Welcome to the Ramco-Gershenson Fourth Quarter and Year-End 2014 Earnings Call. [Operator Instructions]. It is now my pleasure to introduce your host, Dawn Hendershot, Vice President of Investor Relations and Corporate Communications. Thank you, Dawn. You may begin.

Good morning and thank you for joining us for fourth quarter and year-end 2014 earnings conference call for Ramco-Gershenson Properties Trust. With me today are Dennis Gershenson, President and Chief Executive Officer and Gregory Andrews, Chief Financial Officer. At this time, management would like me to inform you that certain statements made during this conference call which are not historical, may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Additionally, statements made during the call are made as of the date of this call. Listeners to any replay should understand that the passage of time by itself will diminish the quality of the statements made. Although we believe that the expectations reflected in any forward-looking statements are based on reasonable assumptions, factors and risks that could cause actual results to differ from expectations are detailed in the fourth quarter press release. I would now like to turn the call over to Dennis Gershenson for his opening remarks.

Thank you, Dawn and good morning. Our company's efforts in 2014 were concentrated on increasing the quality of our portfolio and intelligently growing our asset base while remaining focused on maintaining and improving our capital structure. By every measure, we believe that our actions in the areas of acquisitions and dispositions, development, value-add redevelopments and reanchorings as well as balance sheet management produce a very successful year for our company and set the foundation for additional high-quality growth in both asset value and net operating income for 2015 and 2016. Several of the more important drivers in promoting quality and intelligent growth were our acquisition and capital recycling efforts. Last year, we acquired four high quality well-anchored shopping centers for $322 million and sold five non-core centers for $32 million. These transactions taken together increased our average household income from $72,000 at the beginning of 2014 to $78,000 at year-end. And we achieved an increase in average population from 63,000 persons to 67,500. Average base rents for our four acquisitions was $15.96 per square foot while rents at those centers we sold averaged $8.67. Further, we started 2014 with the state of Michigan representing approximately 36% of base rents and we ended the year with no one market exceeding 29% of rentals. We believe this number will be driven even lower in 2015. It is also noteworthy to point out that each of our 2014 acquisitions included the opportunity to add substantial net asset value to on-site expansions, outlet development or sale and the ability to lease-up existing vacancies. Thus combined, our 2014 acquisitions and dispositions demonstrate the positive results of our efforts to drive the quality of our markets, the demographic profile of our shopping centers, average base rents and the composition of our tenant roster. Last year, we…

Thank you, Dennis. Good morning. Owning a diverse portfolio of high-quality shopping centers continues to provide security and stability in an uncertain world, but that is not enough. A strong capital structure to finance the centers and an efficient organization to lease, manage and redevelop them are essential foundations of our company. With these foundations supporting great assets, our goal is to deliver best-in-class financial results in the future just as we have over the last five years. Let me start by covering our balance sheet. In the fourth quarter, we closed our third private placement borrowing a $100 million of 10 and 12 year notes from an affiliate of New York Life. We used the proceeds to pay down our line of credit to just $10 million at year-end. During the quarter, we also expanded our line commitment to $350 million and extended the final maturity to 2019. As a result, we entered the New Year with low leverage, strong coverage and ample liquidity. At year-end, our net debt EBITDA was 5.9 times. Our fixed charge coverage was 3.0 times and our line availability exceeded $335 million. We also take particular comfort in our weighted average term-to-maturity of 6.5 years and our proportion of fixed-rate debt at 96%. All of these metrics compare favorably to our peer group. In 2015, our pro rata share of maturing mortgage debt is approximately $94 million. In addition, we anticipate paying off $18 million of mortgage loans at two properties where the interest rates would otherwise adjust upward. We expect that paying off the combined $112 million of mortgage debt with unsecured financings will reduce our interest expense while unencumbering more of our net operating income which is currently 76% unencumbered today. Now let me turn to the income statement. Operating FFO for…

[Operator Instructions]. Our first question comes from the line of Craig Schmidt with Bank of America. Please go ahead with your question.

Listening to the call and reading Dennis's quote in the press release, it seems to me that there may be a shift from acquisition to actually more effort on the redevelopment of those assets that you acquired, you know, A is that true? And B, and be how much may be funding those redevelopments through dispositions? Do you have a sense of how many dollars and dispositions may occur in 2015?

First of all, we intended to indeed telegraph that the emphasis will be placed in 2015 on realizing not an insignificant number of opportunities in the acquisitions that we made in 2013 and 2014. The 2014 will begin - will to start to mature as far as real [ph] projects later this year. So indeed we are much more focused on the opportunities in the portfolio however we will continue to look at the potential for acquisitions but we will be very selective in the way we approach that. As far as dispositions are concerned, we obviously have not given specific guidance. Our pipeline for the redevelopments in the supplement were around $50 million and then I identified a number of [inaudible] and there will be some additional projects that we will announce a little later in the year. So you can count on somewhere in the vicinity of $50 million a year as a minimum that we will dedicate toward redevelopment. As far as the dispositions are concerned we review the bottom 5% of the portfolio on a consistent basis. These are usually the smaller assets and as you can see from the dispositions that we talked about have the lower average based rents and potentially the lower demographic profile and those are the ones you can expect that we will be selling in order to fund these activities.

