RPT Realty - Quarter Report: 2009 June (Form 10-Q)

 

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C. 20549

 

FORM 10-Q

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934

For the quarterly period ended June 30, 2009

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934

For the transition period from                      to                     

RAMCO-GERSHENSON PROPERTIES TRUST

(Exact name of registrant as specified in its charter)

MARYLAND (State or other jurisdiction of incorporation or organization)		13-6908486 (I.R.S. Employer Identification Number)
31500 Northwestern Highway Farmington Hills, Michigan		48334
(Address of principal executive offices)		(Zip code)

248-350-9900
(Registrant’s telephone number, including area code)

     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 whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

     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

     Number of common shares of beneficial interest ($0.01 par value) of the registrant outstanding as of July 27, 2009: 18,710,476

 

 

INDEX

				Page No.
		PART I — FINANCIAL INFORMATION
Item 1.		Financial Statements
		Consolidated Balance Sheets — June 30, 2009 (Unaudited) and December 31, 2008			3
		Consolidated Statements of Income and Comprehensive Income — Three Months and Six Months Ended June 30, 2009 and 2008 (Unaudited)			4
		Consolidated Statements of Cash Flows — Six Months Ended June 30, 2009 and 2008 (Unaudited)			5
		Notes to Consolidated Financial Statements			6
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations			20
Item 3.		Quantitative and Qualitative Disclosures About Market Risk			31
Item 4.		Controls and Procedures			32
		PART II — OTHER INFORMATION
Item 1.		Legal Proceedings			33
Item 1A.		Risk Factors			33
Item 4.		Submission of Matters to a Vote of Security Holders			33
Item 6.		Exhibits			34
EX-31.1
EX-31.2
EX-32.1
EX-32.2

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

RAMCO-GERSHENSON PROPERTIES TRUST
CONSOLIDATED BALANCE SHEETS

		June 30,				December 31,
		2009				2008
		(Unaudited)
		(In thousands, except per
		share amounts)
ASSETS
Investment in real estate, net		$	826,296			$	830,392
Cash and cash equivalents			7,818				5,295
Restricted cash			5,202				4,891
Accounts receivable, net			33,665				40,736
Equity investments in and advances to unconsolidated entities			104,623				95,867
Other assets, net			35,718				37,345
Total Assets		$	1,013,322			$	1,014,526
LIABILITIES
Mortgages and notes payable		$	662,176			$	662,601
Accounts payable and accrued expenses			30,273				26,751
Distributions payable			4,958				4,945
Capital lease obligation			7,060				7,191
Total Liabilities			704,467				701,488
SHAREHOLDERS’ EQUITY
Ramco-Gershenson Properties Trust (“RPT”) shareholders’ equity:
Common Shares of Beneficial Interest, par value $0.01, 45,000 shares authorized; 18,710 and 18,583 issued and outstanding as of June 30, 2009 and December 31, 2008, respectively			187				185
Additional paid-in capital			390,105				389,528
Accumulated other comprehensive loss			(3,151	)			(3,851	)
Cumulative distributions in excess of net income			(117,508	)			(112,671	)
Total RPT Shareholders’ Equity			269,633				273,191
Noncontrolling interest in subsidiaries			39,222				39,847
Total Shareholders’ Equity			308,855				313,038
Total Liabilities and Shareholders’ Equity		$	1,013,322			$	1,014,526

See notes to consolidated financial statements.

RAMCO-GERSHENSON PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

		For the Three Months								For the Six Months
		Ended June 30,								Ended June 30,
		2009				2008				2009				2008
		(Unaudited)
		(In thousands, except per share amounts)
REVENUES:
Minimum rents		$	21,215			$	23,101			$	42,594			$	46,122
Percentage rents			27				133				280				497
Recoveries from tenants			9,890				10,313				20,537				21,396
Fees and management income			1,497				1,930				2,626				3,352
Other income			1,000				495				1,353				980
Total revenues			33,629				35,972				67,390				72,347
EXPENSES:
Real estate taxes			4,697				4,805				9,407				9,652
Recoverable operating expenses			5,558				5,500				11,561				12,083
Depreciation and amortization			7,876				7,880				15,669				15,835
Other operating			656				1,013				1,920				2,061
General and administrative			5,364				4,820				9,489				8,625
Interest expense			7,904				8,893				16,008				18,672
Total expenses			32,055				32,911				64,054				66,928
Income from continuing operations before gain on sale of real estate assets and earnings from unconsolidated entities			1,574				3,061				3,336				5,419
Gain on sale of real estate assets			53				103				401				10,287
Income from unconsolidated entities			337				769				857				1,666
Income from continuing operations			1,964				3,933				4,594				17,372
Discontinued operations:
Loss on sale of real estate assets			—				(463	)			—				(463	)
Income from operations			—				108				—				205
Loss from discontinued operations			—				(355	)			—				(258	)
Net Income			1,964				3,578				4,594				17,114
Less: Net income attributable to the noncontrolling interest in subsidiaries			(401	)			(594	)			(781	)			(2,685	)
Net income attributable to RPT common shareholders		$	1,563			$	2,984			$	3,813			$	14,429
Basic earnings per RPT common share:
Income from continuing operations attributable to RPT common shareholders		$	0.08			$	0.18			$	0.20			$	0.79
Loss from discontinued operations attributable to RPT common shareholders			—				(0.02	)			—				(0.01	)
Net income attributable to RPT common shareholders		$	0.08			$	0.16			$	0.20			$	0.78
Diluted earnings per RPT common share:
Income from continuing operations attributable to RPT common shareholders		$	0.08			$	0.18			$	0.20			$	0.79
Loss from discontinued operations attributable to RPT common shareholders			—				(0.02	)			—				(0.01	)
Net income attributable to RPT common shareholders		$	0.08			$	0.16			$	0.20			$	0.78
Basic weighted average common shares outstanding			18,699				18,478				18,654				18,477
Diluted weighted average common shares outstanding			18,699				18,490				18,654				18,489
AMOUNTS ATTRIBUTABLE TO RPT COMMON SHAREHOLDERS:
Income from continuing operations		$	1,563			$	3,291			$	3,813			$	14,652
Loss from discontinued operations			—				(307	)			—				(223	)
Net income		$	1,563			$	2,984			$	3,813			$	14,429
COMPREHENSIVE INCOME
Net income		$	1,563			$	2,984			$	3,813			$	14,429
Other comprehensive loss:
Unrealized gain on interest rate swaps			542				2,828				700				1,024
Comprehensive income			2,105				5,812				4,513				15,453
Comprehensive income attributable to the noncontrolling interest in subsidiaries			74				385				95				140
Comprehensive income attributable to RPT		$	2,179			$	6,197			$	4,608			$	15,593

See notes to consolidated financial statements.

