UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM 8-K
_________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
April 26, 2017
RETAIL OPPORTUNITY INVESTMENTS CORP.
(Exact Name of Registrant as Specified in Its Charter)
_________________
Maryland (State or other jurisdiction of incorporation) | 001-33749 (Commission File Number) | 26-0500600 (I.R.S. Employer Identification No.) |
_________________
RETAIL OPPORTUNITY INVESTMENTS PARTNERSHIP, LP
(Exact Name of Registrant as Specified in Its Charter)
_________________
Delaware (State or other jurisdiction of incorporation) | 333-189057-01 (Commission File Number) | 94-2969738 (LR.S. Employer Identification No.) |
8905 Towne Centre Drive, Suite 108 San Diego, California | (858) 677-0900 (Registrants' Telephone Number, Including Area Code) | 92122 (Zip Code) |
Not applicable (Former Name or Former Address, if Changed Since Last Report) | ||
_________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[_] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d‑2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e‑4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (Section 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (Section 240.12b-2 of this chapter)
[_] Emerging 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. [_]
Item 2.02. Results of Operations and Financial Condition.
On April 26, 2017, Retail Opportunity Investments Corp. (the "Company") issued an earnings release announcing its financial results for the quarter ended March 31, 2017. A copy of the earnings release is attached as Exhibit 99.1 hereto and incorporated herein by reference. On April 26, 2017, in connection with this earnings release, the Company posted certain supplemental information regarding the Company's operations for the quarter ended March 31, 2017 on its website, www.roireit.net. A copy of the supplemental information is attached as Exhibit 99.2 hereto and incorporated herein by reference.
The information in this Current Report, including the exhibits hereto, is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, unless it is specifically incorporated by reference therein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
99.1 Earnings Release, dated April 26, 2017
99.2 Supplemental Information for the quarter ended March 31, 2017
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
RETAIL OPPORTUNITY INVESTMENTS CORP.
Dated: April 26, 2017
By: | /s/ Michael B. Haines Name: Michael B. Haines Title: Chief Financial Officer |
RETAIL OPPORTUNITY INVESTMENTS
PARTNERSHIP, LP
PARTNERSHIP, LP
By: | RETAIL OPPORTUNITY INVESTMENTS GP, LLC, its general partner |
By: | /s/ Michael B. Haines Name: Michael B. Haines Title: Chief Financial Officer |
Retail Opportunity Investments Corp. TRADED: NASDAQ: ROIC
8905 Towne Centre Drive, Suite 108
San Diego, CA 92122
FOR IMMEDIATE RELEASE
Wednesday, April 26, 2017
Retail Opportunity Investments Corp. Reports
Strong 2017 First Quarter Results
San Diego, CA, April 26, 2017 - Retail Opportunity Investments Corp. (NASDAQ:ROIC) announced today financial and operating results for the three months ended March 31, 2017.
HIGHLIGHTS
▪$10.2 million of net income attributable to common stockholders ($0.09 per diluted share)
▪$34.3 million of Funds From Operations(1) ($0.28 per diluted share)
▪$268.4 million of shopping center acquisitions lined up year-to-date
▪$124.5 million of shopping centers acquired year-to-date (including $91.5mm in 1Q’17)
▪$143.9 million of shopping center acquisitions currently under contract
▪97.2% portfolio lease rate at March 31, 2017
▪24.0% increase in same-space comparative cash rents on new leases (9.1% on renewals)
▪2.0% increase in same-center cash net operating income (1Q’17 vs. 1Q’16)
▪$55.7mm of ROIC common equity to be issued in connection with acquisitions ($21.36 per share)
▪33.1% debt-to-total market capitalization ratio at March 31, 2017
▪4.0x interest coverage for 1Q’17
▪Quarterly cash dividend of $0.1875 per share declared
__________________________
(1) A reconciliation of GAAP net income to Funds From Operations (FFO) is provided at the end of this press release.
Stuart A. Tanz, President and Chief Executive Officer of Retail Opportunity Investments Corp. stated, “We are off to a strong and expeditious start to 2017. We continue to make the most of our long-standing relationships across the West Coast to secure excellent acquisition opportunities. To date, we have already lined up approximately $268 million of shopping center acquisitions. Additionally, demand for space across our portfolio continues to be strong. We again achieved a portfolio lease rate above 97% and posted solid rent growth, including a 24% increase in same-space base rent on new leases executed during the first quarter.” Tanz added, “With our performance thus far, we are squarely on track to meet our objectives for the year, including our previously stated guidance of achieving FFO between $1.10 and $1.14 per diluted share for 2017.”
FINANCIAL SUMMARY
For the three months ended March 31, 2017, GAAP net income attributable to common stockholders was $10.2 million, or $0.09 per diluted share, as compared to GAAP net income attributable to common stockholders of $8.0 million, or $0.08 per diluted share, for the three months ended March 31, 2016. FFO for the first quarter of 2017 was $34.3 million, or $0.28 per diluted share, as compared to $29.9 million in FFO, or $0.27 per diluted share for the first quarter of 2016. ROIC reports FFO as a supplemental performance measure in accordance with the definition set forth by the National Association of Real Estate Investment Trusts. A reconciliation of GAAP net income to FFO is provided at the end of this press release.
At March 31, 2017, ROIC had a total market capitalization of approximately $3.8 billion with approximately $1.3 billion of principal debt outstanding, equating to a 33.1% debt-to-total market capitalization ratio. ROIC’s debt outstanding was comprised of $70.5 million of mortgage debt and approximately $1.2 billion of unsecured debt, including $187.0 million outstanding on its unsecured credit facility at March 31, 2017. For the first quarter of 2017, ROIC’s interest coverage was 4.0 times and 94.7% of its portfolio was unencumbered (based on gross leasable area) at March 31, 2017.
ACQUISITION SUMMARY
Year-to-date in 2017, ROIC has lined up a total of $268.4 million in shopping center acquisitions. During the first quarter of 2017, ROIC acquired the following three shopping centers, in separate transactions, totaling $91.5 million.
PCC Natural Markets Plaza
In January 2017, ROIC acquired PCC Natural Markets Plaza for $8.6 million. The shopping center is approximately 34,000 square feet and is anchored by PCC Natural Markets. The property is located in Edmonds, Washington, within the Seattle metropolitan area, and is currently 100% leased.
The Terraces
In March 2017, ROIC acquired The Terraces for $54.1 million. The shopping center is approximately 173,000 square feet and is anchored by Trader Joe’s and Marshall’s. The property is located in Rancho Palos Verdes, California, within the Los Angeles metropolitan area, and is currently 89.1% leased.
Santa Rosa Southside Shopping Center
In March 2017, ROIC acquired Santa Rosa Southside Shopping Center for $28.8 million. The shopping center is approximately 86,000 square feet and is anchored by Cost Plus World Market and REI. The property is located in Santa Rosa, California and is currently 100% leased. ROIC funded the acquisition in part with the issuance of approximately $3.9 million of ROIC common equity, based on a value of $23.00 per share.
Subsequent to the first quarter, ROIC acquired the following grocery-anchored shopping center.
Division Center
In April 2017, ROIC acquired Division Center for $33.0 million. The shopping center is approximately 122,000 square feet and is anchored by Grocery Outlet Supermarket and Rite Aid Pharmacy. The property is located in Portland, Oregon and is currently 98.8% leased.
