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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
Form 10-Q
 
  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES ACT OF 1934
 
For the quarterly period ended September 30, 2020
 
Commission file number 1-10093
 
RPT Realty
(Exact name of registrant as specified in its charter)
 
Maryland 13-6908486
(State of other jurisdiction of incorporation or organization) (I.R.S Employer Identification Numbers)
19 W 44th Street,Suite 1002 
New York,New York10036
(Address of principal executive offices) (Zip Code)

(212) 221-1261
(Registrant’s telephone number, including area code) 

Securities Registered Pursuant to Section 12(b) of the Act:
 
Title of Each Class
Trading Symbol(s)Name of Each Exchange
On Which Registered
Common Shares of Beneficial Interest ($0.01 Par Value Per Share)RPTNew York Stock Exchange
7.25% Series D Cumulative Convertible Perpetual Preferred RPT.PRDNew York Stock Exchange
Shares of Beneficial Interest ($0.01 Par Value Per Share)


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                          No 
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes                         No 
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.  See the definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filerNon-accelerated filer
Smaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes                          No 

Number of common shares of beneficial interest ($0.01 par value) of the registrant outstanding as of October 30, 2020: 80,961,904



INDEX

Page No.
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 6.

Page 2


PART 1 – FINANCIAL INFORMATION
Item 1.  Unaudited Condensed Consolidated Financial Statements

RPT REALTY
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
(Unaudited)
 September 30,
2020
December 31,
2019
ASSETS  
Income producing properties, at cost:  
Land$331,265 $331,265 
Buildings and improvements1,492,689 1,486,838 
Less accumulated depreciation and amortization(384,368)(352,006)
Income producing properties, net1,439,586 1,466,097 
Construction in progress and land available for development36,870 42,279 
Net real estate1,476,456 1,508,376 
Equity investments in unconsolidated joint ventures127,964 130,321 
Cash and cash equivalents217,818 110,259 
Restricted cash and escrows2,304 4,293 
Accounts receivable (net of allowance for doubtful accounts of $10,804 and $1,037 as of September 30, 2020 and December 31, 2019, respectively)
32,833 24,974 
Acquired lease intangibles, net27,934 34,278 
Operating lease right-of-use assets18,745 19,222 
Other assets, net79,580 86,836 
TOTAL ASSETS$1,983,634 $1,918,559 
LIABILITIES AND SHAREHOLDERS' EQUITY  
Notes payable, net$1,053,378 $930,808 
Finance lease obligation926 926 
Accounts payable and accrued expenses45,969 55,360 
Distributions payable1,730 19,792 
Acquired lease intangibles, net36,069 38,898 
Operating lease liabilities17,911 18,181 
Other liabilities22,234 6,339 
TOTAL LIABILITIES1,178,217 1,070,304 
Commitments and Contingencies
RPT Realty ("RPT") Shareholders' Equity: 
Preferred shares of beneficial interest, $0.01 par, 2,000 shares authorized: 7.25% Series D Cumulative Convertible Perpetual Preferred Shares, (stated at liquidation preference $50 per share), 1,849 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively
92,427 92,427 
Common shares of beneficial interest, $0.01 par, 240,000 and 120,000 shares authorized as of September 30, 2020 and December 31, 2019, respectively, and 80,055 and 79,850 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively
801 798 
Additional paid-in capital1,172,998 1,169,557 
Accumulated distributions in excess of net income(463,617)(436,361)
Accumulated other comprehensive (loss) income(16,252)1,819 
TOTAL SHAREHOLDERS' EQUITY ATTRIBUTABLE TO RPT786,357 828,240 
Noncontrolling interest19,060 20,015 
TOTAL SHAREHOLDERS' EQUITY805,417 848,255 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$1,983,634 $1,918,559 

The accompanying notes are an integral part of these condensed consolidated financial statements.
Page 3