Our next question comes from the line of Todd Thomas, KeyBanc Capital Markets. Please go ahead with your question.

A couple of questions, first just back to the Aquia office asset, I was just curious what type of demand you’re seeing for office there and Greg you mentioned the impact on FFO is $0.02 per share, are you forecasting any additional leasing to take place that’s like during the year and what kind of rents do you think are achievable for the remaining office space?

Yes. So the office market in the DC area and Northern Virginia I think it's fairly well recognized to have its challenges and this property is in that market. So it's subject to those overall market forces. I did note that we released a portion of the space that was vacated already I think that lease, the tenant moves in late spring. So we have mitigated a little bit, but there is more to go. We have conversations going with several other tenants in the market who are interested. That area is fairly sensitive to defense contracting and so many of the tenants lease space based on whether they get a contract or not. So it's a little early for us to predict, but I think what we've - the information we given you tells you what kind of our best case expectation is for this year.

Okay. And then Greg in terms of the $112 million of mortgage maturities that you mentioned, I guess is the plan to continue paying them off on the line and then looking for bank financing or private placement later in the year, is that still the best execution for the company and then also are the mortgages are they generally all open for prepayment 90 days ahead on maturity?

They vary in terms of the prepayments somewhere between 30 and 90 days on most of them. Most of them do come due towards the end of the year, so the impact in 2015 from that is relatively minor. And yes we still feel like there is great execution in the bank term loan market and the private placement market. We still have - I think you may recall we did a shelf deal with Prudential last year that leaves about 50 million for us to be able to borrow [ph] there and I think we've seen interest from other private placement lenders and the bank market remains strong. So we will continue to move in the direction we have of on securing the balance sheet which I think gets as good execution and good flexibility.

Any updated thoughts at all on pursuing a rating.

We continue to look at that alternative, I think as we said in the past, the bond market is attractive if you borrow in size and for us those are relatively large amounts. The index eligible bonds are $250 million. So the private placement market has just been an excellent alternative. I think in fact our execution during 2014 in that arena probably better what we could have done in the bond market.

Okay. And then just lastly, for Dennis maybe I was just wondering if you could speak to the resignation of Michael Sullivan and maybe discuss what the company's plans are to back fill his role in asset management.

Sure. Michael had been with us for around eight or nine years. He felt that - he came from a restaurant background originally and so he wanted to pursue interest in that area. We had a very amicable parting; we had a significant depth in the asset management area so there was not one moment of concern that we wouldn't be able to handle the responsibility with our assets. And what's nice about that is that we now in looking at the organizational structure have the flexibility to see exactly how we want to either refill that responsibility or some other individual that may come in who can be helpful to the organization on a broader base.

[Operator Instructions]. Our next question comes from the line of Vincent Chao with Deutsche Bank. Please go ahead with your question.

Just a quick question on the same-store NOI guide is 2.5% to 3.5%. I know some of the redevelopments are excluded from that pool, but when you think about the re-tenantings that you're also doing that could be a drag, now how much or can you quantify what that drag is on same-store NOI growth for 2015?

We don't have a number to give you here and I don't think that it's substantial in the way that your question implies. In each and every year, there's some downtime from re-tenanting, and then new tenants come in, and then there's some downtime somewhere else. So I don't think that there's sort of a particularly unusual amount of that activity in 2015 that somehow has an outside impact during the course of 2015.

And then maybe if you could just talk about your Office Depot and Staples exposure, the number of leases rolling here in the next couple years, maybe the mark-to-market to leases as you see it today?

Sure. So we have leases out with both Office Depot and OfficeMax and the combined company would be our second largest tenant initially at about 2.9% of base rent. We have 23 leases with the combined entity, and the good news, I think, on our front is kind of twofold. One, that the leases expire over the next six or seven years in a fairly even rate, a little bit more between, I think 2017 and 2019, but certainly no big concentration in one year. And the second thing that we like is that the average base rent is really quite reasonable at $11.80 a square foot. So to the extent we get stores back due to closings, or downsizings, we think we'll do at least that well or better on average across that. So the other couple of points I would make about our exposure to the office supply stores is that across those 23 on average there are five other anchors at the shopping center. So to the extent there would be a closing and some downtime, it's not going to have a huge impact on a center with five other anchors. And the other stat that I thought was quite interesting is that the median distance to the next office supply store is five miles. So there's, I think, good spacing in general. There are some that are closer than that, but on average it's five. And I think only about - less than a third are within two miles. So we feel pretty comfortable that this is going to manage itself well and in fact present opportunity as we get space back. We have a lot of tenant interest. We've been proactively trying to work with both Office Depot and Staples to get space back to address that interest and we'll continue to do that.

And then just one other question, I don't know if I missed it from earlier, but did you disclose a cap rate on the three dispositions for the quarter?