ROIC currently has a contract to acquire the following grocery-anchored shopping center.
Highland Hill Shopping Center
ROIC has a contract to acquire Highland Hill Shopping Center for $47.4 million. The shopping center is approximately 164,000 square feet and is anchored by Safeway Supermarket. The property is located in Tacoma, Washington, within the Seattle metropolitan area, and is currently 96.0% leased.
In addition, ROIC has agreed, subject to Board of Director approval and satisfactory completion of due diligence and other conditions, to acquire the following two-property portfolio for $96.5 million. ROIC expects to fund the acquisition in part with the issuance of approximately $51.8 million of ROIC common equity, based on a value of $21.25 per share.
Riverstone Marketplace
Riverstone Marketplace is approximately 108,000 square feet and is anchored by Kroger (QFC) Supermarket. The property is located in Vancouver, Washington, within the Portland metropolitan area and is currently 96.1% leased.
Fullerton Crossroads
Fullerton Crossroads is approximately 222,000 square feet and is anchored by Kroger (Ralph’s) Supermarket. The property is located in Fullerton, California, within Orange County and is currently 100% leased.
PROPERTY OPERATIONS SUMMARY
At March 31, 2017, ROIC’s portfolio was 97.2% leased. For the first quarter of 2017, same-center net operating income (NOI) was $38.4 million, as compared to $37.6 million in same-center NOI for the first quarter of 2016, representing a 2.0% increase. The first quarter same-center comparative NOI includes all of the properties owned by ROIC as of January 1, 2016, totaling 73 shopping centers. ROIC reports same-center comparative NOI on a cash basis. A reconciliation of GAAP operating income to same-center comparative NOI is provided at the end of this press release.
During the first quarter of 2017, ROIC executed 83 leases, totaling 193,091 square feet, achieving an 11.9% increase in same-space comparative base rent, including 27 new leases, totaling 64,076 square feet, achieving a 24.0% increase in same-space comparative base rent, and 56 renewed leases, totaling 129,015 square feet, achieving a 9.1% increase in base rent. ROIC reports same-space comparative base rent on a cash basis.
CASH DIVIDEND
On March 30, 2017, ROIC distributed an $0.1875 per share cash dividend. On April 25, 2017, ROIC’s board of directors declared a cash dividend of $0.1875 per share, payable on June 29, 2017 to stockholders of record on June 15, 2017.
CONFERENCE CALL
ROIC will conduct a conference call and audio webcast to discuss its results on Thursday, April 27, 2017 at 11:00 a.m. Eastern Time / 8:00 a.m. Pacific Time. Those interested in participating in the conference call should dial (877) 312-8783 (domestic), or (408) 940-3874 (international) at least ten minutes prior to the scheduled start of the call. When prompted, provide the Conference ID: 87249391. A live webcast will also be available in listen-only mode at http://www.roireit.net/. The conference call will be recorded and available for replay beginning at 2:00 p.m. Eastern Time on April 27, 2017 and will be available until 11:59 p.m. Eastern Time on May 4, 2017. To access the conference call recording, dial (855) 859-2056 (domestic) or (404) 537-3406 (international) and use the Conference ID: 87249391. The conference call will also be archived on http://www.roireit.net/ for approximately 90 days.
ABOUT RETAIL OPPORTUNITY INVESTMENTS CORP.
Retail Opportunity Investments Corp. (NASDAQ: ROIC), is a fully-integrated, self-managed real estate investment trust (REIT) that specializes in the acquisition, ownership and management of grocery-anchored shopping centers located in densely-populated, metropolitan markets across the West Coast. As of March 31, 2017, ROIC owned 84 shopping centers encompassing approximately 9.7 million square feet. ROIC is the largest publicly-traded, grocery-anchored shopping center REIT focused exclusively on the West Coast. ROIC is a member of the S&P SmallCap 600 Index and has investment-grade corporate debt ratings from Moody's Investor Services and Standard & Poor's. Additional information is available at: www.roireit.net.
When used herein, the words "believes," "anticipates," "projects," "should," "estimates," "expects," “guidance” and similar expressions are intended to identify forward-looking statements with the meaning of that term in Section 27A of the Securities Act of 1933, as amended, and in Section 21F of the Securities and Exchange Act of 1934, as amended. Certain statements contained herein may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results of ROIC to differ materially from future results expressed or implied by such forward-looking statements. Information regarding such risks and factors is described in ROIC's filings with the SEC, including its most recent Annual Report on Form 10-K, which is available at: www.roireit.net.
RETAIL OPPORTUNITY INVESTMENTS CORP.
Consolidated Balance Sheets
(In thousands, except share data)
March 31, 2017 (unaudited) | December 31, 2016 | ||||||
ASSETS | |||||||
Real Estate Investments: | |||||||
Land | $ | 787,765 | $ | 766,199 | |||
Building and improvements | 1,996,526 | 1,920,819 | |||||
2,784,291 | 2,687,018 | ||||||
Less: accumulated depreciation | 207,858 | 193,021 | |||||
Real Estate Investments, net | 2,576,433 | 2,493,997 | |||||
Cash and cash equivalents | 19,430 | 13,125 | |||||
Restricted cash | 163 | 125 | |||||
Tenant and other receivables, net | 35,946 | 35,820 | |||||
Deposits | 2,000 | — | |||||
Acquired lease intangible assets, net | 75,466 | 79,205 | |||||
Prepaid expenses | 2,480 | 3,317 | |||||
Deferred charges, net | 33,807 | 34,753 | |||||
Other assets | 2,812 | 2,627 | |||||
Total assets | $ | 2,748,537 | $ | 2,662,969 | |||
LIABILITIES AND EQUITY | |||||||
Liabilities: | |||||||
Term loan | $ | 299,288 | $ | 299,191 | |||
Credit facility | 184,936 | 95,654 | |||||
Senior Notes Due 2026 | 199,731 | 199,727 | |||||
Senior Notes Due 2024 | 245,486 | 245,354 | |||||
Senior Notes Due 2023 | 245,211 | 245,051 | |||||
Mortgage notes payable | 70,968 | 71,303 | |||||
Acquired lease intangible liabilities, net | 148,986 | 154,958 | |||||
Accounts payable and accrued expenses | 26,941 | 18,294 | |||||
Tenants’ security deposits | 6,288 | 5,950 | |||||
Other liabilities | 13,076 | 11,922 | |||||
Total liabilities | 1,440,911 | 1,347,404 | |||||
Commitments and contingencies | |||||||
Equity: | |||||||
Preferred stock, $.0001 par value 50,000,000 shares authorized; none issued and outstanding | — | — | |||||
Common stock, $0.0001 par value, 500,000,000 shares authorized, 109,726,196 and 109,301,762 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively | 11 | 11 | |||||
Additional paid-in capital | 1,360,700 | 1,357,910 | |||||
Accumulated dividends in excess of earnings | (176,414 | ) | (165,951 | ) | |||
Accumulated other comprehensive loss | (3,013 | ) | (3,729 | ) | |||
Total Retail Opportunity Investments Corp. stockholders’ equity | 1,181,284 | 1,188,241 | |||||
Non-controlling interests | 126,342 | 127,324 | |||||
Total equity | 1,307,626 | 1,315,565 | |||||
Total liabilities and equity | $ | 2,748,537 | $ | 2,662,969 | |||
RETAIL OPPORTUNITY INVESTMENTS CORP.