RPT REALTY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(In thousands, except per share amounts)
(Unaudited)
 Three Months Ended September 30,Nine Months Ended September 30,
 2020201920202019
REVENUE  
Rental income$45,375 $57,809 $140,783 $172,808 
Other property income774 1,024 2,290 3,004 
Management and other fee income338 88 917 178 
TOTAL REVENUE46,487 58,921 143,990 175,990 
EXPENSES  
Real estate taxes8,509 9,123 25,113 27,667 
Recoverable operating expense5,118 6,180 15,894 18,204 
Non-recoverable operating expense2,126 2,463 6,549 7,662 
Depreciation and amortization18,295 20,018 57,003 59,865 
Transaction costs  186  
General and administrative expense6,062 6,249 18,979 18,845 
Insured expenses, net(1,092) (2,745) 
TOTAL EXPENSES39,018 44,033 120,979 132,243 
OPERATING INCOME 7,469 14,888 23,011 43,747 
OTHER INCOME AND EXPENSES  
Other (expense) income, net(92)4 322 (227)
Gain on sale of real estate   6,073 
Earnings from unconsolidated joint ventures456 373 1,514 453 
Interest expense(9,913)(9,917)(29,491)(30,350)
Other gain on unconsolidated joint ventures 237  237 
Loss on extinguishment of debt   (622)
(LOSS) INCOME BEFORE TAX(2,080)5,585 (4,644)19,311 
Income tax benefit (provision)87 (11)37 (82)
NET (LOSS) INCOME(1,993)5,574 (4,607)19,229 
Net loss (income) attributable to noncontrolling partner interest46 (129)106 (448)
NET (LOSS) INCOME ATTRIBUTABLE TO RPT(1,947)5,445 (4,501)18,781 
Preferred share dividends(1,676)(1,676)(5,026)(5,026)
NET (LOSS) INCOME AVAILABLE TO COMMON SHAREHOLDERS$(3,623)$3,769 $(9,527)$13,755 
(LOSS) EARNINGS PER COMMON SHARE  
Basic$(0.05)$0.05 $(0.12)$0.17 
Diluted$(0.05)$0.05 $(0.12)$0.17 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING  
Basic80,051 79,848 79,978 79,786 
Diluted80,051 80,540 79,978 80,479 
Cash Dividend Declared per Common Share$ $0.22 $0.22 $0.66 
OTHER COMPREHENSIVE (LOSS) INCOME   
Net (loss) income$(1,993)$5,574 $(4,607)$19,229 
Other comprehensive gain (loss):  
Gain (loss) on interest rate swaps936 (1,006)(18,500)(5,079)
Comprehensive (loss) income (1,057)4,568 (23,107)14,150 
Comprehensive loss (income) attributable to noncontrolling interest25 (106)535 (330)
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO RPT$(1,032)$4,462 $(22,572)$13,820 

The accompanying notes are an integral part of these condensed consolidated financial statements.
Page 4



RPT REALTY
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
For the Three Months Ended September 30, 2020 and September 30, 2019
(In thousands)
(Unaudited)
Shareholders' Equity of RPT Realty
Preferred
Shares
Common
Shares
Additional
Paid-in Capital
Accumulated Distributions in Excess of Net IncomeAccumulated Other Comprehensive Income (Loss)Noncontrolling InterestTotal Shareholders’ Equity
Balance, June 30, 2020$92,427 $800 $1,171,287 $(459,994)$(17,167)$19,085 $806,438 
Share-based compensation, net of shares withheld for employee taxes— 1 1,711 — — — 1,712 
Dividends declared to preferred shareholders— — — (1,676)— — (1,676)
Other comprehensive income - gain on interest rate swaps— — — — 915 21 936 
Net loss— — — (1,947)— (46)(1,993)
Balance, September 30, 2020$92,427 $801 $1,172,998 $(463,617)$(16,252)$19,060 $805,417 
Balance, June 30, 2019$92,427 $798 $1,167,060 $(475,819)$42 $18,956 $803,464 
Issuance of common shares, net of issuance costs— — 8 — — — 8 
Share-based compensation, net of shares withheld for employee taxes— — 1,231 — — — 1,231 
Dividends declared to common shareholders— — — (17,568)— — (17,568)
Dividends declared to preferred shareholders— — — (1,676)— — (1,676)
Distributions declared to noncontrolling interests— — — — — (419)(419)
Dividends declared to deferred shares— — — (115)— — (115)
Other comprehensive income - loss on interest rate swaps— — — — (983)(23)(1,006)
Net income— — — 5,445 — 129 5,574 
Balance, September 30, 2019$92,427 $798 $1,168,299 $(489,733)$(941)$18,643 $789,493 


The accompanying notes are an integral part of these condensed consolidated financial statements.