RAMCO-GERSHENSON PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS

		For the Six Months
		Ended June 30,
		2009				2008
		(Unaudited)
		(In thousands)
Cash Flows from Operating Activities:
Net income attributable to RPT common shareholders		$	3,813			$	14,429
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			15,669				15,835
Amortization of deferred financing costs			345				436
Gain on sale of real estate assets			(401	)			(10,287	)
Earnings from unconsolidated entities			(857	)			(1,666	)
Discontinued operations			—				(205	)
Noncontrolling interest in subsidiaries			781				2,685
Distributions received from unconsolidated entities			2,358				4,095
Changes in operating assets and liabilities that (used) provided cash:
Accounts receivable			(609	)			(3,069	)
Other assets			498				(2,526	)
Accounts payable and accrued expenses			5,074				(6,145	)
Net Cash Provided by Continuing Operating Activities			26,671				13,582
Loss on sale of Discontinued Operations			—				463
Operating Cash from Discontinued Operations			—				205
Net Cash Provided by Operating Activities			26,671				14,250
Cash Flows from Investing Activities:
Real estate developed or acquired, net of liabilities assumed			(11,155	)			(35,969	)
Investment in and advances to unconsolidated entities, net			(3,110	)			(1,846	)
Proceeds from sales of real estate assets			1,207				4,970
Increase in restricted cash			(311	)			(1,713	)
Repayment of note receivable from joint venture			—				23,249
Net Cash Used in Investing Activities			(13,369	)			(11,309	)
Investing Cash from Discontinued Operations			—				9,157
Net Cash Used in Investing Activities			(13,369	)			(2,152	)
Cash Flows from Financing Activities:
Cash distributions to shareholders			(8,640	)			(17,074	)
Cash distributions to operating partnership unit holders			(1,350	)			(3,360	)
Paydown of mortgages and notes payable			(10,624	)			(81,052	)
Payment of deferred financing costs			(180	)			(56	)
Distributions to noncontrolling partners			(54	)			(28	)
Borrowings on mortgages and notes payable			10,200				81,250
Reduction of capital lease obligation			(131	)			(124	)
Proceeds from exercise of stock options			—				39
Net Cash Used in Financing Activities			(10,779	)			(20,405	)
Net Increase (Decrease) in Cash and Cash Equivalents			2,523				(8,307	)
Cash and Cash Equivalents, Beginning of Period			5,295				14,977
Cash and Cash Equivalents, End of Period		$	7,818			$	6,670
Supplemental Cash Flow Disclosure, including Non-Cash Activities:
Cash paid for interest during the period		$	14,436			$	18,219
Cash paid for federal income taxes			341				5,797
Capitalized interest			815				1,319
Increase in fair value of interest rate swaps			700				1,024
Reclassification of note receivable from joint venture			7,680				—
Decrease in deferred gain on sale of property			—				11,678

See notes to consolidated financial statements.

RAMCO-GERSHENSON PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)

1. Organization and Basis of Presentation

     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 June 30, 2009, the Company owned and managed a portfolio of 89 shopping centers, with approximately 19.8 million square feet of gross leaseable area (“GLA”), 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.

     The accompanying consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, certain information and footnote disclosures normally included in audited financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008 filed with the Securities and Exchange Commission. These consolidated financial statements, in the opinion of management, include all adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the periods and dates presented. Interim operating results are not necessarily indicative of operating results for the full year.

     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. (86.5% and 86.4% owned by the Company at June 30, 2009 and December 31, 2008, 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 Operating Partnership 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. Investments in real estate joint ventures which the Company has the ability to exercise significant influence over, but for which the Company does not have financial or operating control, are accounted for using the equity method of accounting. Accordingly, the Company’s share of the earnings from these joint ventures is included in consolidated net income. All intercompany accounts and transactions have been eliminated in consolidation.

     New Accounting Pronouncements

     In December 2007, the Financial Accounting Standards Board (“FASB”) issued Statement No. 160 “Noncontrolling Interests in Consolidated Financial Statements” (“SFAS 160”). SFAS 160 establishes accounting and reporting standards for the noncontrolling interest in a subsidiary, previously referred to as a minority interest. This statement requires 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 will continue to be based on income amounts attributable to the parent. The Company adopted the provisions of SFAS 160 in the first quarter of 2009. Certain presentation requirements of the standard were applied retrospectively.

     In March 2008, the FASB issued Statement No. 161, “Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133” (“SFAS 161”). SFAS 161 requires 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. SFAS 161 also requires entities to disclose additional information about the amounts and location of derivatives included within the financial statements, how the provisions of SFAS 133 have been applied, and the impact that hedges have on an entity’s financial position, financial performance, and cash flows. SFAS 161 is effective for fiscal years and interim periods beginning after November 15, 2008. The Company implemented the provisions of SFAS 161 in the first quarter of 2009. The application of SFAS 161 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 8 for further information.

     In June 2008, the FASB issued FASB Staff Position No. EITF 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities” (“FSP EITF 03-6-1”). FSP EITF 03-6-1 clarifies 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 prescribed by SFAS No. 128, “Earnings Per Share”. FSP EITF 03-6-1 is effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2008. All prior period earnings per share amounts presented are required to be adjusted retrospectively. Accordingly, the Company adopted the provisions of FSP EITF 03-6-1 in the first quarter of 2009. The adoption of the provisions of FSP EITF 03-6-1 did not have a material effect on the Company’s consolidated financial condition, results of operations, or cash flows. Refer to Note 9 for the calculation of earnings per share.