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data)
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Revenues | |||||||
Base rents | $ | 51,479 | $ | 43,848 | |||
Recoveries from tenants | 13,668 | 11,860 | |||||
Other income | 753 | 386 | |||||
Total revenues | 65,900 | 56,094 | |||||
Operating expenses | |||||||
Property operating | 9,300 | 7,498 | |||||
Property taxes | 7,068 | 5,655 | |||||
Depreciation and amortization | 23,058 | 20,933 | |||||
General and administrative expenses | 3,499 | 3,319 | |||||
Acquisition transaction costs | — | 136 | |||||
Other expense | 49 | 154 | |||||
Total operating expenses | 42,974 | 37,695 | |||||
Operating income | 22,926 | 18,399 | |||||
Non-operating expenses | |||||||
Interest expense and other finance expenses | (11,675 | ) | (9,474 | ) | |||
Net income | 11,251 | 8,925 | |||||
Net income attributable to non-controlling interests | (1,081 | ) | (898 | ) | |||
Net Income Attributable to Retail Opportunity Investments Corp. | $ | 10,170 | $ | 8,027 | |||
Earnings per share - basic and diluted: | $ | 0.09 | $ | 0.08 | |||
Dividends per common share | $ | 0.1875 | $ | 0.1800 | |||
CALCULATION OF FUNDS FROM OPERATIONS
(Unaudited)
(In thousands)
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Net income attributable to ROIC | $ | 10,170 | $ | 8,027 | |||
Plus: Depreciation and amortization | 23,058 | 20,933 | |||||
Funds from operations – basic | 33,228 | 28,960 | |||||
Net income attributable to non-controlling interests | 1,081 | 898 | |||||
Funds from operations – diluted | $ | 34,309 | $ | 29,858 | |||
SAME-CENTER CASH NET OPERATING INCOME ANALYSIS
(Unaudited)
(In thousands, except number of shopping centers and percentages)
Three Months Ended March 31, | |||||||||||||||
2017 | 2016 | $ Change | % Change | ||||||||||||
Number of shopping centers included in same-center analysis | 73 | 73 | |||||||||||||
Same-center occupancy | 97.3 | % | 97.2 | % | 0.1 | % | |||||||||
Revenues: | |||||||||||||||
Base rents | $ | 39,854 | $ | 38,396 | $ | 1,458 | 3.8 | % | |||||||
Percentage rent | 105 | 165 | (60 | ) | (36.4 | )% | |||||||||
Recoveries from tenants | 12,313 | 11,954 | 359 | 3.0 | % | ||||||||||
Other property income | 743 | 225 | 518 | 230.2 | % | ||||||||||
Total Revenues | 53,015 | 50,740 | 2,275 | 4.5 | % | ||||||||||
Operating Expenses: | |||||||||||||||
Property operating expenses | $ | 8,142 | $ | 7,380 | $ | 762 | 10.3 | % | |||||||
Bad debt expense | 433 | 128 | 305 | 238.3 | % | ||||||||||
Property taxes | 6,050 | 5,604 | 446 | 8.0 | % | ||||||||||
Total Operating Expenses | 14,625 | 13,112 | 1,513 | 11.5 | % | ||||||||||
Same-center cash net operating income | $ | 38,390 | $ | 37,628 | $ | 762 | 2.0 | % | |||||||
SAME-CENTER CASH NET OPERATING INCOME RECONCILIATION
(Unaudited)
(In thousands)
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
GAAP operating income | $ | 22,926 | $ | 18,399 | |||
Depreciation and amortization | 23,058 | 20,933 | |||||
General and administrative expenses | 3,499 | 3,319 | |||||
Acquisition transaction costs | — | 136 | |||||
Other expense | 49 | 154 | |||||
Property revenues and other expenses (1) | (6,854 | ) | (4,934 | ) | |||
Total Company cash NOI | 42,678 | 38,007 | |||||
Non same-center cash NOI | (4,288 | ) | (379 | ) | |||
Same-center cash NOI | $ | 38,390 | $ | 37,628 | |||
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(1) | Includes straight-line rents, amortization of above and below-market lease intangibles, anchor lease termination fees, net of contractual amounts, and expense and recovery adjustments related to prior periods. |
NON-GAAP DISCLOSURES
Funds from operations (“FFO”), is a widely recognized non-GAAP financial measure for REITs that the Company believes when considered with financial statements presented in accordance with GAAP, provides additional and useful means to assess its financial performance. FFO is frequently used by securities analysts, investors and other interested parties to evaluate the performance of REITs, most of which present FFO along with net income as calculated in accordance with GAAP. The Company computes FFO in accordance with the “White Paper” on FFO published by the National Association of Real Estate Investment Trusts (“NAREIT”), which defines FFO as net income attributable to common stockholders (determined in accordance with GAAP) excluding gains or losses from debt restructuring, sales of depreciable property and impairments, plus real estate related depreciation and amortization, and after adjustments for partnerships and unconsolidated joint ventures.
The Company uses cash net operating income (“NOI”) internally to evaluate and compare the operating performance of the Company’s properties. The Company believes cash NOI provides useful information to investors regarding the Company’s financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level, and when compared across periods, can be used to determine trends in earnings of the Company’s properties as this measure is not affected by the non-cash revenue and expense recognition items, the cost of the Company’s funding, the impact of depreciation and amortization expenses, gains or losses from the acquisition and sale of operating real estate assets, general and administrative expenses or other gains and losses that relate to the Company’s ownership of properties. The Company believes the exclusion of these items from operating income is useful because the resulting measure captures the actual revenue generated and actual expenses incurred in operating the Company’s properties as well as trends in occupancy rates, rental rates and operating costs. Cash NOI is a measure of the operating performance of the Company’s properties but does not measure the Company’s performance as a whole and is therefore not a substitute for net income or operating income as computed in accordance with GAAP. The Company defines cash NOI as operating revenues (base rent and recoveries from tenants), less property and related expenses (property operating expenses and property taxes), adjusted for non-cash revenue and operating expense items such as straight-line rent and amortization of lease intangibles, debt-related expenses and other adjustments. Cash NOI also excludes general and administrative expenses, depreciation and amortization, acquisition transaction costs, other expense, interest expense, gains and losses from property acquisitions and dispositions, extraordinary items, tenant improvements and leasing commissions. Other REITs may use different
methodologies for calculating cash NOI, and accordingly, the Company’s cash NOI may not be comparable to other REITs.
Contact:
Ashley Rubino, Investor Relations
858-255-4913
arubino@roireit.net
1st QUARTER 2017
SUPPLEMENTAL INFORMATION
Retail Opportunity Investments Corporation
8905 Towne Centre Drive Suite 108
San Diego, CA 92122
www.roireit.net
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Our Company
Retail Opportunity Investments Corp. (Nasdaq: ROIC), is a fully integrated, self-managed real estate investment trust (REIT) that specializes in the acquisition,
ownership and management of grocery-anchored shopping centers located in densely-populated, metropolitan markets across the West Coast. As of March 31,
2017, ROIC owned 84 shopping centers encompassing approximately 9.7 million square feet. ROIC is the largest publicly-traded, grocery-anchored shopping
center REIT focused exclusively on the West Coast. ROIC is a member of the S&P SmallCap 600 Index and has investment-grade corporate debt ratings from
Moody's Investor Services and S&P Global Ratings. Additional information is available at www.roireit.net.