We did not.

Is that something you can share with us, I mean not on an individual, but maybe just all three?

Yes. I think on a blended basis, it was between an 8% and a 9% cap.

Our next question comes from the line of Collin Mings with Raymond James and Associates. Please go ahead with your question.

Just a quick follow-up here, just going through the supplemental, it looks like the expected yield on your Harvest Junction North project came down about 100 basis points from what you had previously estimated and the product stabilization has been pushed out a little bit. Can you maybe discuss what's driving that and just more widely talk about what you're seeing as far as construction costs and what's going on there?

So Harvest Junction is centered in Longmont, Colorado. It's a beautiful property and a really nice area. And as you often find in those kind of communities, the cities have pretty stringent requirements of what they like to see. So the increase in cost is really largely due to some of the requirements that the city demanded in terms of finish and the like. And that also, I think helped drive the fact that the project's pushed out a little bit. But it's fantastic property, fantastic area and we're so excited at those levels of returns about what we're doing there.

Okay. I know that's helpful. But just more broadly just as far as construction costs and what're we seeing as far as the broader environment there?

I would say that construction costs may be up modestly, but we took that into consideration when we put our original pro formas together relative to contingency numbers on construction costs. So we do not expect with the projects that we've got going to see any real changes in our numbers

And then you touched just again as far as the progress made in 2014 as far as reducing that Michigan exposure, you outlined kind of plans that are an intent to continue to reduce that into 2015. Is there a target or a way we should think about that over the intermediate term on where you would like to get that?

Yes. We have said for some time that we're interested in having no one market or state more than 25%. So we do intend to drive that number lower. What you need to understand, however, is that there are a significant number of assets in the state of Michigan that we consider core. And therefore, the changes that you're going to see will either involve some very small centers in non-strategic markets in Michigan or as we reallocate assets to other states and make other acquisitions, that was the primary driver in the 2014 year and I think you'll see similar type of moves in 2015.

Our next question comes from the line of Chris Lucas with Capital One Securities. Please go ahead with your question.

Greg, if I could, on the operating margin or tenant recoveries for the quarter I guess I was wondering if you could maybe provide a little more color in that is there any one-time items in there? Is this fourth-quarter number a good run rate going forward? And then on the taxes, I think you mentioned as being one of the primary drivers of that. Is that related to 2014 acquisitions, or what is exactly going on there?

Let me start with the first part, which is I think the recovery rate was depressed a little in the fourth quarter, and if you're looking for a run rate, I think you should focus more on the full-year number. Basically what happened is we got some costs in the fourth quarter a little bit higher than we expected including some tax bills that had been estimated earlier, but came in higher and in particular, some of that were the centers that were less occupied than the portfolio average and so we have to pick up a share of that. So I think we have a little bit of a blip, a little bit of a onetime adjustment in the fourth quarter when we trued things up. But I think if you look at the full year, you'll have a better run rate for projecting going forward.

If I could just add something to Greg's comments, some of those costs really were acquisitions that we had made at the tailend of 2013 in shopping centers that were in the 80% leased category. So, we knew that we were buying centers where we had the opportunity to lease-up those assets. We're making significant progress in 2014 to see occupancy start to occur in 2015, and so that will ameliorate some of the landlord costs vis-a-vis the real estate taxes that we had to pick up

And then maybe, Dennis, I'm sort of taking a step back for the bigger picture. In the markets that you operate in, are you seeing any change to sort of new development round up, new development starts taking place. And we've seen a couple of the public peers announce some new land acquisitions for new development. I'm curious to your thoughts about where you are in that cycle at this point.

Well, first of all in our markets what we're really seeing is that any construction that is really taking place is more along the line of people acquiring really distressed assets and then attempting to turn them around to make them much more viable shopping centers, that's where the lion share of the development we're seeing. In our markets, we really have not seen much if any new development commencing. One of the things of course, to remember is that if we took a look at a piece of property today and said, Boy, that might be a good opportunity for development, between entitlements, finding the right kinds of tenants, building the shopping center, opening it and stabilizing it, you're talking anywhere from 3 to 4 years. But again, we're not seeing anything necessarily on the horizon. Our development activities, really at this juncture involve acquiring land adjacent to our projects. You can see that in Fox River at Harvest Junction as well as some on-site development and I talked about that in St. Louis, etcetera. That's where our focus will be, in not necessarily going to a greenfield site and running around attempting to find retailers for those locations, but more what you would probably call expansions of existing centers whether it's on-site or in an adjacent property.

Our next question comes from the line of Michael Mueller with JPMorgan. Please go ahead with your question.

Everything else was pretty much asked already, but I was just curious, have you closed anything on the acquisition side at this point?

At this juncture, we have nothing specific in the pipeline.

[Operator Instructions]. There are no further questions at this time. I would now like to turn the floor back over to management for any closing remarks.

Ladies and gentlemen as always, thank you for your interest and your attention. We look forward to talking to you again at the end of the first quarter. Have a wonderful day.