Year Ended December 31,  
    2009     2008     2007     2006     2005  
    (In thousands, except per share and Other Data not in dollars)  
 
Operating Data:
                                       
Total revenue
  $ 124,140     $ 134,629     $ 145,205     $ 146,418     $ 138,728  
Operating income
    6,482       5,265       10,152       13,626       14,335  
Gain on sale of real estate assets, net of taxes
    5,010       19,595       32,643       23,388       1,136  
Income from continuing operations
    12,820       27,366       45,291       40,016       17,871  
Discontinued operations
                                       
Gain (loss) on sale of property
    2,886       (463 )           1,075        
Income from operations
    230       529       694       1,004       3,982  
                                         
Net income
    15,936       27,432       45,985       42,095       21,853  
Net income attributable to noncontrolling interest
                                       
in subsidiaries
    (2,216 )     (3,931 )     (7,310 )     (6,471 )     (3,360 )
Preferred share dividends
                (3,146 )     (6,655 )     (6,655 )
Loss on redemption of preferred shares
                (1,269 )            
                                         
Net income attributable to RPT common shareholders
  $ 13,720     $ 23,501     $ 34,260     $ 28,969     $ 11,838  
                                         
Earnings Per Share Data:
                                       
From continuing operations attributable to RPT common
                                       
shareholders:
                                       
Basic earnings per RPT common share
  $ 0.50     $ 1.27     $ 1.89     $ 1.63     $ 0.50  
Diluted earnings per RPT common share
    0.50       1.27       1.88     $ 1.63     $ 0.50  
Net income attributable to RPT common shareholders:
                                       
Basic earnings per RPT common share
  $ 0.62     $ 1.27     $ 1.92     $ 1.74     $ 0.70  
Diluted earnings per RPT common share
    0.62       1.27       1.91       1.73       0.70  
Cash dividends declared per RPT common share
  $ 0.79     $ 1.62     $ 1.85     $ 1.79     $ 1.75  
Distributions to RPT common shareholders
  $ 17,974     $ 34,338     $ 32,156     $ 29,737     $ 29,167  
Weighted average shares outstanding:
                                       
Basic
    22,193       18,471       17,851       16,665       16,837  
Diluted
    22,193       18,478       18,529       16,716       16,880  
Balance Sheet Data (at December 31):
                                       
Cash and cash equivalents
  $ 8,800     $ 5,295     $ 14,977     $ 11,550     $ 7,136  
Accounts receivable, net
    31,900       34,020       35,787       33,692       32,341  
Investment in real estate (before accumulated depreciation)
    995,451       1,005,109       1,045,372       1,048,602       1,047,304  
Total assets
    997,957       1,014,526       1,088,499       1,064,870       1,125,275  
Mortgages and notes payable
    552,551       662,601       690,801       676,225       724,831  
Total liabilities
    591,392       701,488       765,742       720,722       774,442  
Total RPT shareholders’ equity
    367,228       273,714       281,517       304,547       312,418  
Noncontrolling interest in subsidiaries
    39,337       39,324       41,240       39,601       38,415  
Total shareholders’ equity
    406,565       313,038       322,757       344,148       350,833  
Other Data:
                                       
Funds from operations available
                                       
to RPT common shareholders(1)
  $ 45,298     $ 47,362     $ 54,975     $ 54,604     $ 47,896  
Cash provided by operating activities
    48,064       26,998       85,988       46,785       44,605  
Cash (used in) provided by investing activities
    (3,445 )     33,602       23,182       42,113       (86,517 )
Cash (used in) provided by financing activities
    (41,114 )     (70,282 )     (105,743 )     (84,484 )     41,238  
Number of properties (at December 31)(2)
    88       89       89       81       84  
Company owned GLA (at December 31)(2)
    15,306       15,914       16,030       14,645       15,000  
Occupancy rate (at December 31)(2)
    90.3 %     91.3 %     92.1 %     93.6 %     93.7 %
 
 
(1) We consider funds from operations, also known as “FFO,” an appropriate supplemental measure of the financial performance of an equity REIT. Under the National Association of Real Estate Investment Trusts (“NAREIT”) definition, FFO represents net income, excluding extraordinary items (as defined under


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accounting principles generally accepted in the United States of America (“GAAP”)), and gain (loss) on sales of depreciable property, plus real estate related depreciation and amortization (excluding amortization of financing costs), and after adjustments for unconsolidated partnerships and joint ventures. See “Funds From Operations” in Item 7 for a discussion of FFO and a reconciliation of FFO to net income.
 
(2) Includes properties owned by us and our joint ventures.
 
Item 7.   Management’s Discussion and Analysis of Financial Condition and Results of Operations.
 
The following discussion should be read in conjunction with the Consolidated Financial Statements, the Notes thereto, and the comparative summary of selected financial data appearing elsewhere in this report. Discontinued operations are discussed in Note 3 of the Notes to the Consolidated Financial Statements in Item 8. The financial information in this Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on results from continuing operations.
 
In June 2009, the Financial Accounting Standards Board (“FASB”) issued the FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles, also known as FASB Accounting Standards Codification (“ASC”) 105-10, “Generally Accepted Accounting Principles”, (“ASC 105-10”). ASC 105-10 establishes the FASB Accounting Standards Codification (“Codification”) as the single source of authoritative U.S. GAAP recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The Codification supersedes all existing non-SEC accounting and reporting standards. All other non-grandfathered, non-SEC accounting literature not included in the Codification will become non-authoritative. Following the Codification, the FASB will not issue new standards in the form of Statements, FASB Staff Positions or Emerging Issues Task Force Abstracts. The FASB, instead, will issue Accounting Standards Updates (“ASU”), which will serve to update the Codification, provide background information about the guidance and provide the basis for conclusions on the changes to the Codification. The FASB’s Codification project was not intended to change GAAP, however it will change the way the guidance is organized and presented. As a result, these changes will have a significant impact on how companies reference GAAP in their financial statements and in their accounting policies for financial statements issued for interim and annual periods ending after September 15, 2009. The Company implemented the Codification in the third quarter 2009. Any technical references contained in the accompanying financial statements and notes to consolidated financial statements have been updated to correspond to the new Codification topics, as appropriate. New standards not yet codified have been referenced as issued and will be updated when codified.
 
Overview
 
We are a fully integrated, self-administered, publicly-traded REIT which owns, develops, acquires, manages and leases community shopping centers and one enclosed regional mall in the Midwestern, Southeastern and Mid-Atlantic regions of the United States. At December 31, 2009, we owned interests in 88 shopping centers, comprised of 65 community centers, 21 power centers, one single tenant retail property, and one enclosed regional mall, totaling approximately 19.8 million square feet of GLA. We or our joint ventures own approximately 15.3 million square feet of such GLA, with the remaining portion owned by various anchor stores.
 
In the third quarter of 2009, the Company’s Board of Trustees completed a review of financial and strategic alternatives announced in the first quarter of 2009. The Company believes it is best positioned going forward to optimize shareholder value through a stand-alone business strategy focused on the following initiatives:
 
  •  De-leverage the balance sheet and strengthen the Company’s financial position by utilizing a variety of measures including reducing debt through the sale of non-core assets, growth in shopping center operating income and other actions, where appropriate
 
  •  Increase real estate value by aggressively leasing vacant spaces and entering into new leases for occupied spaces when leases are about to expire
 
  •  Complete existing redevelopment projects and time future accretive redevelopments in a manner that allows completed projects to positively impact operating income while new projects are undertaken


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  •  Conservatively acquire shopping centers under the appropriate economic conditions that have the potential to produce superior returns and geographic market diversification
 
2009 Highlights include:
 
Significant Transactions and De-leveraging Activities
 
In December 2009, the Company closed on a new $217 million secured credit facility (the “Credit Facility”) consisting of a $150 million secured revolving credit facility and a $67 million amortizing secured term loan facility. The terms of the Credit Facility provide that the revolving credit facility may be increased by up to $50 million at the Company’s request, dependent upon there being one or more lenders willing to acquire the additional commitment, for a total secured credit facility commitment of $267 million. The secured revolving credit facility matures in December 2012 and bears interest at LIBOR plus 350 basis points with a 2% LIBOR floor. The amortizing secured term loan facility also bears interest at LIBOR plus 350 basis points with a 2% LIBOR floor and requires a $33 million payment by September 2010 and a final payment of $34 million by June 2011. The new Credit Facility amended and restated the Company’s former $250 million unsecured credit facility which was comprised of a $150 million unsecured revolving credit facility and $100 million unsecured term loan facility.
 
Also in December 2009, the Company amended its secured revolving credit facility for The Towne Center at Aquia, reducing the facility from $40 million to $20 million. The revolving credit facility securing The Town Center at Aquia bears interest at LIBOR plus 350 basis points with a 2% LIBOR floor and matures in December 2010, with two, one-year extension options.
 
In September 2009, the Company successfully completed an equity offering of 12.075 million common shares, which included 1.575 million shares purchased pursuant to an over-allotment option granted to the underwriters. The offering price was $8.50 per common share ($0.01 par value per share) generating net proceeds of $96.2 million. The net proceeds from the equity offering were used to pay down the Company’s outstanding debt.
 
During the third quarter of 2009, the Company sold three unencumbered net leased real estate assets for net proceeds of approximately $27.4 million. The net proceeds from these asset sales were used to pay down the Company’s outstanding debt.
 
In August 2009, the Company sold Taylor Plaza, a stand-alone Home Depot in Taylor, MI, to a third party for net proceeds of $5.0 million. The Company recognized a gain on the sale of Taylor Plaza of approximately $2.9 million. Income from operations and the gain on the sale of Taylor Plaza are classified in discontinued operations on the consolidated statements of income and comprehensive income for all periods presented.
 
In September 2009, the Company sold a 207,945 square foot Wal-Mart at its Northwest Crossing shopping center in Knoxville, Tennessee and a 207,445 square foot Wal-Mart at its Taylors Square shopping center, in Greenville (Taylors), South Carolina. The Company retained ownership of the remaining portion of both shopping centers amounting to approximately 125,000 square feet at Northwest Crossing and approximately 34,000 square feet at Taylors Square. The two Wal-Mart sales to third parties generated combined net proceeds of approximately $22.4 million, and resulted in a net gain of approximately $4.7 million.
 
During 2009, there was no significant acquisition activity. Future acquisition activity will depend upon a number of factors, including market conditions, the availability of capital to the Company, and the prospects for creating value at acquired properties.
 
Corporate Governance
 
In 2009, the Company’s Board of Trustees made a number of significant best practices corporate governance changes further aligning the Company’s interests with those of its shareholders. These changes included the expansion of the Board with the addition of two outside trustees and the termination of the Company’s Shareholders Rights Plan. The Board also committed to declassify the Board of Trustees by seeking shareholder approval to amend the Company’s declaration of trust at the 2010 Annual Meeting of Shareholders. Furthermore, the roles of Chairman of the Board and Chief Executive Officer were separated with the election of a non-executive Chairman of the Board.


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Leasing
 
During 2009, the Company opened 80 new stores for the year at an average base rent of $12.60 per square foot, 15.9% above portfolio average rent. The Company renewed 219 leases for the year at rental rates 4.3% over prior rents paid.
 
The Company opened five anchor stores in 2009 at a combined average base rent of $9.04 per square foot, a 9.9% increase over portfolio average rents for anchor space. Additionally, we renewed 18 anchor leases, at an average base rent of $7.52 per square foot, achieving an increase of 5.4% over prior rental rates. Overall portfolio average base rents for anchor tenants increased to $8.22 per square foot in 2009 from $8.11 per square foot in 2008.
 
In 2009, the Company opened 75 non-anchor stores at a combined average base rent of $15.07 per square foot, a 6.4% decrease over portfolio average rents for non-anchor space. Additionally, we renewed 201 non-anchor leases, at an average base rent of $15.11 per square foot, achieving an increase of 3.6% over prior rental rates. Overall portfolio average base rents for non-anchor tenants decreased to $16.10 per square foot in 2009 from $16.51 per square foot for 2008.
 
The Company’s core operating portfolio, which excludes joint venture properties and properties under redevelopment, was 92.2% occupied at December 31, 2009, compared to 94.4% at December 31, 2008. Overall portfolio occupancy, which includes joint venture properties and properties under redevelopment, was 90.3% at December 31, 2009, compared to 91.3% at December 31, 2008.
 
Redevelopment
 
In 2010, the Company plans to focus on completing those redevelopment projects presently in progress. We and our joint ventures have eight redevelopment projects currently in progress, all with signed leases for the expansion or addition of an anchor or one or more out-lot tenants. We estimate the total project costs of the eight redevelopment projects in progress to be $46.0 million. Four of the redevelopment projects involve core operating properties included on our balance sheet and are expected to cost approximately $18.8 million of which $11.1 million has been spent as of December 31, 2009. For the four redevelopment projects at properties held by joint ventures, we estimate off-balance sheet project costs of approximately $27.2 million (our share is estimated to be $7.9 million) of which $17.4 million has been spent as of December 31, 2009 (our share is $5.1 million).
 
While we anticipate redevelopment projects will increase rental revenue upon completion, a majority of the projects has required taking some retail space off-line to accommodate the new/expanded tenancies. These measures have resulted in the loss of minimum rents and recoveries from tenants for those spaces removed from our pool of leasable space. The process of value-added redevelopment resulted in a short-term temporary reduction of net operating income and FFO. The Company expects that revenues related to our share of these redevelopment projects will be increased by approximately $3.4 million on annualized basis by the end of 2010.
 
Development
 
The Company is taking a conservative approach to the development of new shopping centers given current market conditions by curtailing further investment until leasing, construction financing and partnership requirements have been met. At December 31, 2009, the Company had four projects in development and pre-development. As of December 31, 2009, we and one of our joint ventures have spent $98.1 million on the four developments excluding certain land parcels we own through taxable REIT subsidiaries:
 
         
    Costs Incurred
 
    To Date
 
Development Project/Location
  (In millions)  
 
Hartland Towne Square — Hartland Twp., MI
  $ 25.6  
The Town Center at Aquia — Stafford, VA
    38.2  
Gateway Commons — Lakeland, FL
    20.3  
Parkway Shops — Jacksonville, FL
    14.0  
         
Total
  $ 98.1  
         


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We own 20% of the joint venture that is developing Hartland Towne Square. The Company is currently providing the mezzanine financing for the project, the balance of which was $11.8 million at December 31, 2009, with a total commitment of up to $58.0 million. As of December 31, 2009, the Company was also guarantor on a loan for $8.5 million to the joint venture. The Company intends to seek joint venture partners for The Town Center at Aquia, Gateway Commons, and Parkway Shops. It is the Company’s policy to only start vertical construction on new development projects after the project has received entitlements, significant anchor commitments, construction financing and joint venture partner commitments, if appropriate. We are active in the entitlement and pre-leasing phases at the development projects listed above. The Company does not expect to secure financing and to identify joint venture partners until the entitlement and pre-leasing phases are complete.
 
Critical Accounting Policies
 
Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon our Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of these Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Senior management has discussed the development, selection and disclosure of these estimates with the Audit Committee of our Board of Trustees. Actual results could materially differ from these estimates.
 
Critical accounting policies are those that are both significant to the overall presentation of our financial condition and results of operations and require management to make difficult, complex or subjective judgments. For example, significant estimates and assumptions have been made with respect to useful lives of assets, recovery ratios, capitalization of development and leasing costs, recoverable amounts of receivables and initial valuations and related amortization periods of deferred costs and intangibles, particularly with respect to property acquisitions. Our critical accounting policies have not materially changed during the year ended December 31, 2009. The following discussion relates to what we believe to be our most critical accounting policies that require our most subjective or complex judgment.
 
Allowance for Bad Debts
 
We provide for bad debt expense based upon the allowance method of accounting. We continuously monitor the collectibility of our accounts receivable (billed and unbilled, including straight-line) from specific tenants, analyze historical bad debts, customer credit worthiness, current economic trends and changes in tenant payment terms when evaluating the adequacy of the allowance for bad debts. When tenants are in bankruptcy, we make estimates of the expected recovery of pre-petition and post-petition claims. The period to resolve these claims can exceed one year. Management believes the allowance is adequate to absorb currently estimated bad debts. However, if we experience bad debts in excess of the allowance we have established, our operating income would be reduced.
 
Accounting for the Impairment of Long-Lived Assets
 
The Company periodically reviews whether events and circumstances subsequent to the acquisition or development of long-lived assets, or intangible assets subject to amortization, have occurred that indicate the remaining estimated useful lives of those assets may warrant revision or that the remaining balance of those assets may not be recoverable. If events and circumstances, including but not limited to, declines in occupancy and rental rates, tenant sales, net operating income and geographic location of our shopping center properties, indicate that the long-lived assets should be reviewed for possible impairment, we prepare projections to assess whether future cash flows, on a non-discounted basis, for the related assets are likely to exceed the recorded carrying amount of those assets to determine if an impairment of the carrying amount is appropriate. The cash flow projections consider factors common in the valuation of real estate, such as expected future operating income, trends in occupancy, rental rates and recovery ratios, as well as capitalization rates, leasing demands and competition in the marketplace.


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At December 31, 2009, the Company prepared undiscounted cash flow projections for eight shopping center properties that met management’s criteria for possible impairment testing. In all instances, the non-discounted cash flows exceeded the recorded carrying amounts of those individual properties. The least excess of non-discounted cash flow over recorded carrying value was 109% of the carrying value. Therefore none of the properties met the standards for impairment of long-lived assets.
 
Management is required to make subjective assessments as to whether there are impairments in value of its long-lived assets or intangible assets. Subsequent changes in estimated undiscounted cash flows arising from changes in our assumptions could affect the determination of whether impairment exists and whether the effects could have a material impact on the Company’s net income. To the extent impairment has occurred, the loss will be measured as the excess of the carrying amount of the property over the fair value of the property as determined by valuation techniques appropriate in the circumstances. The Company does not believe that the value of any long-lived asset or intangible asset was impaired at December 31, 2009.
 
In determining the estimated useful lives of intangible assets with finite lives, we consider the nature, life cycle position, and historical and expected future operating cash flows of each asset, as well as our commitment to support these assets through continued investment.
 
In 2008, the Company recognized a $5.1 million loss on the impairment of its Ridgeview Crossing shopping center in Elkin, North Carolina. The non-cash impairment charge is included in “restructuring, impairment of real estate assets, and other items” on the consolidated statements of income and comprehensive income. There were no impairment charges for the years ended December 31, 2009 and 2007. See Note 16 of the Notes to the Consolidated Financial Statements for further information.
 
Revenue Recognition
 
Shopping center space is generally leased to retail tenants under leases which are accounted for as operating leases. We recognize minimum rents using the straight-line method over the terms of the leases commencing when the tenant takes possession of the space. Certain of the leases also provide for additional revenue based on contingent percentage income which is recorded on an accrual basis once the specified target that triggers this type of income is achieved. The leases also typically provide for recoveries from tenants of common area maintenance, real estate taxes and other operating expenses. These recoveries are recognized as revenue in the period the applicable costs are incurred. Revenues from fees and management income are recognized in the period in which the services have been provided and the earnings process is complete. Lease termination income is recognized when a lease termination agreement is executed by the parties and the tenant vacates the space.
 
Share-Based Compensation
 
All share-based payments to employees, including grants of employee stock options, are recognized in the financial statements as compensation expense based upon the fair value on the grant date. We determine fair value of such awards using the Black-Scholes option pricing model. The Black-Scholes option pricing model incorporates certain assumptions such as risk-free interest rate, expected volatility, expected dividend yield and expected life of options, in order to arrive at a fair value estimate. Expected volatilities are based on the historical volatility of our common shares. Expected lives of options are based on the average expected holding period of our outstanding options and their remaining terms. The risk-free interest rate is based upon quoted market yields for United States treasury debt securities. The expected dividend yield is based on our historical dividend rates. We believe the assumptions selected by management are reasonable; however, significant changes could materially impact the results of the calculation of fair value.
 
Off Balance Sheet Arrangements
 
We have ten off balance sheet investments in joint ventures in which we own 50% or less of the total ownership interests. We provide leasing, development and property management services to the ten joint ventures. These investments are accounted for under the equity method. Our level of control of these joint ventures is such that we are not required to include them as consolidated subsidiaries. See Note 7 of the Notes to the Consolidated Financial Statements in Item 8.


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Results of Operations
 
Comparison of the Year Ended December 31, 2009 to the Year Ended December 31, 2008
 
For purposes of comparison between the years ended December 31, 2009 and 2008, “Same Center” refers to the shopping center properties owned by consolidated entities for the period from January 1, 2008 through December 31, 2009. Included in “Same Center” in 2009 is the impact of the sales of two net leased Wal-Marts during the year.
 
For purposes of comparison between the years ended December 31, 2009 and 2008, “Redevelopments” refers to any shopping center properties under redevelopment during the period from January 1, 2008 through December 31, 2009.
 
In August 2008, we sold the Plaza at Delray shopping center to a joint venture in which we have a 20% ownership interest. This sale to our joint venture is referred to as the “Disposition” in the following discussion.
 
Revenues
 
Total revenues decreased $10.5 million, or 7.8%, to $124.1 million in 2009, as compared to $134.6 million in 2008. The decrease in total revenues was primarily the result of a $7.0 million decrease in minimum rents and a $1.6 million decrease in recoveries from tenants, and a $1.6 million decrease in fees and management income.
 
Minimum rents decreased $7.0 million, or 7.7%, to $83.3 million in 2009 as follows:
 
                 
    Increase (Decrease)  
    Amount
       
    (In millions)     Percentage  
 
Same Center
  $ (3.0 )     (3.3 )%
Redevelopments
    (1.1 )     (1.2 )%
Disposition
    (2.9 )     (3.2 )%
                 
    $ (7.0 )     (7.7 )%
                 
 
The decrease in Same Center minimum rents from the prior year was primarily attributable to approximately $2.2 million in decreases related to tenant vacancies, approximately $1.3 million in decreases related to tenant bankruptcies, including Circuit City and Linens ’n Things, rent relief and other concessions granted of $0.4 million, and the impact of the sale of the two net leased Wal-Marts of $0.6 million, all of which were partially offset by an increase of $1.5 million due to increased rental rates on new or renewal leases.
 
Bankruptcies impact our allowance for doubtful accounts and the related bad debt expense at the time the tenant files for bankruptcy protection. When tenants are in bankruptcy, the Company makes estimates of the expected recovery of pre-petition and post-petition claims and adjusts the allowance for doubtful accounts to the appropriate estimated amount. For the year ended December 31, 2009, there were no material adjustments made to the allowance for doubtful accounts due to bankruptcies.
 
Recoveries from tenants decreased $1.6 million, or 4.6%, to $32.7 million in 2009 from $34.3 million in 2008 as follows:
 
                 
    Increase (Decrease)  
    Amount
       
    (In millions)     Percentage  
 
Same Center
  $ (0.9 )     (2.5 )%
Redevelopments
    0.3       0.9 %
Disposition
    (1.0 )     (3.0 )%
                 
    $ (1.6 )     (4.6 )%
                 
 
The decrease in recoveries from tenants for the Same Center properties was due primarily to the bankruptcy of Circuit City that closed a store at one of the Company’s shopping centers in 2008, as well as the impact of the sales


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of two net leased Wal-Marts in 2009. The Company’s overall recovery ratio was 95.7% in 2009 compared to 97.0% in 2008.
 
Recoverable operating expenses, which includes real estate tax expense, are a component of our recovery ratio. These expenses decreased $1.1 million, or 3.4%, to $34.2 million in 2009, compared to $35.3 million in 2008 as follows:
 
                 
    Increase (Decrease)  
    Amount
       
    (In millions)     Percentage  
 
Same Center
  $ (0.3 )     (1.1 )%
Redevelopments
    0.5       1.4 %
Disposition
    (1.3 )     (3.7 )%
                 
    $ (1.1 )     (3.4 )%
                 
 
The decrease in Same Center recoverable operating expenses is mainly attributable to higher snow removal costs in 2008.
 
Fees and management income decreased $1.6 million, or 24.2%, to $4.9 million in 2009 as compared to $6.5 million in 2008. The decrease was mainly attributable to a net decrease in development related fees of approximately $1.0 million. The decrease in development fees was mainly due to fees earned in 2008 relating to the development of the Hartland Towne Square center by our Ramco RM Hartland SC LLC joint venture.
 