Supplemental Information
The enclosed information should be read in conjunction with ROIC's filings with the Securities and Exchange Commission, including but not limited to, its
Form 10-Qs filed quarterly and Form 10-Ks filed annually. Additionally, the enclosed information does not purport to disclose all items under generally
accepted accounting principles (“GAAP”).
Non-GAAP Disclosures
Funds from operations (“FFO”), is a widely-recognized non-GAAP financial measure for REITs that the Company believes when considered with financial
statements presented in accordance with GAAP, provides additional and useful means to assess its financial performance. FFO is frequently used by securities
analysts, investors and other interested parties to evaluate the performance of REITs, most of which present FFO along with net income as calculated in
accordance with GAAP. The Company computes FFO in accordance with the “White Paper” on FFO published by the National Association of Real Estate
Investment Trusts (“NAREIT”), which defines FFO as net income attributable to common stockholders (determined in accordance with GAAP) excluding
gains or losses from debt restructuring, sales of depreciable property and impairments, plus real estate related depreciation and amortization, and after
adjustments for partnerships and unconsolidated joint ventures.
The Company uses cash net operating income (“NOI”) internally to evaluate and compare the operating performance of the Company’s properties. The
Company believes cash NOI provides useful information to investors regarding the Company’s financial condition and results of operations because it reflects
only those income and expense items that are incurred at the property level, and when compared across periods, can be used to determine trends in earnings of
the Company’s properties as this measure is not affected by the non-cash revenue and expense recognition items, the cost of the Company’s funding, the impact
of depreciation and amortization expenses, gains or losses from the acquisition and sale of operating real estate assets, general and administrative expenses or
other gains and losses that relate to the Company’s ownership of properties. The Company believes the exclusion of these items from operating income is
useful because the resulting measure captures the actual revenue generated and actual expenses incurred in operating the Company’s properties as well as trends
in occupancy rates, rental rates and operating costs. Cash NOI is a measure of the operating performance of the Company’s properties but does not measure the
Company’s performance as a whole and is therefore not a substitute for net income or operating income as computed in accordance with GAAP. The Company
defines cash NOI as operating revenues (base rent and recoveries from tenants), less property and related expenses (property operating expenses and property
taxes), adjusted for non-cash revenue and operating expense items such as straight-line rent and amortization of lease intangibles, debt-related expenses and
other adjustments. Cash NOI also excludes general and administrative expenses, depreciation and amortization, acquisition transaction costs, other expense,
interest expense, gains and losses from property acquisitions and dispositions, extraordinary items, tenant improvements and leasing commissions. Other
REITs may use different methodologies for calculating cash NOI, and accordingly, the Company’s cash NOI may not be comparable to other REITs.
Supplemental Disclosure
Quarter Ended March 31, 2017Overview
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Page
Balance Sheets……..……………………………………………………………..………………………………………………… 4
Income Statements .…………………………………………………………………………………..……..…………...………… 5
Funds From Operations …………………………………………………………………………………………………………… 6
Summary of Debt Outstanding .……………………………………………..…………………………………………………… 7
Selected Financial Analysis .……………………………………………………………………………………………………… 9
2017 Property Acquisitions ………………………….………………………...………………………………………………… 10
Property Portfolio ………………………………………………….……………………………………………………………… 11
Same-Center Cash Net Operating Income Analysis……………………………………………………………………………… 14
Top Ten Tenants ………………….…………….………………….……………………………………………………………… 15
Lease Expiration Schedule ……………………..………………………..…….………………………………………………… 16
Leasing Summary ………………………………………………………..…................................................................................ 17
Same-Space Comparative Leasing Summary ………………………………………………………..…...................................... 18
Investor Information …………………………………………………………..…………………………………………………… 19
Financial Data
Portfolio Data
Supplemental Disclosure
Quarter Ended March 31, 2017Table of Contents
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(unaudited, dollars in thousands, except par values and share amounts)
03/31/17 12/31/16
ASSETS:
Real Estate Investments:
Land 787,765$ 766,199$
Building and improvements 1,996,526 1,920,819
Less: accumulated depreciation (207,858) (193,021)
Real Estate Investments, net 2,576,433 2,493,997
Cash and cash equivalents 19,430 13,125
Restricted cash 163 125
Tenant and other receivables, net 35,946 35,820
Deposits 2,000 -
Acquired lease intangible assets, net 75,466 79,205
Prepaid expenses 2,480 3,317
Deferred charges, net 33,807 34,753
Other assets 2,812 2,627
TOTAL ASSETS 2,748,537$ 2,662,969$
LIABILITIES:
Term loan 299,288$ 299,191$
Credit facility 184,936 95,654
Senior Notes Due 2026 199,731 199,727
Senior Notes Due 2024 245,486 245,354
Senior Notes Due 2023 245,211 245,051
Mortgage notes payable 70,968 71,303
Acquired lease intangible liabilities, net 148,986 154,958
Accounts payable and accrued expenses 26,941 18,294
Tenants' security deposits 6,288 5,950
Other liabilities 13,076 11,922
TOTAL LIABILITIES 1,440,911 1,347,404
EQUITY:
Common stock, $.0001 par value 500,000,000 shares authorized 11 11
Additional paid-in capital 1,360,700 1,357,910
Dividends in excess of earnings (176,414) (165,951)
Accumulated other comprehensive loss (3,013) (3,729)
Total Retail Opportunity Investments Corp. stockholders' equity 1,181,284 1,188,241
Non-controlling interests 126,342 127,324
TOTAL EQUITY 1,307,626 1,315,565
TOTAL LIABILITIES AND EQUITY 2,748,537$ 2,662,969$
The Company's Form 10-Q for the quarter ended March 31, 2017, and Form 10-K for the year ended December 31, 2016 should be read in conjunction with the above information.
Supplemental Disclosure
Quarter Ended March 31, 2017Balance Sheets
- 5 -
(in thousands, except per share amounts)
3 Months Ended (Unaudited) 12 Months En
03/31/17 03/31/16 03/31/17
REVENUES:
Base rents 51,479$ 43,848$ 183,330$
Recoveries from tenants 13,668 11,860 51,454
Other income 753 386 2,405
TOTAL REVENUES 65,900 56,094 237,189
OPERATING EXPENSES:
Property operating 9,300$ 7,498$ 32,201$
Property taxes 7,068 5,655 25,058
Depreciation and amortization 23,058 20,933 88,359
General and administrative expenses 3,499 3,319 13,120
Acquisition transaction costs - 136 824
Other expense 49 154 456
TOTAL OPERATING EXPENSES 42,974 37,695 160,018
OPERATING INCOME 22,926 18,399 77,171
NON-OPERATING EXPENSES:
Interest expense and other finance expenses (11,675) (9,474) (40,741)
TOTAL NON-OPERATING EXPENSES (11,675) (9,474) (40,741)
NET INCOME 11,251$ 8,925$ 36,430$
NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS (1,081) (898) (3,676)
NET INCOME ATTRIBUTABLE TO RETAIL OPPORTUNITY INVESTMENTS CORP. 10,170$ 8,027$ 32,754$
NET INCOME PER COMMON SHARE - BASIC 0.09$ 0.08$ 0.31$
NET INCOME PER COMMON SHARE - DILUTED 0.09$ 0.08$ 0.31$
Weighted average common shares outstanding - basic 109,227 99,411 104,072
Weighted average common shares outstanding - diluted 121,054 110,711 116,040
The Company's Form 10-Q for the quarters ended March 31, 2017 and March 31, 2016 should be read in conjunction with the above information.