Page 5


RPT REALTY
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
For the Nine Months Ended September 30, 2020 and September 30, 2019
(In thousands)
(Unaudited)
 Shareholders' Equity of RPT Realty  
 Preferred
Shares
Common
Shares
Additional
Paid-in Capital
Accumulated Distributions in Excess of Net IncomeAccumulated Other Comprehensive Income (Loss)Noncontrolling InterestTotal Shareholders’ Equity
Balance, December 31, 2019$92,427 $798 $1,169,557 $(436,361)$1,819 $20,015 $848,255 
Issuance of common shares, net of issuance costs— — (385)— — — (385)
Share-based compensation, net of shares withheld for employee taxes— 3 3,826 — — — 3,829 
Dividends declared to common shareholders— — — (17,593)— — (17,593)
Dividends declared to preferred shareholders— — — (5,026)— — (5,026)
Distributions declared to noncontrolling interests— — — — — (420)(420)
Dividends declared to deferred shares— — — (136)— — (136)
Other comprehensive income - loss on interest rate swaps— — — — (18,071)(429)(18,500)
Net loss— — — (4,501)— (106)(4,607)
Balance, September 30, 2020$92,427 $801 $1,172,998 $(463,617)$(16,252)$19,060 $805,417 
Balance, December 31, 2018$92,427 $797 $1,164,848 $(450,130)$4,020 $19,581 $831,543 
Adoption of ASU 2016-02
— — — (325)— (8)(333)
Issuance of common shares, net of issuance costs— — (86)— — — (86)
Share-based compensation, net of shares withheld for employee taxes— 1 3,537 — — — 3,538 
Dividends declared to common shareholders— — — (52,670)— — (52,670)
Dividends declared to preferred shareholders— — — (5,026)— — (5,026)
Distributions declared to noncontrolling interests— — — — — (1,260)(1,260)
Dividends declared to deferred shares— — — (363)— — (363)
Other comprehensive income - loss on interest rate swaps— — — — (4,961)(118)(5,079)
Net income— — — 18,781 — 448 19,229 
Balance, September 30, 2019$92,427 $798 $1,168,299 $(489,733)$(941)$18,643 $789,493 

The accompanying notes are an integral part of these condensed consolidated financial statements.

Page 6



RPT REALTY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 Nine Months Ended September 30,
 20202019
OPERATING ACTIVITIES  
Net (loss) income$(4,607)$19,229 
Adjustments to reconcile net (loss) income to net cash provided by operating activities:  
Depreciation and amortization57,003 59,865 
Amortization of deferred financing fees1,059 1,069 
Income tax (benefit) provision (37)82 
Earnings from unconsolidated joint ventures(1,514)(453)
Distributions received from operations of unconsolidated joint ventures3,896 194 
Loss on extinguishment of debt 622 
Other gain on unconsolidated joint ventures (237)
Gain on sale of real estate  (6,073)
Insured expenses, net(2,745) 
Amortization of acquired above and below market lease intangibles, net(2,248)(5,544)
Amortization of premium on mortgages, net(676)(722)
Service-based restricted share expense2,855 2,732 
Long-term incentive cash and equity compensation expense1,658 1,647 
Changes in assets and liabilities, net of effect of acquisitions and dispositions:  
Accounts receivable, net(7,909)2,196 
Other assets, net1,805 (2,897)
Accounts payable and other liabilities(7,504)(2,068)
Net cash provided by operating activities41,036 69,642 
INVESTING ACTIVITIES  
Development and capital improvements(13,285)(45,998)
Capital improvements covered by insurance(5,197) 
Net proceeds from sales of real estate 67,913 
Distributions from sale of joint venture property 1,985 
Insurance proceeds from insured expenses2,888  
Investment in equity interests in unconsolidated joint ventures(11) 
Net cash (used in) provided by investing activities(15,605)23,900 
FINANCING ACTIVITIES  
Repayment of mortgages and notes payable(1,718)(30,065)
Proceeds on revolving credit facility225,000  
Repayments on revolving credit facility(100,000) 
Payment of deferred financing costs(567) 
Proceeds from issuance of common shares, net of costs(385)(86)
Shares used for employee taxes upon vesting of awards(954)(608)
Dividends paid to preferred shareholders(5,026)(5,026)
Dividends paid to common shareholders(35,371)(52,983)
Distributions paid to operating partnership unit holders(840)(1,260)
Net cash provided by (used in) financing activities80,139 (90,028)
Net change in cash, cash equivalents and restricted cash105,570 3,514 
Cash, cash equivalents and restricted cash and escrows at beginning of period114,552 44,722 
Cash, cash equivalents and restricted cash and escrows at end of period$220,122 $48,236 