     In April 2009, the FASB issued FASB Staff Position No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly”. This Staff Position clarifies the application of FASB Statement No. 157, Fair Value Measurements, when the volume and level of activity for the asset or liability have significantly decreased. This FSP also includes guidance on identifying circumstances that indicate a transaction is not orderly. Additionally, FASB Staff Position No. 157-4 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 guidance in this Staff Position is effective for interim and annual reporting periods ending after June 15, 2009, and must be applied prospectively. The Company is currently evaluating the application of Staff Position No. 157-4, but does not expect the standard to have a material impact on the Company’s consolidated financial position, results of operations, or cash flows.

     In May 2009, the FASB issued Statement No. 165, “Subsequent Events” (“SFAS 165”). SFAS 165 requires 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 standard also requires entities to disclose the date through which subsequent events have been evaluated, as well as whether that date is the date the financial statements were issued or the date the financial statements were available to be issued. SFAS 165 is effective for interim or annual financial periods ending after June 15, 2009, and is to be applied prospectively. Accordingly, the Company adopted the provisions of SFAS in the second quarter of 2009. The adoption of the provisions of SFAS 165 did not have a material effect on the Company’s consolidated financial condition, results of operations, or cash flows. Refer to Note 14 for the Company’s disclosure on subsequent events.

     In June 2009, the FASB issued Statement No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles—a replacement of FASB Statement No. 162” (“SFAS 168”). SFAS 168, or the FASB Accounting Standards Codification (“Codification”), will become the source of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. On the effective date of SFAS 168, the Codification will supersede all then-existing non-SEC accounting and reporting standards. All other non-grandfathered non-SEC accounting literature not included in the Codification will become non-authoritative. SFAS 168 is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The Company does not expect the standard to have a material impact on the Company’s consolidated financial position, results of operations, or cash flows.

2. Accounts Receivable, Net

     Accounts receivable includes $17,242 and $17,605 of unbilled straight-line rent receivables at June 30, 2009 and December 31, 2008, respectively.

     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 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 $3,845 and $4,287 at June 30, 2009 and December 31, 2008, respectively.

     Accounts receivable at June 30, 2009 and December 31, 2008 includes $1,800 and $2,258, respectively, due from Atlantic Realty Trust (“Atlantic”) for reimbursement of tax deficiencies, interest and other miscellaneous expenses 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.

3. Investment in Real Estate, Net

     Investment in real estate consisted of the following:

		June 30,				December 31,
		2009				2008
		(Unaudited)
Land		$	144,191			$	144,422
Buildings and improvements			833,294				813,705
Construction in progress			35,233				46,982
			1,012,718				1,005,109
Less: accumulated depreciation			(186,422	)			(174,717	)
Investment in real estate, net		$	826,296			$	830,392

4. Equity Investments in and Advances to Unconsolidated Entities

     As of June 30, 2009, the Company had investments in the following unconsolidated entities:

						Total Assets				Total Assets
		Ownership as of				as of				as of
Entity Name		June 30, 2009				June 30, 2009				December 31, 2008
						(Unaudited)
S-12 Associates			50	%		$	669			$	661
Ramco/West Acres LLC			40	%			9,822				9,877
Ramco/Shenandoah LLC			40	%			15,539				15,592
Ramco/Lion Venture LP			30	%			536,607				536,446
Ramco 450 Venture LLC			20	%			365,692				362,885
Ramco 191 LLC			20	%			23,780				23,240
Ramco RM Hartland SC LLC			20	%			20,985				19,760
Ramco HHF KL LLC			7	%			51,827				52,461
Ramco HHF NP LLC			7	%			27,759				28,126
Ramco Jacksonville North Industrial LLC			5	%			1,267				1,257
						$	1,053,947			$	1,050,305

Debt

     The Company’s unconsolidated entities had the following debt outstanding at June 30, 2009 (unaudited):

		Balance				Interest
Entity Name		Outstanding				Rate				Maturity Date
S-12 Associates		$	858				7.3	%		May 2016 (1)
Ramco/West Acres LLC			8,639				8.1	%		April 2010 (2)
Ramco/Shenandoah LLC			11,965				7.3	%		February 2012
Ramco/Lion Venture LP			271,286				4.6% - 8.3	%		Various (3)
Ramco 450 Venture LLC			217,272				5.3% - 6.5	%		Various (4)
Ramco 191 LLC			8,750				1.8	%		June 2010
Ramco RM Hartland SC LLC			8,505				3.3	%		July 2009
Ramco RM Hartland SC LLC			6,942				13.0	%		October 2009
Ramco Jacksonville North Industrial LLC			738				2.6	%		September 2009
		$	534,955

Fees and Management Income from Transactions with Joint Ventures

     Under the terms of agreements with certain joint ventures, the Company is the manager of the joint ventures and their properties, earning fees for acquisitions, development, management, leasing, and financing. The fees earned by the Company, which are reported in the consolidated statements of income as fees and management income, are summarized as follows:

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2009				2008				2009				2008
		(Unaudited)								(Unaudited)
Management fees		$	712			$	682			$	1,441			$	1,379
Leasing fees			306				246				416				384
Acquisition and development fees			150				227				271				297
Financing fees			58				170				68				193
Total		$	1,226			$	1,325			$	2,196			$	2,253

Combined Condensed Financial Information

     Combined condensed financial information for the Company’s unconsolidated entities is summarized as follows:

		June 30,				December 31,
		2009				2008
		(Unaudited)
ASSETS
Investment in real estate, net		$	1,010,234			$	1,012,752
Other assets			43,713				37,553
Total Assets		$	1,053,947			$	1,050,305
LIABILITIES AND OWNERS’ EQUITY
Mortgage notes payable		$	534,955			$	540,766
Other liabilities			30,300				25,641
Owners’ equity			488,692				483,898
Total Liabilities and Owners’ Equity		$	1,053,947			$	1,050,305
Company’s equity investments in and advances to unconsolidated entities		$	104,623			$	95,867

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2009				2008				2009				2008
		(Unaudited)								(Unaudited)
TOTAL REVENUES		$	24,802			$	23,491			$	50,287			$	48,003
TOTAL EXPENSES			23,374				20,416				46,733				41,107
Net income		$	1,428			$	3,075			$	3,554			$	6,896
Company’s share of earnings from unconsolidated entities		$	337			$	769			$	857			$	1,666