Supplemental Disclosure
Quarter Ended March 31, 2017Income Statements
- 6 -
(in thousands, except per share amounts)
3 Months Ended (Unaudited) 12 Months E
03/31/17 03/31/16 03/31/17
Funds from Operations (FFO) (1) :
Net income attributable to ROIC common stockholders 10,170$ 8,027$ 32,754$
Plus:
Depreciation and amortization expense 23,058 20,933 88,359
FUNDS FROM OPERATIONS - BASIC 33,228$ 28,960$ 121,113$
Net income attributable to non-controlling interests 1,081 898 3,676
FUNDS FROM OPERATIONS - DILUTED 34,309$ 29,858$ 124,789$
FUNDS FROM OPERATIONS PER SHARE - BASIC 0.30$ 0.29$ 1.16$
FUNDS FROM OPERATIONS PER SHARE - DILUTED 0.28$ 0.27$ 1.08$
Weighted average common shares outstanding - basic 109,227 99,411 104,072
Weighted average common shares outstanding - diluted 121,054 110,711 116,040
Common dividends per share 0.1875$ 0.1800$ 0.72$
FFO Payout Ratio 66.3% 66.7% 66.7%
The above does not purport to disclose all items required under GAAP.
(1) - Funds from operations ("FFO"), is a widely-recognized non GAAP financial measure for REITs that ROIC believes, when considered with financial statements determined in accordance with GAAP, provides additional and useful means to assess its financial performance. FFO is frequently used by
securities analysts, investors and other interested parties to evaluate the performance of REITs. ROIC computes FFO in accordance with the "White Paper" on FFO published by the National Association of Real Estate Investment Trusts ("NAREIT"), which defines FFO as net income attributable to common
shareholders (determined in accordance with GAAP) excluding gains or losses from debt restructuring and sales of property, plus real estate related depreciation and amortization, and after adjustments for partnerships and unconsolidated joint ventures.
Supplemental Disclosure
Quarter Ended March 31, 2017Funds From Operations
- 7 -
(unaudited, dollars in thousands)
Outstanding GAAP Maturity Percent of
Balance Interest Rate Interest Rate Date Total Indebtedness
Fixed Rate Debt
Mortgage Debt:
Bernardo Heights Plaza 8,167$ 5.70% 3.30% 07/11/17 0.6%
Santa Teresa Village 10,322 6.20% 3.26% 02/01/18 0.8%
Magnolia Shopping Center 9,090 5.50% 3.86% 10/01/18 0.7%
Casitas Plaza Shopping Center 7,415 5.32% 4.20% 06/01/22 0.6%
Diamond Hills Plaza 35,500 3.55% 3.61% 10/01/25 2.8%
Net unamortized premiums on mortgages 866
Net unamortized deferred financing charges (392)
Total Mortgage Debt 70,968$ 4.6% 3.6% 5.2 Years (WA) 5.5%
Unsecured Senior Notes:
Senior Notes Due 2023 250,000$ 5.00% 5.21% 12/15/23 19.9%
Net unamortized discount on notes (3,026)
Net unamortized deferred financing charges (1,763)
Senior Notes Due 2023, net 245,211
Senior Notes Due 2024 250,000 4.00% 4.21% 12/15/24 19.9%
Net unamortized discount on notes (2,814)
Net unamortized deferred financing charges (1,700)
Senior Notes Due 2024, net 245,486
Senior Notes Due 2026 200,000 3.95% 3.95% 09/22/26 15.9%
Net unamortized deferred financing charges (269)
Senior Notes Due 2026, net 199,731
Total Unsecured Senior Notes 690,428$ 4.34% 4.49% 7.9 Years (WA) 55.7%
Interest rate swaps 100,000 1.96% 1.96% 1/31/2019 8.0%
Total Fixed Rate Debt 861,396$ 4.09% 4.13% 6.9 Years (WA) 69.2%
Variable Rate Debt
Credit Facility 187,000$ 1.96% 1.96% 01/31/19 14.9%
Net unamortized deferred financing charges (2,064)
Credit Facility, net 184,936
Term Loan 300,000 1.89% 1.89% 01/31/19 23.9%
Net unamortized deferred financing charges (712)
Term Loan, net 299,288
Interest rate swaps (100,000) (8.0)%
Total Variable Rate Debt 384,224$ 1.92% 1.92% 1.8 Years (WA) 30.8%
TOTAL DEBT 1,245,620$ 3.57% 3.60% 5.5 Years (WA) 100.0%
Net unamortized premiums on mortgages (866)
Net unamortized discount on notes 5,840
Net unamortized deferred financing charges 6,900
Total Principal Debt 1,257,494$
(1) Does not include extension options available to ROIC.
Supplemental Disclosure
Quarter Ended March 31, 2017Summary of Debt Outstanding
(1)
(1)
- 8 -
(unaudited, dollars in thousands)
Summary of Principal Maturities
Senior Total Principal Percentage of
Credit Facility Term Loan Unsecured Notes Payments Debt Maturing
8,099$ -$ -$ -$ 8,599$ 0.7%
18,900 - - - 19,237 1.5%
- 187,000 300,000 - 487,157 38.7%
- - - - 166 0.0%
- - - - 282 0.0%
6,585 - - - 7,322 0.6%
- - - 250,000 250,686 19.9%
- - - 250,000 250,708 19.9%
32,787 - - - 33,337 2.8%
- - - 200,000 200,000 15.9%
66,371$ 187,000$ 300,000$ 700,000$ 1,257,494$ 100.0%
Summary of Unencumbered/Encumbered Properties
Percentage
GLA of GLA
Unencumbered properties 9,137,588 94.7%
Encumbered properties 515,296 5.3%
9,652,884 100.0%
Summary of Unsecured Debt/Secured Debt
Percentage of Total
Principal Debt
Unsecured principal debt 1,187,000$ 94.4%
Secured principal debt 70,494 5.6%
Total Principal Debt 1,257,494$ 100.0%
(1) Does not include extension options available to ROIC.
(2) Negligible percentage rounds down to zero.