The accompanying notes are an integral part of these condensed consolidated financial statements.
Page 7


RPT REALTY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended September 30,
20202019
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION  
Cash paid for interest (net of capitalized interest of $2 and $125 in 2020 and 2019, respectively)
$25,991 $26,794 
Operating lease right-of-use assets obtained in exchange for operating lease liabilities 2,191 

As of September 30,
Reconciliation of cash, cash equivalents and restricted cash and escrows20202019
Cash and cash equivalents$217,818 $44,472 
Restricted cash and escrows2,304 3,764 
$220,122 $48,236 

The accompanying notes are an integral part of these condensed consolidated financial statements.
Page 8


RPT REALTY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1.  Organization and Basis of Presentations

Organization

RPT Realty, together with our subsidiaries (the “Company” or “RPT”), is a real estate investment trust (“REIT”) engaged in the business of owning and operating a national portfolio of open-air shopping destinations principally located in the 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 (“NYSE”). The common shares of beneficial interest of the Company, par value $0.01 per share (the “common share”), are listed and traded on the NYSE under the ticker symbol “RPT”. As of September 30, 2020, the Company's portfolio consisted of 49 shopping centers (including five shopping centers owned through a joint venture) (the “aggregate portfolio”) representing 11.9 million square feet of gross leaseable area (“GLA”).  As of September 30, 2020, the Company’s pro-rata share of the aggregate portfolio was 93.3% leased.

Basis of Presentation

The condensed consolidated financial statements include the accounts of the Company and our majority owned subsidiary, RPT Realty, L.P., a Delaware limited partnership (the “Operating Partnership” or “OP” which was 97.7% owned by the Company at September 30, 2020 and December 31, 2019), and all wholly-owned subsidiaries, including entities in which we have a controlling financial interest or have been determined to be the primary beneficiary of a variable interest entity (“VIE”). The presentation of consolidated financial statements does not itself imply that assets of any consolidated entity (including any special-purpose entity formed for a particular project) are available to pay the liabilities of any other consolidated entity, or that the liabilities of any other consolidated entity (including any special-purpose entity formed for a particular project) are obligations of any other consolidated entity. Investments in real estate joint ventures over which we have the ability to exercise significant influence, but for which we do not have financial or operating control, are accounted for using the equity method of accounting. Accordingly, our share of the earnings (loss) of these joint ventures is included in consolidated net income (loss). All intercompany transactions and balances are eliminated in consolidation.

We have elected to be a REIT for federal income tax purposes.  The information furnished is unaudited and reflects all adjustments which are, in the opinion of management, necessary to reflect a fair statement of the results for the interim periods presented, and all such adjustments are of a normal recurring nature.  These condensed consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2019.

The preparation of our unaudited financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management of the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited financial statements and the reported amounts of revenues and expenses during the reporting period.  We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and reported amounts that are not readily apparent from other sources.  The Company considered impacts to its estimates related to the current pandemic of the novel coronavirus disease (“COVID-19”) as appropriate, within its unaudited condensed consolidated financial statements and there may be changes to those estimates in future periods. The Company believes that its accounting estimates are appropriate after giving consideration to the increased uncertainties surrounding the severity and duration of the COVID-19 pandemic. Actual results could differ from those estimates.

