NEW YORK, March 31, 2020 (GLOBE NEWSWIRE) -- RPT Realty (NYSE:RPT) (the “Company” or “RPT”) issued the following statement regarding the COVID-19 pandemic and announced that it has taken decisive actions to enhance liquidity and balance sheet flexibility in light of the potential impact of the pandemic on the Company’s business.
“At this unprecedented time in history, our priority is the health and safety of our employees and their families, our tenants and our shopping center customers,” said Brian Harper, President and CEO. “I am happy to report that our entire staff successfully transitioned to a cloud based, fully remote operation several weeks ago. From a business perspective, we have proactively reduced capital expenditures and implemented further liquidity enhancing measures to help us navigate through the potential COVID‐19 disruption. Additionally, the steps taken over the past year and a half through our non-core asset sales, proactive refinancing and the formation of our joint venture with an affiliate of GIC Private Limited have resulted in substantial improvements to our portfolio quality, our balance sheet and our strong liquidity position. We will continue to remain vigilant stewards of capital for our investors as we proactively prepare for near-term potential disruption, while positioning RPT for long-term success.”
Guidance
Given the uncertainties surrounding the impact of the COVID-19 pandemic on the economy, the Company is withdrawing all previously provided guidance for 2020 as disclosed in the Company’s fourth quarter 2019 earnings press release dated February 19, 2020. Additional information has been posted to the Company’s website at investors.rptrealty.com.
Liquidity and balance sheet flexibility enhancements
The Company has taken the following measures to further strengthen liquidity and increase balance sheet flexibility:
- Drew down $225 million on its previously unused revolving line of credit in March 2020.
- Suspended all acquisition and disposition activity until further notice with no transactions made since December 31, 2019.
- Suspended all new development and redevelopment project starts until further notice and currently have no committed development or redevelopment projects in progress.
- Started deferring all but essential maintenance capital expenditures in early March.
- The Board of Trustees is evaluating the Company’s dividend policy with decisions regarding future dividend payments beyond the previously announced first quarter dividend, payable on April 1, 2020 to be made based on then current market and business conditions. Decisions regarding future dividends will be made with liquidity, capital preservation and sustainability as the Company’s highest priorities, while still meeting REIT qualification requirements.
Following the $225 million drawdown on the revolving line of credit the Company had approximately $320 million of cash and cash equivalents representing approximately 2x its 2019 base rent.
Operating portfolio and balance sheet improvements
Prior to the pandemic, the Company had already made significant improvements to the operating portfolio and balance sheet including:
- Sold $190 million of the Company’s most at-risk properties by the first quarter 2019, including the only enclosed mall in the portfolio.
- Implemented numerous business processes and policies to enhance business visibility, improve governance and optimize cash flows.
- Curated improved tenancy across the portfolio with over 65% of the Company’s properties having a grocery or grocer component and over 86% of annualized base rent stemming from National or Regional tenants.
- Refinanced $710 million of debt in the fourth quarter 2019, which reduced the Company’s debt maturities through 2022 to just 10% of total debt at December 31, 2019 with no debt maturities in 2020.
- Entered into a new joint venture (“R2G”) with an affiliate of GIC Private Limited (“GIC”) and received $118.3 million in gross proceeds for the 48.5% stake in R2G that was acquired by GIC. Additionally, over the next three years, GIC has committed up to $200.0 million of additional capital, beyond their initial investment, that will fund its 48.5% share of potential mutually agreed upon future acquisitions of grocery-anchored shopping centers in target markets in the U.S. Combined with amounts committed by the Company, R2G will have up to $412.4 million of capital to deploy at the appropriate time.
Community and tenant support
The Company is committed to supporting the needs of its communities and tenants during this time of crisis. Below are some of the ways RPT is helping to support the relief efforts:
- Providing information and resources to assist tenants with communication efforts, small business resources and state-by-state COVID-19 updates at rptrealty.com.
- Following all precautions prescribed by the Centers for Disease Control and the World Health Organization to mitigate the spread of COVID-19 at company offices and shopping centers.
- Helping tenants to continue to provide essential goods and services to their customers by keeping shopping centers open, subject to local, state and federal mandates.
- Donating over 20,000 meals to support schools and nursing home employees in the Company’s local communities.
- Dollar matching employee donations with proceeds used to support hospital workers and volunteers.
- Offering the medical community vacant spaces for storage.
- Preparing to launch a program to assist its tenants in optimizing the benefits from the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
About RPT Realty
RPT Realty owns and operates a national portfolio of open-air shopping destinations principally located in top U.S. markets. The Company's shopping centers offer diverse, locally-curated consumer experiences that reflect the lifestyles of their surrounding communities and meet the modern expectations of the Company's retail partners. The Company is a fully integrated and self-administered REIT publicly traded on the New York Stock Exchange (the “NYSE”). The common shares of the Company, par value $0.01 per share (the “common shares”) are listed and traded on the NYSE under the ticker symbol “RPT”. As of December 31, 2019, our property portfolio consisted of 49 shopping centers (including five shopping centers owned through a joint venture) representing 11.9 million square feet of gross leasable area. As of December 31, 2019, the Company's pro-rata share of the aggregate portfolio was 94.7% leased. For additional information about the Company please visit rptrealty.com.
Forward-Looking Statements
This press release contains forward-looking statements that represent the Company’s expectations and projections for the future. Management of the Company believes the expectations reflected in any forward-looking statements made in this press release are based on reasonable assumptions, however, the Company can give no assurances that such expectations will be attained or achieved. Certain factors could occur that might cause actual results to vary, including, among others, economic, business and financial conditions, including the impact of the COVID-19 pandemic on the Company’s business, tenants, and operations and changes in the Company’s industry and changes in the real estate markets in particular, economic and other developments in markets where the Company has a high concentration of properties, the Company’s business strategy, the Company’s projected operating results, bankruptcy or insolvency of a key tenant or a significant number of smaller tenants, adverse impact of e-commerce developments and shifting consumer retail behavior on tenants, interest rates or operating costs, the potential discontinuation of LIBOR, the Company’s leverage, the Company’s ability to generate sufficient cash flows to service outstanding indebtedness and make distributions to shareholders, the Company’s continued compliance with debt covenants, general volatility of the capital and credit markets and the market price of the Company’s common shares, risks generally associated with real estate acquisitions and dispositions, including the Company’s ability to identify and pursue acquisition and disposition opportunities, risks generally associated with redevelopment, including the impact of construction delays and cost overruns and the Company’s ability to lease redeveloped space and identify and pursue redevelopment opportunities, risks generally associated with joint ventures, the Company’s ability to enter into new leases or renew leases on favorable terms, the Company’s ability to create long-term shareholder value, the Company’s ability to continue to qualify as a REIT, regulatory changes and other risk factors, including those detailed in the sections of the Company’s most recent Form 10-K filed with the Securities and Exchange Commission titled “Risk Factors.” Forward-looking statements speak only as of the date hereof and the Company expressly disclaims any obligation to update any forward-looking statements.
Contact Information
Vin Chao
Senior Vice President of Finance
vchao@rptrealty.com
(212) 221-1752
Source: RPT Realty