Amount
2017 500$
Mortgage Principal
2019 157
2020 166
2021 282
2022 737
2023 686
Year Amortization
2018 337
Mortgage Principal
due at Maturity
84
2024 708
2025 550
2026 -
4,123$
Number of
Properties
79
5
Supplemental Disclosure
Quarter Ended March 31, 2017Summary of Debt Outstanding, continued
(1) (1)
(2)
(2)
- 9 -
(unaudited, in thousands, except per share amounts)
03/31/17 12/31/16 09/30/16 06/30/16 03/31/16
Debt coverage ratios, three months ending:
Interest coverage ratio (EBITDA/interest expense) 4.0x 4.0x 4.2x 4.1x 4.2x
Debt service coverage (EBITDA/(interest expense + scheduled principal payments)) 3.9x 3.9x 4.1x 4.0x 4.1x
Net principal debt (Total principal debt less cash & equivalents)/Annualized EBITDA 6.7x 6.4x 6.4x 7.3x 6.5x
Debt/equity ratios, at period end:
Total principal debt/total market capitalization 33.1% 31.4% 29.0% 32.8% 31.8%
Total principal debt/total equity market capitalization 49.4% 45.9% 40.8% 48.9% 46.6%
Total principal debt/total book assets 45.8% 43.9% 41.7% 46.9% 44.0%
Total principal debt/undepreciated book value 42.5% 40.9% 39.0% 44.1% 41.4%
Secured principal debt/undepreciated book value 2.4% 2.4% 2.5% 2.6% 3.1%
Market capitalization calculations, at period end:
Common shares outstanding 109,263 108,891 108,749 101,564 99,526
Operating partnership units (OP units) outstanding 11,686 11,668 11,810 12,180 12,274
Common stock price per share 21.03$ 21.13$ 21.96$ 21.67$ 20.12$
Total equity market capitalization 2,543,568$ 2,547,411$ 2,647,473$ 2,464,823$ 2,249,419$
Total principal debt 1,257,494 1,168,683 1,078,869 1,204,551 1,047,869
TOTAL MARKET CAPITALIZATION 3,801,062$ 3,716,094$ $3,726,342 $3,669,374 3,297,288$
Unsecured Senior Notes Financial Covenants: (1)
Total debt to total assets not to exceed 60% 44.3% 42.7% 40.7% 46.1% 43.3%
Total secured debt to total assets not to exceed 40% 2.5% 2.6% 2.7% 2.8% 3.3%
Total unencumbered assets to total unsecured debt not to be less than 150% 225.4% 234.3% 246.9% 216.6% 232.9%
Consolidated income available for debt service to interest expense not to be less than 1.5:1 4.0x 4.1x 4.1x 4.0x 3.9x
(1) Calculated in accordance with GAAP pursuant to underlying bond indentures.
Supplemental Disclosure
Quarter Ended March 31, 2017Selected Financial Analysis
- 10 -
(dollars in thousands)
Date Owned
Shopping Centers Location Acquired Purchase Amount GLA
1Q 2017
PCC Natural Markets Plaza Edmonds, WA 01/25/17 8,600$ 34,459
The Terraces Rancho Palos Verdes, CA 03/17/17 54,100 172,922
Santa Rosa Southside Shopping Center Santa Rosa, CA 03/24/17 28,810 85,535
Total 1Q 2017 91,510$ 292,916
2Q 2017
Total 2Q 2017 -$ -
3Q 2017
Total 3Q 2017 -$ -
4Q 2017
Total 4Q 2017 -$ -
Total 2017 Acquisitions 91,510$ 292,916
Supplemental Disclosure
Quarter Ended March 31, 20172017 Property Acquisitions
- 11 -
(dollars in thousands)
Date Owned %
Southern California City State Acquired GLA Leased ABR (1) Major Tenants
Los Angeles metro area
Paramount Plaza * Paramount CA 12/22/09 95,062 100.0% 1,774$ Grocery Outlet Supermarket, 99¢ Only Stores, Rite Aid Pharmacy
Claremont Promenade * Claremont CA 09/23/10 92,297 98.8% 2,344 Super King Supermarket
Gateway Village * Chino Hills CA 12/17/10 96,959 98.7% 2,806 Sprouts Market
Seabridge Marketplace * Oxnard CA 05/31/12 93,630 96.8% 1,614 Safeway (Vons) Supermarket
Glendora Shopping Center * Glendora CA 08/01/12 106,535 100.0% 1,326 Albertson's Supermarket
Redondo Beach Plaza * Redondo Beach CA 12/28/12 110,509 100.0% 2,138 Safeway (Vons) Supermarket, Petco
Diamond Bar Town Center * Diamond Bar CA 02/01/13 100,342 98.5% 2,204 Walmart Neighborhood Market, Crunch Fitness
Diamond Hills Plaza * Diamond Bar CA 04/22/13 139,505 100.0% 3,551 H-Mart Supermarket, Rite Aid Pharmacy
Plaza de la Cañada * La Cañada Flintridge CA 12/13/13 100,408 98.3% 2,397 Gelson's Supermarket, TJ Maxx, Rite Aid Pharmacy
Fallbrook Shopping Center * Los Angeles CA 06/13/14 755,299 100.0% 12,431 Sprouts Market, Trader Joe's, Kroger (Ralph's) Supermarket(2), TJ Maxx
Moorpark Town Center * Moorpark CA 12/03/14 133,547 99.0% 2,003 Kroger (Ralph's) Supermarket, CVS Pharmacy
Ontario Plaza * Ontario CA 01/06/15 150,149 97.1% 2,059 El Super Supermarket, Rite Aid Pharmacy
Park Oaks Shopping Center * Thousand Oaks CA 01/06/15 110,092 99.3% 2,752 Safeway (Vons) Supermarket, Dollar Tree
Warner Plaza * Woodland Hills CA 12/31/15 112,261 88.3% 4,139 Sprouts Market, Kroger (Ralph's) Supermarket (2), Rite Aid Pharmacy (2)
Magnolia Shopping Center Santa Barbara CA 03/10/16 116,360 98.3% 2,206 Kroger (Ralph's) Supermarket
Casitas Plaza Shopping Center Carpinteria CA 03/10/16 97,407 98.6% 1,520 Albertson's Supermarket, CVS Pharmacy
Bouquet Center Santa Clarita CA 04/28/16 148,903 97.3% 3,267 Safeway (Vons) Supermarket, CVS Pharmacy, Ross Dress For Less
North Ranch Shopping Center Westlake Village CA 06/01/16 146,625 92.8% 4,929 Kroger (Ralph's) Supermarket, Trader Joe's, Rite Aid Pharmacy, Petco
The Knolls Long Beach CA 10/03/16 52,021 100.0% 1,292 Trader Joe's, Pet Food Express
The Terraces Rancho Palos Verdes CA 03/17/17 172,922 89.1% 3,138 Trader Joe's, Marshall's, LA Fitness
Los Angeles metro area total 2,930,833 97.8% 59,890$
Orange County metro area
Santa Ana Downtown Plaza * Santa Ana CA 01/26/10 105,546 100.0% 2,203$ Kroger (Food 4 Less) Supermarket, Marshall's
Sycamore Creek * Corona CA 09/30/10 74,198 100.0% 1,714 Safeway (Vons) Supermarket, CVS Pharmacy (2)
Desert Springs Marketplace * Palm Desert CA 02/17/11 109,806 100.0% 2,688 Kroger (Ralph's) Supermarket, Rite Aid Pharmacy
Cypress Center West * Cypress CA 12/04/12 107,246 99.0% 1,947 Kroger (Ralph's) Supermarket, Rite Aid Pharmacy
Harbor Place Center * Garden Grove CA 12/28/12 119,821 100.0% 1,619 AA Supermarket, Ross Dress For Less
Five Points Plaza * Huntington Beach CA 09/27/13 160,536 98.3% 4,196 Trader Joe's, Pier 1
Peninsula Marketplace * Huntington Beach CA 10/15/13 95,416 100.0% 2,437 Kroger (Ralph's) Supermarket, Planet Fitness
Mission Foothill Marketplace * Mission Viejo CA 12/04/14 110,678 83.3% 1,657 Safeway (Vons) Supermarket (3), CVS Pharmacy
Orange Country metro area total 883,247 97.5% 18,461$
San Diego metro area
Marketplace Del Rio * Oceanside CA 01/03/11 177,195 86.6% 2,938$ Stater Brothers Supermarket, Walgreens
Renaissance Towne Centre * San Diego CA 08/03/11 53,074 95.5% 2,339 CVS Pharmacy
Euclid Plaza * San Diego CA 03/29/12 77,044 96.8% 1,393 Vallarta Supermarket, Walgreens
Bay Plaza * San Diego CA 10/05/12 73,324 93.8% 1,805 Seafood City Supermarket
Bernardo Heights Plaza * Rancho Bernardo CA 02/06/13 37,729 100.0% 942 Sprouts Market
Hawthorne Crossings * San Diego CA 06/27/13 141,288 100.0% 3,234 Mitsuwa Supermarket, Ross Dress For Less, Staples
Creekside Plaza * Poway CA 02/28/14 128,852 100.0% 2,746 Stater Brothers Supermarket, DigiPlex Theatre
San Diego metro area total 688,506 95.2% 15,397$
Southern California Totals 4,502,586 97.3% 93,748$
(1) ABR is equal to annualized base rent on a cash basis for all leases in-place at period end.