Other income decreased $0.5 million to $2.5 million in 2009, compared to $3.0 million in 2008. Decreases in tax increment financing of $0.5 million and lease terminations of $0.2 million were offset by an increase in interest income of $0.5 million. The decrease in lease termination income was attributable mostly to a lower number of lease terminations in 2009 as compared to the prior year. Tax increment financing revenue related to the Company’s River City Marketplace shopping center in Jacksonville, Florida decreased as bond payments commenced in 2009. Offsetting the decreases, interest income increased primarily on advances to the Ramco RM Hartland SC LLC joint venture relating to the development of Hartland Towne Square.
 
Expenses
 
Total expenses decreased $11.7 million, or 9.0%, to $117.7 million in 2009 as compared to $129.4 million in 2008. The decrease was primarily the result of decreases in interest expense of $5.4 million, general and administrative expenses of $1.7 million, restructuring, impairment of real estate assets and other items of $1.4 million, recoverable operating expenses of $1.1 million, and depreciation and amortization of $1.1 million.
 
Depreciation and amortization expense decreased $1.1 million, or 3.6%, in 2009 as follows:
 
                 
    Increase (Decrease)  
    Amount
       
    (In millions)     Percentage  
 
Same Center
  $ (0.2 )     (0.9 )%
Disposition
    (0.9 )     (2.7 )%
                 
    $ (1.1 )     (3.6 )%
                 
 
The $0.2 million decrease in Same Center depreciation and amortization expense was due primarily to the disposal of assets as a result of the bankruptcies of Circuit City and Linens ’n Things that closed stores at two of the Company’s core operating properties in 2008, partially offset by an increase due to redevelopment projects completed during 2009.
 
General and administrative expenses was $13.4 million in 2009, compared to $15.1 million in 2008, a decrease of $1.7 million, or 11.1%. The decrease in general and administrative expenses was primarily attributable to a decrease in salary-related expenses of approximately $1.9 million, mainly the result of a reduction in staff in 2009. A decrease of $0.6 million is due to positive year-end business tax adjustments in 2009. Additionally, the decrease is


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attributable to a $0.4 million arbitration award in 2008 to a third-party relating to the alleged breach by the Company of a property management agreement. These decreases in general and administrative expenses were offset by a decrease of approximately $1.6 million in the portion of costs charged to development and redevelopment projects and capitalized in 2009, compared to 2008.
 
Restructuring, impairment of real estate assets, and other items decreased $1.4 million, to $4.4 million in 2009, compared to $5.8 million in 2008. Restructuring expense of $1.6 million in 2009 included severance and other benefit-related costs primarily related to the previously announced resignation of the Company’s former Chief Financial Officer in November 2009, as well as other employees who were terminated during the year. No similar costs were incurred in 2008. In 2009, the Company’s Board completed its review of financial and strategic alternatives. Also during 2009, the Company resolved a proxy contest by adding two new outside trustees to the Board. Costs incurred for the strategic review and proxy contest in 2009 were $1.6 million with no similar costs in 2008. As part of a continuous review of future growth opportunities, in the fourth quarter of 2009, the Company determined that there were better investment alternatives than continuing to pursue the pre-development of the Northpointe Town Center in Jackson, Michigan. As such, the Company wrote off its land option payments, third-party due diligence expenses and capitalized general and administrative costs for this project, resulting in a non-recurring charge of $1.2 million. The Company abandoned various projects totaling $0.7 million in 2008. In 2008, the Company recognized a non-recurring impairment charge of $5.1 million relating to its Ridgeview Crossing shopping center in Elkin, North Carolina. There were no impairment charges on real estate assets in 2009.
 
Interest expense decreased $5.4 million, or 14.9%, to $31.1 million in 2009, compared to $36.5 million in 2008. The summary below identifies the components of the net decrease:
 
                         
                Increase
 
    2009     2008     (Decrease)  
 
Average total loan balance
  $ 629,246     $ 677,497     $ (48,251 )
Average rate
    5.1 %     5.6 %     (0.5 )%
                         
Total interest on debt
  $ 32,030     $ 38,219     $ (6,189 )
Amortization of loan fees
    875       971       (96 )
Interest on capital lease obligation
    410       425       (15 )
Capitalized interest and other
    (2,227 )     (3,097 )     870  
                         
    $ 31,088     $ 36,518     $ (5,430 )
                         
 
Other
 
Gain on sale of real estate assets decreased $14.6 million, to $5.0 million in 2009, as compared to $19.6 million in 2008. The decrease in the gain on sale of real estate assets is due primarily to the recognition of the gains on the sale of the Mission Bay Plaza shopping center to our Ramco/Lion Venture LP joint venture in the first quarter of 2008 and the sale of the Plaza at Delray shopping center to a joint venture with an investor advised by Heitman LLC in the third quarter of 2008. In the third quarter 2009, the Company sold two net leased Wal-Marts at the Northwest Crossing and Taylors Square shopping centers.
 
Earnings from unconsolidated entities represent our proportionate share of the earnings of various joint ventures in which we have an ownership interest. Earnings from unconsolidated entities was $1.3 million in 2009, compared to $2.5 million in 2008, a decrease of $1.2 million. In 2009, earnings from unconsolidated entities decreased approximately $0.7 million from the Ramco 450 Venture LLC joint venture and approximately $0.2 million from the Ramco/Lion Venture LP joint venture. The decrease was primarily the result of the bankruptcy of Linens ’n Things and Circuit City that closed stores in the second half of 2008 at joint venture properties in which the Company holds an ownership interest.
 
Discontinued operations increased $3.0 million in 2009 due to the gain on the sale of Taylor Plaza of $2.9 million in 2009 and the loss on the sale of Highland Square of $0.5 million in 2008.


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Noncontrolling interest in subsidiaries represents the income attributable to the portion of the Operating Partnership not owned by the Company. Noncontrolling interest in subsidiaries in 2009 decreased $1.7 million, to $2.2 million, compared to $3.9 million in 2008. The decrease is primarily attributable to the noncontrolling interest’s proportionate share of the lower gain on the sale of real estate assets in 2009 compared to 2008.
 
Comparison of the Year Ended December 31, 2008 to the Year Ended December 31, 2007
 
For purposes of comparison between the years ended December 31, 2008 and 2007, “Same Center” refers to the shopping center properties owned by consolidated entities for the period from January 1, 2007 through December 31, 2008.
 
For purposes of comparison between the years ended December 31, 2008 and 2007, “Redevelopments” refers to any shopping center properties under redevelopment during the period from January 1, 2007 through December 31, 2008.
 
In April 2007 we acquired an additional 80% ownership interest in Ramco Jacksonville LLC, bringing our total ownership interest to 100%, resulting in the consolidation of such entity in our financial statements. This property is referred to as the “Acquisition” in the following discussion.
 
In March 2007, we sold Chester Springs Shopping Center to Ramco 450 Venture LLC, a joint venture with an investor advised by Heitman LLC. In June 2007, we sold two shopping centers, Shoppes of Lakeland and Kissimmee West, to Ramco HHF KL LLC, a newly formed joint venture. In July 2007, we sold Paulding Pavilion to Ramco 191 LLC, our joint venture with Heitman Value Partners Investment LLC. In late December 2007, we sold Mission Bay to Ramco/Lion Venture LP. In August 2008, we sold the Plaza at Delray shopping center to Ramco 450 Venture LLC. These sales to joint ventures in which we have an ownership interest are collectively referred to as the “Dispositions” in the following discussion.
 
Revenues
 
Total revenues decreased $10.6 million, or 7.3%, to $134.6 million in 2008, as compared to $145.2 million in 2007. The decrease in total revenues was primarily the result of a $5.7 million decrease in minimum rents and a $3.0 million decrease in recoveries from tenants.
 
Minimum rents decreased $5.7 million, or 5.9%, to $90.3 million in 2008 as follows:
 
                 
    Increase (Decrease)  
    Amount
       
    (In millions)     Percentage  
 
Same Center
  $ 0.2       0.2 %
Acquisition
    3.4       3.5 %
Dispositions
    (9.3 )     (9.6 )%
                 
    $ (5.7 )     (5.9 )%
                 
 
The increase in Same Center minimum rents was principally attributable to two major tenants signing new leases at two of our properties in 2008, partially offset by the bankruptcy of Linens ’n Things in 2008 that closed at one of our centers, and an adjustment to straight-line accounts receivable rent in 2007.


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Recoveries from tenants decreased $3.0 million, or 8.1%, to $34.3 million in 2008 as follows:
 
                 
    Increase (Decrease)  
    Amount
       
    (In millions)     Percentage  
 
Same Center
  $ 0.5       1.3 %
Acquisition
    1.0       2.8 %
Redevelopments
    (0.8 )     (2.3 )%
Dispositions
    (3.7 )     (9.9 )%
                 
    $ (3.0 )     (8.1 )%
                 
 
The increase in recoveries from tenants for the Same Center properties was due primarily to expanding our electricity resale program in certain of our properties, partially offset by the impact of redevelopment activity. Our overall recovery ratio was 97.0% in 2008 compared to 98.1% in 2007.
 
Recoverable operating expenses, which includes real estate tax expense, are a component of our recovery ratio. These expenses decreased $2.7 million, or 7.1%, to $35.3 million in 2008 as follows:
 
                 
    Increase (Decrease)  
    Amount
       
    (In millions)     Percentage  
 
Same Center
  $ 0.5       1.5 %
Acquisition
    0.9       2.4 %
Redevelopments
    (0.8 )     (2.0 )%
Dispositions
    (3.3 )     (9.0 )%
                 
    $ (2.7 )     (7.1 )%
                 
 
The increase in Same Center recoverable operating expenses is mainly attributable to higher electricity costs from the expansion of our electricity resale program.
 
Fees and management income decreased $0.3 million, or 5.1%, to $6.5 million in 2008 as compared to $6.8 million in 2007. The decrease was primarily attributable to a decrease in acquisition fees of approximately $2.1 million, partially offset by an increase of $0.9 million in management fees and an increase in leasing fees of approximately $0.5 million. The acquisition fees earned in 2007 related to the purchase of 13 shopping centers by joint ventures in which we have an ownership interest. The increase in management fees and leasing fees in 2008 was mainly due to managing the 13 shopping centers that were purchased in the prior year by our joint venture partners. Other fees and management income increased $0.2 million when compared to 2007.
 
Other income decreased $1.5 million to $3.0 million in 2008, compared to $4.5 million in 2007. The decrease was primarily due to a $1.1 million decrease in lease termination income, from $1.9 million in 2007 to $0.8 million in 2008, attributable mostly to income earned in 2007 on lease terminations from redevelopment properties. Additionally, interest income decreased $0.7 million in 2008. In 2007, Ramco-Gershenson Properties L.P. (the “Operating Partnership”) earned approximately $0.5 million of interest income on advances to Ramco Jacksonville LLC related to the River City Marketplace development when it was a joint venture, with no similar income earned during 2008. Offsetting the decreases was an increase of approximately $0.7 in tax increment financing revenue in 2008, which represents the Company’s share of a surplus earned at our River City Marketplace development. No tax increment financing income was earned in 2007.
 
Expenses
 
Total expenses decreased $5.7 million, or 4.2%, to $129.4 million in 2008 as compared to $135.1 million in 2007. The decrease was mainly driven by decreases in interest expense of $6.1 million, depreciation and amortization of $4.3 million, and recoverable operating expenses of $2.7 million, partially offset by a $5.6 million loss on restructuring charges, impairment of real estate assets and other items and a $1.0 million increase in general and administrative expenses.


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Depreciation and amortization expense decreased $4.3 million, or 12.0%, in 2008 as follows:
 
                 
    Increase (Decrease)  
    Amount
       
    (In millions)     Percentage  
 
Same Center
  $ 1.3       3.6 %
Acquisition
    1.4       3.9 %
Redevelopments
    (4.0 )     (11.0 )%
Dispositions
    (3.0 )     (8.5 )%
                 
    $ (4.3 )     (12.0 )%
                 
 
Offsetting the decrease in depreciation and amortization expense, same centers increased $1.3 million due to the write off of assets for the bankruptcy of Linens ’n Things and Circuit City. The $4.0 million decrease in Redevelopments was directly related to a center we demolished in late December 2007 in anticipation of redevelopment.
 
General and administrative expense was $15.1 million in 2008, as compared to $14.1 million in 2007, an increase of $1.0 million, or 7.2%. The increase in general and administrative expenses was primarily attributable to an increase in salary-related expenses of approximately $2.0 million, mainly the result of additional hiring following the expansion of our infra-structure related to increased joint venture activity and asset management. The increase in general and administrative expenses was also due to an additional $0.4 million arbitration award in 2008 to a third-party relating to the alleged breach by the Company of a property management agreement. These increases in general and administrative expenses were offset by a decrease primarily due to an increase of approximately $1.3 million in the portion of costs charged to development and redevelopment projects and capitalized in 2008, compared to 2007. General and administrative expenses were also impacted by a decrease in income tax expense of approximately $0.2 million in 2008, mainly the result of a Michigan Business Tax adjustment.
 
Restructuring, impairment of real estate assets, and other items increased $5.6 million, to $5.8 million in 2008, compared to $0.2 million in 2007. In the fourth quarter of 2008, the Company recognized a non-recurring impairment charge of $5.1 million relating to the Company’s Ridgeview Crossing shopping center in Elkin, North Carolina. The Company also abandoned various projects totaling $0.7 million in 2008.
 
Interest expense decreased $6.1 million, or 14.3%, to $36.5 million in 2008 compared to $42.6 million in 2007. The summary below identifies the components of the net decrease:
                         
                Increase
 
    2008     2007     (Decrease)  
 
Average total loan balance
  $ 677,497     $ 692,817     $ (15,320 )
Average rate
    5.6 %     6.2 %     (0.6 )%
                         
Total interest on debt
  $ 38,219     $ 43,244     $ (5,025 )
Amortization of loan fees
    971       1,166       (195 )
Interest on capital lease
                       
obligation
    425       439       (14 )
Capitalized interest and other
    (3,097 )     (2,240 )     (857 )
                         
    $ 36,518     $ 42,609     $ (6,091 )
                         
 
Other
 
Gain on sale of real estate assets decreased $13.0 million, to $19.6 million in 2008, as compared to $32.6 million in 2007. In 2008, the Company sold the Plaza at Delray shopping center to a joint venture in which we have an ownership interest, sold land parcels at Hartland Towne Square, and recognized the deferred gain of $11.7 million on the sale of Mission Bay Plaza to a joint venture in which it has a 30% ownership interest. In 2007, the Company sold Chester Springs Shopping Center to our Ramco 450 Venture LLC joint venture, sold the Shoppes of Lakeland and Kissimmee West to our Ramco HHF KL LLC joint venture, and sold land parcels at River City Marketplace.


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Earnings from unconsolidated entities represents our proportionate share of the earnings of various joint ventures in which we have an ownership interest. Earnings from unconsolidated entities were $2.5 million in both 2008 and 2007. During 2008, earnings from unconsolidated entities increased by approximately $0.4 million from the Ramco 450 Venture LLC, Ramco 191 LLC, Ramco HHF KL LLC, and Ramco HHF NP LLC joint ventures, offset by a $0.4 million decrease in earnings from the Ramco/Lion Venture LP joint venture that resulted primarily from the bankruptcy of a certain national retailer that closed stores at four of the joint venture properties in which the Company holds an ownership interest. In April 2007, we purchased the remaining 80% ownership interest in Ramco Jacksonville LLC (“Jacksonville”) and we have consolidated Jacksonville in our results of operations since the date of acquisition.
 
Discontinued operations decreased $0.6 million in 2008 due to the loss on the sale of Highland Square of $0.5 million.
 
Noncontrolling interest in subsidiaries represents the income attributable to the portion of the Operating Partnership not owned by the Company. Noncontrolling interest in subsidiaries in 2008 decreased $3.4 million, to $3.9 million, as compared to $7.3 million in 2007. The decrease is primarily attributable to the lower gain on the sale of real estate assets.
 
Liquidity and Capital Resources
 
The principal uses of our liquidity and capital resources are for operations, developments, redevelopments, including expansion and renovation programs, selective acquisitions, and debt repayment, as well as dividend payments in accordance with REIT requirements. We anticipate that the combination of cash on hand and cash retained from operations, the availability under our Credit Facility, additional financings, equity offerings, and the sale of existing properties will satisfy our expected working capital requirements through at least the next 12 months and allow us to achieve continued growth. Although we believe that the combination of factors discussed above will provide sufficient liquidity, no such assurance can be given.
 
As part of our business plan to de-leverage the Company and strengthen our financial position, on September 16, 2009, the Company issued 12.075 million common shares of beneficial interest, at $8.50 per share. The Company received net proceeds from the offering of approximately $96.2 million after deducting underwriting discounts, commissions and transaction expenses payable by the Company. The net proceeds from the offering were used to reduce outstanding borrowings.
 
As opportunities arise and market conditions permit, we will continue to pursue the strategy of selling mature properties or non-core assets which have less potential for growth or are not viable for redevelopment.. Our ability to obtain acceptable selling prices and satisfactory terms and financing will impact the timing of future sales. The Company expects any net proceeds from the sale of properties would be used to reduce outstanding debt. The Company used approximately $23.5 million in net proceeds from real estate asset sales in the third quarter of 2009 to pay down outstanding debt, and expects any net proceeds from the future sale of properties to be used to further reduce debt.
 
Development and redevelopment activity in 2009 was financed generally through cash provided from operating activities, asset sales, mortgage refinancings, and an increase in borrowings under the Company’s Credit Facility.
 
Total debt outstanding was approximately $552.6 million at December 31, 2009, as compared to $662.6 million at December 31, 2008.
 
The following is a summary of our cash flow activities (dollars in thousands):
 
                         
    Year Ended December 31,
    2009   2008   2007
 
Cash provided by operating activities
  $ 48,064     $ 26,998     $ 85,988  
Cash (used in) provided by investing activities
    (3,445 )     33,602       23,182  
Cash used in financing activities
    (41,114 )     (70,282 )     (105,743 )


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For the year ended December 31, 2009, we generated $48.1 million in cash flows from operating activities, as compared to $27.0 million in 2008. Cash flows from operating activities were higher in 2009 mainly due to lower net cash outflows for accounts payable and accrued expenses and higher net cash inflows for accounts receivable. In 2009, investing activities used $3.4 million of cash flows, as compared to $33.6 million provided by investing activities in 2008. Cash flows from investing activities were lower in 2009, due to significantly lower cash received from sales of real estate assets, lower investments in real estate and the repayment of a note receivable from a joint venture in 2008. In 2009, cash flows used in financing activities were $41.1 million, as compared to $70.3 million in 2008. In September 2009, the Company raised net proceeds of $96.2 million in an equity offering and used the proceeds to pay down outstanding debt. As a result, along with the paydown of debt from net proceeds received from real estate asset sales in 2009, the Company had higher net paydowns of mortgages and notes payable than in the prior year. Additionally, in 2009, the Company had significantly lower distributions to shareholders and operating partnership unit holders, as compared to 2008.
 
Dividends
 
Under the Code, as a REIT we must distribute annually to our shareholders at least 90% of our REIT taxable income, excluding net capital gain. Distributions paid are at the discretion of our Board of Trustees and depend on our actual net income available to common shareholders, cash flow, financial condition, capital requirements, restrictions in financing arrangements, the annual distribution requirements under REIT provisions of the Code and such other factors as our Board of Trustees deems relevant.
 
We declared a quarterly cash dividend distribution of $0.1633 per common share paid to shareholders of record on December 20, 2009, as compared to the dividend paid in the same quarter of 2008 of $0.2313 per share. The quarterly dividend was reduced to $0.2313 per common share in the fourth quarter of 2008, from $0.4625 per common share in each of the first three quarters of 2008. To strengthen the Company’s liquidity position, the Board of Trustees elected to keep the aggregate distribution dollars relatively constant when additional common shares were issued in September 2009. Therefore, the distribution per common share was reduced in proportion to the new common shares issued, to $0.1633 per common share in the third quarter of 2009. The cash we estimate to retain annually from the reduced dividend as compared to the first three quarters of 2008 is approximately $17.7 million and will be used to fund our future capital requirements. Our dividend policy has not changed in that we expect to continue making distributions to shareholders of at least 90% of our REIT taxable income, excluding net capital gain, in order to maintain qualification as a REIT. We satisfied the REIT requirement with distributed common and preferred share cash dividends of $18.7 million in 2009, $29.9 million in 2008 and $36.4 million in 2007.
 
Distributions paid by the Company are funded from cash flows from operating activities. To the extent that cash flows from operating activities were insufficient to pay total distributions for any period, alternative funding sources were used as shown in the following table. Examples of alternative funding sources may include proceeds from sales of real estate assets and bank borrowings. Although the Company may use alternative sources of cash to fund distributions in a given period, we expect that distribution requirements for an entire year will be met with cash flows from operating activities. The following table presents the Company’s total distributions compared to cash


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provided by operating activities, as well as any alternative sources of funding for distributions used if a deficiency existed for a given period.
 
                         
    Year Ended December 31,  
    2009     2008     2007  
 
Cash provided by operating activities
  $ 48,064     $ 26,998     $ 85,988  
Cash distributions to common shareholders
    (17,974 )     (34,338 )     (32,156 )
Cash distributions to operating partnership unit holders
    (2,503 )     (6,059 )     (5,360 )
Distributions to noncontrolling partners
    (54 )     (53 )     (121 )
                         
Total distributions
    (20,531 )     (40,450 )     (37,637 )
                         
Surplus (deficiency)
  $ 27,533     $ (13,452 )   $ 48,351  
                         
Alternative sources of funding for distributions:
                       
Proceeds from sales of real estate assets
    n/a     $ 74,269       n/a  
Total sources of alternative funding for distributions
    n/a     $ 74,269       n/a  
                         
 
 
n/a — Not applicable
 
Debt
 
In December 2009, the Company closed on a new $217 million secured credit facility consisting of a $150 million secured revolving credit facility and a $67 million amortizing secured term loan facility. The terms of the Credit Facility provide that the revolving credit facility may be increased by up to $50 million at the Company’s request, dependent upon there being one or more lenders willing to acquire the additional commitment, for a total secured credit facility commitment of $267 million. The secured revolving credit facility matures in December 2012 and bears interest at LIBOR plus 350 basis points with a 2% LIBOR floor. The amortizing secured term loan facility also bears interest at LIBOR plus 350 basis points with a 2% LIBOR floor and requires a $33 million payment by September 2010 and a final payment of $34 million by June 2011. The Credit Facility is secured by mortgages on various properties that have an approximate net book value of $291.9 million as of December 31, 2009. The Credit Facility amended and restated the Company’s former $250 million unsecured credit facility which was comprised of a $150 million unsecured revolving credit facility and $100 million unsecured term loan facility.
 
Also in December 2009, the Company amended its secured revolving credit facility for The Towne Center at Aquia, reducing the facility from $40.0 million to $20.0 million. The revolving credit facility securing The Town Center at Aquia bears interest at LIBOR plus 350 basis points with a 2% LIBOR floor and matures in December 2010, with two, one-year extensions at the Company’s option. Additionally in December 2009, the Company paid off the $22.7 million loan securing the West Oaks II and Spring Meadows shopping centers.
 
It is anticipated that funds borrowed under the Company’s credit facilities will be used for general corporate purposes, including working capital, capital expenditures, the repayment of indebtedness or other corporate activities. For further information on the credit facilities and other debt refer to Note 9 to the Consolidated Financial Statements.
 