Equity Distribution Agreement

In February 2020, the Company entered into an Equity Distribution Agreement (Equity Distribution Agreement) pursuant to which the Company may offer and sell, from time to time, the Company's common shares having an aggregate gross sales price of up to $100.0 million. Sales of the shares of common stock may be made, in the Company's discretion, from time to time in "at-the-market" offerings as defined in Rule 415 of the Securities Act of 1933. The Equity Distribution Agreement also provides that the Company may enter into forward contracts for shares of its common stock with forward sellers and forward purchasers. For the nine months ended September 30, 2020, we did not issue any common shares through the arrangement. As of September 30, 2020, we have full capacity remaining under the agreement.

Page 9


Significant Risks and Uncertainties

One of the most significant risks and uncertainties is the potential adverse effect of COVID-19. On February 28, 2020, the World Health Organization (“WHO”) raised its assessment of the COVID-19 threat from high to very high at a global level due to the continued increase in the number of cases and affected countries, and on March 11, 2020, the WHO characterized COVID-19 as a pandemic. On March 13, 2020, the United States declared a national emergency with respect to COVID-19. As a result of COVID-19, we have received numerous rent relief requests, most often in the form of rent deferrals. We have evaluated, and continue to evaluate, each tenant rent relief request on an individual basis, considering a number of factors. As of September 30, 2020, accrued but uncollected third quarter rental income was $7.3 million of which $3.5 million was reserved as rental income not probable of collection. In addition, a charge of $1.2 million for straight-line rent receivable was taken in the third quarter of 2020. While the Company is unable at this time to reasonably estimate the impact that COVID-19 will continue to have on our business, financial position and operating results in future periods due to numerous uncertainties, the Company is closely monitoring the impact of the pandemic on all aspects of its business. A number of our tenants have closed their stores for a period of time as a result of COVID-19 and have requested rent relief, most often in the form of rent deferral, which the Company evaluates on a case-by-case basis. The COVID-19 pandemic has had and will likely to continue to have, repercussions across local, national and global economies and financial markets, including a potential global recession.

COVID-19 may continue to have material and adverse effects on our financial condition, results of operations and cash flows in the near term due to, but not limited to, the following:
Reduced economic activity severely impacting our tenants' businesses, financial condition and liquidity and may cause tenants to be unable to fully meet their obligations to us or to otherwise seek modifications of such obligations, resulting in increases in uncollectible receivables and reductions in rental income;
The negative financial impact of COVID-19 could impact our future compliance with financial covenants of our credit agreement and other debt agreements, and as a result, our lenders may require us to accelerate the timing of payments which would have a material adverse effect on our business, operations, financial condition and liquidity, unless we obtain waivers or modifications from our lenders; and
Weaker economic conditions could cause us to recognize impairment in the value of our tangible and intangible assets based on the then Company's reasonable assessment.
The extent to which COVID-19 impacts our operations and those of our tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others. As such, we are unable to predict the impact that it ultimately will have on its financial condition, results of operations and cash flows.

Recently Adopted Accounting Pronouncements

In August 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-13, “Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement,” (“ASU 2018-13”) which amends Accounting Standards Codification (ASC) 820, Fair Value Measurement. ASU 2018-13 modified the disclosure requirements for fair value measurements by removing, modifying or adding certain disclosures. This standard became effective for public companies for fiscal years beginning after December 15, 2019, including interim periods within that fiscal year. The adoption of this standard did not have a material impact on our condensed consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04 “Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”). ASU 2017-04 simplifies the accounting for goodwill impairment by removing Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. The standard became effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The adoption of this standard did not have a material impact on our condensed consolidated financial statements.

In June 2016, the FASB updated ASC Topic 326 “Financial Instruments - Credit Losses” with ASU 2016-13 “Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). ASU 2016-13 enhances the methodology of measuring expected credit losses to include the use of forward-looking information to better inform credit loss estimates. In addition, in November 2018 the FASB issued ASU 2018-19, which clarifies that receivables arising from operating leases are not within the scope of the credit losses standard, but rather, should be accounted for in accordance with the leases standard. The standard became effective for annual periods beginning after December 15, 2019, including interim periods within that fiscal year. The adoption of this standard did not have a material impact on our condensed consolidated financial statements.

Page 10


Recent Accounting Pronouncements

In March 2020, the FASB issued ASU 2020-04 “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). ASU 2020-04 provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. The ASU is intended to help stakeholders during the global market-wide reference rate transition period. Therefore, it will be in effect for a limited time through December 31, 2022. We are currently evaluating the guidance and have not determined the impact this standard may have on our condensed consolidated financial statements.