(2) These retailers are not tenants of ROIC.
(3) This tenant is not in possession of the space but has an ongoing financial obligation to ROIC.
*Denotes properties in same center pool for 1Q 2017.
Supplemental Disclosure
Quarter Ended March 31, 2017Property Portfolio
- 12 -
(dollars in thousands)
Date Owned %
Northern California City State Acquired GLA Leased ABR (1) Major Tenants
San Francisco metro area
Pleasant Hill Marketplace * Pleasant Hill CA 04/08/10 69,715 100.0% 1,471$ Buy Buy Baby, Total Wine and More, Basset Furniture
Pinole Vista Shopping Center * Pinole CA 01/06/11 223,502 91.3% 2,671 SaveMart (Lucky) Supermarket, Kmart
Country Club Gate Center * Pacific Grove CA 07/08/11 109,331 94.1% 1,980 SaveMart (Lucky) Supermarket, Rite Aid Pharmacy
Marlin Cove Shopping Center * Foster City CA 05/04/12 73,280 96.8% 2,138 99 Ranch Market
The Village at Novato * Novato CA 07/24/12 20,081 100.0% 550 Trader Joe's, Pharmaca Pharmacy
Santa Teresa Village * San Jose CA 11/08/12 124,295 93.7% 2,436 Raleys (Nob Hill) Supermarket, Dollar Tree
Granada Shopping Center * Livermore CA 06/27/13 69,325 100.0% 1,229 SaveMart (Lucky) Supermarket
Country Club Village * San Ramon CA 11/26/13 111,093 100.0% 2,095 Walmart Neighborhood Market, CVS Pharmacy
North Park Plaza * San Jose CA 04/30/14 76,697 100.0% 2,238 H-Mart Supermarket
Winston Manor * South San Francisco CA 01/07/15 49,852 96.8% 1,304 Grocery Outlet Supermarket
Jackson Square * Hayward CA 07/01/15 114,220 100.0% 2,125 Safeway Supermarket, CVS Pharmacy, 24 Hour Fitness
Gateway Centre * San Ramon CA 09/01/15 112,640 96.5% 2,543 SaveMart (Lucky) Supermarket, Walgreens
Iron Horse Plaza * Danville CA 12/04/15 61,860 89.3% 1,942 Lunardi's Market
Monterey Center Monterey CA 07/14/16 25,798 100.0% 1,068 Trader Joe's, Pharmaca Pharmacy
Santa Rosa Southside Shopping Center Santa Rosa CA 03/24/17 85,535 100.0% 1,287 REI, Cost Plus World Market
San Francisco metro area total 1,327,224 96.4% 27,077$
Sacramento metro area
Norwood Shopping Center * Sacramento CA 04/06/10 85,693 98.0% 1,339$ Viva Supermarket, Rite Aid Pharmacy, Citi Trends
Mills Shopping Center * Rancho Cordova CA 02/17/11 235,314 85.4% 2,370 Viva Supermarket, Ross Dress For Less (dd's Discounts), Dollar Tree
Morada Ranch * Stockton CA 05/16/11 101,842 95.1% 2,078 Raleys Supermarket
Round Hill Square Shopping Center * Zephyr Cove NV 09/21/11 115,984 98.0% 1,929 Safeway Supermarket, Dollar Tree, US Postal Service
Green Valley Station * Cameron Park CA 06/15/12 52,245 77.9% 859 CVS Pharmacy
Sacramento metro area total 591,078 90.7% 8,575$
Northern California Totals 1,918,302 94.6% 35,652$
(1) ABR is equal to annualized base rent on a cash basis for all leases in-place at period end.
*Denotes properties in same center pool for 1Q 2017.