The Company has $80.1 million in scheduled debt maturities in 2010, which includes $41.3 million of scheduled amortization payments. The $41.3 million of scheduled amortization payments consists of $33.0 million for the Company’s secured term loan facility, $5.0 million for the Company’s secured revolving credit facility on The Town Center at Aquia, and $3.3 million for various other mortgages and notes payable. Debt principal maturities in 2010 include the Company’s secured revolving credit facility on The Town Center at Aquia ($20.0 million outstanding at December 31, 2009), and fixed rate mortgages on Promenade at Pleasant Hill ($12.9 million outstanding at December 31, 2009), Publix at River Crossing ($3.1 million outstanding at December 31, 2009) and fixed rate purchase money mortgages on Parkway Shops ($6.9 million outstanding at December 31, 2009). As discussed above, the Company retains the option to extend the revolving credit facility securing The Town Center at Aquia to December 2012. With respect to the various fixed rate mortgage and floating


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rate mortgages, it is the Company’s intent to refinance these mortgages and notes payable upon or shortly prior to their expiration. However, there can be no assurance that the Company will be able to refinance its debt on commercially reasonable or any other terms.
 
Under terms of various debt agreements, we may be required to maintain interest rate swap agreements to reduce the impact of changes in interest rates on our floating rate debt. We have interest rate swap agreements with an aggregate notional amount of $100.0 million at December 31, 2009. Based on rates in effect at December 31, 2009, the agreements provide for fixed rates ranging from 6.4% to 6.7% and all expire in December 2010.
 
After taking into account the impact of converting our variable rate debt into fixed rate debt by use of the interest rate swap agreements, at December 31, 2009 our variable rate debt accounted for approximately $93.5 million of outstanding debt with a weighted average interest rate of 5.0%. Variable rate debt accounted for approximately 16.9% of our total debt and 10.7% of our total capitalization.
 
At December 31, 2009, the Company has $524.4 million of mortgage loans, both fixed and floating rate, encumbering our consolidated properties, including $179.0 million of mortgage loans under the Company’s secured credit facilities. We also have $537.7 million of mortgage loans on properties held by our unconsolidated joint ventures (of which our pro rata share is $138.7 million). Such mortgage loans are generally non-recourse, subject to certain exceptions for which we would be liable for any resulting losses incurred by the lender. These exceptions vary from loan to loan but generally include fraud or a material misrepresentation, misstatement or omission by the borrower, intentional or grossly negligent conduct by the borrower that harms the property or results in a loss to the lender, filing of a bankruptcy petition by the borrower, either directly or indirectly, and certain environmental liabilities. In addition, upon the occurrence of certain of such events, such as fraud or filing of a bankruptcy petition by the borrower, we would be liable for the entire outstanding balance of the loan, all interest accrued thereon and certain other costs, penalties and expenses.
 
The unconsolidated joint ventures in which our Operating Partnership owns an interest and which are accounted for by the equity method of accounting are subject to mortgage indebtedness, which in most instances is non-recourse. At December 31, 2009, mortgage debt for the unconsolidated joint ventures was $537.7 million, of which our pro rata share was $138.7 million with a weighted average interest rate of 6.5%. Fixed rate debt for the unconsolidated joint ventures was $508.7 million at December 31, 2009. Our pro rata share of the fixed rate debt amounted to $133.1 million, or 95.9% of our total pro rata share of such debt. The mortgage debt of $11.0 million at Peachtree Hill, a shopping center owned by our Ramco 450 Venture LLC, is recourse debt. The loan is secured by unconditional guarantees of payment and performance by Ramco 450 Venture LLC, the Company, and the Operating Partnership.
 
Investments in Unconsolidated Entities
 
In 2007, we formed Ramco HHF KL LLC, a joint venture with a discretionary fund managed by Heitman LLC that invests in core assets. We own 7% of the joint venture and our joint venture partner owns 93%. Subsequent to the formation of the joint venture, we sold Shoppes of Lakeland in Lakeland, Florida and Kissimmee West in Kissimmee, Florida to the joint venture. The Company recognized 93% of the gain on the sale of these two centers to the joint venture, representing the gain attributable to the joint venture partner’s 93% ownership interest. The remaining 7% of the gain on the sale of these two centers has been deferred and recorded as a reduction in the carrying amount of the Company’s equity investments in and advances to unconsolidated entities.
 
In 2007, we formed Ramco HHF NP LLC, a joint venture with a discretionary fund managed by Heitman LLC that invests in core assets. We own 7% of the joint venture and our joint venture partner owns 93%. In August 2007, the joint venture acquired Nora Plaza located in Indianapolis, Indiana.
 
In 2007, we formed Ramco RM Hartland SC LLC (formerly Ramco Highland Disposition LLC), a joint venture with Hartland Realty Partners LLC to develop Hartland Towne Square, a traditional community center in Hartland, Michigan. We own 20% of the joint venture and our joint venture partner owns 80%. As of December 31, 2009, the joint venture has $8.5 million of variable rate debt and $11.8 million of fixed rate debt.


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In 2007, we formed Ramco Jacksonville North Industrial LLC, a joint venture formed to develop land adjacent to our River City Marketplace shopping center. We own 5% of the joint venture and our joint venture partner owns 95%. As of December 31, 2009, the joint venture has $0.7 million of variable rate debt.
 
During 2007, we acquired the remaining 80% interest in Ramco Jacksonville LLC, an entity that was formed to develop a shopping center in Jacksonville, Florida.
 
Contractual Obligations
 
The following are our contractual cash obligations as of December 31, 2009 (dollars in thousands):
 
                                         
          Payments Due by Period  
          Less than
    1 - 3
    4 - 5
    After 5
 
Contractual Obligations
  Total     1 year     years     years     years  
 
Mortgages and notes payable, principal
  $ 552,551     $ 80,103     $ 202,114     $ 65,901     $ 204,433  
Interest on mortgages and notes payable
    158,668       30,656       50,368       28,089       49,555  
Employment contracts
    1,203       466       737              
Capital lease
    8,663       677       1,354       6,632        
Operating leases
    5,241       909       1,854       1,659       819  
Unconditional construction cost obligations
    20,114       20,114                    
                                         
Total contractual cash obligations
  $ 746,440     $ 132,925     $ 256,427     $ 102,281     $ 254,807  
                                         
 
We anticipate that the combination of cash on hand, cash provided from operating activities, the availability under the Credit Facility ($56.7 million at December 31, 2009, plus up to an additional $50 million dependent upon there being one or more lenders willing to acquire the additional commitment), our access to the capital markets and the sale of existing properties will satisfy our expected working capital requirements through at least the next 12 months. Although we believe that the combination of factors discussed above will provide sufficient liquidity, no assurance can be given.
 
At December 31, 2009, we did not have any contractual obligations that required or allowed settlement, in whole or in part, with consideration other than cash.
 
Mortgages and notes payable
 
See the analysis of our debt included in “Liquidity and Capital Resources” above.
 
Employment Contracts
 
At December 31, 2009, we had an employment contract with our President, Chief Executive Officer that contains minimum guaranteed compensation.
 
Operating and Capital Leases
 
We lease office space for our corporate headquarters and our Florida office under operating leases. We also have an operating lease at our Taylors Square shopping center and a capital ground lease at our Gaines Marketplace shopping center.
 
Construction Costs
 
In connection with the development and expansion of various shopping centers as of December 31, 2009, we have entered into agreements for construction activities with an aggregate cost of approximately $20.1 million.


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Planned Capital Spending
 
The Company is focusing on its core strengths of enhancing the value of our existing portfolio of shopping centers through successful leasing efforts and completing those redevelopment projects in 2010 that are currently in progress. In addition, during 2009, there was no significant acquisition activity.
 
During 2009, we spent approximately $7.6 million on revenue-generating capital expenditures, including tenant improvements, leasing commissions paid to third-party brokers, legal costs relative to lease documents and capitalized leasing and construction costs. These types of investments generate a return through rents from tenants over the terms of their leases. Revenue-enhancing capital expenditures, including expansions, renovations and repositionings, were approximately $16.4 million in 2009. Revenue neutral capital expenditures, such as roof and parking lot repairs, which are anticipated to be recovered from tenants, amounted to approximately $1.8 million in 2009.
 
In 2010, we anticipate spending approximately $19.9 million for revenue-generating, revenue-enhancing and revenue neutral capital expenditures, including approximately $10.5 million for redevelopment projects.
 
Capitalization
 
At December 31, 2009, our market capitalization amounted to $875.1 million. Market capitalization consisted of $552.6 million of debt (including property-specific mortgages, a secured Credit Facility consisting of a secured term loan credit facility and a secured revolving credit facility, the secured revolving credit facility on The Town Center at Aquia, and a Junior Subordinated Note), and $322.5 million of common shares (based on the closing price of $9.54 per share on December 31, 2009) and Operating Partnership units at market value. Our ratio of debt to total market capitalization was 63.1% at December 31, 2009, as compared to 83.3% at December 31, 2008. The decrease in total debt to market capitalization was due to using proceeds from the equity offering and real estate asset sales in the third quarter of 2009 to pay down debt and the impact of the increase in the price per common share from $6.18 at December 31, 2008 to $9.54 at December 31, 2009. After taking into account the impact of converting our variable rate debt into fixed rate debt by use of interest rate swap agreements, our outstanding debt at December 31, 2009 had a weighted average interest rate of 6.0% and consisted of $459.1 million of fixed rate debt and $93.5 million of variable rate debt. Outstanding letters of credit issued under the Credit Facility totaled approximately $1.3 million at December 31, 2009.
 
At December 31, 2009, the noncontrolling interest in the Operating Partnership represented a 8.6% ownership in the Operating Partnership. The OP Units may, under certain circumstances, be exchanged for our common shares of beneficial interest on a one-for-one basis. We, as sole general partner of the Operating Partnership, have the option, but not the obligation, to settle exchanged OP Units held by others in cash based on the current trading price of our common shares of beneficial interest. Assuming the exchange of all OP Units, there would have been 33,809,728 of our common shares of beneficial interest outstanding at December 31, 2009, with a market value of approximately $322.5 million.
 
Funds From Operations
 
We consider funds from operations, also known as “FFO,” an appropriate supplemental measure of the financial performance of an equity REIT. Under the National Association of Real Estate Investment Trusts (NAREIT) definition, FFO represents net income attributable to common shareholders, excluding extraordinary items (as defined under GAAP) and gains (losses) on sales of depreciable property, plus real estate related depreciation and amortization (excluding amortization of financing costs), and after adjustments for unconsolidated partnerships and joint ventures. FFO is intended to exclude GAAP historical cost depreciation and amortization of real estate investments, which assumes that the value of real estate assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions and many companies utilize different depreciable lives and methods. Because FFO adds back depreciation and amortization unique to real estate, and excludes gains and losses from depreciable property dispositions and extraordinary items, it provides a performance measure that, when compared year over year, reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, acquisition and development activities and interest costs, which provides a perspective of our financial performance not immediately apparent from net income attributable to


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common shareholders determined in accordance with GAAP. In addition, FFO does not include the cost of capital improvements, including capitalized interest.
 
For the reasons described above we believe that FFO provides us and our investors with an important indicator of our operating performance. This measure of performance is used by us for several business purposes and for REITs it provides a recognized measure of performance other than GAAP net income attributable to common shareholders, which may include non-cash items. Other real estate companies may calculate FFO in a different manner.
 
We recognize FFO’s limitations when compared to GAAP net income attributable to common shareholders. FFO does not represent amounts available for needed capital replacement or expansion, debt service obligations, or other commitments and uncertainties. In addition, FFO does not represent cash generated from operating activities in accordance with GAAP and is not necessarily indicative of cash available to fund cash needs, including the payment of dividends. FFO should not be considered as an alternative to net income attributable to common shareholders (computed in accordance with GAAP) or as an alternative to cash flow as a measure of liquidity. FFO is simply used as an additional indicator of our operating performance.


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The following table illustrates the calculations of FFO (in thousands, except per share data):
 
                         
   
Years Ended December 31,
 
    2009     2008     2007  
 
Net income attributable to RPT common shareholders(1)
  $ 13,720     $ 23,501     $ 34,260  
Add:
                       
Preferred share dividends
                3,146  
Loss on redemption of preferred shares
                1,269  
Depreciation and amortization expense
    36,819       37,850       40,924  
Noncontrolling interest in partnership:
                       
Continuing operations
    1,793       3,922       7,215  
Discontinued operations
    423       (27 )     95  
Less:
                       
Gain on sale of depreciable property(2)
    (4,571 )     (18,347 )     (29,869 )
Discontinued operations, loss (gain) on sale of property
    (2,886 )     463        
                         
Funds from operations
    45,298       47,362       57,040  
Less:
                       
Preferred stock dividends(3)
                (2,065 )
                         
Funds from operations attributable to RPT common shareholders, assuming conversion of OP units(4)
  $ 45,298     $ 47,362     $ 54,975  
                         
Weighted average equivalent shares outstanding, diluted(3)
    25,112       21,397       21,449  
                         
Net income per diluted share to FFO per diluted share reconciliation:
                       
Net income per diluted share(1)
  $ 0.62     $ 1.27     $ 1.91  
Add:
                       
Depreciation and amortization expense
    1.47       1.77       1.91  
Noncontrolling interest in partnership:
                       
Continuing Operations
    0.07       0.18       0.34  
Discontinued Operations
                 
Discontinued operations, loss (gain) on sale of property
    (0.11 )     0.02        
Less:
                       
Gain on sale of depreciable real estate(2)
    (0.18 )     (0.86 )     (1.39 )
Assuming conversion of OP units
    (0.07 )     (0.17 )     (0.11 )
                         
Funds from operations per diluted share
    1.80       2.21       2.66  
Less:
                       
Preferred Stock dividends, net
                (0.10 )
                         
Funds from operations attributable to RPT common shareholders per diluted share, assuming conversion of OP units
  $ 1.80     $ 2.21     $ 2.56  
                         
 
 
(1) In 2008, an impairment charge in the amount of $5,103 was included in our FFO calculations.
 
(2) Excludes gain on sale of undepreciated land of $439, $1,248, and $2,774, for 2009, 2008, and 2007, respectively.
 
(3) In 2007, the Series C Preferred Shares were dilutive and therefore, the dividends paid were not included in the calculation of our diluted FFO.
 
(4) In 2007, loss on redemption of preferred shares in the amount of $1,269 was not included in our FFO calculations.


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Inflation
 
Inflation has been relatively low in recent years and has not had a significant detrimental impact on the results of our operations. Should inflation rates increase in the future, substantially all of our tenant leases contain provisions designed to partially mitigate the negative impact of inflation in the near term. Such lease provisions include clauses that require our tenants to reimburse us for real estate taxes and many of the operating expenses we incur. Also, many of our leases provide for periodic increases in base rent which are either of a fixed amount or based on changes in the consumer price index and/or percentage rents (where the tenant pays us rent based on a percentage of its sales). Significant inflation rate increases over a prolonged period of time may have a material adverse impact on our business.
 
Recent Accounting Pronouncements
 
In March 2008, the FASB updated ASC 815 “Derivatives and Hedging”, requiring entities that utilize derivative instruments to provide qualitative disclosures about their objectives and strategies for using such instruments, as well as any details of credit-risk-related contingent features contained within derivatives. The update also requires entities to disclose additional information about the amounts and location of derivatives included within the financial statements, how the provisions of the accounting guidance have been applied, and the impact that hedges have on an entity’s financial position, financial performance, and cash flows. The new accounting guidance was effective for fiscal years and interim periods beginning after November 15, 2008. The Company implemented the provisions of the standard in the first quarter of 2009. The application did not have a material effect on the Company’s results of operations or financial position because it only included new disclosure requirements. Refer to Note 11 of the Notes to the Consolidated Financial Statements for further information.
 
In June 2008, the FASB updated ASC 260 “Earnings Per Share” to clarify that unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents are considered participating securities and should be included in the calculation of basic earnings per share using the two-class method. This new accounting rule was effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2008. All prior period earnings per share amounts presented were required to be adjusted retrospectively. Accordingly, the Company adopted the provisions of this standard in the first quarter of 2009. The adoption did not have a material effect on the Company’s consolidated financial condition, results of operations, or cash flows. Refer to Note 13 of the Notes to the Consolidated Financial Statements for the calculation of earnings per share.
 
In April 2009, the FASB updated ASC 820-10-65 “Fair Value Measurements and Disclosures: Overall: Open Effective Date Information”. This guidance clarifies the application of accounting rules for fair value measurements when the volume and level of activity for the asset or liability have significantly decreased and on identifying circumstances that indicate a transaction is not orderly. Additionally, the guidance emphasizes that even if there has been a significant decrease in the volume and level of activity for the asset or liability and regardless of the valuation technique(s) used, the objective of a fair value measurement remains the same. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. The provisions of the new accounting rule were effective for interim and annual reporting periods ending after June 15, 2009, to be applied prospectively. The Company adopted the provisions in the third quarter of 2009. The adoption of the accounting standard did not have a material impact on the Company’s consolidated financial position, results of operations, or cash flows.
 
In May 2009, the FASB issued ASC 855, “Subsequent Events”, requiring that an entity shall recognize in the financial statements the effects of all subsequent events that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements. The new accounting provisions were effective for interim or annual financial periods ending after June 15, 2009, to be applied prospectively. Accordingly, the Company adopted the provisions in the second quarter of 2009. The adoption of the provisions did not have a material effect on the Company’s consolidated financial condition, results of operations, or cash flows. Refer to Note 23 of the Notes to the Consolidated Financial Statements for the Company’s disclosure on subsequent events.


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In June 2009, the FASB issued Statement of Financial Accounting Standards No. 167 (“SFAS 167”), “Amendments to FASB Interpretation No. 46(R)”, which has not yet been codified. SFAS 167 amends guidance surrounding a company’s analysis to determine whether any of its variable interests constitute controlling financial interests in a variable interest entity. This analysis identifies the primary beneficiary of a variable interest entity as the enterprise that has both of the following characteristics; a) the power to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance, and b) the obligation to absorb losses of the entity that could potentially be significant to the variable interest entity or the right to receive benefits from the entity that could potentially be significant to the variable interest entity. Additionally, an enterprise is required to assess whether it has an implicit financial responsibility to ensure that a variable interest entity operates as designed when determining whether it has the power to direct the activities of the variable interest entity that most significantly impact the entity’s economic performance. The new guidance also requires ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity. The guidance is effective for the first annual reporting period beginning after November 15, 2009. Accordingly, the Company will reevaluate its interests in variable interest entities for the period beginning January 1, 2010 to determine that the entities are reflected properly in the financial statements as investments or consolidated entities. The Company is currently evaluating the application of the new accounting standard.
 
In June 2009, the FASB issued ASC 105-10, “Generally Accepted Accounting Principleswhich established the FASB Accounting Standards Codification as the sole source of authoritative U.S. generally accepted accounting principles recognized by the FASB. Effective July 1, 2009 the Company adopted the provisions of ASC 105-10 and have updated the references to GAAP in its condensed financial statements and notes to consolidated condensed financial statements for the period ended September 30, 2009. The adoption of this standard did not have a material impact on the Company’s consolidated financial position, results of operations, or cash flows.
 
In August 2009, the FASB issued ASU 2009-05, “Fair Value Measurements and Disclosures — Measuring Liabilities at Fair Value,” which updates ASC 820-10. The update clarifies that in circumstances in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more of the following techniques:
 
1. A valuation technique that uses:
 
a) the quoted price of an identical liability when traded as an asset, or
 
b) quoted prices for similar liabilities or similar liabilities when traded as assets.
 
2. Another valuation technique that is consistent with the principles of ASC 820. Examples include an income approach, such as a present value technique, or a market approach, such as a technique that is based on the amount at the measurement date that the reporting entity would pay to transfer the identical liability or would receive to enter into the identical liability.
 
This standard was effective for financial statements issued for interim and annual periods ending after August 2009. As such, the Company adopted ASU 2009-05 effective for the quarter ending September 30, 2009. The adoption of this new accounting standard did not have a material impact on the Company’s disclosures.
 
Item 7A.   Quantitative and Qualitative Disclosures About Market Risk
 
We have exposure to interest rate risk on our variable rate debt obligations. We are not subject to any foreign currency exchange rate risk or commodity price risk, or other material rate or price risks. Based on our debt and interest rates and the interest rate swap agreements in effect at December 31, 2009, a 100 basis point change in interest rates would affect our annual earnings and cash flows by between approximately $0.9 million and $1.7 million. We believe that a 100 basis point change in interest rates would impact the fair value of our total outstanding debt at December 31, 2009 by approximately $13.6 million.
 
Under terms of various debt agreements, we may be required to maintain interest rate swap agreements to reduce the impact of changes in interest rates on our floating rate debt. We have interest rate swap agreements with an aggregate notional amount of $100.0 million at December 31, 2009. Based on rates in effect at December 31,


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2009, the interest rate swap agreements provide for fixed rates ranging from 6.4% to 6.7% and expire December 2010.
 
The following table sets forth information as of December 31, 2009 concerning our long-term debt obligations, including principal cash flows by scheduled maturity, weighted average interest rates of maturing amounts and fair market value (dollars in thousands):
 
                                                                 
                                              Fair
 
    2010     2011     2012     2013     2014     Thereafter     Total     Value  
 
Fixed-rate debt
  $ 56,637     $ 57,990     $ 74,126     $ 33,651     $ 32,250     $ 204,433     $ 459,087     $ 443,415  
Average interest rate
    7.0 %     7.0 %     6.6 %     5.5 %     5.5 %     5.8 %     6.2 %     6.5 %
Variable-rate debt
  $ 23,466     $ 17,962     $ 52,036     $     $     $     $ 93,464     $ 93,464  
Average interest rate
    5.5 %     5.4 %     4.7 %                       5.1 %     5.1 %
 
We estimated the fair value of our fixed rate mortgages using a discounted cash flow analysis, based on our incremental borrowing rates for similar types of borrowing arrangements with the same remaining maturity. Considerable judgment is required to develop estimated fair values of financial instruments. The table incorporates only those exposures that exist at December 31, 2009 and does not consider those exposures or positions which could arise after that date or firm commitments as of such date. Therefore, the information presented therein has limited predictive value. Our actual interest rate fluctuations will depend on the exposures that arise during the period and on interest rates.
 
Item 8.   Financial Statements and Supplementary Data.
 
Our consolidated financial statements and supplementary data are included as a separate section in this Annual Report on Form 10-K commencing on page F-1 and are incorporated herein by reference.
 
Item 9.   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
 
None.
 
Item 9A.   Controls and Procedures
 
Disclosure Controls and Procedures
 
We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended (“Exchange Act”), such as this report on Form 10-K, is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Interim Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the design control objectives, and management was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
 
We carried out an assessment as of December 31, 2009 of the effectiveness of the design and operation of our disclosure controls and procedures. This assessment was done under the supervision and with the participation of management, including our Chief Executive Officer and Interim Chief Financial Officer. Based on such evaluation, our management, including our Chief Executive Officer and Interim Chief Financial Officer, concluded that such disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2009.


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Management’s Report on Internal Control Over Financial Reporting
 
Management is responsible for establishing and maintaining effective internal control over financial reporting as such term is defined under Rule 13a-15(f) promulgated under the Securities Exchange Act of 1934, as amended.
 
Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and preparation of our consolidated financial statements for external purposes in accordance with generally accepted accounting principles.
 
Internal control over financial reporting includes those policies and procedures that pertain to our ability to record, process, summarize and report reliable financial data. Management recognizes that there are inherent limitations in the effectiveness of any internal control and effective internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation. Additionally, because of changes in conditions, the effectiveness of internal control over financial reporting may vary over time.
 
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
 
Management of the Company conducted an assessment of our internal controls over financial reporting as of December 31, 2009 using the framework established by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control — Integrated Framework. Based on this assessment, management has concluded that our internal control over financial reporting was effective as of December 31, 2009.
 
Our independent registered public accounting firm, Grant Thornton LLP, has issued an attestation report on our internal control over financial reporting. Their report appears below.


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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
Board of Trustees and shareholders
Ramco-Gershenson Properties Trust
 
We have audited Ramco-Gershenson Properties Trust and subsidiaries’ (the “Company”) internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.
 
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
 
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
 
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
 
In our opinion, Ramco-Gershenson Properties Trust and subsidiaries maintained, in all material respects, effective internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control — Integrated Framework issued by COSO.
 
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Ramco-Gershenson Properties Trust and subsidiaries as of December 31, 2009 and 2008, and the related consolidated statements of income and comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2009 and our report dated March 12, 2010 expressed an unqualified opinion.
 