In April 2020, the FASB issued a staff question-and-answer (“Q&A”) document focused on the application of the lease guidance in ASC 842, Leases, for lease concessions related to the effects of the COVID-19 pandemic. Included in this Q&A, the FASB staff determined that it would be acceptable for entities to make an election to account for lease concessions related to the effects of the COVID-19 pandemic consistent with how those concessions would be accounted for under Topic 842 and Topic 840 as though enforceable rights and obligations for those concessions existed (regardless of whether those enforceable rights and obligations for the concessions explicitly exist in the contract). Consequently, for concessions related to the effects of the COVID-19 pandemic, an entity will not have to analyze each contract to determine whether enforceable rights and obligations for concessions exist in the contract and can elect to apply or not apply the lease modification guidance in Topic 842 and Topic 840 to those contracts.

The FASB also acknowledged that some concessions will provide a deferral of payments with no substantive changes to the consideration in the original contract. The FASB indicated that a deferral affects the timing, but the amount of the consideration is substantially the same as that required by the original contract. The staff expects that there will be multiple ways to account for those deferrals, none of which the staff believes is more preferable than the others. Two of those methods are:
Account for the concessions as if no changes to the lease contract were made. Under that accounting, a lessor would increase its lease receivable, and a lessee would increase its accounts payable as receivables/payments accrue. In its income statement, a lessor would continue to recognize income, and a lessee would continue to recognize expense during the deferral period.
Account for the deferred payments as variable lease payments.
In cases where we have granted a deferral for future periods as a result of COVID-19, we have accounted for the concessions as if no changes to the lease contract were made. Under that accounting, we have increased our lease receivable as the receivables have accrued. In our statement of operations, we have continued to recognize income during the deferral period to the extent that we believe collection of that income is probable.

2.  Real Estate

Included in our net real estate assets are income producing properties that are recorded at cost less accumulated depreciation and amortization, construction in progress and land available for development.

We review our investment in real estate, including any related intangible assets, for impairment on a property-by-property basis whenever events or changes in circumstances indicate that the carrying value of the property may not be recoverable.  These changes in circumstances include, but are not limited to, changes in occupancy, rental rates, net operating income, real estate values and expected holding period.

For the nine months ended September 30, 2020 and 2019, we recorded no impairment provision.

Land available for development includes real estate projects where vertical construction has yet to commence, but which have been identified by us and are available for future development when market conditions dictate the demand for a new shopping center or outparcel pad. The viability of all projects under construction or development is regularly evaluated under applicable accounting requirements, including requirements relating to abandonment of assets or changes in use.  Land available for development was $28.7 million and $28.5 million at September 30, 2020 and December 31, 2019, respectively.

Page 11


Construction in progress represents existing development, redevelopment and tenant build-out projects.  When projects are substantially complete and ready for their intended use, balances are transferred to land or building and improvements as appropriate.  Construction in progress was $8.2 million and $13.8 million at September 30, 2020 and December 31, 2019, respectively. The decrease in construction in progress from December 31, 2019 to September 30, 2020 was due primarily to the completion of ongoing expansion projects and the completion of insurance reimbursable building improvements.

Pursuant to the criteria established under ASC Topic 360 we classify properties as held for sale when executed purchase and sales agreement contingencies have been satisfied thereby signifying that the sale is legally binding and probable of closing within one year of the reporting date. As of September 30, 2020, and December 31, 2019, we had no properties and no land parcels classified as held for sale.

3.  Property Acquisitions and Dispositions

Acquisitions

There were no acquisitions in the nine months ended September 30, 2020.

Dispositions

There were no dispositions in the nine months ended September 30, 2020.

4.  Equity Investments in Unconsolidated Joint Ventures

We are an investor in three joint venture agreements: 1) R2G Venture LLC, 2) Ramco/Lion Venture LP, and 3) Ramco HHF NP LLC, whereby we own 51.5%, 30%, and 7%, respectively, of the equity in each joint venture. As of September 30, 2020, our R2G Venture LLC joint venture owned five income-producing shopping centers, and our other two joint ventures did not own any income producing properties. We and the joint venture partners have joint approval rights for major decisions, including those regarding property operations.  We cannot make significant decisions without our partner’s approval.  Accordingly, we account for our interest in the joint ventures using the equity method of accounting.