5. Other Assets, Net

     Other assets consisted of the following:

		June 30,				December 31,
		2009				2008
		(Unaudited)
Leasing costs		$	39,898			$	38,980
Intangible assets			5,836				5,836
Deferred financing costs			6,036				6,626
Other			5,975				5,904
			57,745				57,346
Less: accumulated amortization			(36,500	)			(34,320	)
			21,245				23,026
Prepaid expenses and other			13,244				12,967
Proposed development and acquisition costs			1,229				1,352
Other assets, net		$	35,718			$	37,345

     Intangible assets at June 30, 2009 include $4,526 of lease origination costs and $1,228 of favorable leases related to the allocation of the purchase price 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 June 30, 2009 and 2008, $1,750 and $2,605, respectively, of intangible assets, net of accumulated amortization of $4,004 and $3,870, respectively, were included in other assets in the consolidated balance sheets. Included in net intangible assets at June 30, 2009 and 2008, were approximately $1,361 and $2,076, respectively, of lease origination costs and $389 and $529, respectively, of above-market leases. Included in accounts payable and accrued expenses at June 30, 2009 and 2008 were intangible liabilities related to below-market leases of $623 and $939, respectively, and an adjustment to increase debt to fair market value in the amount of $433 and $749, 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 $61 and $64, respectively, and an increase in revenue of $83 and $113, respectively, for the six months ended June 30, 2009 and 2008. The adjustment of debt decreased interest expense by $155 and $93 for the six months ended June 30, 2009 and 2008, respectively.

     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.

     The Company recorded amortization of deferred financing costs of $345 and $436, respectively, during the six months ended June 30, 2009 and 2008. This amortization has been recorded as interest expense in the Company’s consolidated statements of income.

     The following table represents estimated future amortization expense related to other assets as of June 30, 2009 (unaudited):

Year Ending December 31,
2009 (July 1 — December 31)		$	3,206
2010			4,620
2011			3,694
2012			2,847
2013			2,169
Thereafter			4,709
Total		$	21,245

6. Mortgages and Notes Payable

     Mortgages and notes payable consisted of the following:

		June 30,				December 31,
		2009				2008
		(Unaudited)
Fixed rate mortgages with interest rates ranging from 4.8% to 8.1%, due at various dates from December 2009 through May 2018		$	352,084			$	354,253
Floating rate mortgages with interest rates ranging from 3.1% to 5.3%, due at various dates from November 2009 through June 2011			14,667				15,023
Secured Revolving Credit Facility, with an interest rate at LIBOR plus 325 basis points due December 2009. The effective rate at June 30, 2009 and December 31, 2008 was 3.6% and 4.3%, respectively			40,000				40,000
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 June 30, 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 June 30, 2009 and December 31, 2008 was 4.6% and 5.7%, respectively			100,000				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 June 30, 2009 and December 31, 2008 was 1.7% and 3.0%, respectively			127,300				125,200
		$	662,176			$	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 $443,252 as of June 30, 2009.

     The Company has a $250,000 unsecured credit facility (the “Credit Facility”) consisting of a $100,000 unsecured term loan credit facility and a $150,000 unsecured revolving credit facility. The Credit Facility provides that the unsecured revolving credit facility may be increased by up to $100,000 at the Company’s request, for a total unsecured revolving credit facility commitment of $250,000. The unsecured term loan credit facility matures in December 2010 and bears interest at a rate equal to LIBOR plus 130 to 165 basis points, depending on certain debt ratios. The unsecured revolving credit facility matures in December 2009 and bears interest at a rate equal to LIBOR plus 115 to 150 basis points, depending on certain debt ratios. Additionally, the Company has a $40,000 revolving credit facility secured by The Towne Center at Aquia, that matures in December 2009 and bears interest at a rate equal to LIBOR plus 325 basis points, depending on certain debt ratios. The Company retains the option to extend the maturity date of both the unsecured revolving credit facility and the $40,000 revolving credit facility secured by The Towne Center at Aquia to December 2010.

     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.

     In June 2009, the Company extended the maturity date of the $7,387 variable rate mortgage securing the Gaines Marketplace shopping center to June 2011.

     At June 30, 2009, outstanding letters of credit issued under the Credit Facility, not reflected in the accompanying consolidated balance sheets, totaled approximately $1,776. 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, loan to asset value, tangible net worth and various other calculations. As of June 30, 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.

     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 at June 30, 2009. Based on rates in effect at June 30, 2009, the agreements provide for fixed rates ranging from 4.4% to 4.7% and expire December 2010.

The following table presents scheduled principal payments on mortgages and notes payable as of June 30, 2009 (unaudited):

Year Ending December 31,
2009 (July 1 — December 31)		$	199,984
2010			126,736
2011			35,071
2012			34,011
2013			33,485
Thereafter			232,889
Total		$	662,176

     With respect to the various fixed rate and floating rate mortgages, it is the Company’s intent to refinance these mortgages upon or prior to their maturities. Even though the Company has the option to extend the maturities of the unsecured revolving credit facility and the $40,000 revolving credit facility secured by The Towne Center at Aquia until December 2010, we have been proactive with our bank group to replace the debt well in advance of maturity. The Company has agreed in principle on the material terms for a new $150,000 revolving credit facility and a $100,000 term loan, both of which are expected to be secured by approximately 33 assets that are currently unencumbered, as well as a new $40,000 revolving credit facility secured by The Town Center at Aquia. The material terms of the new credit facilities have been agreed to by the lead arranging bank and administrative agent. To date, the Company has received commitments from the participants in the new credit facilities on a significant portion of the total requirement. Subject to documentation, due diligence, and customary conditions, the Company expects to close on the new credit facilities late third quarter or early fourth quarter of 2009. Although the Company expects to refinance the debt mentioned above, there can be no assurance that the Company will be able to refinance its debt on commercially reasonable or any other terms.

by the lead arranging bank and administrative agent. To date, the Company has received commitments from the participants in the new credit facilities on a significant portion of the total requirement. Subject to documentation, due diligence, and customary conditions, the Company expects to close on the new credit facilities late third quarter or early fourth quarter of 2009. Although the Company expects to refinance the debt mentioned above, there can be no assurance that the Company will be able to refinance its debt on commercially reasonable or any other terms.