/s/  Grant Thornton LLP
 
Southfield, Michigan
March 12, 2010


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Changes in Internal Control over Financial Reporting
 
There have been no changes in the Company’s internal control over financial reporting during the most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
 
Item 9B.   Other Information.
 
None.
 
PART III
 
Item 10.   Directors, Executive Officers and Corporate Governance.
 
The information required by this Item is incorporated herein by reference to our proxy statement for the 2010 annual meeting of shareholders (the “Proxy Statement”) under the captions “Proposal 1-Election of Trustees — Trustees and Executive Officers,” “Proposal 1-Election of Trustees — Committees of the Board,” “Proposal 1-Election of Trustees — Corporate Governance,” and “Additional Information — Section 16(a) Beneficial Ownership Reporting Compliance.”
 
Item 11.   Executive Compensation.
 
The information required by this Item is incorporated herein by reference to our Proxy Statement under the captions “Proposal 1-Election of Trustees — Trustee Compensation,” “Compensation Committee Interlocks and Insider Participation,” “Compensation Discussion and Analysis,” “Compensation Committee Report,” and “Executive Compensation Tables.”
 
Item 12.   Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
 
The following table sets forth certain information regarding our equity compensation plans as of December 31, 2009:
 
                         
                Number of Securities
 
    Number of Securities
          Remaining Available
 
    to be Issued
    Weighted-Average
    for Future Issuances
 
    Upon Exercise of
    Exercise Price of
    Under Equity Compensation
 
    Outstanding Options,
    Outstanding Options,
    Plans (Excluding Securities
 
    Warrants and Rights
    Warrants and Rights
    Reflected in Column (a))
 
Plan Category
  (a)     (b)     (c)  
 
Equity compensation plans approved by security holders(1)
    513,455 (2)   $ 28.47 (3)     911,308 (4)
Equity compensation plans not approved by security holders
                 
                         
Total
    513,455     $ 28.47       911,308  
                         
 
 
(1) Consists of grants made under the 1996 Share Option Plan, 1997 Non-Employee Trustee Stock Option Plan, 2003 Long-Term Incentive Plan, 2003 Non-Employee Trustee Stock Option Plan, and 2008 Restricted Share Plan for Non-employee Trustees.
 
(2) Consists of 324,720 options outstanding, 65,043 deferred common shares (see Note 17 of the Consolidated Financial Statements) and 123,692 shares of restricted stock issuable on the satisfaction of applicable performance measures. The number of shares of restricted stock overstates dilution to the extent we do not satisfy the applicable performance measures. In particular, subsequent to December 31, 2009, the Compensation Committee determined that we did not achieve certain performance measures underlying restricted share grants, resulting in the forfeiture of 37,800 shares of restricted stock that are listed in this column as outstanding as of December 31, 2009.


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(3) Solely consists of outstanding options, as the deferred common shares and shares of restricted stock do not have an exercise price.
 
(4) Includes 776,308 securities available for issuance under the 2009 Omnibus Long-Term Incentive Plan and 135,000 options available for issuance under the 2008 Restricted Share Plan for Non-Employee Trustees. There were no securities available for issuance under the 2003 Long-Term Incentive Plan.
 
Additional information required by this Item is incorporated herein by reference to our Proxy Statement under the caption “Security Ownership of Certain Beneficial Owners and Management.”
 
Item 13.   Certain Relationships and Related Transactions, and Director Independence.
 
The information required by this Item is incorporated herein by reference to our Proxy Statement under the captions “Related Person Transactions,” and “Proposal 1-Election of Trustees — Committees of the Board.”
 
Item 14.   Principal Accountant Fees and Services.
 
The information required by this Item is incorporated herein by reference to our Proxy Statement under the captions “Audit Committee Disclosure,” and “Report of the Audit Committee.”
 
PART IV
 
Item 15.   Exhibits and Financial Statement Schedules.
 
(a) (1) Consolidated financial statements. See “Item 8 — Financial Statements and Supplementary Data.”
 
(2) Financial statement schedule. See “Item 8 — Financial Statements and Supplementary Data.”
 
(3) Exhibits
 
         
  3 .1   Amended and Restated Declaration of Trust of the Company, dated October 2, 1997, incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1997.
  3 .2   Articles of Amendment to Ramco-Gershenson Properties Trust Declaration of Trust, dated June 8, 2005, incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K dated June 9, 2005.
  3 .3   Articles Supplementary to Ramco-Gershenson Properties Trust Declaration of Trust, incorporated by reference to Exhibit 3.1 to Registrant’s Form 8-K dated December 12, 2007.
  3 .4   By-Laws of the Company, as amended and restated as of March 10, 2008, incorporated by reference to Exhibit 3.3 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2007.
  3 .5   Articles Supplementary reclassifying 50,000 Series A Junior Participating Shares of Beneficial Interest as filed with the State Department of Assessment and Taxation of Maryland on or about March 31, 2009, incorporated by reference to Exhibit 3.1 to Registrant’s Form 8-K dated March 31, 2009.
  3 .6   Articles Supplementary Classifying 50,000 Series A Junior Participating Shares of Beneficial Interest as authorized but unissued and unclassified preferred shares of the Company, as filed with the State Department of Assessment and Taxation of Maryland on or about September 8, 2009, incorporated by reference to Exhibit 3.1 to Registrant’s Form 8-K dated September 9, 2009.
  4 .1   Amended and Restated Fixed Rate Note ($110 million), dated March 30, 2007, by and Between Ramco Jacksonville LLC and JPMorgan Chase Bank, N.A., incorporated by reference to Exhibit 4.1 to Registrant’s Form 8-K dated April 16, 2007.
  4 .2   Amended and Restated Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated March 30, 2007, by and between Ramco Jacksonville LLC and JPMorgan Chase Bank, N.A., incorporated by reference to Exhibit 4.2 to Registrant’s Form 8-K dated April 16, 2007.
  4 .3   Assignment of Leases and Rents, dated March 30, 2007, by and between Ramco Jacksonville LLC and JPMorgan Chase Bank, N.A., incorporated by reference to Exhibit 4.3 to Registrant’s Form 8-K dated April 16, 2007.
  4 .4   Environmental Liabilities Agreement, dated March 30, 2007, by and between Ramco Jacksonville LLC and JPMorgan Chase Bank, N.A., incorporated by reference to Exhibit 4.4 to Registrant’s Form 8-K dated April 16, 2007.


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  4 .5   Acknowledgment of Property Manager, dated March 30, 2007 by and between Ramco-Gershenson, Inc. and JPMorgan Chase Bank, N.A., incorporated by reference to Exhibit 4.6 to Registrant’s Form 8-K dated April 16, 2007.
  4 .6   Rights Agreement, dated as of March 25, 2009 between Ramco-Gershenson Properties Trust and American Stock Transfer & Trust Company, LLC which includes as Exhibits thereto of the Articles Supplementary, Form of Rights Certificate and the Summary of Terms attached thereto as Exhibit A, B and C, respectively, incorporated by reference to Exhibit 4.1 to Registrant’s Form 8-K dated March 31, 2009.
  4 .7   Amendment to Rights Agreement, dated September 8, 2009, between the Company and American Stock Transfer & Trust Company, LLC, incorporated by reference to Exhibit 4.1 to Registrant’s Form 8-K dated September 9, 2009.
  10 .1   1996 Share Option Plan of the Company, incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 1996.**
  10 .2   Registration Rights Agreement, dated as of May 10, 1996, among the Company, Dennis Gershenson, Joel Gershenson, Bruce Gershenson, Richard Gershenson, Michael A. Ward U/T/A dated 2/22/77, as amended, and each of the Persons set forth on Exhibit A attached thereto, incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 1996.
  10 .3   Exchange Rights Agreement, dated as of May 10, 1996, by and among the Company and each of the Persons whose names are set forth on Exhibit A attached thereto, incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 1996.
  10 .4   Change of Venue Merger Agreement dated as of October 2, 1997 between the Company (formerly known as RGPT Trust, a Maryland real estate investment trust), and Ramco- Gershenson Properties Trust, a Massachusetts business trust, incorporated by reference to Exhibit 10.41 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1997.
  10 .5   Exchange Rights Agreement dated as of September 4, 1998 between Ramco-Gershenson Properties Trust, and A.T.C., L.L.C., incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 1998.
  10 .6   Limited Liability Company Agreement of Ramco/West Acres LLC., incorporated by reference to Exhibit 10.53 to the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2001.
  10 .7   Assignment and Assumption Agreement dated September 28, 2001 among Flint Retail, LLC and Ramco/West Acres LLC and State Street Bank and Trust for holders of J.P. Mortgage Commercial Mortgage Pass-Through Certificates, incorporated by reference to Exhibit 10.54 to the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2001.
  10 .8   Limited Liability Company Agreement of Ramco/Shenandoah LLC., Incorporated by reference to Exhibit 10.41 to the Company’s on Form 10-K for the year ended December 31, 2001.
  10 .9   Purchase and Sale Agreement, dated May 21, 2002 between Ramco-Gershenson Properties, L.P. and Shop Invest, LLC., incorporated by reference to Exhibit 10.46 to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2002.
  10 .10   Ramco-Gershenson Properties Trust 2003 Long-Term Incentive Plan, incorporated by reference to Appendix B of the Company’s 2003 Proxy Statement filed on April 28, 2003.**
  10 .11   Amended and Restated Limited Partnership Agreement of Ramco/Lion Venture LP, dated as of December 29, 2004, by Ramco-Gershenson Properties, L.P., as a limited partner, Ramco Lion LLC, as a general partner, CLPF-Ramco, L.P. as a limited partner, and CLPF-Ramco GP, LLC as a general partner, incorporated by reference Exhibit 10.62 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2004.
  10 .12*   Summary of Trustee Compensation Program.**
  10 .13   Form of Nonstatutory Stock Option Agreement, incorporated by reference Exhibit 10.66 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2004.**
  10 .14   Second Amended and Restated Limited Liability Company Agreement of Ramco Jacksonville LLC, dated March 1, 2005, by Ramco-Gershenson Properties , L.P. and SGC Equities LLC., incorporated by reference Exhibit 10.65 to the Registrant’s Quarterly Report on Form 10-Q for the period ended March 31, 2005.
  10 .15   Form of Restricted Stock Award Agreement Under 2003 Long-Term Incentive Plan, incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K dated June 16, 2006.**

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  10 .16   Form of Trustee Stock Option Award Agreement Under 2003 Non-Employee Trustee Stock Option Plan, incorporated by reference to Exhibit 10.2 to Registrant’s Form 8-K dated June 16, 2006.**
  10 .17   Employment Agreement, dated as of August 1, 2007, between the Company and Dennis Gershenson, incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2007.**
  10 .18   Restricted Share Award Agreement Under 2008 Restricted Share Plan for Non-Employee Trustee, incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2008.**
  10 .19   Restricted Share Plan for Non-Employee Trustees, incorporated by reference to Appendix A of the Company’s 2008 Proxy Statement filed on April 30, 2008.**
  10 .20   Ramco-Gershenson Properties Trust 2009 Omnibus Long-Term Incentive Plan, incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K, dated June 15, 2009. **
  10 .21   Amended and Restated Secured Master Loan Agreement, dated as of December 11, 2009, by and among Ramco-Gershenson Properties L.P., as Borrower, Ramco-Gershenson Properties Trust, as Guarantor, KeyBank National Association, as Agent, KeyBanc Capital Markets, as Sole Lead Manager and Arranger, JPMorgan Chase Bank, N.A. and Bank of America, N.A., as Co-Syndication Agents, Deutsche Bank Trust Company Americas, as Documentation Agent, and other specified banks which are a Party or may become Parties to such Agreement, incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K, dated December 17, 2009.
  10 .22   Amended and Restated Unconditional Guaranty of Payment and Performance, dated December 11, 2009, by Ramco-Gershenson Properties Trust, as Guarantor, in favor of KeyBank National Association and certain other lenders, incorporated by reference to Exhibit 10.2 to Registrant’s Form 8-K, dated December 17, 2009.
  10 .23   First Amended and Restated Revolving Credit Agreement, dated as of December 11, 2009, by and among Ramco-Gershenson Properties L.P., as Borrower, Ramco-Gershenson Properties Trust, as Guarantor, Ramco Virginia Properties, L.L.C., KeyBank National Association, as Agent, KeyBanc Capital Markets, as Sole Lead Manager and Arranger, and other specified banks which are a Party or may become Parties to such Agreement, incorporated by reference to Exhibit 10.3 to Registrant’s Form 8-K, dated December 17, 2009.
  10 .24   Separation Agreement and Release between Ramco-Gershenson Properties Trust and Richard J. Smith, dated December 23, 2009, incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K, dated December 29, 2009.
  10 .25   Employment Letter, dated February 16, 2010, between Ramco-Gershenson Properties Trust and Gregory R. Andrew, incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K, dated February 19, 2010.**
  10 .26   Change in Control Policy, dated March 1, 2010, incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K dated March 4, 2010.
  10 .27   2010 Executive Incentive Plan, dated March 1, 2010, incorporated by reference to Exhibit 10.2 to Registrant’s Form 8-K dated March 4, 2010.
  10 .28*   Registration Rights Agreement, dated February 17, 2010, between Ramco-Gershenson Properties Trust and JCP Realty, Inc.
  12 .1*   Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends.
  21 .1*   Subsidiaries
  23 .1*   Consent of Grant Thornton LLP.
  31 .1*   Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
  31 .2*   Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
  32 .1*   Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
  32 .2*   Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
Filed herewith
** Management contract or compensatory plan or arrangement
 
The Company has not filed certain instruments with respect to long-term debt that did not exceed 10% of the Company’s total assets. The Company will furnish a copy of such agreements with the SEC upon request.
 
15(b) The exhibits listed at item 15(a)(3) that are noted ‘filed herewith’ are hereby filed with this report.
 
15(c) The financial statement schedules listed at Item 15(a)(2) are hereby filed with this report.

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SIGNATURES
 
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
Ramco-Gershenson Properties Trust
 
     
Dated: March 12, 2010
 
By: 
/s/  Dennis E. Gershenson

Dennis E. Gershenson,
President and Chief Executive Officer
 
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of registrant and in the capacities and on the dates indicated.
 
     
     
Dated: March 12, 2010
 
By: 
/s/   Stephen R. Blank

Stephen R. Blank,
Chairman
     
Dated: March 12, 2010
 
By: 
/s/   Dennis E. Gershenson

Dennis E. Gershenson,
Trustee, President and Chief Executive Officer
(Principal Executive Officer)
     
Dated: March 12, 2010
 
By: 
/s/   Arthur H. Goldberg

Arthur H. Goldberg,
Trustee
     
Dated: March 12, 2010
 
By: 
/s/   Robert A. Meister

Robert A. Meister,
Trustee
     
Dated: March 12, 2010
 
By: 
/s/   David J. Nettina

David J. Nettina,
Trustee
     
Dated: March 12, 2010
 
By: 
/s/   Matthew L. Ostrower

Matthew L. Ostrower,
Trustee
     
Dated: March 12, 2010
 
By: 
/s/   Joel M. Pashcow

Joel M. Pashcow,
Trustee
     
Dated: March 12, 2010
 
By: 
/s/   Mark K. Rosenfeld

Mark K. Rosenfeld,
Trustee
     
Dated: March 12, 2010
 
By: 
/s/   Michael A. Ward

Michael A. Ward,
Trustee
     
Dated: March 12, 2010
 
By: 
/s/  James H. Smith

James H. Smith,
Interim Chief Financial Officer
(Principal Financial and Accounting Officer)


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RAMCO-GERSHENSON PROPERTIES TRUST
 
Index to Consolidated Financial Statements
 
         
    Page
 
    F-2  
Consolidated Financial Statements:
       
    F-3  
    F-4  
    F-5  
    F-6  
    F-7  


F-1


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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
Board of Trustees and shareholders
Ramco-Gershenson Properties Trust
 
We have audited the accompanying consolidated balance sheets of Ramco-Gershenson Properties Trust (a Maryland corporation) and subsidiaries as of December 31, 2009 and 2008, and the related consolidated statements of income and comprehensive income, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2009. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
 
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
 
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Ramco-Gershenson Properties Trust and subsidiaries as of December 31, 2009 and 2008, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2009 in conformity with accounting principles generally accepted in the United States of America.
 
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Ramco-Gershenson Properties Trust and subsidiaries internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated March 12, 2010 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
 
/s/ GRANT THORNTON LLP
 
Southfield, Michigan
March 12, 2010


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RAMCO-GERSHENSON PROPERTIES TRUST
 
CONSOLIDATED BALANCE SHEETS
 
                 
    December 31,  
    2009     2008  
    (In thousands, except per share amounts)  
 
ASSETS
               
Investment in real estate, net
  $ 804,295     $ 830,392  
Cash and cash equivalents
    8,800       5,295  
Restricted cash
    3,838       4,891  
Accounts receivable, net
    31,900       34,020  
Notes receivable from unconsolidated entities
    12,566       6,716  
Equity investments in unconsolidated entities
    97,506       95,867  
Other assets, net
    39,052       37,345  
                 
Total Assets
  $ 997,957     $ 1,014,526  
                 
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
Mortgages and notes payable
  $ 552,551     $ 662,601  
Accounts payable and accrued expenses
    26,440       26,751  
Distributions payable
    5,477       4,945  
Capital lease obligation
    6,924       7,191  
                 
Total Liabilities
    591,392       701,488  
SHAREHOLDERS’ EQUITY
               
Ramco-Gershenson Properties Trust (“RPT”) shareholders’ equity:
               
Common shares of beneficial interest, par value $0.01, 45,000 shares authorized; 30,907 and 18,583 issued and outstanding as of December 31, 2009 and 2008, respectively
    309       185  
Additional paid-in capital
    486,731       389,528  
Accumulated other comprehensive loss
    (2,149 )     (3,328 )
Cumulative distributions in excess of net income
    (117,663 )     (112,671 )
                 
Total RPT Shareholders’ Equity
    367,228       273,714  
Noncontrolling interest in subsidiaries
    39,337       39,324  
                 
Total Shareholder’s Equity
    406,565       313,038  
                 
Total Liabilities and Shareholders’ Equity
  $ 997,957     $ 1,014,526  
                 
 
See notes to consolidated financial statements.


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RAMCO-GERSHENSON PROPERTIES TRUST
 
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
 
                         
    Year Ended December 31,  
    2009     2008     2007  
    (In thousands, except
 
    per share amounts)  
 
REVENUES:
                       
Minimum rents
  $ 83,281     $ 90,271     $ 95,935  
Percentage rents
    769       636       676  
Recoveries from tenants
    32,694       34,258       37,279  
Fees and management income
    4,916       6,484       6,831  
Other income
    2,480       2,980       4,484  
                         
Total revenues
    124,140       134,629       145,205  
                         
EXPENSES:
                       
Real estate taxes
    18,280       18,344       19,666  
Recoverable operating expenses
    15,883       16,974       18,344  
Depreciation and amortization
    30,866       32,009       36,358  
Other operating
    3,714       4,611       3,785  
General and administrative
    13,448       15,121       14,108  
Restructuring costs, impairment of real estate assets and other items
    4,379       5,787       183  
Interest expense
    31,088       36,518       42,609  
                         
Total expenses
    117,658       129,364       135,053  
                         
Income from continuing operations before gain on sale of real estate assets and earnings from unconsolidated entities
    6,482       5,265       10,152  
Gain on sale of real estate assets, net of taxes of $202, $2,237 and $4,418 in
                       
2009, 2008 and 2007, respectively
    5,010       19,595       32,643  
Earnings from unconsolidated entities
    1,328       2,506       2,496  
                         
Income from continuing operations
    12,820       27,366       45,291  
                         
Discontinued operations:
                       
Gain (loss) on sale of property
    2,886       (463 )      
Income from operations
    230       529       694  
                         
Income from discontinued operations
    3,116       66       694  
                         
Net Income
    15,936       27,432       45,985  
Less: Net income attributable to the noncontrolling interest in subsidiaries
    (2,216 )     (3,931 )     (7,310 )
Preferred share dividends
                (3,146 )
Loss on redemption of preferred shares
                (1,269 )
                         
Net income attributable to RPT common shareholders
  $ 13,720     $ 23,501     $ 34,260  
                         
Basic earnings per RPT common share:
                       
Income from continuing operations attributable to RPT common shareholders
  $ 0.50     $ 1.27     $ 1.89  
Income from discontinued operations attributable to RPT common shareholders
    0.12             0.03  
                         
Net income attributable to RPT common shareholders
  $ 0.62     $ 1.27     $ 1.92  
                         
Diluted earnings per RPT common share:
                       
Income from continuing operations attributable to RPT common shareholders
  $ 0.50     $ 1.27     $ 1.88  
Income from discontinued operations attributable to RPT common shareholders
    0.12             0.03  
                         
Net income attributable to RPT common shareholders
  $ 0.62     $ 1.27     $ 1.91  
                         
Basic weighted average common shares outstanding
    22,193       18,471       17,851  
                         
Diluted weighted average common shares outstanding
    22,193       18,478       18,529  
                         
AMOUNTS ATTRIBUTABLE TO RPT COMMON SHAREHOLDERS:
                       
Income from continuing operations attributable to RPT common shareholders
  $ 11,027     $ 23,444     $ 33,661  
Income from discontinued operations attributable to RPT common shareholders
    2,693       57       599  
                         
Net income attributable to RPT common shareholders
  $ 13,720     $ 23,501     $ 34,260  
                         
COMPREHENSIVE INCOME
                       
Net income
  $ 15,936     $ 27,432     $ 45,985  
Other comprehensive income (loss):
                       
Unrealized gain (loss) on interest rate swaps
    1,334       (3,006 )     (1,092 )
                         
Comprehensive income
    17,270       24,426       44,893  
Comprehensive income attributable to the noncontrolling interest in subsidiaries
    (2,371 )     (3,531 )     (7,161 )
                         
Comprehensive income attributable to RPT common shareholders
  $ 14,899     $ 20,895     $ 37,732  
                         
 
See notes to consolidated financial statements.


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RAMCO-GERSHENSON PROPERTIES TRUST
 
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(In thousands, except share amounts)
 
                                                         
                      Accumulated
    Cumulative
             
          Common
    Additional
    Other
    Distributions in
    Noncontrolling
    Total
 
    Preferred
    Shares Par
    Paid-In
    Comprehensive
    Excess of
    Interest
    Shareholders’
 
    Shares     Value     Capital     Income (Loss)     Net Income     in Subsidiaries     Equity  
 
Balance, January 1, 2007
  $ 75,518     $ 166     $ 335,738     $ 211     $ (107,086 )   $ 39,601     $ 344,148  
Cash distributions declared
                            (33,274 )     (5,522 )     (38,796 )
Preferred shares dividends declared
                            (3,146 )           (3,146 )
Stock options exercised
                268                         268  
Share-based compensation expense
                1,323                         1,323  
Redemption of 1,000 shares of Series B Preferred stock
    (23,804 )           (7 )           (1,234 )           (25,045 )
Redemption of 31 shares of Series C Preferred stock
    (853 )                       (35 )           (888 )
Conversion of 1,857 shares of Series C Preferred Shares to commom shares
    (50,861 )     19       50,842                          
Net income
                                    38,675       7,310       45,985  
Unrealized loss on interest rate swaps
                      (943 )             (149 )     (1,092 )
                                                         
Balance, December 31, 2007
          185       388,164       (732 )     (106,100 )     41,240       322,757  
Cash distributions declared
                            (29,884 )     (5,437 )     (35,321 )
Restricted stock dividends
                            (188 )           (188 )
Share-based compensation expense
                1,325                         1,325  
Stock options exercised
                39                         39  
Net income
                            23,501       3,931       27,432  
Unrealized loss on interest rate swaps
                      (2,596 )           (410 )     (3,006 )
                                                         
Balance, December 31, 2008
          185       389,528       (3,328 )     (112,671 )     39,324       313,038  
Cash distributions declared
                            (18,559 )     (2,358 )     (20,917 )
Restricted stock dividends
                            (153 )           (153 )
Share-based compensation expense
                1,087                         1,087  
Issuance of common shares
          124       96,116                         96,240  
Net income
                                  13,720       2,216       15,936  
Unrealized gain on interest rate swaps
                      1,179             155       1,334  
                                                         
Balance, December 31, 2009
  $     $ 309     $ 486,731     $ (2,149 )   $ (117,663 )   $ 39,337     $ 406,565  
                                                         
 
See notes to consolidated financial statements.


