Responsive REIT
Michigan-based REIT develops, redevelops, acquires and manages shopping centers in proven markets while keeping an eye out for new ones.
Susan H. Fishman

Ramco-Gershenson’s 400,000-square-foot Beacon Square is located in Grand Haven, Michigan, a suburb of Muskegon.

In the early 1950s, brothers William and Aaron Gershenson formed the A & W Management Company, the predecessor organization to Ramco-Gershenson, Inc. Over its 45-year history, the Gershenson organization established a strong foundation in the shopping center industry, responsible for the development of more than 70 shopping centers primarily in the Midwestern United States. In 1975 William Gershenson’s four sons — Joel, Dennis, Richard and Bruce — and associate Mike Ward assumed leadership responsibility of Ramco-Gershenson, Inc.

On May 1, 1996, Ramco-Gershenson, Inc. and 22 of its primary shopping centers merged with RPS Realty Trust to form Ramco-Gershenson Properties Trust. The firm went through a number of changes over the years and in May 2001, the formation of an oversight advisory committee eliminated the operating responsibilities of Joel Gershenson, Bruce Gershenson and Mike Ward, who were now members of this newly formed committee. In June 2005, Richard Gershenson, executive vice president and head of development, left the company to pursue private business opportunities. The company hired Michael Sullivan, senior vice president, as the head of asset management. 

Ramco-Gershenson’s 150,000-square-foot Gaines Marketplace is in Gaines Township, Michigan, a suburb of Grand Rapids.

Today, Ramco-Gershenson Properties Trust has a portfolio of 80 shopping centers, of which more than 51 percent are supermarket anchored, consisting of approximately 17.8 million square feet of gross leasable area. The Trust’s properties consist of 79 community centers, 15 of which are power centers and two of which are single-tenant properties. The company also owns one regional mall.

Growth of the company comes through several different vehicles, according to Litzler: 1) additional ground-up development, 2) continued redevelopment of the portfolio and 3) acquisitions of shopping centers and, within that category, re-development and expansion of those assets, as well.

River City Marketplace in Jacksonville, Florida, will be around 1 million square feet when all of the development is completed.

Another integral part of Ramco-Gershenson’s business plan is acquisitions of well located shopping centers. In the early years, the company was in the mall and strip center business with three enclosed malls. But the recent focus has been away from enclosed malls with a focus on community centers, which can consist of power centers and smaller supermarket-anchored shopping centers or centers that have a discount department store and a supermarket with retail in between. The firm recently sold seven shopping centers, primarily in the Carolinas, Alabama, the panhandle of Florida, Georgia and Tennessee — properties which qualified as tertiary market assets and were part of a focused exit strategy.

“We primarily look for metropolitan markets with a trade area of at least 150,000 to 250,000 people,” notes President and CEO Dennis Gershenson.

In 2005, Ramco-Gershenson had more shopping centers under development than it has since going public, with three centers in Michigan and one in Florida, called River City Marketplace. The center is strategically located at the interchange of I-95 and Airport Road, just north of I-295, in one of the fastest growing areas in north Florida. The development is located at the first commercial exit along I-95 as people enter Florida from Georgia.

Dennis Gershenson, president and CEO of Ramco-Gershenson Properties Trust.

Tenants already open at River City Marketplace include Wal-Mart; Bed Bath & Beyond; Cracker Barrel, Ross Dress For Less and Old Navy. The center will weigh in around 1 million square feet upon completion and will include an 18-screen Hollywood Cinema.

Crossroads Centre was another notable Ramco-Gershenson shopping center developed and built in 2001. The 354,000-square-foot center is excellently positioned near the highly traveled intersection I-75 and US Highway 20 in Rossford, Ohio. Anchor tenants include Target, The Home Depot, Giant Eagle, Linens ‘n Things, Michaels Stores, and outparcels are occupied by Pier 1, Pet Supplies Plus, Chili’s and Mattress Firm. Adjacent to Crossroads Centre is Rossford Point, developed by Ramco-Gershenson this year. With roughly 20,000 square feet, the center is anchored by PetsMart.

“Along with our peers, we’re very focused on building high-quality developments with tenants that satisfy the demographics of the trade area,” says Gershenson. “We’re one of those organizations that has been doing this longer than most, so we truly understand the dynamics of what it takes to make a shopping center successful. We’re very focused on being responsive to the community and the trade area and making sure our assets are not only demographically responsive but that we’re building the types of centers that are on the cutting edge.”

Another strength for the company is the strong, long term relationships that it has with retailers, adds Litzler.

“When new retail formats come into play or new mid-boxes roll out for regional developments, we’re on the leading edge of making deals with these folks, and we can utilize them both in the redevelopments of our existing portfolio as well as new shopping centers,” he says.

One thing that may set Ramco-Gershenson apart from its peers is the long-time redevelopment of its assets, notes Gershenson.

“We’ve been redeveloping our shopping centers a minimum of four to five a year since 1996,” he says. “We have been successful in going back with individual shopping centers and upgrading them three, four and, in some cases, five times since 1996. We are constantly adding new retailers and expanding our anchors and the shopping center proper. So we are responsive to the new venues that have come into retailing that should be a part of any shopping center. In 2005, we had 10 shopping centers in redevelopment.”

Ramco-Gershenson’s focused business plan is to continue to expand the company’s presence in those markets where it already has shopping centers. The firm has grown to 23 shopping centers in Florida where, at the time of the reverse merger in 1996, it had six shopping centers.

“There is still significant opportunity to grow the company in areas where we know the markets very well,” says Gershenson. “But we are also constantly examining the demographic makeup of additional areas. We’re getting into those markets before the rest of the world discovers that there’s been a significant population growth in a specific metropolitan area.”