7. 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 certain assets, such as impaired real estate assets, at fair value on a nonrecurring basis.

Fair Value Hierarchy

     As required under SFAS 157, 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 derivative instruments as recurring Level 2.

     Real Estate Assets

     Real estate assets are subject to impairment testing on a nonrecurring basis. The Company records investments in real estate at cost, less accumulated depreciation. When the fair value of a real estate asset is lower than the cost, the asset is considered impaired and is written down to fair value. The Company utilizes cash flow analyses by applying appropriate discount rates, and other valuation techniques, including management’s analysis of comparable properties in the existing portfolio and observable market prices to determine the fair value of its shopping centers. As such, the Company classifies impaired real estate assets as nonrecurring Level 3.

     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 June 30, 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 June 30, 2009.

		Total
		Fair Value				Level 1				Level 2				Level 3
Liabilities
Derivative liabilities (1)			($3,151	)		$	—				($3,151	)		$	—

     Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis

     The table below presents the recorded amount of assets measured at fair value on a nonrecurring basis as of June 30, 2009 (in thousands). The Company did not have any material liabilities that were required to be measured at fair value on a nonrecurring basis at June 30, 2009.

		Total
		Fair Value				Level 1				Level 2				Level 3
Assets
Investments in real estate, net (1)		$	3,000			$	—			$	—			$	3,000

8. Derivative Financial Instruments

     As of June 30, 2009, the Company had $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 June 30, 2009, the agreements provide for fixed rates ranging from 4.4% to 4.7% on a portion of the Company’s unsecured credit facility and expire December 2010.

     On the date the Company enters into an interest rate swap for risk management purposes, 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.

     The following table summarizes the notional values and fair values of the Company’s derivative financial instruments as of June 30, 2009:

		Hedge		Notional				Fixed				Fair				Expiration
Underlying Debt		Type		Value				Rate				Value				Date
Credit Facility		Cash Flow		$	20,000				4.4	%		$	(581	)			12/2010
Credit Facility		Cash Flow			10,000				4.6	%			(315	)			12/2010
Credit Facility		Cash Flow			10,000				4.6	%			(315	)			12/2010
Credit Facility		Cash Flow			10,000				4.6	%			(307	)			12/2010
Credit Facility		Cash Flow			10,000				4.6	%			(307	)			12/2010
Credit Facility		Cash Flow			20,000				4.7	%			(663	)			12/2010
Credit Facility		Cash Flow			20,000				4.7	%			(663	)			12/2010
				$	100,000							$	(3,151	)

     The following table presents the fair values of derivative financial instruments in the Company’s consolidated balance sheets as of June 30, 2009 and December 31, 2008, respectively:

		Liability Derivatives
		June 30, 2009								December 31, 2008
						(Unaudited)
Derivatives Designated as Hedging		Balance Sheet				Fair				Balance Sheet				Fair
Instruments under SFAS 133		Location				Value				Location				Value
Interest rate contracts		Accounts payable and accrued expenses				$	(3,151	)		Accounts payable and accrued expenses				$	(3,851	)
Total						$	(3,151	)						$	(3,851	)

     The effect of derivative financial instruments on the Company’s consolidated statements of income for the six months ended June 30, 2009 and 2008, is summarized as follows:

										Location of				Amount of Gain (Loss)
		Amount of Gain (Loss)								Gain (Loss)				Reclassified from
Derivatives in		Recognized in OCI on Derivative								Reclassified from				Accumulated OCI into
SFAS 133		(Effective Portion)								Accumulated OCI				Income (Effective Portion)
Cash Flow Hedging		Six Months Ended June 30,								into Income				Six Months Ended June 30,
Relationship		2009				2008				(Effective Portion)				2009				2008
Interest rate contracts		$	700			$	1,024			Interest Expense				$	(1,390	)		$	(551	)
Total		$	700			$	1,024							$	(1,390	)		$	(551	)

9. Earnings Per Common Share

     The following table sets forth the computation of basic and diluted earnings per common share (“EPS”) (in thousands, except per share data):

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2009				2008				2009				2008
		(Unaudited)								(Unaudited)
Numerator:
Income from continuing operations before noncontrolling interest		$	1,964			$	3,933			$	4,594			$	17,372
Noncontrolling interest in subsidiaries from continuing operations			(401	)			(642	)			(781	)			(2,720	)
Income from continuing operations available to RPT common shareholders			1,563				3,291				3,813				14,652
Discontinued operations, net of noncontrolling interest in subsidiaries:
Loss on sale of real estate assets			—				(400	)			—				(400	)
Income from operations			—				93				—				177
Net income available to RPT common shareholders		$	1,563			$	2,984			$	3,813			$	14,429
Denominator:
Weighted-average common shares for basic EPS			18,699				18,478				18,654				18,477
Effect of dilutive securities:
Options outstanding			—				12				—				12
Weighted-average common shares for diluted EPS			18,699				18,490				18,654				18,489
Basic EPS:
Income from continuing operations attributable to RPT common shareholders		$	0.08			$	0.18			$	0.20			$	0.79
Loss from discontinued operations attributable to RPT common shareholders			—				(0.02	)			—				(0.01	)
Net income attributable to RPT common shareholders		$	0.08			$	0.16			$	0.20			$	0.78
Diluted EPS:
Income from continuing operations attributable to RPT common shareholders		$	0.08			$	0.18			$	0.20			$	0.79
Loss from discontinued operations attributable to RPT common shareholders			—				(0.02	)			—				(0.01	)
Net income attributable to RPT common shareholders		$	0.08			$	0.16			$	0.20			$	0.78

10. Shareholder Rights Plan

     Our Board of Trustees has the authority to issue Preferred Shares and to determine the price, rights (including conversion rights), preferences and privileges of those shares without any further vote or action by the shareholders. Consistent with this authority, in March 2009, our Board of Trustees adopted for a one-year term a Shareholder Rights Plan (the “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 (the “Rights”). If exercisable, each Right will entitle its holder to purchase from the Company one one-thousandth of a share of a newly created Series A Junior Participating Preferred Shares of beneficial interest, par value $0.01 per share, of the Company for $30.00 (the “Purchase Price”). The Rights will become exercisable if any person or any of its affiliates or associates, directly or indirectly, becomes the beneficial owner of 15% or more of the Company’s common shares or has commenced a tender or exchange offer which, if consummated, would result in any person or any of its affiliates or associates becoming the beneficial owner of 15% or more of the Company’s common shares. If any person or any of its affiliates or associates becomes the beneficial owner of 15% or more of the Company’s common shares, each right will entitle its holder, other than the acquiring person, to purchase a number of shares of the Company’s or the acquiror’s common share having a value of twice the Purchase Price. The Rights are deemed attached to the certificates representing outstanding common shares of beneficial interest.