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RAMCO-GERSHENSON PROPERTIES TRUST
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
                         
    Year Ended December 31,  
    2009     2008     2007  
    (In thousands)  
 
Cash Flows from Operating Activities:
                       
Net income
  $ 15,936     $ 27,432     $ 45,985  
Adjustments to reconcile net income to net cash provided by operating activities:
                       
Depreciation and amortization
    30,866       32,009       36,358  
Amortization of deferred financing costs
    875       971       1,166  
Gain on sale of real estate assets
    (5,010 )     (19,595 )     (32,643 )
Loss on impairment of real estate assets
          5,103        
Abandonment of pre-development sites
    1,224       684       183  
Earnings from unconsolidated entities
    (1,328 )     (2,506 )     (2,496 )
Discontinued operations
    (230 )     (529 )     (694 )
Distributions received from unconsolidated entities
    3,836       6,389       5,934  
Share-based compensation
    1,291       1,325       1,323  
Changes in assets and liabilities that provided (used) cash:
                       
Accounts receivable
    2,120       (4,949 )     379  
Other assets
    165       1,594       4,473  
Accounts payable and accrued expenses
    901       (22,189 )     24,708  
                         
Net Cash Provided by Continuing Operating Activities
    50,646       25,739       84,676  
(Gain) loss on sale of Discontinued Operations
    (2,886 )     463        
Operating Cash from Discontinued Operations
    304       796       1,312  
                         
Net Cash Provided by Operating Activities
    48,064       26,998       85,988  
                         
Cash Flows from Investing Activities:
                       
Real estate developed or acquired, net of liabilities assumed
    (21,598 )     (67,880 )     (87,133 )
Investment in and notes receivable from unconsolidated entities
    (10,922 )     (6,079 )     (38,177 )
Payments on notes receivable from joint ventures
          23,249       13,500  
Proceeds from sales of real estate assets
    22,985       74,269       132,997  
Decrease in restricted cash
    1,053       886       1,995  
                         
Net Cash (Used in) Provided by Continuing Investing Activities
    (8,482 )     24,445       23,182  
Cash from Discontinued Operations Provided by Investing Activities
    5,037       9,157        
                         
Net Cash (Used in) Provided by Investing Activities
    (3,445 )     33,602       23,182  
                         
Cash Flows from Financing Activities:
                       
Cash distributions to common shareholders
    (17,974 )     (34,338 )     (32,156 )
Cash distributions to operating partnership unit holders
    (2,503 )     (6,059 )     (5,360 )
Cash dividends paid on preferred shares
                (4,810 )
Payment for deferred financing costs
    (6,507 )     (1,419 )     (878 )
Distributions to noncontrolling partners
    (54 )     (53 )     (121 )
Paydown of mortgages and notes payable
    (286,235 )     (195,758 )     (317,102 )
Borrowings on mortgages and notes payable
    176,186       167,558       280,588  
Reduction of capitalized lease obligation
    (267 )     (252 )     (239 )
Purchase and retirement of preferred shares
                (25,933 )
Net proceeds from issuance of common shares
    96,240              
Proceeds from exercise of stock options
          39       268  
                         
Net Cash Used in Financing Activities
    (41,114 )     (70,282 )     (105,743 )
                         
Net Increase (Decrease) in Cash and Cash Equivalents
    3,505       (9,682 )     3,427  
Cash and Cash Equivalents, Beginning of Period
    5,295       14,977       11,550  
                         
Cash and Cash Equivalents, End of Period
  $ 8,800     $ 5,295     $ 14,977  
                         
Supplemental Cash Flow Disclosure, including Non-Cash Activities:
                       
Cash paid for interest during the period
  $ 28,783     $ 35,628     $ 41,936  
Cash paid for federal income taxes
    378       6,333       1,030  
Capitalized interest
    2,116       1,577       2,881  
Assumed debt of acquired property and joint venture interests
                12,197  
Increase (decrease) in fair value of interest rate swaps
    1,334       (3,006 )     (1,092 )
Decrease in deferred gain on sale of property
          11,678        
 
See notes to consolidated financial statements


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RAMCO-GERSHENSON PROPERTIES TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2009, 2008 and 2007
(Dollars in thousands)
 
1.   Organization and Summary of Significant Accounting Policies
 
Ramco-Gershenson Properties Trust, together with its subsidiaries (the “Company”), is a real estate investment trust (“REIT”) engaged in the business of owning, developing, acquiring, managing and leasing community shopping centers, regional malls and single tenant retail properties. At December 31, 2009, the Company owned interests in and managed a portfolio of 88 shopping centers, with approximately 19.8 million square feet of gross leaseable area (“GLA”) of which 15.3 million is owned by the Company, located in the Midwestern, Southeastern and Mid-Atlantic regions of the United States. The Company’s centers are usually anchored by discount department stores or supermarkets and the tenant base consists primarily of national and regional retail chains and local retailers. The Company’s credit risk, therefore, is concentrated in the retail industry.
 
The economic performance and value of the Company’s real estate assets are subject to all the risks associated with owning and operating real estate, including risks related to adverse changes in national, regional and local economic and market conditions. The economic condition of each of the Company’s markets may be dependent on one or more industries. An economic downturn in one of these industries may result in a business downturn for the Company’s tenants, and as a result, these tenants may fail to make rental payments, decline to extend leases upon expiration, delay lease commencements or declare bankruptcy.
 
In June 2009, the Financial Accounting Standards Board (“FASB”) issued the FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles, also known as FASB Accounting Standards Codification (“ASC”) 105-10, “Generally Accepted Accounting Principles”, (“ASC 105-10”). ASC 105-10 establishes the FASB Accounting Standards Codification (“Codification”) as the single source of authoritative U.S. GAAP recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The Codification supersedes all existing non-SEC accounting and reporting standards. All other non-grandfathered, non-SEC accounting literature not included in the Codification will become non-authoritative. Following the Codification, the FASB will not issue new standards in the form of Statements, FASB Staff Positions or Emerging Issues Task Force Abstracts. The FASB, instead, will issue Accounting Standards Updates (“ASU”), which will serve to update the Codification, provide background information about the guidance and provide the basis for conclusions on the changes to the Codification. The FASB’s Codification project was not intended to change GAAP, however it will change the way the guidance is organized and presented. As a result, these changes will have a significant impact on how companies reference GAAP in their financial statements and in their accounting policies for financial statements issued for interim and annual periods ending after September 15, 2009. The Company implemented the Codification in the third quarter 2009. Any technical references contained in the accompanying financial statements and notes to consolidated financial statements have been updated to correspond to the new Codification topics, as appropriate. New standards not yet codified have been referenced as issued and will be updated when codified.
 
Principles of Consolidation
 
The consolidated financial statements include the accounts of the Company and its majority owned subsidiary, the Operating Partnership, Ramco-Gershenson Properties, L.P. (91.4%, 86.4%, and 86.4% owned by the Company at December 31, 2009, 2008 and 2007, respectively), and all wholly-owned subsidiaries, including bankruptcy remote single purpose entities and all majority-owned joint ventures over which the Company has control. The presentation of consolidated financial statements does not itself imply that assets of any consolidated entity (including any special-purpose entity formed for a particular project) are available to pay the liabilities of any other consolidated entity, or that the liabilities of any other consolidated entity (including any special-purpose entity formed for a particular project) are obligations of any other consolidated entity. Investments in real estate joint ventures for which the Company has the ability to exercise significant influence over, but for which the Company


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does not have financial or operating control, are accounted for using the equity method of accounting. Accordingly, the Company’s share of the earnings of these joint ventures is included in consolidated net income. All intercompany accounts and transactions have been eliminated in consolidation.
 
The Company owns 100% of the non-voting and voting common stock of Ramco-Gershenson, Inc. (“Ramco”), and therefore it is included in the consolidated financial statements. Ramco has elected to be a taxable REIT subsidiary for federal income tax purposes. Ramco provides property management services to the Company and to other entities. See Note 20 for management fees earned from related parties.
 
Use of Estimates
 
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management of the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and reported amounts that are not readily apparent from other sources. Actual results could differ from those estimates.
 
Listed below are certain significant estimates and assumptions used in the preparation of the Company’s consolidated financial statements.
 
Reclassifications
 
Certain reclassifications of prior period amounts have been made in the financial statements in order to conform to the 2009 presentation.
 
Allowance for Doubtful Accounts
 
The Company provides for bad debt expense based upon the allowance method of accounting. The Company monitors the collectibility of its accounts receivable (billed and unbilled, including straight-line) from specific tenants, and analyzes historical bad debts, customer credit worthiness, current economic trends and changes in tenant payment terms when evaluating the adequacy of the allowance for bad debts. When tenants are in bankruptcy, the Company makes estimates of the expected recovery of pre-petition and post-petition claims. The period to resolve these claims can exceed one year. Accounts receivable in the accompanying balance sheets is shown net of an allowance for doubtful accounts of $3,288 and $4,287 as of December 31, 2009 and 2008, respectively.
 
                         
    2009     2008     2007  
 
Allowance for doubtful accounts:
                       
Balance at beginning of year
  $ 4,287     $ 3,313     $ 2,913  
Charged to expense
    1,129       2,013       1,157  
Write offs
    (2,128 )     (1,039 )     (757 )
                         
Balance at end of year
  $ 3,288     $ 4,287     $ 3,313  
                         
 
Accounting for the Impairment of Long-Lived Assets and Equity Investments
 
The Company periodically reviews whether events and circumstances subsequent to the acquisition or development of long-lived assets, or intangible assets subject to amortization, have occurred that indicate the remaining estimated useful lives of those assets may warrant revision or that the remaining balance of those assets may not be recoverable. If events and circumstances, including but not limited to, declining trends in occupancy and rental rates, tenant sales, net operating income and geographic location of our shopping center properties, indicate that the long-lived assets should be reviewed for possible impairment, we prepare projections to assess whether future cash flows, on a non-discounted basis, for the related assets are likely to exceed the recorded carrying amount


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of those assets to determine if an impairment of the carrying amount is appropriate. The cash flow projections consider factors common in the valuation of real estate, such as expected future operating income, trends in occupancy, rental rates and recovery ratios, as well as leasing demands and competition in the marketplace.
 
The Company’s management is required to make subjective assessments as to whether there are impairments in value of its long-lived assets, or intangible assets. Subsequent changes in estimated undiscounted cash flows arising from changes in our assumptions could affect the determination of whether impairment exists and whether the effects could have a material impact on the Company’s net income. To the extent impairment has occurred, the loss will be measured as the excess of the carrying amount of the property over the fair value of the property as determined by valuation techniques appropriate in the circumstances. The Company does not believe that the value of any long-lived asset, or intangible asset was impaired at December 31, 2009.
 
In determining the estimated useful lives of intangibles assets with finite lives, we consider the nature, life cycle position, and historical and expected future operating cash flows of each asset, as well as our commitment to support these assets through continued investment.
 
In 2008, the Company recognized a $5,103 loss on the impairment of its Ridgeview Crossing shopping center in Elkin, North Carolina. The non-cash impairment charge is included in “restructuring, impairment of real estate assets, and other items” on the consolidated statements of income and comprehensive income. There were no impairment charges for the years ended December 31, 2009 and 2007. See Note 16 of the Notes to the Consolidated Financial Statements for further information.
 
Revenue Recognition
 
Shopping center space is generally leased to retail tenants under leases which are accounted for as operating leases. The Company recognizes minimum rents on the straight-line method over the terms of the leases, commencing when the tenant takes possession of the space, as required under accounting guidance for operating leases. Certain of the leases also provide for additional revenue based on contingent percentage income, which is recorded on an accrual basis once the specified target that triggers this type of income is achieved. The leases also typically provide for recoveries from tenants of common area maintenance, real estate taxes and other operating expenses. These recoveries are recognized as revenue in the period the applicable costs are incurred. Revenue from fees and management income are recognized in the period in which the services have been provided and the earnings process is complete. Lease termination income is recognized when a lease termination agreement is executed by the parties and the tenant vacates the space and is included in “other income” on the consolidated statements of income and comprehensive income.
 
Straight line rental income was greater than the current amount required to be paid by the Company’s tenants by $1,214, $1,641 and $1,338 for the years ended December 31, 2009, 2008 and 2007, respectively.
 
Revenues from the Company’s largest tenant, TJ Maxx/Marshalls, amounted to 4.0% of its annualized base rent for the year ended December 31, 2009 and 3.6% for the years ended December 31, 2008 and 2007, respectively.
 
Gain on sale of properties and other real estate assets are recognized when it is determined that the sale has been consummated, the buyer’s initial and continuing investment is adequate, the Company’s receivable, if any, is not subject to future subordination, and the buyer has assumed the usual risks and rewards of ownership of the assets.
 
Accounting Policies
 
Cash and Cash Equivalents
 
The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.
 
Income Tax Status
 
The Company conducts its operations with the intent of meeting the requirements applicable to a REIT under sections 856 through 860 of the Internal Revenue Code. In order to maintain its qualification as a REIT, the


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Company is required to distribute annually at least 90% of its REIT taxable income, excluding net capital gain, to its shareholders. As long as the Company qualifies as a REIT, it will generally not be liable for federal corporate income taxes.
 
Certain of the Company’s operations, including property management and asset management, as well as ownership of certain land, are conducted through taxable REIT subsidiaries, (each, a “TRS”). A TRS is a C corporation that has not elected REIT status and, as such, is subject to federal corporate income tax. The Company uses the TRS format to facilitate its ability to provide certain services and conduct certain activities that are not generally considered as qualifying REIT activities.
 
During the years ended December 31, 2009, 2008, and 2007, the Company sold various properties and land parcels at a gain, resulting in both a federal and state tax liability. Tax liabilities of $202, $2,237, and $4,418 have been netted against the gain on sale of real estate assets in the Company’s consolidated statements of income for the years ended December 31, 2009, 2008, and 2007, respectively.
 
The Company had no unrecognized tax benefits as of December 31, 2009. The Company expects no significant increases or decreases in unrecognized tax benefits due to changes in tax positions within one year of December 31, 2009. The Company has no interest or penalties relating to income taxes recognized in the statement of operations for the twelve months ended December 31, 2009 or in the balance sheet as of December 31, 2009. It is the Company’s accounting policy to classify interest and penalties relating to unrecognized tax benefits as interest expense and tax expense, respectively. As of December 31, 2009, returns for the calendar years 2006 through 2008 remain subject to examination by the Internal Revenue Service (“IRS”) and various state and local tax jurisdictions. As of December 31, 2009, certain returns for calendar year 2005 also remain subject to examination by various state and local tax jurisdictions.
 
Real Estate
 
The Company records real estate assets at cost less accumulated depreciation. Direct costs incurred for the acquisition, development and construction of properties are capitalized. For redevelopment of an existing operating property, the undepreciated net book value plus the direct costs for the construction incurred in connection with the redevelopment are capitalized to the extent such costs do not exceed the estimated value when complete.
 
Depreciation is computed using the straight-line method and estimated useful lives for buildings and improvements of 40 years and equipment and fixtures of 5 to 10 years. Expenditures for improvements to tenant spaces are capitalized as part of buildings and improvements and are amortized over the life of the initial term of each lease or the useful life of the asset. The Company commences depreciation of the asset once the improvements have been completed and the premise is placed into service. Expenditures for normal, recurring, or periodic maintenance are charged to expense when incurred. Renovations which improve or extend the life of the asset are capitalized.
 
Other Assets
 
Other assets consist primarily of prepaid expenses, proposed development and acquisition costs, financing and leasing costs. Financing and leasing costs are amortized using the straight-line method over the terms of the respective agreements. Should a tenant terminate its lease, the unamortized portion of the leasing cost is expensed. Unamortized financing costs are expensed when the related agreements are terminated before their scheduled maturity dates. Proposed development and acquisition costs are deferred and transferred to construction in progress when development commences or expensed if development is not considered probable.
 
Purchase Accounting for Acquisitions of Real Estate and Other Assets
 
Acquired real estate assets have been accounted for using the purchase method of accounting and accordingly, the results of operations are included in the consolidated statements of income from the respective dates of acquisition. The Company allocates the purchase price to (i) land and buildings based on management’s internally prepared estimates and (ii) identifiable intangible assets or liabilities generally consisting of above-market and below-market leases and in-place leases, which are included in other assets or accrued expenses in the consolidated


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balance sheets. The Company uses estimates of fair value based on estimated cash flows, using appropriate discount rates, and other valuation techniques, including management’s analysis of comparable properties in the existing portfolio, to allocate the purchase price to acquired tangible and intangible assets. Liabilities assumed generally consist of mortgage debt on the real estate assets acquired. Assumed debt with a stated interest rate that is significantly different from market interest rates for similar debt instruments is recorded at its fair value based on estimated market interest rates at the date of acquisition.
 
The estimated fair value of above-market and below-market in-place leases for acquired properties is recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of the lease.
 
The aggregate fair value of other intangible assets consisting of in-place, at market leases, is estimated based on internally developed methods to determine the respective property values. Factors considered by management in their analysis include an estimate of costs to execute similar leases and operating costs saved.
 
The fair value of above-market in-place leases and the fair value of other intangible assets acquired are recorded as identified intangible assets, included in other assets, and are amortized as reductions of rental revenue over the remaining term of the respective leases. The fair value of below-market in-place leases are recorded as deferred credits and are amortized as additions to rental income over the remaining terms of the respective leases. Should a tenant terminate its lease, the unamortized portion of the in-place lease value would be expensed or taken to income immediately as appropriate.
 
Investments in Unconsolidated Entities
 
The Company accounts for its investments in unconsolidated entities using the equity method of accounting, as the Company exercises significant influence over, but does not control, these entities. In assessing whether or not the Company controls an entity, it applies the criteria of ASC 810 “Consolidation”. Variable interest entities within the scope of ASC 810 are required to be consolidated by their primary beneficiary. The primary beneficiary of a variable interest entity is determined to be the party that absorbs a majority of the entity’s expected losses, receives a majority of its expected returns, or both. The Company has evaluated the applicability of ASC 810 to its investments in and advances to its joint ventures and has determined that these ventures do not meet the criteria of a variable interest entity and, therefore, consolidation of these ventures is not required. The Company’s investments in unconsolidated entities are initially recorded at cost, and subsequently adjusted for equity in earnings and cash contributions and distributions.
 
Distributions Received from Unconsolidated Entities
 
The Company considers distributions received from unconsolidated entities as returns on investment in those entities to the extent of cumulative net operational cash flows, and therefore classifies these distributions as cash flows from operating activities in the consolidated statements of cash flows. Cumulative net operational cash flows are defined as the cumulative earnings from unconsolidated entities adjusted for non-cash items such as depreciation expense, bad debt expense and gain or loss on sale of real estate assets. Other distributions received from unconsolidated entities would be considered a return of the investment and classified as cash flows from investing activities on the consolidated statements of cash flows. There was no return of investment for the years ended December 31, 2009, 2008 and 2007.
 
Fair Value Measurements
 
On January 1, 2008, the Company adopted the accounting rules for fair value measurements, which defines fair value, establishes a framework for measuring fair value under accounting principles generally accepted in the United States, and enhances disclosures about fair value measurements. Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value measurement standard clarifies that fair value should be based on the assumptions market participants would use


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when pricing an asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. The fair value hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data. Fair value measurements are required to be separately disclosed by level within the fair value hierarchy.
 
Fair value measurements for assets and liabilities where there exists limited or no observable market data are, therefore, based primarily upon estimates, and are often calculated based on the economic and competitive environment, the characteristics of the asset or liability and other factors. Therefore, fair value cannot be determined with precision and may not be realized in an actual sale or immediate settlement of the asset or liability. Additionally, there may be inherent weaknesses in any calculation technique, and changes in the underlying assumptions used, including but not limited to estimates of future cash flows, could impact the calculation of current or future values. For further discussion on fair value measurement, see Note 10.
 
Derivative Financial Instruments
 
The Company recognizes all derivative financial instruments in the consolidated financial statements at fair value. Changes in fair value of derivative financial instruments that qualify for hedge accounting are recorded in shareholders’ equity as a component of accumulated other comprehensive income or loss.
 
In managing interest rate exposure on certain floating rate debt, the Company at times enters into interest rate protection agreements. The Company does not utilize these arrangements for trading or speculative purposes. The differential between fixed and variable rates to be paid or received is accrued monthly, and recognized currently in the consolidated statements of income. The Company is exposed to credit loss in the event of non-performance by the counter party to the interest rate swap agreements; however, the Company does not anticipate non-performance by the counter party.
 
Recognition of Share-based Compensation Expense
 
The Company recognizes the cost of its employee stock option and restricted share awards in its consolidated statements of income based upon the grant date fair value. The total cost of the Company’s share-based awards is equal to their grant date fair value and is recognized over the service periods of the awards. Under the modified prospective transition method, the Company began to recognize as expense the cost of unvested awards outstanding as of January 1, 2006.
 
Noncontrolling Interest in Subsidiaries
 
Effective January 1, 2009, the Company adopted the provisions of the accounting standard for noncontrolling interests, previously referred to as minority interests, requiring noncontrolling interests to be treated as a separate component of equity, not as a liability or other item outside of permanent equity. Consolidated net income and comprehensive income is required to include the noncontrolling interest’s share. The calculation of earnings per share continues to be based on income amounts attributable to the parent.
 
Noncontrolling interest in subsidiaries for the years ending December 31 consisted of the following:
 
                         
    2009     2008     2007  
 
Noncontrolling interest in subsidiaries at January 1
  $ 39,324     $ 41,240     $ 39,601  
Net income attributable to noncontrolling interest in subsidiaries
    2,216       3,931       7,310  
Distributions to noncontrolling interest holders
    (2,358 )     (5,437 )     (5,522 )
Other comprehensive income (loss) attributable to noncontrolling interest in subsidiaries
    155       (410 )     (149 )
                         
Total noncontrolling interest in subsidiaries at December 31
  $ 39,337     $ 39,324     $ 41,240  
                         
 
2.   Recent Accounting Pronouncements
 
In March 2008, the FASB updated ASC 815 “Derivatives and Hedging”, requiring entities that utilize derivative instruments to provide qualitative disclosures about their objectives and strategies for using such


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instruments, as well as any details of credit-risk-related contingent features contained within derivatives. The update also requires entities to disclose additional information about the amounts and location of derivatives included within the financial statements, how the provisions of the accounting guidance have been applied, and the impact that hedges have on an entity’s financial position, financial performance, and cash flows. The new accounting guidance was effective for fiscal years and interim periods beginning after November 15, 2008. The Company implemented the provisions of the standard in the first quarter of 2009. The application did not have a material effect on the Company’s results of operations or financial position because it only included new disclosure requirements. Refer to Note 11 of the Notes to the Consolidated Financial Statements for further information.
 
In June 2008, the FASB updated ASC 260 “Earnings Per Share” to clarify that unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents are considered participating securities and should be included in the calculation of basic earnings per share using the two-class method. This new accounting rule was effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2008. All prior period earnings per share amounts presented were required to be adjusted retrospectively. Accordingly, the Company adopted the provisions of this standard in the first quarter of 2009. The adoption did not have a material effect on the Company’s consolidated financial condition, results of operations, or cash flows. Refer to Note 13 of the Notes to the Consolidated Financial Statements for the calculation of earnings per share.
 
In April 2009, the FASB updated ASC 820-10-65 “Fair Value Measurements and Disclosures: Overall: Open Effective Date Information”. This guidance clarifies the application of accounting rules for fair value measurements when the volume and level of activity for the asset or liability have significantly decreased and on identifying circumstances that indicate a transaction is not orderly. Additionally, the guidance emphasizes that even if there has been a significant decrease in the volume and level of activity for the asset or liability and regardless of the valuation technique(s) used, the objective of a fair value measurement remains the same. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. The provisions of the new accounting rule were effective for interim and annual reporting periods ending after June 15, 2009, to be applied prospectively. The Company adopted the provisions in the third quarter of 2009. The adoption of the accounting standard did not have a material impact on the Company’s consolidated financial position, results of operations, or cash flows.
 