The combined condensed financial information for our unconsolidated joint ventures is summarized as follows:
Balance SheetsSeptember 30, 2020December 31, 2019
 (In thousands)
ASSETS  
Investment in real estate, net$228,109 $233,531 
Other assets29,811 27,463 
Total Assets$257,920 $260,994 
LIABILITIES AND OWNERS' EQUITY  
Total liabilities$16,935 $15,943 
Owners' equity240,985 245,051 
Total Liabilities and Owners' Equity$257,920 $260,994 
RPT's equity investments in unconsolidated joint ventures$127,964 $130,321 

Page 12


 Three Months Ended September 30,Nine Months Ended September 30,
Statements of Operations2020201920202019
 (In thousands)(In thousands)
Total revenue$6,714 $180 $18,298 $1,662 
Total expenses
5,833 240 15,373 1,021 
Income before other income and expense881 (60)2,925 641 
Gain on sale of real estate 5,494  5,494 
Net income $881 $5,434 $2,925 $6,135 
RPT's share of earnings from unconsolidated joint ventures$456 $373 $1,514 $453 

Acquisitions

There was no acquisition activity in the nine months ended September 30, 2020 by any of our unconsolidated joint ventures.

Dispositions

There was no disposition activity in the nine months ended September 30, 2020 by any of our unconsolidated joint ventures.

Joint Venture Management and Other Fee Income

We are engaged by our joint ventures to provide asset management, property management, leasing and investing services for such ventures' respective properties.  We receive fees for our services, including a property management fee calculated as a percentage of gross revenues received, and recognize these fees as the services are rendered.  

The following table provides information for our fees earned which are reported in our condensed consolidated statements of operations and comprehensive income:
 Three Months Ended September 30,Nine Months Ended September 30,
 2020201920202019
 (In thousands)(In thousands)
Management fees$213 $21 $652 $85 
Leasing fees125  265 2 
Construction fees   24 
Disposition fees 67  67 
Total$338 $88 $917 $178 

Page 13


5.  Debt

The following table summarizes our mortgages, notes payable, revolving credit facility and finance lease obligation as of September 30, 2020 and December 31, 2019:
Notes Payable and Finance Lease ObligationSeptember 30,
2020
December 31,
2019
 (In thousands)
Senior unsecured notes$535,000 $535,000 
Unsecured term loan facilities310,000 310,000 
Fixed rate mortgages85,863 87,581 
Unsecured revolving credit facility125,000  
 1,055,863 932,581 
Unamortized premium1,319 1,995 
Unamortized deferred financing costs(3,804)(3,768)
Total notes payable$1,053,378 $930,808 
Finance lease obligation $926 $926 
 
Senior Unsecured Notes

The following table summarizes the Company's senior unsecured notes:
September 30, 2020December 31, 2019
Senior Unsecured NotesMaturity DatePrincipal BalanceInterest Rate/Weighted Average Interest RatePrincipal BalanceInterest Rate/Weighted Average Interest Rate
 (in thousands)(in thousands)
Senior unsecured notes 6/27/2021$37,000 3.75 %$37,000 3.75 %
Senior unsecured notes 6/27/202341,500 4.12 %41,500 4.12 %
Senior unsecured notes5/28/202450,000 4.65 %50,000 4.65 %
Senior unsecured notes11/18/202425,000 4.05 %25,000 4.05 %
Senior unsecured notes 6/27/202531,500 4.27 %31,500 4.27 %
Senior unsecured notes7/6/202550,000 4.20 %50,000 4.20 %
Senior unsecured notes 9/30/202550,000 4.09 %50,000 4.09 %
Senior unsecured notes5/28/202650,000 4.74 %50,000 4.74 %
Senior unsecured notes11/18/202625,000 4.28 %25,000 4.28 %
Senior unsecured notes 12/21/202730,000 4.57 %30,000 4.57 %
Senior unsecured notes11/30/202875,000 3.64 %75,000 3.64 %
Senior unsecured notes12/21/202920,000