11. Leases

     Approximate future minimum revenues from rentals under noncancelable operating leases in effect at June 30, 2009, assuming no new or renegotiated leases or option extensions on lease agreements, are as follows (unaudited):

Year Ending December 31,
2009 (July 1 — December 31)		$	41,350
2010			80,624
2011			73,670
2012			64,189
2013			55,194
Thereafter			253,618
Total		$	568,645

     The Company has an operating lease for its corporate office space for a term expiring in 2014. The Company also has operating leases for office space in Florida and land at one of its shopping centers. In addition, the Company has a capitalized ground lease. Total amounts expensed relating to these leases were $787 and $755 for the six months ended June 30, 2009 and 2008, respectively.

     Approximate future minimum rental payments under the Company’s noncancelable office leases and land, assuming no options extensions, and a capital ground lease at one of its shopping centers, are as follows (unaudited):

		Operating				Capital
Year Ending December 31,		Leases				Lease
2009 (July 1 — December 31)		$	452			$	339
2010			909				677
2011			916				677
2012			938				677
2013			960				677
Thereafter			1,517				5,956
Total minimum lease payments			5,692				9,003
Less: amounts representing interest			—				(1,943	)
Total		$	5,692			$	7,060

12. Commitments and Contingencies

Construction Costs

     In connection with the development and expansion of various shopping centers, as of June 30, 2009 we have entered into agreements for construction costs of approximately $26,804, including approximately $10,816 for costs related to the development of Hartland Towne Square in Hartland, Michigan and $14,084 for The Towne Center at Aquia in Stafford, Virginia.

Litigation

     We are 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 our consolidated financial statements.

13. 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 treats 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. As of the date of this filing, the Michigan Supreme Court has not ruled nor has the Michigan Department of Treasury issued any guidance on this matter.

     If the Michigan Court of Appeals decision is ultimately upheld, 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 continues to closely monitor this case and is in the process of evaluating any potential impact. Given the uncertainty surrounding the ultimate resolution of this matter, the Company has not recorded a reserve as of June 30, 2009.

14. Subsequent Events

     In accordance with SFAS No. 165, “Subsequent Events”, the Company has evaluated subsequent events through the date that the consolidated financial statements were issued. No events have taken place that meet the definition of a subsequent event that requires disclosure in this filing.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

     The following discussion and analysis of the financial condition and results of operations should be read in conjunction with the consolidated financial statements, including the respective notes thereto, which are included in this Form 10-Q.

Overview

     We are a fully integrated, self-administered, publicly-traded REIT which owns, develops, acquires, manages and leases community shopping centers (including power centers and single-tenant retail properties) and one enclosed regional mall in the Midwestern, Southeastern and Mid-Atlantic regions of the United States. At June 30, 2009, we owned interests in 89 shopping centers, comprised of 88 community centers and one enclosed regional mall, totaling approximately 19.8 million square feet of GLA. We and our joint venture partners own approximately 15.7 million square feet of such GLA, with the remaining portion owned by various anchor stores.

     Our corporate strategy is to maximize total return for our shareholders by improving operating income and enhancing asset value. We pursue our goal through:

	•		Aggressively leasing vacant spaces and entering into new leases for occupied spaces when leases are about to expire;
	•		A proactive approach to redeveloping, renovating and expanding our shopping centers; and
	•		The development of new shopping centers in metropolitan markets where we believe demand for a center exists.

     We have followed a disciplined approach to managing our operations by focusing primarily on enhancing the value of our existing portfolio through strategic sales and successful leasing efforts. We continue to selectively pursue new development, redevelopment and acquisition opportunities.

Leasing

     During the second quarter of 2009, 18 tenants took occupancy of their stores at an average base rent of $10.45 per square foot. Included in the 18 tenants were five anchor tenants paying on average $9.04 per square foot, an 11.3% increase above portfolio average rents for anchor space. Also included were 13 non-anchor tenants paying on average $16.00 per square foot, a 2.7% decrease over portfolio average rents for non-anchor space. The Company signed 27 new leases during the second quarter of 2009 for new tenancies that will take occupancy in subsequent periods, at an increase of 31.6% above portfolio average rents. Additionally, we renewed 47 non-anchor leases, at an average base rent of $16.54 per square foot, achieving an increase of 5.7% over prior rental rates. Overall portfolio average base rents for non-anchor tenants decreased to $16.44 per square foot in the second quarter of 2009 from $16.49 for the same period in 2008.

     The Company’s core operating portfolio was 94.4% occupied at June 30, 2009, compared to 94.7% at June 30, 2008. Overall portfolio occupancy, which includes joint venture properties and properties under redevelopment, was 91.3% at June 30, 2009, compared to 92.0% at June 30, 2008.

Redevelopment

     We and our joint ventures have eight redevelopments currently in process. We estimate the total project costs of the eight redevelopment projects in process to be $48.6 million. Four of the redevelopments involve core operating properties included in our balance sheet and are expected to cost approximately $19.5 million of which $7.9 million has been spent as of June 30, 2009. For the four redevelopment projects at properties held by joint ventures, we estimate off-balance sheet project costs of approximately $29.1 million (our share is estimated to be $8.3 million) of which $12.2 million has been spent as of June 30, 2009 (our share is $3.6 million).