In May 2009, the FASB issued ASC 855, “Subsequent Events”, requiring that an entity shall recognize in the financial statements the effects of all subsequent events that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements. The new accounting provisions were effective for interim or annual financial periods ending after June 15, 2009, to be applied prospectively. Accordingly, the Company adopted the provisions in the second quarter of 2009. The adoption of the provisions did not have a material effect on the Company’s consolidated financial condition, results of operations, or cash flows. Refer to Note 23 of the Notes to the Consolidated Financial Statements for the Company’s disclosure on subsequent events.
 
In June 2009, the FASB issued Statement of Financial Accounting Standards No. 167 (“SFAS 167”), “Amendments to FASB Interpretation No. 46(R)”, which has not yet been codified. SFAS 167 amends guidance surrounding a company’s analysis to determine whether any of its variable interests constitute controlling financial interests in a variable interest entity. This analysis identifies the primary beneficiary of a variable interest entity as the enterprise that has both of the following characteristics; a) the power to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance, and b) the obligation to absorb losses of the entity that could potentially be significant to the variable interest entity or the right to receive benefits from the entity that could potentially be significant to the variable interest entity. Additionally, an enterprise is required to assess whether it has an implicit financial responsibility to ensure that a variable interest entity operates as designed when determining whether it has the power to direct the activities of the variable interest entity that most significantly impact the entity’s economic performance. The new guidance also requires ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity. The guidance is effective for the first annual reporting period beginning after November 15, 2009. Accordingly, the Company will reevaluate its interests in variable interest entities for the period beginning January 1, 2010 to determine that the entities are reflected


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properly in the financial statements as investments or consolidated entities. The Company is currently evaluating the application of the new accounting standard.
 
In June 2009, the FASB issued ASC 105-10, “Generally Accepted Accounting Principleswhich established the FASB Accounting Standards Codification as the sole source of authoritative U.S. generally accepted accounting principles recognized by the FASB. Effective July 1, 2009 the Company adopted the provisions of ASC 105-10 and have updated the references to GAAP in its condensed financial statements and notes to consolidated condensed financial statements for the period ended September 30, 2009. The adoption of this standard did not have a material impact on the Company’s consolidated financial position, results of operations, or cash flows.
 
In August 2009, the FASB issued ASU 2009-05, “Fair Value Measurements and Disclosures — Measuring Liabilities at Fair Value,” which updates ASC 820-10. The update clarifies that in circumstances in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more of the following techniques:
 
1. A valuation technique that uses:
 
a) the quoted price of an identical liability when traded as an asset, or
 
b) quoted prices for similar liabilities or similar liabilities when traded as assets.
 
2. Another valuation technique that is consistent with the principles of ASC 820. Examples include an income approach, such as a present value technique, or a market approach, such as a technique that is based on the amount at the measurement date that the reporting entity would pay to transfer the identical liability or would receive to enter into the identical liability.
 
This standard was effective for financial statements issued for interim and annual periods ending after August 2009. As such, the Company adopted ASU 2009-05 effective for the quarter ending September 30, 2009. The adoption of this new accounting standard did not have a material impact on the Company’s disclosures.
 
3.   Discontinued Operations
 
In August 2009, the Company sold Taylor Plaza, a stand-alone Home Depot in Taylor, Michigan, to a third party for approximately $5,000 in net proceeds. The transaction resulted in a gain on the sale of $2,886 for the year ended December 31, 2009. Total revenue for Taylor Plaza was $493, $798 and $860 for the years ended December 31, 2009, 2008, and 2007, respectively.
 
In June 2008, the Company sold the Highland Square Shopping Center in Crossville, Tennessee, to a third party for approximately $9,200 in net proceeds. The transaction resulted in a loss on the sale of $463, for the year ended December 31, 2008. Total revenue for Highland Square was $413 and $969 for the years ended December 31, 2008, and 2007, respectively. There was no revenue related to Highland Square for the year ended December 31, 2009.
 
All periods presented reflect the operations of the aforementioned properties as discontinued operations on the consolidated statements of income and comprehensive income in accordance with ASC 205-20 Financial Statement Presentation: Discontinued Operations.
 
As of December 31, 2009 and 2008, the Company had not classified any properties as Real Estate Assets Held for Sale in its consolidated balance sheets.
 
4.   Accounts Receivable, Net
 
Accounts receivable includes $17,474 and $17,605 of unbilled straight-line rent receivables at December 31, 2009 and 2008.
 
The Company provides for bad debt expense based upon the allowance method of accounting. The Company monitors the collectability of its accounts receivable (billed and unbilled, including straight-line) from specific tenants, and analyzes historical bad debts, customer credit worthiness, current economic trends and changes in tenant payment terms when evaluating the adequacy of the allowance for doubtful accounts. When tenants are in


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bankruptcy, the Company makes estimates of the expected recovery of pre-petition and post-petition claims. The ultimate resolution of these claims can be delayed for one year or longer. Accounts receivable in the accompanying balance sheets is shown net of an allowance for doubtful accounts of $3,288 and $4,287 at December 31, 2009 and December 31, 2008, respectively.
 
Accounts receivable at December 31, 2009 and 2008 included $1,296 and $2,258, respectively, due from Atlantic Realty Trust (“Atlantic”) for reimbursement of tax deficiencies and interest related to the Internal Revenue Service (“IRS”) examination of the Company’s taxable years ended December 31, 1991 through 1995. Under terms of the tax agreement the Company entered into with Atlantic (“Tax Agreement”), Atlantic assumed all of the Company’s liability for tax and interest arising out of that IRS examination. Effective June 30, 2006, Atlantic was merged into (acquired by) Kimco SI 1339, Inc. (formerly known as SI 1339, Inc.), a wholly owned subsidiary of Kimco Realty Corporation (“Kimco”), with Kimco SI 1339, Inc. continuing as the surviving corporation. By way of the merger, Kimco SI 1339, Inc. acquired Atlantic’s assets, subject to its liabilities, including its obligations to the Company under the Tax Agreement. See Note 21.
 
5.   Investment in Real Estate, Net
 
Investment in real estate at December 31 consisted of the following:
 
                 
    2009     2008  
 
Land
  $ 141,794     $ 144,422  
Buildings and improvements
    820,070       813,705  
Construction in progress
    33,587       46,982  
                 
      995,451       1,005,109  
Less: accumulated depreciation
    (191,156 )     (174,717 )
                 
Investment in real estate, net
  $ 804,295     $ 830,392  
                 
 
6.   Property Acquisitions and Dispositions
 
Acquisitions:
 
The Company had no acquisitions of wholly-owned shopping center properties in the years ended December 31, 2009 and 2008. However, the Company acquired various parcels of land for development purposes totaling approximately $402 and $11,640 in 2009 and 2008, respectively.
 
During 2007, the Company acquired the remaining 80% interest in Ramco Jacksonville LLC, an entity that was formed to develop a shopping center in Jacksonville, Florida, for $5,100 in cash and the assumption of a $75,000 mortgage note payable due April 2017. The Company has consolidated Jacksonville in its results of operations since the date of the acquisition.
 
Dispositions:
 
In August 2009, the Company sold Taylor Plaza, a stand-alone Home Depot in Taylor, Michigan, to a third party for approximately $5,000 in net proceeds. The transaction resulted in a gain on the sale of $2,886 for the year ended December 31, 2009. Income from operations and the gain on sale relating to Taylor Plaza are classified in discontinued operations on the consolidated statements of income and comprehensive income for all periods presented. See Note 3.
 
In June 2008, the Company sold Highland Square Shopping Center in Crossville, Tennessee, to a third party. The transaction resulted in a loss on the sale of $463 in 2008. Income from operations and the loss on sale relating to Highland Square are classified in discontinued operations on the consolidated statements of income and comprehensive income for all periods presented. See Note 3.
 
In August 2008, the Company sold the Plaza at Delray shopping center in Delray Beach, Florida, to a joint venture in which it has a 20% ownership interest. Permanent financing for the shopping center was secured by the joint venture in the amount of $48,000 for five years at an interest rate of 6.0%. The transaction allowed the


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Company to pay down $43,000 in long-term debt. The Company recognized a gain of $8,213, net of taxes, on the sale of this center, which represents the gain attributable to the joint venture partner’s 80% ownership interest.
 
During 2008, the Company sold various parcels of land resulting in a total net gain of $1,477.
 
In March 2007, the Company sold its ownership interest in Chester Springs Shopping Center to a joint venture in which it has a 20% ownership interest. The joint venture assumed debt of $23,800 in connection with the sale of this center and the Company recognized a gain of $21,801, net of taxes, on the sale of this center, which represents the gain attributable to the joint venture partner’s 80% ownership interest.
 
In June 2007, the Company sold its ownership interest in Kissimmee West and Shoppes of Lakeland to a joint venture in which it has a 7% ownership interest. The Company recognized a gain of $8,104 net of taxes, on the sale of these centers which represents the gain attributable to the joint venture partner’s 93% ownership interest.
 
In July 2007, the Company sold its ownership interest in Paulding Pavilion to a joint venture in which it has a 20% ownership interest. The joint venture assumed debt of $4,675 in connection with the sale of this center and the Company recognized a gain of $207, net of taxes on the sale of this center, which represents the gain attributable to the joint venture partner’s 80% ownership interest.
 
In December 2007, the Company sold its ownership interest in Mission Bay Plaza to a joint venture in which it has a 30% ownership interest. The joint venture assumed debt of $40,500 in connection with the sale of this center. The joint venture’s initial investment was not sufficient to allow the Company to recognize the gain attributable to the joint venture partner’s 70% ownership interest, therefore, $11,700 of the gain was deferred in 2007. In January 2008, the proceeds were received and the Company recognized the gain of $11,700.
 
During 2007, the Company sold various parcels of land adjacent to its River City Marketplace shopping center to third parties. These land sales resulted in a total net gain of $2,774. In addition, the Company sold other real estate during 2007 for a loss of $243.
 
7.   Equity Investments in and Notes Receivable from Unconsolidated Entities
 
As of December 31, 2009, the Company had investments in the following unconsolidated entities:
 
                         
          Total Assets
    Total Assets
 
    Ownership as of
    as of
    as of
 
    December 31,
    December 31,
    December 31,
 
Unconsolidated Entities
  2009     2009     2008  
 
S-12 Associates
    50 %   $ 644     $ 661  
Ramco/West Acres LLC
    40 %     9,610       9,877  
Ramco/Shenandoah LLC
    40 %     15,164       15,592  
Ramco/Lion Venture LP
    30 %     534,348       536,446  
Ramco 450 Venture LLC
    20 %     364,347       362,885  
Ramco 191 LLC
    20 %     23,975       23,240  
Ramco RM Hartland SC LLC
    20 %     25,630       19,760  
Ramco HHF KL LLC
    7 %     50,991       52,461  
Ramco HHF NP LLC
    7 %     27,086       28,126  
Ramco Jacksonville North Industrial LLC
    5 %     1,279       1,257  
                         
            $ 1,053,074     $ 1,050,305  
                         


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There were no acquisitions of shopping centers in 2009 by any of the Company’s unconsolidated joint ventures. Ramco 450 Venture LLC acquired the following centers in 2008:
 
                                 
          Property
    Purchase
    Debt
 
Acquisition Date
 
Property Name
   
Location
    Price     Assumed  
 
2008
                               
April
    Rolling Meadows       Rolling Meadows, IL     $ 16,750     $ 11,911  
August
    Plaza at Delray*       Delray Beach, FL       71,800        
                                 
                    $ 88,550     $ 11,911  
                                 
 
 
* Acquired from the Company
 
Debt
 
The Company’s unconsolidated entities had the following debt outstanding at December 31, 2009:
 
                     
    Balance
    Interest
     
Unconsolidated Entities
  outstanding     Rate     Maturity Date
 
S-12 Associates
  $ 810       7.3 %   May 2016(1)
Ramco/West Acres LLC
    8,572       8.1 %   April 2030(2)
Ramco/Shenandoah LLC
    11,873       7.3 %   February 2012
Ramco/Lion Venture LP
    269,740       Various     Various(3)
Ramco 450 Venture LLC
    216,916       Various     Various(4)
Ramco 191 LLC
    8,750       1.7 %   June 2010
Ramco RM Hartland SC, LLC
    8,505       6.0 %   January 2010
Ramco RM Hartland SC, LLC
    11,818       13.0 %   October 2010(5)
Ramco Jacksonville North Industrial LLC
    748       6.0 %   September 2010(6)
                     
    $ 537,732              
                     
 
 
(1) Interest rate resets per formula annually.
 
(2) Under terms of the note, the anticipated repayment date is April 2010.
 
(3) Interest rates range from 4.6% to 8.3%, with maturities ranging from November 2009 to June 2020.
 
(4) Interest rates range from 5.3% to 6.5% with maturities ranging from February 2011 to January 2018.
 
(5) Represents mezzanine financing between the Company and the joint venture entity in which the Company has an ownership interest. Ramco RM Hartland SC, LLC can borrow up to $58,000 under this mezzanine financing arrangement provided by the Company. Included in “Notes receivable from unconsolidated entities” on the consolidated balance sheets.
 
(6) Represents mezzanine financing between the Company and the joint venture entity in which the Company has an ownership interest. Included in “Notes receivable from unconsolidated entities” on the consolidated balance sheets.
 
In November 2009, RLV Cypress Pointe LP, an entity in a joint venture in which the Company has a 30% ownership interest, had a $14,500 loan reach maturity. The joint venture continues to negotiate the terms of an extension of the debt with the special servicer and anticipates having to pay a fee and pay down a portion of the outstanding balance to extend the debt. There can be no assurance that the joint venture entity will be able to refinance the debt on Cypress Point on commercially reasonable or any other terms. The Company’s share of the debt was $4,350 at December 31, 2009.


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Fees and Management Income from Transactions with Joint Ventures
 
Under the terms of agreements with joint ventures, Ramco is the manager of the joint ventures and their properties, earning fees for acquisitions, development, management, leasing, and financing. The fees earned by Ramco, which are reported in the Company’s consolidated statements of income and comprehensive income as fees and management income, are summarized as follows:
 
                         
    2009     2008     2007  
 
Management fees
  $ 2,844     $ 2,848     $ 1,944  
Leasing fees
    794       958       585  
Acquisition fees
    603       675       2,868  
Financing fees
    80       300       989  
                         
Total
  $ 4,321     $ 4,781     $ 6,386  
                         
 
Concurrently with the sale of The Plaza at Delray Shopping Center to Ramco 450 Venture LLC, during 2008, the Company entered into a Master Lease agreement for vacant tenant space at the center. Under terms of the agreement, the Company was responsible for minimum rent and recoveries of operating expense for a period of one year ending August 2009. During 2009 and 2008, the Company paid $301 and $204, respectively, to the joint venture as required under the agreements.
 
In 2007, as part of the sale of Kissimmee West and Shoppes of Lakeland to Ramco HHF KL LLC, the Company entered into Master Lease agreements for vacant tenant space at each of the two centers. Under terms of the agreements, the Company was responsible for minimum rent, recoveries of operating expense, and future tenant allowance, if any, for a period ending June 2009. The Company paid $132, $414, and $197 in 2009, 2008 and 2007, respectively, to the joint venture as required under the agreements.
 
Combined Condensed Financial Information
 
Combined condensed financial information of the Company’s unconsolidated entities is summarized as follows:
 
                         
    2009     2008     2007  
 
ASSETS
Investment in real estate, net
  $ 1,010,216     $ 1,012,752     $ 921,107  
Other assets
    42,858       37,553       64,805  
                         
Total Assets
  $ 1,053,074     $ 1,050,305     $ 985,912  
                         
 
LIABILITIES
Mortgage notes payable
  $ 537,732     $ 540,766     $ 472,402  
Other liabilities
    25,657       25,641       47,615  
Owners’ equity
    489,685       483,898       465,895  
                         
Total Liabilities and Owners’ Equity
  $ 1,053,074     $ 1,050,305     $ 985,912  
                         
                         
Company’s equity investments in unconsolidated entities
  $ 97,506     $ 95,867     $ 117,987  
                         
Company’s notes receivable from unconsolidated entities
  $ 12,566     $ 6,716     $  
                         
                         
TOTAL REVENUES
  $ 99,434     $ 97,994     $ 70,445  
TOTAL EXPENSES
    93,859       86,894       61,697  
                         
Net Income
  $ 5,575     $ 11,100     $ 8,748  
                         
Company’s share of earnings from unconsolidated entities
  $ 1,328     $ 2,506     $ 2,496  
                         


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8.   Other Assets, Net
 
Other assets at December 31 were as follows:
 
                 
    2009     2008  
 
Leasing costs
  $ 40,922     $ 38,980  
Intangible assets
    5,836       5,836  
Deferred financing costs
    10,525       6,626  
Other
    6,162       5,904  
                 
      63,445       57,346  
Less: accumulated amortization
    (37,766 )     (34,320 )
                 
      25,679       23,026  
Prepaid expenses and other
    13,373       12,967  
Proposed development costs
          1,352  
                 
Other assets, net
  $ 39,052     $ 37,345  
                 
 
Intangible assets at December 31, 2009 included $4,526 of lease origination costs and $1,228 of favorable leases related to the allocation of the purchase prices for acquisitions made since 2002. These assets are being amortized over the lives of the applicable leases as reductions or additions to minimum rent revenue, as appropriate, over the initial terms of the respective leases.
 
At December 31, 2009 and 2008, $1,520 and $1,994, respectively, of intangible assets, net of accumulated amortization of $4,234 and $3,761, respectively, were included in other assets in the consolidated balance sheets. Of this amount, approximately $1,192 and $1,543, respectively, was attributable to in-place leases, principally lease origination costs and $328 and $451, respectively, was attributable to above-market leases. Included in accounts payable and accrued expenses at December 31, 2009 and 2008 were intangible liabilities related to below-market leases of $552 and $706, respectively, and an adjustment to increase debt to fair market value in the amount of $285 and $588, respectively. The lease-related intangible assets and liabilities are being amortized over the terms of the acquired leases, which resulted in additional expense of approximately $123, $130 and $264, respectively, and an increase in revenue of $154, $221 and $343, respectively, for the years ended December 31, 2009, 2008, and 2007. The adjustment of debt decreased interest expense by $304 and $254 for the years ended December 31, 2009 and 2008, respectively and increased interest expense by $46 for the year ended December 31, 2007.
 
The average amortization period for intangible assets attributable to lease origination costs and for favorable leases is 5.5 years and 4.5 years, respectively.
 
Deferred financing costs, net of accumulated amortization were $8,056 at December 31, 2009, compared to $3,190 at December 31, 2008. The increase in deferred financing costs compared to 2008 was the result of the refinancing of the Company’s Credit Facility in December 2009. The Company disposed of fully amortized deferred financing costs of $1,204 and $611 for the years ended December 31, 2009 and 2008, respectively. The Company recorded amortization of deferred financing costs of $875, $971, and $1,166, respectively, during the years ended December 31, 2009, 2008, and 2007. This amortization has been recorded as interest expense in the Company’s consolidated statements of income.


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The following table represents estimated aggregate amortization expense related to other assets as of December 31, 2009:
 
         
Year Ending December 31,
     
 
2010
  $ 7,070  
2011
    6,077  
2012
    5,192  
2013
    2,433  
2014
    1,533  
Thereafter
    3,374  
         
Total
  $ 25,679  
         
 
9.   Mortgages and Notes Payable
 
Mortgages and notes payable at December 31 consisted of the following:
 
                 
    2009     2008  
 
Fixed rate mortgages with interest rates ranging from 4.8% to 8.1%, due at various dates from September 2010 through December 2019
  $ 330,963     $ 354,253  
Floating rate mortgages with interest rates ranging from 5.3% to 5.5%, due June 2011
    14,427       15,023  
Revolving Credit Facility, securing The Towne Center at Aquia, with an interest rate at LIBOR plus 350 basis points with a 2.0% LIBOR floor, due December 2010. The effective rate at December 31, 2009 was 5.5% and 4.3% at December 31, 2008
    20,000       40,000  
Secured Term Loan Facility, with an interest rate at LIBOR plus 350 basis points with a 2.0% LIBOR floor, due June 2011, maximum borrowings $67,000. The effective rate at December 31, 2009 was 6.5%
    67,000        
Secured Revolving Credit Facility, with an interest rate at LIBOR plus 350 basis points with a 2.0% LIBOR floor, due December 2012, maximum borrowings $150,000. The effective rate at December 31, 2009 was 5.5%
    92,036        
Junior subordinated notes, unsecured, due January 2038, with an interest rate fixed until January 2013 when the notes are redeemable or the interest rate becomes LIBOR plus 330 basis points. The effective rate at both December 31, 2009 and December 31, 2008 was 7.9%
    28,125       28,125  
Unsecured Term Loan Credit Facility, with an interest rate at LIBOR plus 130 to 165 basis points, due December 2010, maximum borrowings $100,000. The effective rate at December 31, 2008 was 5.7%
          100,000  
Unsecured Revolving Credit Facility, with an interest rate at LIBOR plus 115 to 150 basis points, due December 2009, maximum borrowings $150,000. The effective rate at December 31, 2008 was 3.0%
          125,200  
                 
    $ 552,551     $ 662,601  
                 
 
The mortgage notes, both fixed rate and floating rate, are secured by mortgages on properties that have an approximate net book value of $415,813 as of December 31, 2009.
 
In December 2009, the Company closed on a new $217,000 secured credit facility consisting of a $150,000 secured revolving credit facility and a $67,000 amortizing secured term loan facility. The Credit Facility provides that the secured revolving credit facility may be increased by up to $50,000 at the Company’s request, dependent upon there being one or more lenders willing to acquire the additional commitment, for a total secured credit facility commitment of $267,000. The secured revolving credit facility matures in December 2012 and bears interest at LIBOR plus 350 basis points with a 2% LIBOR floor. The amortizing secured term loan facility also bears interest at LIBOR plus 350 basis points with a 2% LIBOR floor and requires a $33,000 payment by September 2010 and a final payment of $34,000 by June 2011. The Credit Facility is secured by mortgages on various


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properties that have an approximate net book value of $291,942 as of December 31, 2009. The Credit Facility amended and restated the Company’s former $250,000 credit facility comprised of a $150,000 unsecured revolving credit facility and a $100,000 unsecured term loan facility.
 
Also in December 2009, the Company amended its secured revolving credit facility for The Towne Center at Aquia, reducing the facility from $40,000 to $20,000. The revolving credit facility securing The Town Center at Aquia bears interest at LIBOR plus 350 basis points with a 2% LIBOR floor and matures in December 2010, with two, one-year extension options.
 
In December 2009, the Company paid off the $22,705 loan securing the West Oaks II and Spring Meadows shopping centers.
 
In September 2009, the Company used $96,240 in net proceeds from its equity offering to pay down the previous unsecured revolving credit facility. The Company also used approximately $23,500 in net proceeds from real estate asset sales in the third quarter of 2009 to pay down the previous unsecured revolving credit facility.
 
It is anticipated that funds borrowed under the aforementioned credit facilities will be used for general corporate purposes, including working capital, capital expenditures, the repayment of indebtedness or other corporate activities.
 
At December 31, 2009, outstanding letters of credit issued under the Credit Facility, not reflected in the accompanying consolidated balance sheets, total approximately $1,300. These letters of credit reduce the availability under the Credit Facility.
 
The Credit Facility and the secured term loan contain financial covenants relating to total leverage, fixed charge coverage ratio, tangible net worth and various other calculations. As of December 31, 2009, the Company was in compliance with the covenant terms.
 