     In 2009, the Company plans to focus on completing those redevelopment projects presently in process that have commitments for the expansion or addition of an anchor tenant. While we anticipate redevelopments will be accretive 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. Based on the sheer number of value-added redevelopments that are in process in 2009, the revenue loss has created a short-term negative impact on net operating income and FFO. The majority of the projects are expected to stabilize by the first half of 2010.

Development

     As previously announced, the Company continues to take a conservative approach to the development of new shopping centers, curtailing further investment until leasing, construction financing and partnership requirements have been met. At June 30, 2009, the Company had two projects under construction and three projects in the pre-development phase with an estimated total project cost of current phases of $253.7 million. As of June 30, 2009, we and one of our joint ventures have spent $113.0 million on such developments.

     At June 30, 2009, the current developments that the Company’s intends to wholly-own or to be developed through joint venture partners that the Company anticipates having no more than a 20% ownership interest in are as follows:

						Total				Costs				Estimated
						Projected				Incurred to				Future
Development Project/Location				Project Type		Cost				Date				Costs
Northpointe Town Center - Jackson, MI				On-Balance Sheet		$	34,725			$	1,211			$	33,514
Hartland Towne Square - Hartland Twp., MI				Off-Balance Sheet-20% Ownership			24,411				21,084				3,327
The Town Center at Aquia - Stafford, VA				Proposed Off-Balance Sheet-20% Ownership			98,439				59,554				38,885
Gateway Commons - Lakeland, FL				Proposed Off-Balance Sheet-20% Ownership			64,709				18,495				46,214
Parkway Shops - Jacksonville, FL				Proposed Off-Balance Sheet-20% Ownership			31,405				12,610				18,795
				Total		$	253,689			$	112,954			$	140,735
				RPT Anticipated Share of Total Estimated Costs Including Debt		$	78,518			$	23,560			$	54,958

     We own 20% of the joint venture that is developing Hartland Towne Square, and our share of the estimated $24.4 million of project costs is $4.9 million. The Company is currently providing the mezzanine financing for the project which was $6.9 million at June 30, 2009. We expect The Town Center at Aquia, Gateway Commons, and Parkway Shops to be completed through joint ventures, and ultimately be accounted as off-balance sheet assets, even though we do not have joint venture partners to date and no assurance can be given that we will have joint venture partners on such projects.

Acquisitions/Dispositions

Critical Accounting Policies and Estimates

     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 other assumptions that are believed to be reasonable under the circumstances, the results of which forms 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 differ from these estimates under different assumptions or conditions.

     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, 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 as discussed in our Annual Report on Form 10-K for the year ended December 31, 2008 have not materially changed during the first six months of 2009.

     For purposes of comparison between the three months ended June 30, 2009 and 2008, “Same Center” refers to the shopping center properties owned by consolidated entities as of April 1, 2008 and June 30, 2009.

     In August 2008, we sold the Plaza at Delray shopping center to a joint venture with an investor advised by Heitman LLC. This sale to our joint venture in which we have an ownership interest is referred to as the “Disposition” in the following discussion.

     Revenues

     Total revenues decreased $2.3 million, or 6.5%, to $33.6 million for the three months ended June 30, 2009, as compared to $35.9 million in 2008. The decrease in total revenues was primarily the result of a $1.9 million decrease in minimum rents and a $0.4 million decrease in fees and management income.

     Minimum rents decreased $1.9 million, or 8.2%, to $21.2 million for the three months ended June 30, 2009 as follows:

		Increase (Decrease)
		Amount
		(in millions)				Percentage
Same Center		$	(0.7	)			(3.0%	)
Disposition			(1.2	)			(5.2%	)
		$	(1.9	)			(8.2%	)

     The decrease in Same Center minimum rents was primarily attributable to the current challenging economic environment resulting in an increased number of tenant bankruptcies, including Circuit City and Linens ‘n Things, as well as the vacancy of a major tenant at one of the Company’s shopping centers in January 2009.

     Recoveries from tenants decreased $0.4 million, or 4.1%, to $9.9 million for the three months ended June 30, 2009. Substantially all of the decrease was due to the Disposition.

     The overall property operating expense recovery ratio was 96.4% for the three months ended June 30, 2009, as compared to 100.1% for the same period in the prior year. The decrease was primarily due to the current challenging economic environment resulting in an increased number of tenant bankruptcies, including Circuit City and Linens ’n Things in the second half of 2008.

     Recoverable operating expenses, which includes real estate tax expense, are a component of our recovery ratio. These expenses decreased $0.1 million, or 0.5%, to $10.2 million for the three months ended June 30, 2009 as follows:

		Increase (Decrease)
		Amount
		(in millions)				Percentage
Same Center		$	0.4				4.6%
Disposition			(0.5	)			(5.1%	)
		$	(0.1	)			(0.5%	)

     The increase in Same Center recoverable operating expenses was due primarily to expanding our electricity resale program in 2009.

     Fees and management income decreased approximately $433,000 to $1.5 million for the three months ended June 30, 2009 as compared to $1.9 million for the three months ended June 30, 2008. The decrease was mainly attributable to a net decrease in development related fees of approximately $505,000, partially offset by an increase

in leasing fees of approximately $159,000. The decrease in development fees was mainly due to fees earned in the second quarter of 2008 relating to the development of the Hartland Towne Square center by our Ramco RM Hartland SC LLC joint venture. The increase in leasing fees is primarily attributable to leasing fees earned at a redevelopment property in the second quarter of 2009.

     Other income increased approximately $505,000 to $1.0 million for the three months ended June 30, 2009, compared to $495,000 for the same period in the prior year. The increase was primarily due to a $178,000 increase in lease termination fees and a $115,000 increase in interest income. The increase in lease termination income was mostly attributable to income earned in the second quarter of 2009 on a higher volume of lease terminations. Interest income increased on advances to the Ramco RM Hartland SC LLC joint venture relating to the development of Hartland Towne Square. Other miscellaneous income for the three months ended June 30, 2009, increased approximately $172,000 when compared to the same period in the prior year.

     Expenses

     Total expenses decreased $0.8 million, or 2.6%, to $32.1 million for the three months ended June 30, 2009 as compared to $32.9 million for the three months ended June 30, 2008. The decrease was primarily due to a decrease in interest expense of $1.0 million and a decrease in other operating expenses of $0.4 million, offset by an increase in general and administrative expenses of $0.6 million.

     Depreciation and amortization expense was $7.9 million for the three months ended June 30, 2009 and 2008.

     Other operating expenses decreased $0.3 million, or 35.2%, to $0.7 million for the three months ended June 30, 2009, as compared to $1.0 million for the same period in 2008. The decrease in other operating expenses from the second quarter of 2008 was primarily due to decreases in bad debt expense of approximately $122,000.

     General and administrative expenses was $5.4 million for the three months ended June 30, 2009, as compared to $4.8 million for the same period in 2008, an increase of $0.6 million, or 11.3%. The increase in general and administrative expenses was primarily due to costs incurred related to the Company’s recent proxy contest and strategic review process in the second quarter of 2009.

     Interest expense decreased $1.0 million, or 11.1%, to $7.9 million for the three months ended June 30, 2009 as compared to $8.9 million in 2008. The summary below identifies the components of the net decrease:

		Three Months Ended
		June 30,
		2009				2008
Average total loan balance		$	665,905			$	698,197
Average rate			4.9	%			5.6	%
Total interest on debt		$	8,142			$	9,698
Amortization of loan fees			176				212
Interest on capital lease obligation			103				107
Capitalized interest and other			(517	)			(1,124	)
		$	7,904			$	8,893

     Other

     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 decreased approximately $432,000 from approximately $769,000 for the three months ended June 30, 2008 to approximately $337,000 for the three months ended June 30, 2009. During the three months ended June 30, 2009, earnings from unconsolidated entities decreased approximately $231,000 from the Ramco/Lion Venture LP joint venture and $134,000 from the Ramco 450 Venture LLC joint venture primarily the result of the bankruptcies of Circuit City and Linens ‘n Things that closed stores in the second half of 2008 at five of the joint venture properties in which the Company holds an ownership interest.

     Noncontrolling interest in subsidiaries represents the equity in income attributable to the portion of the Operating Partnership not owned by us. Noncontrolling interest for the second quarter of 2009 decreased $0.2 million to $0.4 million, as compared to $0.6 million for the second quarter of 2008. The decrease is primarily attributable to the noncontrolling interest’s proportionate share of the lower total revenues in 2009 when compared to the same period in 2008.

Comparison of Six Months Ended June 30, 2009 to Six Months Ended June 30, 2008

     For purposes of comparison between the six months ended June 30, 2009 and 2008, “Same Center” refers to the shopping center properties owned by consolidated entities as of January 1, 2008 and June 30, 2009.

     In August 2008, we sold the Plaza at Delray shopping center to a joint venture with an investor advised by Heitman LLC. This sale to our joint venture in which we have an ownership interest is referred to as the “Disposition” in the following discussion.

     Revenues

     Total revenues decreased $5.0 million, or 6.9%, to $67.4 million for the six months ended June 30, 2009, as compared to $72.4 million in 2008. The decrease in total revenues was primarily the result of a $3.5 million decrease in minimum rents, a $0.9 million decrease in recoveries from tenants, and a $0.7 million decrease in fees and management income.

     Minimum rents decreased $3.5 million, or 7.6%, to $42.6 million for the six months ended June 30, 2009 as follows:

		Increase (Decrease)
		Amount
		(in millions)				Percentage
Same Center		$	(1.0	)			(2.3%	)
Disposition			(2.5	)			(5.3%	)
		$	(3.5	)			(7.6%	)

     The decrease in Same Center minimum rents was primarily attributable to the current challenging economic environment resulting in an increased number of tenant bankruptcies, including Circuit City and Linens ‘n Things, as well as the vacancy of a major tenant at one of the Company’s shopping centers in January 2009.

     Recoveries from tenants decreased $0.9 million, or 4.0%, to $20.5 million for the six months ended June 30, 2009. Substantially all of the decrease was due to the Disposition.

     The overall property operating expense recovery ratio was 97.9% for the six months ended June 30, 2009, as compared to 98.4% for the same period in the prior year. We expect our recovery ratio to be between 97% and 98% for the full year of 2009.

     Recoverable operating expenses, which includes real estate tax expense, are a component of our recovery ratio. These expenses decreased $0.8 million, or 3.6%, to $21.0 million for the six months ended June 30, 2009 as follows:

		Increase (Decrease)
		Amount
		(in millions)				Percentage
Same Center		$	0.3				1.3%
Disposition			(1.1	)			(4.9%	)
		$	(0.8	)			(3.6%	)

     The increase in Same Center recoverable operating expenses is mainly attributable to the completed construction of a building at one of the Company’s shopping centers in the first quarter of 2009.

     Fees and management income decreased approximately $726,000 to $2.6 million for the six months ended June 30, 2009, as compared to the same period in 2008. The decrease was mainly attributable to a net decrease in development related fees of approximately $610,000. The decrease in development fees was mainly due to fees earned in the second quarter of 2008 relating to the development of the Hartland Towne Square center by our Ramco RM Hartland SC LLC joint venture.

     Other income increased approximately $373,000 to $1.4 million for the six months ended June 30, 2009, compared to $1.0 million for the same period in the prior year. The increase was primarily due to a $145,000 increase in interest income for the six months ended June 30, 2009. Interest income increased on advances to the Ramco RM Hartland SC LLC joint venture relating to the development of Hartland Towne Square. Other miscellaneous income for the six months ended June 30, 2009, increased approximately $183,000 when compared to the same period in the prior year.

     Expenses

     Total expenses decreased $2.8 million, or 4.3%, to $64.1 million for the six months ended June 30, 2009 as compared to $66.9 million for the six months ended June 30, 2008. The decrease was primarily due to decreases in interest expense of $2.7 million, recoverable operating expenses of $0.8 million, and depreciation and amortization of $0.2 million, partially offset by a $0.9 million increase in general and administrative expenses.

     Depreciation and amortization expense decreased $0.2 million, or 1.0%, for the six months ended June 30, 2009 as follows:

		Increase (Decrease)
		Amount
		(in millions)				Percentage
Same Center		$	0.6				3.9%
Disposition			(0.8	)			(4.9%	)
		$	(0.2	)			(1.0%	)