The mortgage loans encumbering the Company’s properties, including properties held by its unconsolidated joint ventures, are generally non-recourse, subject to certain exceptions for which the Company would be liable for any resulting losses incurred by the lender. These exceptions vary from loan to loan but generally include fraud or a material misrepresentation, misstatement or omission by the borrower, intentional or grossly negligent conduct by the borrower that harms the property or results in a loss to the lender, filing of a bankruptcy petition by the borrower, either directly or indirectly, and certain environmental liabilities. In addition, upon the occurrence of certain events, such as fraud or filing of a bankruptcy petition by the borrower, the Company would be liable for the entire outstanding balance of the loan, all interest accrued thereon and certain other costs, including penalties and expenses. At December 31, 2009, the mortgage debt of $11.0 million at Peachtree Hill, a shopping center owned by Ramco 450 Venture LLC, a joint venture in which the Company has 20% ownership interest, is recourse debt. The loan is secured by unconditional guarantees of payment and performance by Ramco 450 Venture LLC, the Company, and the Operating Partnership.
 
We have entered into mortgage loans which are secured by multiple properties and contain cross-collateralization and cross-default provisions. Cross-collateralization provisions allow a lender to foreclose on multiple properties in the event that we default under the loan. Cross-default provisions allow a lender to foreclose on the related property in the event a default is declared under another loan.
 
Under terms of various debt agreements, the Company may be required to maintain interest rate swap agreements to reduce the impact of changes in interest rates on its floating rate debt. The Company has interest rate swap agreements with an aggregate notional amount of $100,000 in effect at December 31, 2009. Based on rates in effect at December 31, 2009, the agreements provide for fixed rates ranging from 6.4% to 6.7% and expire on December 2010.


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The following table presents scheduled principal payments on mortgages and notes payable as of December 31, 2009:
 
         
Year Ending December 31,
     
 
2010
  $ 80,103  
2011
    75,952  
2012
    126,162  
2013
    33,651  
2014
    32,250  
Thereafter
    204,433  
         
Total
  $ 552,551  
         
 
With respect to the various fixed rate mortgages due in 2010, it is the Company’s intent to refinance these mortgages and notes payable. However, there can be no assurance that the Company will be able to refinance its debt on commercially reasonable or any other terms.
 
10.   Fair Value
 
The Company utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. Derivative instruments (interest rate swaps) are recorded at fair value on a recurring basis. Additionally, the Company, from time to time, may be required to record other assets at fair value on a nonrecurring basis.
 
Fair Value Hierarchy
 
As required by accounting guidance for fair value measurements, the Company groups assets and liabilities at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value.
 
These levels are:
 
  Level 1   Valuation is based upon quoted prices for identical instruments traded in active markets.
 
  Level 2   Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.
 
  Level 3   Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability.
 
The following is a description of valuation methodologies used for the Company’s assets and liabilities recorded at fair value.
 
Derivative Assets and Liabilities
 
All derivative instruments held by the Company are interest rate swaps for which quoted market prices are not readily available. For those derivatives, the Company measures fair value on a recurring basis using valuation models that use primarily market observable inputs, such as yield curves. The Company classifies derivatives instruments as Level 2.
 
Real Estate Assets
 
Real estate assets are subject to impairment testing on a nonrecurring basis. The Company classifies impaired real estate assets as nonrecurring Level 3. The Company reviews investment in real estate for impairment on a property-by-property basis whenever events or changes in circumstances indicate that the carrying value of the investment in real estate may not be recoverable. These circumstances include, but are not limited to, declining


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trends in occupancy and rental rates, tenant sales, net operating income and geographic location of our shopping center properties. The Company recognizes an impairment of a property when the estimated undiscounted operating cash flows plus its residual value is less than its carrying value of the property. To the extent impairment has occurred, the Company charges to expense the excess of the carrying value of the property over its estimated fair value.
 
Assets and Liabilities Recorded at Fair Value on a Recurring Basis
 
The table below presents the recorded amount of liabilities measured at fair value on a recurring basis as of December 31, 2009 (in thousands). The Company did not have any material assets that were required to be measured at fair value on a recurring basis at December 31, 2009.
 
                                 
    Total
                   
    Fair Value     Level 1     Level 2     Level 3  
 
Liabilities
                               
Derivative liabilities(1)
  $ (2,517 )   $     $ (2,517 )   $  
                                 
 
 
(1) Interest rate swaps
 
The carrying values of cash and cash equivalents, restricted cash, receivables and accounts payable and accrued liabilities are reasonable estimates of their fair values because of the short maturity of these financial instruments. As of December 31, 2009 and 2008, the carrying amounts of the Company’s borrowings under variable rate debt approximated fair value.
 
The Company estimated the fair value of fixed rate mortgages using a discounted cash flow analysis, based on its incremental borrowing rates for similar types of borrowing arrangements with the same remaining maturity. The following table summarizes the fair value and net book value of properties with fixed rate debt as of December 31:
 
                 
    2009     2008  
 
Fair value of debt
  $ 443,415     $ 467,835  
Net book value
  $ 459,088     $ 482,378  
 
Considerable judgment is required to develop estimated fair values of financial instruments. Although the fair value of the Company’s fixed rate debt differs from the carrying amount, settlement at the reported fair value may not be possible or may not be a prudent management decision. The estimates presented herein are not necessarily indicative of the amounts the Company could realize on disposition of the financial instruments.
 
11.   Derivative Financial Instruments
 
As of December 31, 2009, the Company has $100,000 of interest rate swap agreements. Under the terms of certain debt agreements, the Company is required to maintain interest rate swap agreements in an amount necessary to ensure that the Company’s variable rate debt does not exceed 25% of its assets, as computed under the agreements, to reduce the impact of changes in interest rates on its variable rate debt. Based on rates in effect at December 31, 2009, the agreements provide for fixed rates ranging from 6.4% to 6.7% on a portion of the Company’s secured credit facility and expire on December 2010.
 
On the date the Company enters into an interest rate swap, the derivative is designated as a hedge against the variability of cash flows that are to be paid in connection with a recognized liability. Subsequent changes in the fair value of a derivative designated as a cash flow hedge that is determined to be highly effective are recorded in other comprehensive income (“OCI”) until earnings are affected by the variability of cash flows of the hedged transaction. The differential between fixed and variable rates to be paid or received is accrued, as interest rates change, and recognized currently as interest expense in the consolidated statement of income.


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The following table summarizes the notional values and fair values of the Company’s derivative financial instruments as of December 31, 2009:
 
                                         
    Hedge
    Notional
    Fixed
    Fair
    Expiration
 
Underlying Debt
  Type     Value     Rate     Value     Date  
 
Credit Facility
    Cash Flow       20,000       6.4 %     (473 )     12/2010  
Credit Facility
    Cash Flow       10,000       6.6 %     (252 )     12/2010  
Credit Facility
    Cash Flow       10,000       6.6 %     (252 )     12/2010  
Credit Facility
    Cash Flow       10,000       6.6 %     (243 )     12/2010  
Credit Facility
    Cash Flow       10,000       6.6 %     (243 )     12/2010  
Credit Facility
    Cash Flow       20,000       6.7 %     (527 )     12/2010  
Credit Facility
    Cash Flow       20,000       6.7 %     (527 )     12/2010  
                                         
            $ 100,000             $ (2,517 )        
                                         
 
The change in fair market value of the interest rate swap agreements resulted in other comprehensive income of $1,334 for the year ended December 31, 2009 and other comprehensive loss of $3,006 and $1,092 for the years ended December 31, 2008 and 2007, respectively.
 
The following table presents the fair values of derivative financial instruments in the Company’s consolidated balance sheets as of December 31, 2009 and December 31, 2008, respectively:
 
                         
    Liability Derivatives  
    December 31, 2009     December 31, 2008  
Derivatives Designated
  Balance Sheet
  Fair
    Balance Sheet
  Fair
 
as Hedging Instruments
  Location   Value     Location   Value  
 
Interest rate contracts
  Accounts payable and accrued expenses   $ (2,517 )   Accounts payable and accrued expenses   $ (3,851 )
                         
Total
      $ (2,517 )   Total   $ (3,851 )
                         
 
The effect of derivative financial instruments on the Company’s consolidated statements of income for the years ended December 31, 2009 and 2008, is summarized as follows:
 
                                     
    Amount of Gain (Loss)
    Location of
  Amount of Gain (Loss)
 
    Recognized in OCI on
    Gain (Loss)
  Reclassified from
 
    Derivative
    Reclassified from
  Accumulated OCI into
 
Derivatives in
  (Effective Portion)     Accumulated OCI
  Income (Effective Portion)  
Cash Flow Hedging
  Year Ended December 31,     into Income
  Year Ended December 31,  
Relationship
  2009     2008     (Effective Portion)   2009     2008  
 
Interest rate contracts
  $ 1,334     $ (3,006 )   Interest Expense   $ (2,836 )   $ (1,367 )
                                     
Total
  $ 1,334     $ (3,006 )   Total   $ (2,836 )   $ (1,367 )
                                     


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12.   Leases
 
Revenues
 
Approximate future minimum revenues from rentals under noncancelable operating leases in effect at December 31, 2009, assuming no new or renegotiated leases or option extensions on lease agreements are as follows:
 
         
Year Ending December 31,
     
 
2010
  $ 78,801  
2011
    73,134  
2012
    65,037  
2013
    55,721  
2014
    47,446  
Thereafter
    199,050  
         
Total
  $ 519,189  
         
 
Expenses
 
The Company has an operating lease for its corporate office space in Michigan for a term expiring in 2014. The Company also has operating leases for office space in Florida and land under a portion of one of its shopping centers. In addition, the Company has a capitalized ground lease. Total amounts expensed relating to these leases were $1,583, $1,538 and $1,526 for the years ended December 31, 2009, 2008, and 2007, respectively.
 
Approximate future minimum rental expense under the Company’s noncancelable operating leases, assuming no option extensions, and the capitalized ground lease at one of its shopping centers, is as follows:
 
                 
    Operating
    Capital
 
Year Ending December 31:
  Leases     Lease  
 
2010
  $ 909     $ 677  
2011
    916       677  
2012
    938       677  
2013
    961       677  
2014
    698       5,955  
Thereafter
    819        
                 
Total minimum lease payments
    5,241       8,663  
Less: amounts representing interest
          (1,739 )
                 
Total
  $ 5,241     $ 6,924  
                 


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13.   Earnings per Share
 
The following table sets forth the computation of basic and diluted earnings per share (“EPS”) (in thousands, except per share data):
 
                         
    2009     2008     2007  
 
Numerator:
                       
Income from continuing operations before noncontrolling interest
  $ 12,820     $ 27,366     $ 45,291  
Noncontrolling interest in subsidiaries from continuing operations
    (1,793 )     (3,922 )     (7,215 )
Preferred shares dividends
                (3,146 )
Loss on redemption of preferred shares
                (1,269 )
                         
Income from continuing operations available to RPT common shareholders
    11,027       23,444       33,661  
Discontinued operations, net of noncontrolling interest in subsidiaries:
                       
Gain (loss) on sale of real estate assets
    2,494       (400 )      
Income from operations
    199       457       599  
                         
Net income available to RPT common shareholders — basic(1)
    13,720       23,501       34,260  
Add Series C Preferred Share dividends
                1,081  
                         
Net income available to RPT common shareholders — diluted(1)
  $ 13,720     $ 23,501     $ 35,341  
                         
Denominator:
                       
Weighted-average common shares for basic EPS
    22,193       18,471       17,851  
Effect of dilutive securities:
                       
Preferred shares
                624  
Options outstanding
            7       54  
                         
Weighted-average common shares for diluted EPS
    22,193       18,478       18,529  
                         
Basic EPS:
                       
Income from continuing operations attributable to RPT common shareholders
  $ 0.50     $ 1.27     $ 1.89  
Income (loss) from discontinued operations attributable to RPT common shareholders
    0.12             0.03  
                         
Net income attributable to RPT common shareholders
  $ 0.62     $ 1.27     $ 1.92  
                         
Diluted EPS:
                       
Income from continuing operations attributable to RPT common shareholders
  $ 0.50     $ 1.27     $ 1.88  
Income (loss) from discontinued operations attributable to RPT common shareholders
    0.12             0.03  
                         
Net income attributable to RPT common shareholders
  $ 0.62     $ 1.27     $ 1.91  
                         
 
 
(1) During 2007, the Company’s Series C Preferred Shares were dilutive and therefore the Series C Preferred Shares were included in the calculation of diluted EPS. As of June 1, 2007, all of the Company’s Series C Preferred Shares had been redeemed.


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14.   Shareholders’ Equity
 
On September 16, 2009, the Company issued 12.075 million common shares of beneficial interest (par value $0.01 per share), at $8.50 per share. The Company received net proceeds from the offering of $96,240 after deducting underwriting discounts, commissions and transaction expenses payable by the Company. The net proceeds from the offering were used to reduce outstanding borrowings under the Company’s unsecured revolving credit facility.
 
On April 2, 2007, the Company announced that it would redeem all of its outstanding 7.95% Series C Cumulative Convertible Preferred Shares of Beneficial Interest on June 1, 2007. As of June 1, 2007, 1,856,846 Series C Preferred Shares, or approximately 98% of the total outstanding as of the April 2007 redemption notice, had been converted into common shares of beneficial interest on a one-for-one basis. The remaining 31,154 Series C Cumulative Convertible Preferred Shares were redeemed on June 1, 2007, at the preferred redemption price of $28.50 resulting in a charge to equity of $35, plus accrued and unpaid dividends.
 
On October 8, 2007, the Company announced that it would redeem all of its outstanding 9.5% Series B Cumulative Redeemable Preferred Shares of Beneficial Interest on November 12, 2007. The shares were redeemed at a redemption price of $25.00 per share, resulting in a charge to equity of approximately $1,234, plus accrued and unpaid dividends to the redemption date without interest.
 
The Company has a dividend reinvestment plan that allows for participating shareholders to have their dividend distributions automatically invested in additional shares of beneficial interest based on the average price of the shares acquired for the distribution.
 
15.   Shareholder Rights Plan
 
On September 8, 2009, as part of significant corporate governance changes, the Board of Trustees terminated the Shareholder Rights Plan.
 
In March 2009, consistent with their authority, the Board of Trustees adopted for a one-year term a Shareholder Rights Plan in which one purchase right was distributed as a dividend on each share of common share held of record as of the close of business on April 10, 2009.
 
16.   Restructuring Costs, Impairment of Real Estate Assets and Other Items
 
The following table presents a summary of the charges recorded of real estate assets in restructuring costs, impairment of real estate assets and other items for the years ended at December 31:
 
                         
    2009     2008     2007  
 
Restructuring expense
  $ 1,604     $     $  
Strategic review and proxy contest expenses
    1,551              
Impairment of real estate assets
          5,103        
Abandonment of pre-development site
    1,224       684       183  
                         
Total
  $ 4,379     $ 5,787     $ 183  
                         
 
Restructuring expense included severance and other benefit-related costs primarily related to the previously announced resignation of the Company’s former Chief Financial Officer in November 2009, as well as other employees who were terminated during the year ended December 31, 2009. No similar costs were incurred in the


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year ended December 31, 2008 and 2007. The Company’s liability for restructuring costs consisted of the following for the year ended December 31, 2009:
 
         
    2009  
 
Liability for restructuring costs at January 1
  $  
Restructuring expenses incurred during the period
    1,604  
Severence payments made to employees
    (492 )
         
Liability for restructuring costs at December 31
  $ 1,112  
         
 
In 2009, the Company’s Board of Trustees completed their review of financial and strategic alternatives. Also during 2009, the Company resolved a proxy contest by adding two new members to the Board of Trustees. Costs incurred for the strategic review and proxy contest were $1,551 for the year ended December 31, 2009.
 
In the fourth quarter of 2008, the Company recognized a non-recurring impairment charge of $5,103 relating to its Ridgeview Crossing shopping center in Elkin, North Carolina. There were no impairment charges on real estate assets for the years ended December 31, 2009 and 2007.
 
As part of a continuous review of future growth opportunities, in the fourth quarter of 2009, the Company determined that there were better investment alternatives than continuing to pursue the pre-development of the Northpointe Town Center in Jackson, Michigan. As such, the Company wrote-off its land option payments, third-party due diligence expenses and capitalized general and administrative costs for this project, resulting in a non-recurring charge of $1,224 for the year ended December 31, 2009. The Company abandoned various projects totaling $684 and $183 for the years ended December 31, 2008 and 2007, respectively.
 
17.   Share-based Compensation Plans
 
Incentive Plan and Stock Option Plans
 
2009 Omnibus Long-Term Incentive Plan
 
In June 2009, the Company’s shareholders approved the 2009 Omnibus Long-Term Incentive Plan (the “Plan”). The Plan allows the Company to grant trustees, officers, key employees or consultants of the Company restricted shares, restricted share units, options to purchase unrestricted shares, share appreciation rights, unrestricted shares and other awards to acquire up to 900,000 shares. The Plan will be administered by the Compensation Committee of the Board of Trustees. The right to exercise or receive a grant or award of any performance award may be subject to the Company’s or individual performance conditions as specified by the Compensation Committee. The maximum number of shares that can be awarded under the Plan to any one person, other than pursuant to an option or share appreciation right, is 100,000 shares per year. Options may be granted at per share prices not less than fair market value at the date of grant, and in the case of incentive options, must be exercisable within ten years.
 
2003 Long-Term Incentive Plan
 
The Company’s 2003 Long-Term Incentive Plan (the “LTIP”) allowed the Company to grant employees the following: incentive or non-qualified stock options to purchase common shares of the Company, share appreciation rights, restricted shares, awards of performance shares and performance units issuable in the future upon satisfaction of certain conditions and rights, such as financial performance based targets and market based metrics, as well as other share-based awards as determined by the Compensation Committee of the Board of Trustees. Effective June 10, 2009, this plan was terminated, except with respect to awards outstanding.
 
1996 Share Option Plan
 
Effective March 5, 2003, this plan was terminated, except with respect to awards outstanding. This plan allowed for the grant of stock options to executive officers and employees of the Company. Shares subject to outstanding awards under the 1996 Share Option Plan are not available for re-grant if the awards are forfeited or cancelled.


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Option Deferral
 
In December 2003, the Company amended the plan to allow vested options to be exercised by tendering mature shares with a market value equal to the exercise price of the options. In December 2004, seven executives executed an option deferral election with regards to approximately 395,000 options at an average exercise price of $15.51 per option. In November 2006, one executive executed an option deferral election with regards to 25,000 options at an average exercise price of $16.38 per option. These elections allowed the employees to defer the receipt of the net shares they would receive at exercise. The deferred gain will remain in a deferred compensation account for the benefit of the employees for a period of five years, with up to two additional 24 month deferral periods.
 
The seven executives that executed an option deferral election in 2004 exercised 395,000 options by tendering approximately 190,000 mature shares and deferring receipt of approximately 205,000 shares under the option deferral election. The one executive that executed an option deferral election in 2006 exercised 25,000 options by tendering approximately 11,000 mature shares and deferring receipt of approximately 14,000 shares. As the Company declares dividend distributions on its common shares, the deferred options will receive their proportionate share of the distribution in the form of dividend equivalent cash payments that will be accounted for as compensation to the employees. At December 31, 2009, there were 65,000 shares under the option deferral election outstanding.
 
2008 Restricted Share Plan for Non-Employee Trustees
 
During 2008, the Company adopted the 2008 Restricted Share Plan for Non-Employee Trustees (the “Trustees’ Plan”) which provides for granting up to 160,000 restricted shares awards to non-employee trustees of the Company. Each non-employee trustee will be granted 2,000 restricted shares on June 30 of each year. Each grant of 2,000 restricted shares will vest ratably over three years on the anniversary of the grant date. Awards under the Trustees’ Plan are granted in shares and are not based on dollar value; therefore the dollar value of the benefits to be received is not determinable.
 
2003 and 1997 Non-Employee Trustee Stock Option Plans
 
These plans were terminated on June 11, 2008 and March 5, 2003, respectively, except with respect to awards outstanding. Shares subject to outstanding awards under the two Non-Employee Trustee Stock Option Plans are not available for re-grant if the awards are forfeited or cancelled.
 
Share-based Compensation
 
The Company recognized the share-based compensation expense of $1,291, $1,251, and $660 for 2009, 2008 and 2007, respectively. The total fair value of shares vested during the years ended December 31, 2009, 2008 and 2007 was $267, $326 and $186, respectively. The fair values of each option granted used in determining the share-based compensation expense is estimated on the date of grant using the Black-Scholes option- pricing model. This model incorporates certain assumptions for inputs including risk-free rates, expected dividend yield of the underlying common shares, expected option life and expected volatility. The Company used the following assumptions for options granted in the following period:
 
         
    2007
 
Weighted average fair value of grants
  $ 4.46  
Risk-free interest rate
    4.5 %
Dividend yield
    5.5 %
Expected life (in years)
    5  
Expected volatility
    21.6 %
 
The options were part of the LTIP and were granted annually based on attaining certain Company performance criteria. No options were granted under the LTIP in the years ended December 31, 2009 and 2008. The Company recognized $1,194, $1,026 and $(134) of expense (income) related to restricted share grants during the years ended December 31, 2009, 2008 and 2007, respectively.


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The following table reflects the stock option activity for all plans described above:
 
                         
          Weighted
       
          Average
    Aggregate
 
    Number of
    Exercise
    Intrinsic
 
    Shares     Price     Value  
                (In thousands)  
 
Outstanding at January 1, 2007
    247,304     $ 25.53          
Granted
    116,585       34.53          
Cancelled, expired or forfeited
    (8,708 )     31.39          
Exercised
    (10,744 )     24.99     $ 133  
                         
Balance at December 31, 2007
    344,437     $ 28.45          
Granted
                   
Cancelled, expired or forfeited
    (3,388 )     24.92          
Exercised
    (2,000 )     19.63     $ 5  
                         
Balance at December 31, 2008
    339,049     $ 28.53          
Granted
                   
Cancelled, expired or forfeited
    (14,329 )     29.84          
Exercised
              $  
                         
Balance at December 31, 2009
    324,720     $ 28.47          
                         
Options exercisable at December 31:
                       
2007
    159,221     $ 24.20     $  
2008
    243,883     $ 26.73     $  
2009
    297,903     $ 27.95     $  
Weighted-average fair value of options granted during the year:
                       
2007
  $ 4.46                  
2008
  $                  
2009
  $                  
 
The following tables summarize information about options outstanding at December 31, 2009:
 
                                         
    Options Outstanding              
          Weighted-Average
          Options Exercisable  
          Remaining
    Weighted-Average
          Weighted-Average
 
Range of Exercise Price
  Outstanding     Contractual Life     Exercise Price     Exercisable     Exercise Price  
 
$14.06 — $19.63
    37,000       0.8     $ 15.42       37,000     $ 15.42  
$23.77 — $27.96
    107,533       4.8       26.72       107,533       26.72  
$28.80 — $29.06
    76,706       6.0       29.03       76,706       29.03  
$34.30 — $36.50
    103,481       7.1       34.56       76,664       34.64  
                                         
      324,720       5.4     $ 28.47       297,903     $ 27.95  
                                         


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A summary of the activity of restricted shares under the LTIP for the years ended December 31, 2009, 2008 and 2007 is presented below:
 
                 
          Weighted
 
          Average
 
    Number of
    Grant-Date
 
    Shares     Fair Value  
 
Outstanding at January 1, 2007
    3,703     $ 27.01  
Granted
    13,292       37.18  
Forfeited
             
                 
Outstanding at December 31, 2007
    16,995          
Granted
    109,188       22.08  
Forfeited
             
                 
Outstanding at December 31, 2008
    126,183          
Granted
    145,839       5.98  
Vested
    (75,625 )     19.75  
Forfeited
    (7,105 )     20.34  
                 
Outstanding at December 31, 2009
    189,292     $ 11.83  
                 
 
As of December 31, 2009 there was approximately $1,098 of total unrecognized compensation cost related to non-vested restricted share awards granted under the Company’s various share-based plans that it expects to recognize over a weighted average period of 2.1 years.
 
The Company received cash of $0, $39 and $268 from options exercised during the years ended December 31, 2009, 2008 and 2007, respectively. The impact of these cash receipts is included in financing activities in the accompanying consolidated statements of cash flows.
 
18.   401(k) Plan
 
The Company sponsors a 401(k) defined contribution plan covering substantially all officers and employees of the Company which allows participants to defer a percentage of compensation on a pre-tax basis up to a statutory limit. The Company contributes up to a maximum of 50% of the employee’s contribution, up to a maximum of 5% of an employee’s annual compensation. During the years ended December 31, 2009, 2008 and 2007, the Company’s matching cash contributions were $0, $267, and $220, respectively. For 2009 and 2010, the Company suspended the matching of employee contributions.


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19.   Quarterly Financial Data (Unaudited)
 
The following table sets forth the quarterly results of operations for the years ended December 31, 2009 and 2008 (in thousands, except per share amounts):
 
                                 
    Quarters Ended 2009  
    March 31     June 30     September 30     December 31  
 
Revenue
  $ 32,033     $ 31,518     $ 30,246     $ 30,343  
Operating income
    1,677       1,488       2,604       713  
Income from continuing operations
    2,545       1,878       7,706       691  
Income from discontinued operations
    85       86       2,945        
                                 
Net income
  $ 2,630     $ 1,964     $ 10,651     $ 691  
Net income attributable to noncontrolling interest in subsidiaries
    (380 )     (401 )     (1,327 )     (108 )
                                 
Net income attributable to RPT common shareholders
  $ 2,250     $ 1,563     $ 9,324     $ 583  
                                 
Basic earnings per RPT common share:
                               
Income from continuing operations attributable to RPT common shareholders
  $ 0.12     $ 0.08     $ 0.33     $ 0.02  
Income from discontinued operations attributable to RPT common shareholders
                0.12        
                                 
Net income attributable to RPT common shareholders
  $ 0.12     $ 0.08     $ 0.45     $ 0.02  
                                 
Diluted earnings per RPT common share:
                               
Income from continuing operations attributable to RPT common shareholders
  $ 0.12     $ 0.08     $ 0.33     $ 0.02  
Income from discontinued operations attributable to RPT common shareholders
                0.12        
                                 
Net income attributable to RPT common shareholders
  $ 0.12     $ 0.08     $ 0.45     $ 0.02  
                                 
 


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    Quarters Ended 2008  
    March 31     June 30     September 30     December 31  
 
Revenue
  $ 34,652     $ 34,096     $ 32,437     $ 33,444  
Operating income (loss)
    2,310       2,973       3,630       (3,648 )
Income (loss) from continuing operations
    13,391       3,845       13,160       (3,030 )
Income (loss) from discontinued operations
    145       (267 )     90       98  
                                 
Net income (loss)
  $ 13,536     $ 3,578     $ 13,250     $ (2,932 )
Net (income) loss attributable to noncontrolling interest in subsidiaries
    (2,091 )     (594 )     (1,665 )     419  
                                 
Net income (loss) attributable to RPT common shareholders
  $ 11,445     $ 2,984     $ 11,585     $ (2,513 )
                                 
Basic earnings (loss) per RPT common share:
                               
Income (loss) from continuing operations attributable to RPT common shareholders
  $ 0.61     $ 0.17     $ 0.62     $ (0.14 )
Income (loss) from discontinued operations attributable to RPT common shareholders
    0.01       (0.01 )     0.01        
                                 
Net income (loss) attributable to RPT common shareholders
  $ 0.62     $ 0.16     $ 0.63     $ (0.14 )
                                 
Diluted earnings (loss) per RPT common share:
                               
Income (loss) from continuing operations attributable to RPT common shareholders
  $ 0.61     $ 0.17     $ 0.62     $ (0.14 )
Income (loss) from discontinued operations attributable to RPT common shareholders
    0.01       (0.01 )     0.01        
                                 
Net income (loss) attributable to RPT common shareholders
  $ 0.62     $ 0.16     $ 0.63     $ (0.14 )
                                 
 
Earnings per share, as reported in the above table, are based on weighted average common shares outstanding during the quarter and, therefore, may not agree with the earnings per share calculated for the years ended December 31, 2009 and 2008.

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20.   Transactions With Related Parties
 
The Company has management agreements with various partnerships and performs certain administrative functions on behalf of entities owned in part by certain trustees and/or officers of the Company. The following revenue was earned during the three years ended December 31 from these related parties:
 
                         
    2009     2008     2007  
 
Management fees
  $ 103     $ 114     $ 118  
Leasing fees
    21       57       17  
Brokerage commissions
                20  
Other
    8              
                         
Total
  $ 132     $ 171     $ 155  
                         
 
The Company had receivables from related parties of $25 and $34 at December 31, 2009 and 2008, respectively.
 
21.   Commitments and Contingencies
 
Construction Costs
 
In connection with the development and expansion of various shopping centers as of December 31, 2009, the Company has entered into agreements for construction costs of approximately $20,114, including approximately $14,436 for costs related to the development of The Towne Center at Aquia and approximately $3,298 for costs related to the development of Hartland Towne Square.
 
Internal Revenue Service Examinations
 
IRS Audit Resolution for Years 1991 to 1995
 
RPS Realty Trust (“RPS”), a Massachusetts business trust, was formed on September 21, 1988 to be a diversified growth-oriented REIT. From its inception, RPS was primarily engaged in the business of owning and managing a participating mortgage loan portfolio. From May 1, 1991 through April 30, 1996, RPS acquired ten real estate properties by receipt of deed in-lieu of foreclosure. Such properties were held and operated by RPS through wholly-owned subsidiaries.
 
In May 1996, RPS acquired, through a reverse merger, substantially all the shopping centers and retail properties as well as the management company and business operations of Ramco-Gershenson, Inc. and certain of its affiliates. The resulting trust changed its name to Ramco-Gershenson Properties Trust and Ramco-Gershenson, Inc.’s officers assumed management responsibility for the Company. The trust also changed its operations from a mortgage REIT to an equity REIT and contributed certain mortgage loans and real estate properties to Atlantic Realty Trust (“Atlantic”), an independent, newly formed liquidating real estate investment trust. The shares of Atlantic were immediately distributed to the shareholders of Ramco-Gershenson Properties Trust.
 
For purposes of the following discussion, the terms “Company”, “we”, “our” or “us” refers to Ramco-Gershenson Properties Trust and/or its predecessors.
 
On October 2, 1997, with approval from our shareholders, we changed our state of organization from Massachusetts to Maryland by merging into a newly formed Maryland real estate investment trust thereby terminating the Massachusetts trust.
 
We were the subject of an IRS examination of our taxable years ended December 31, 1991 through 1995. We refer to this examination as the IRS Audit. On December 4, 2003, we reached an agreement with the IRS with respect to the IRS Audit. We refer to this agreement as the Closing Agreement. Pursuant to the terms of the Closing Agreement we agreed to pay “deficiency dividends” (that is, our declaration and payment of a distribution that is permitted to relate back to the year for which the IRS determines a deficiency in order to satisfy the requirement for REIT qualification that we distribute a certain minimum amount of our “REIT taxable income” for such year) in amounts not less than $1,400 and $809 for our 1992 and 1993 taxable years, respectively. We also consented to the


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assessment and collection of $770 in tax deficiencies and to the assessment and collection of interest on such tax deficiencies and on the deficiency dividends referred to above.
 
In connection with the incorporation, and distribution of all of the shares, of Atlantic in May 1996, we entered into the Tax Agreement with Atlantic under which Atlantic assumed all of our tax liabilities arising out of the IRS’ then ongoing examinations (which included, but is not otherwise limited to, the IRS Audit), excluding any tax liability relating to any actions or events occurring, or any tax return position taken, after May 10, 1996, but including liabilities for additions to tax, interest, penalties and costs relating to covered taxes. In addition, the Tax Agreement provides that, to the extent any tax which Atlantic is obligated to pay under the Tax Agreement can be avoided through the declaration of a deficiency dividend, we would make, and Atlantic would reimburse us for the amount of, such deficiency dividend.
 
On December 15, 2003, our Board of Trustees declared a cash “deficiency dividend” in the amount of $2,209, which was paid on January 20, 2004, to common shareholders of record on December 31, 2003. On January 21, 2004, pursuant to the Tax Agreement, Atlantic reimbursed us $2,209 in recognition of our payment of the deficiency dividend. Atlantic has also paid all other amounts (including the tax deficiencies and interest referred to above), on behalf of the Company, assessed by the IRS to date.
 
Pursuant to the Closing Agreement we agreed to an adjustment to our taxable income for each of our taxable years ended December 31, 1991 through 1995. The Company has advised the relevant taxing authorities for the state and local jurisdictions where it conducted business during those years of such adjustments and the terms of the Closing Agreement. We believe that our exposure to state and local tax, penalties and interest will not exceed $1,000 as of December 31, 2009. It is management’s belief that any liability for state and local tax, penalties, interest, and other miscellaneous expenses that may exist in relation to the IRS Audit will be covered under the Tax Agreement.
 
Effective June 30, 2006, Atlantic was merged into (acquired by) Kimco SI 1339, Inc. (formerly known as SI 1339, Inc.), a wholly-owned subsidiary of Kimco Realty Corporation (“Kimco”), with Kimco SI 1339, Inc. continuing as the surviving corporation. By way of the merger, Kimco SI 1339, Inc. acquired Atlantic’s assets, subject to its liabilities (including its obligations to the Company under the Tax Agreement). In a press release issued on the effective date of the merger, Kimco disclosed that the shareholders of Atlantic received common shares of Kimco valued at $81,800 in exchange for their shares in Atlantic.
 
Litigation
 
The Company is currently involved in certain litigation arising in the ordinary course of business. The Company believes that this litigation will not have a material adverse effect on its consolidated financial statements.
 
Environmental Matters
 
Under various Federal, state and local laws, ordinances and regulations relating to the protection of the environment (“Environmental Laws”), a current or previous owner or operator of real estate may be liable for the costs of removal or remediation of certain hazardous or toxic substances disposed, stored, released, generated, manufactured or discharged from, on, at, onto, under or in such property. Environmental Laws often impose such liability without regard to whether the owner or operator knew of, or was responsible for, the presence or release of such hazardous or toxic substance. The presence of such substances, or the failure to properly remediate such substances when present, released or discharged, may adversely affect the owner’s ability to sell or rent such property or to borrow using such property as collateral. The cost of any required remediation and the liability of the owner or operator therefore as to any property is generally not limited under such Environmental Laws and could exceed the value of the property and/or the aggregate assets of the owner or operator. Persons who arrange for the disposal or treatment of hazardous or toxic substances may also be liable for the cost of removal or remediation of such substances at a disposal or treatment facility, whether or not such facility is owned or operated by such persons. In addition to any action required by Federal, state or local authorities, the presence or release of hazardous or toxic substances on or from any property could result in private plaintiffs bringing claims for personal injury or other causes of action.


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In connection with ownership (direct or indirect), operation, management and development of real properties, the Company may be potentially liable for remediation, releases or injury. In addition, Environmental Laws impose on owners or operators the requirement of on-going compliance with rules and regulations regarding business-related activities that may affect the environment. Such activities include, for example, the ownership or use of transformers or underground tanks, the treatment or discharge of waste waters or other materials, the removal or abatement of asbestos-containing materials (“ACMs”) or lead- containing paint during renovations or otherwise, or notification to various parties concerning the potential presence of regulated matters, including ACMs. Failure to comply with such requirements could result in difficulty in the lease or sale of any affected property and/or the imposition of monetary penalties, fines or other sanctions in addition to the costs required to attain compliance. Several of the Company’s properties have or may contain ACMs or underground storage tanks (“USTs”); however, the Company is not aware of any potential environmental liability which could reasonably be expected to have a material impact on its financial position or results of operations. No assurance can be given that future laws, ordinances or regulations will not impose any material environmental requirement or liability, or that a material adverse environmental condition does not otherwise exist.
 
22.   Other Taxes
 
On May 12, 2009, the Michigan Court of Appeals affirmed a decision of the Michigan Tax Tribunal that a wholly-owned limited liability company (“LLC”) met the statutory definition of a “person” under the former Michigan Single Business Tax Act (“SBTA”) and was required to file a separate return despite being classified as a disregarded entity for federal tax purposes. The Court of Appeals ruled that a 1999 Michigan Department of Treasury Revenue Administration Bulletin (“RAB”) that required conformity with federal tax laws conflicted with the SBTA, which treated various other entities not taxable at the federal level, such as partnerships, as taxable entities for SBTA purposes.
 
The Michigan Single Business Tax (“SBT”) was repealed and replaced by the Michigan Business Tax effective for the Company’s taxable year beginning January 1, 2008. Prior to such repeal, the Company relied on the RAB, including the activities of any LLC classified as a disregarded entity for federal tax purposes in its member’s SBT return.
 
On June 23, 2009, the Michigan Department of Treasury formally appealed the Court of Appeals’ decision to the Michigan Supreme Court. On September 28, 2009, the Michigan Supreme Court denied the appeal. On February 5, 2010, the Michigan Department of Treasury issued a notice indicating that they intend to apply the court’s decision retroactively. However, this notice is not binding on the State of Michigan or the taxpayer.
 
The Company could be obligated to file additional stand-alone tax returns for each of its Michigan LLC’s and pay any related tax, interest and/or penalties, for all tax years open under the applicable statute of limitations. Any amounts owed, if this were to occur, would be reflected as operating expenses in the Company’s consolidated statements of income in the period of the payment. The Company has determined that any impact as a result of applying this decision would not be material to its results of operations or financial position.
 
23.   Subsequent Events
 
The Company has evaluated subsequent events through the date that the consolidated financial statements were issued. There were no subsequent events requiring disclosure as part of this filing.


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24.   Real Estate Assets
 
Years Ended December 31, 2009 and 2008 (Dollars in thousands)
 
Net Investment in Real Estate Assets at December 31, 2009
 
                                                                                                     
                                Initial Cost to Company     Subsequent
    Gross Cost at
                   
                                      Building &
    Additions
    End of Period(b)                    
              Year
    Year
    Year
          Improvements
    (Retirements),
          Building &
          Accumulated
       
Property
 
Location
        Constructed(a)     Acquired     Renovated     Land     (f)     Net     Land     Improvements     Total     Depreciation(c)     Encumbrances  
 
Florida
                                                                                                   
Coral Creek Shops
  Coconut Creek     Florida       1992       2002               1,565       14,085       159       1,572       14,237       15,809       2,697       (e )
Gateway Commons
  Lakeland     Florida               2008               17,625             6,074       17,784       5,915       23,699                
Lantana Shopping Center
  Lantana     Florida       1959       1996       2002       2,590       2,600       7,012       2,590       9,612       12,202       2,827       (e )
Naples Towne Center
  Naples     Florida       1982       1996       2003       218       1,964       5,038       807       6,413       7,220       2,017       (d )
Parkway Shops
  Jacksonville     Florida               2008               11,265             2,694       11,265       2,694       13,959             (e )
Pelican Plaza
  Sarasota     Florida       1983       1997               710       6,404       470       710       6,874       7,584       2,118       (d )
River City
  Jacksonville     Florida       2005       2005               19,768       73,859       5,612       11,961       87,278       99,239       7,893       (e )
River Crossing Centre
  New Port Richey     Florida       1998       2003               728       6,459       14       728       6,473       7,201       1,082       (e )
Rivertowne Square
  Deerfield Beach     Florida       1980       1998               954       8,587       1,366       954       9,953       10,907       2,255          
Southbay Shopping Center
  Osprey     Florida       1978       1998               597       5,355       1,032       597       6,387       6,984       1,830          
Sunshine Plaza
  Tamarac     Florida       1972       1996       2001       1,748       7,452       12,685       1,748       20,137       21,885       7,402       (e )
The Crossroads
  Royal Palm Beach     Florida       1988       2002               1,850       16,650       158       1,857       16,801       18,658       3,250       (e )
Village Lakes Shopping Center
  Land O’ Lakes     Florida       1987       1997               862       7,768       463       862       8,231       9,093       2,460       (d )
Georgia
                                                                                                   
Centre at Woodstock
  Woodstock     Georgia       1997       2004               1,880       10,801       (322 )     1,987       10,372       12,359       1,418       (e )
Conyers Crossing
  Conyers     Georgia       1978       1998               729       6,562       675       729       7,237       7,966       2,331       (d )
Holcomb Center
  Alpharetta     Georgia       1986       1996               658       5,953       5,974       3,432       9,153       12,585       2,286       (d )
Horizon Village
  Suwanee     Georgia       1996       2002               1,133       10,200       82       1,143       10,272       11,415       1,994       (d )
Mays Crossing
  Stockbridge     Georgia       1984       1997       2007       725       6,532       1,738       725       8,270       8,995       2,432       (d )
Promenade at Pleasant Hill
  Duluth     Georgia       1993       2004               3,891       22,520       (614 )     3,650       22,147       25,797       3,072       (e )
Michigan
                                                                                                   
Auburn Mile
  Auburn Hills     Michigan       2000       1999               15,704             (7,236 )     5,917       2,551       8,468       1,361       (e )
Beacon Square
  Grand Haven     Michigan       2004       2004               1,806       6,093       2,404       1,809       8,494       10,303       948       (e )
Clinton Pointe
  Clinton Township     Michigan       1992       2003               1,175       10,499       173       1,175       10,672       11,847       1,694       (d )
Clinton Valley Mall
  Sterling Heights     Michigan       1977       1996       2002       1,101       9,910       6,412       1,101       16,322       17,423       5,077       (d )
Clinton Valley
  Sterling Heights     Michigan       1985       1996       2009       399       3,588       3,715       523       7,179       7,702       2,135       (d )
Eastridge Commons
  Flint     Michigan       1990       1996       2001       1,086       9,775       2,376       1,086       12,151       13,237       4,855       (d )
Edgewood Towne Center
  Lansing     Michigan       1990       1996       2001       665       5,981       126       645       6,127       6,772       2,133       (d )
Fairlane Meadows
  Dearborn     Michigan       1987       2003               1,955       17,557       429       1,956       17,985       19,941       2,948       (d )
Fraser Shopping Center
  Fraser     Michigan       1977       1996               363       3,263       917       363       4,180       4,543       1,424       (d )
Gaines Marketplace
  Gaines Twp.     Michigan       2004       2004               226       6,782       8,849       8,343       7,514       15,857       946       (e )
Hartland Towne Square
  Hartland     Michigan               2008               8,138       2,022       848       5,611       5,397       11,008                
Hoover Eleven
  Warren     Michigan       1989       2003               3,308       29,778       285       3,304       30,067       33,371       4,720       (e )


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Table of Contents

 
 
                                                                                                     
                                Initial Cost to Company     Subsequent
    Gross Cost at
                   
                                      Building &
    Additions
    End of Period(b)                    
              Year
    Year
    Year
          Improvements
    (Retirements),
          Building &
          Accumulated
       
Property
 
Location
        Constructed(a)     Acquired     Renovated     Land     (f)     Net     Land     Improvements     Total     Depreciation(c)     Encumbrances  
 
Jackson Crossing
  Jackson     Michigan       1967       1996       2002       2,249       20,237       14,569       2,249       34,806       37,055       10,494       (d )
Jackson West
  Jackson     Michigan       1996       1996       1999       2,806       6,270       4,963       2,691       11,348       14,039       3,777       (e )
Kentwood Towne Center
  Kentwood     Michigan       1988       1996               2,799       9,484       68       2,841       9,510       12,351       1,590       (e )
Lake Orion Plaza
  Lake Orion     Michigan       1977       1996               470       4,234       1,243       1,241       4,706       5,947       1,594       (d )
Lakeshore Marketplace
  Norton Shores     Michigan       1996       2003       2006       2,018       18,114       1,249       3,402       17,979       21,381       3,151       (e )
Livonia Plaza
  Livonia     Michigan       1988       2003               1,317       11,786       10       1,317       11,796       13,113       2,111       (d )
Madison Center
  Madison Heights     Michigan       1965       1997       2000       817       7,366       3,086       817       10,452       11,269       3,469       (e )
New Towne Plaza
  Canton Twp.     Michigan       1975       1996       2005       817       7,354       3,804       817       11,158       11,975       3,877       (e )
Oak Brook Square
  Flint     Michigan       1982       1996               955       8,591       5,538       955       14,129       15,084       3,730       (d )
Roseville Towne Center
  Roseville     Michigan       1963       1996       2004       1,403       13,195       7,296       1,403       20,491       21,894       6,797       (d )
Shoppes at Fairlane
  Dearborn     Michigan       2007       2005               1,300       63       3,184       1,304       3,243       4,547       252       (d )
Southfield Plaza
  Southfield     Michigan       1969       1996       2003       1,121       10,090       4,440       1,121       14,530       15,651       4,331       (d )
Tel-Twelve
  Southfield     Michigan       1968       1996       2005       3,819       43,181       33,220       3,819       76,401       80,220       21,643       (d )
West Oaks I
  Novi     Michigan       1979       1996       2004             6,304       11,246       1,768       15,782       17,550       4,496       (e )
West Oaks II
  Novi     Michigan       1986       1996       2000       1,391       12,519       5,897       1,391       18,416       19,807       6,019          
North Carolina
                                                                                                   
Ridgeview Crossing
  Elkin     North Carolina       1989       1997       1995       1,054       9,494       (7,548 )     390       2,610       3,000       91          
Ohio
                                                                                                   
Crossroads Centre
  Rossford     Ohio       2001       2001               5,800       20,709       1,367       4,903       22,973       27,876       5,408       (e )
Office Max Center
  Toledo     Ohio       1994       1996               227       2,042             227       2,042       2,269       698       (d )
Rossford Pointe
  Rossford     Ohio       2006       2005               796       3,087       2,312       797       5,398       6,195       542       (d )
Spring Meadows Place
  Holland     Ohio       1987       1996       2005       1,662       14,959       4,946       1,653       19,914       21,567       6,417       (d )
Troy Towne Center
  Troy     Ohio       1990       1996       2003       930       8,372       (417 )     813       8,072       8,885       2,946       (d )
South Carolina
                                                                                                   
Taylors Square
  Taylors     South Carolina       1989       1997       2005       1,581       14,237       (12,209 )     223       3,386       3,609       762       (d )
Tennessee
                                                                                                   
Northwest Crossing
  Knoxville     Tennessee       1989       1997       2006       1,284       11,566       (3,220 )     399       9,231       9,630       2,008       (d )
Northwest Crossing II
  Knoxville     Tennessee       1999       1999               570             1,628       570       1,628       2,198       416       (d )
Stonegate Plaza
  Kingsport     Tennessee       1984       1997       1993       606       5,454       (4,816 )     606       638       1,244       2          
Virginia
                                                                                                   
Aqvia Towne Center
  Stafford     Virginia       1989       1998               2,187       19,776       44,144       3,509       62,598       66,107       6,803       (e )
Wisconsin
                                                                                                   
East Town Plaza
  Madison     Wisconsin       1992       2000       2000       1,768       16,216       71       1,768       16,287       18,055       3,919       (e )
West Allis Towne Centre
  West Allis     Wisconsin       1987       1996               1,866       16,789       10,249       1,866       27,038       28,904       6,208          
                                                                                                     
Grand Total
                                      $ 149,035     $ 640,488     $ 205,928     $ 141,794     $ 853,657     $ 995,451     $ 191,156          
                                                                                                     
 
 
(a) If prior to May 1996, constructed by a predecessor of the Company.
 
(b) The aggregate cost of land and buildings and improvements for federal income tax purposes is approximately $968 million.
 
(c) Depreciation for all properties is computed over the useful life which is generally forty years.
 
(d) The property is pledged as collateral on the secured credit facility.
 
(e) The property is pledged as collateral on secured mortgages.
 
(f) Refer to Note 1 for a summary of the Company’s capitalization policies.


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The changes in real estate assets and accumulated depreciation for the years ended December 31, 2009, and 2008 are as follows:
 
                                     
Real Estate Assets
 
2009
   
2008
   
Accumulated Depreciation
 
2009
   
2008
 
 
Balance at beginning of period
  $ 1,005,109     $ 1,045,372     Balance at beginning of period   $ 174,717     $ 168,962  
Land Development/Acquisitions
    (19 )     20,258     Sales/Retirements     (7,091 )     (11,690 )
Discontinued Operations
    (2,603 )     (12,624 )   Discontinued Operations     (859 )     (3,242 )
Capital Improvements
    19,019       41,015     Depreciation     24,389       20,687  
                                     
Sale/Retirements of Assets
    (26,055 )     (88,912 )   Balance at end of period   $ 191,156     $ 174,717  
                                     
Balance at end of period
  $ 995,451     $ 1,005,109                      
                                     


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