Supplemental Disclosure
Quarter Ended March 31, 2017Property Portfolio, continued
- 13 -
(dollars in thousands)
Date Owned %
Pacific Northwest City State Acquired GLA Leased ABR (1) Major Tenants
Seattle metro area
Meridian Valley Plaza * Kent WA 02/01/10 51,597 96.9% 611$ Kroger (QFC) Supermarket
The Market at Lake Stevens * Lake Stevens WA 03/11/10 74,130 100.0% 1,454 Albertson's (Haggen) Supermarket
Canyon Park Shopping Center * Bothell WA 07/29/11 123,592 100.0% 2,356 PCC Natural Market, Rite Aid Pharmacy, Petco
Hawks Prairie Shopping Center * Lacey WA 09/09/11 157,529 92.6% 1,646 Safeway Supermarket, Dollar Tree, Big Lots
The Kress Building * Seattle WA 09/30/11 74,616 100.0% 1,808 IGA Supermarket, TJMaxx
Gateway Shopping Center * Marysville WA 02/16/12 104,298 87.4% 2,313 WinCo Foods
(2), Rite Aid Pharmacy, Ross Dress For Less
Aurora Square * Shoreline WA 05/02/12 38,030 100.0% 339 Central Supermarket
Canyon Crossing * Puyallup WA 04/15/13 120,508 96.9% 2,549 Safeway Supermarket
Crossroads Shopping Center * Bellevue WA 2010/2013 463,846 99.6% 10,238 Kroger (QFC) Supermarket, Bed Bath & Beyond, Dick's Sporting Goods
Aurora Square II * Shoreline WA 05/22/14 65,680 100.0% 1,072 Marshall's, Pier 1 Imports
Bellevue Marketplace * Bellevue WA 12/10/15 113,758 100.0% 2,783 Asian Food Center
Four Corner Square * Maple Valley WA 12/21/15 119,560 100.0% 2,515 Grocery Outlet Supermarket, Walgreens, Johnsons Home & Garden
Bridle Trails Shopping Center Kirkland WA 10/17/16 104,281 100.0% 1,809 Unified (Red Apple) Supermarket, Bartell Drugs
PCC Natural Markets Plaza Edmonds WA 01/25/17 34,459 100.0% 646 PCC Natural Market
Seattle metro area total 1,645,884 98.0% 32,139$
Portland metro area
Vancouver Market Center * Vancouver WA 06/17/10 118,385 96.9% 1,285$ Skyzone
Happy Valley Town Center * Happy Valley OR 07/14/10 138,662 100.0% 3,404 New Seasons Supermarket
Wilsonville Old Town Square * Wilsonville OR 2010/2012 49,937 100.0% 1,790 Kroger (Fred Meyer) Supermarket
(2)
Cascade Summit Town Square * West Linn OR 08/20/10 94,934 99.3% 1,649 Safeway Supermarket
Heritage Market Center * Vancouver WA 09/23/10 107,468 100.0% 1,749 Safeway Supermarket, Dollar Tree
Division Crossing * Portland OR 12/22/10 103,561 100.0% 1,200 Rite Aid Pharmacy, Ross Dress For Less, Ace Hardware
Halsey Crossing * Gresham OR 12/22/10 99,414 100.0% 1,337 24 Hour Fitness, Dollar Tree
Hillsboro Market Center * Hillsboro OR 11/23/11 156,021 100.0% 2,423 Albertson's Supermarket, Dollar Tree, Marshall's
Robinwood Shopping Center * West Linn OR 08/23/13 70,831 98.3% 990 Walmart Neighborhood Market
Tigard Marketplace * Tigard OR 02/18/14 136,889 99.3% 1,929 H-Mart Supermarket, Bi-Mart Pharmacy
Wilsonville Town Center * Wilsonville OR 12/11/14 167,829 99.0% 2,637 Safeway Supermarket, Rite Aid Pharmacy, Dollar Tree
Tigard Promenade * Tigard OR 07/28/15 88,043 100.0% 1,443 Safeway Supermarket
Sunnyside Village Square * Happy Valley OR 07/28/15 84,870 100.0% 1,435 Grocery Outlet Supermarket, 24 Hour Fitness, Ace Hardware
Johnson Creek Center * Happy Valley OR 11/09/15 108,588 98.7% 2,165 Trader Joe's, Walgreens, Sportsman's Warehouse
Rose City Center Portland OR 09/15/16 60,680 100.0% 675 Safeway Supermarket
Portland metro area total 1,586,112 99.4% 26,111$
Pacific Northwest Totals 3,231,996 98.7% 58,250$
TOTAL SHOPPING CENTERS 9,652,884 97.2% 187,650$
(1) ABR is equal to annualized base rent on a cash basis for all leases in-place at period end.
(2) These retailers are not tenants of ROIC.
*Denotes properties in same center pool for 1Q 2017.
Supplemental Disclosure
Quarter Ended March 31, 2017Property Portfolio, continued
- 14 -
(unaudited, dollars in thousands)
3 Months Ended 12 Months E
03/31/17 03/31/16 $ Change % Change 03/31/17 03/31/16
Number of shopping centers included in same-center analysis (1) 73 73 61 61
Same-center occupancy 97.3% 97.2% 0.1% 97.3% 97.2%
REVENUES:
Base rents $39,854 38,396$ 1,458$ 3.8% 128,703$ 123,998$
Percentage rent 105 165 (60) (36.4)% 1,423 1,096
Recoveries from tenants 12,313 11,954 359 3.0% 41,107 38,188
Other property income 743 225 518 230.2% 1,273 1,253
TOTAL REVENUES 53,015 50,740 2,275 4.5% 172,506 164,535
OPERATING EXPENSES:
Property operating expenses 8,142$ 7,380$ 762$ 10.3% 26,983$ 25,833$
Bad debt expense 433 128 305 238.3% 972 1,128
Property taxes 6,050 5,604 446 8.0% 18,893 18,264
TOTAL OPERATING EXPENSES 14,625 13,112 1,513 11.5% 46,848 45,225
SAME-CENTER CASH NET OPERATING INCOME 38,390$ 37,628$ 762$ 2.0% 125,658$ 119,310$
SAME-CENTER CASH NET OPERATING INCOME RECONCILIATION
GAAP Operating Income 22,926$ 18,399$ 125,658$ 119,310$
Depreciation and amortization 23,058 20,933 (88,359) (70,957)
General and administrative expenses 3,499 3,319 (13,120) (12,650)
Acquisition transaction costs - 136 (824) (965)
Other expense 49 154 (456) (627)
Property revenues and other expenses (2) (6,854) (4,934) 18,775 16,223
TOTAL COMPANY CASH NET OPERATING INCOME 42,678 38,007
Non Same-Center Cash NOI (4,288) (379) 35,497 9,001
SAME-CENTER CASH NET OPERATING INCOME 38,390$ 37,628$ 77,171$ 59,335$
(1) Same centers are those properties which were owned for the entirety of the current and comparable prior year period.
(2) Includes straight-line rents, amortization of above and below-market lease intangibles, anchor lease termination fees net of contractual amounts, and expense and recovery adjustments related to prior periods.
Supplemental Disclosure
Quarter Ended March 31, 2017Same-Center Cash Net Operating Income Analysis
- 15 -
(dollars in thousands)
Percent
Number of Leased of Total Percent of
Tenant Leases GLA Leased GLA ABR Total ABR
1 Albertson's / Safeway Supermarkets 19 951,474 10.1% 11,221$ 6.0%
2 Kroger Supermarkets 9 368,461 3.9% 5,334 2.8%
3 Rite Aid Pharmacy 13 245,682 2.6% 3,123 1.7%
4 Marshall's / TJMaxx 7 208,645 2.2% 2,999 1.6%
5 SaveMart Supermarkets 4 187,639 2.0% 2,813 1.5%
6 JP Morgan Chase 19 85,873 0.9% 2,672 1.4%
7 Sprouts Markets 4 159,163 1.7% 2,568 1.4%
8 Ross Dress For Less / dd's Discounts 7 191,703 2.0% 2,558 1.4%
9 Trader Joe's 8 96,714 1.0% 2,492 1.3%
10 H-Mart Supermarkets 3 147,040 1.6% 2,383 1.3%
Top 10 Tenants Total 93 2,642,394 28.0% 38,163$ 20.4%
Other Tenants 1,743 6,741,057 72.0% 149,487 79.6%
Total Portfolio 1,836 9,383,451 100.0% 187,650$ 100.0%
Supplemental Disclosure
Quarter Ended March 31, 2017Top Ten Tenants
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(dollars in thousands)
Anchor Tenants (1) Number of Leased Percent of Total Percent of ABR
Leases Expiring (2) GLA Total Leased GLA ABR Total ABR Per Sq. Ft.
2017 5 157,461 1.7% 1,602$ 0.9% 10.18$
2018 17 473,490 5.0% 7,318 3.9% 15.46
2019 15 446,065 4.8% 7,303 3.9% 16.37
2020 15 500,893 5.3% 5,708 3.0% 11.40
2021 13 473,042 5.0% 5,038 2.7% 10.65
2022 15 433,635 4.6% 5,520 2.9% 12.73
2023 15 555,685 5.9% 8,228 4.4% 14.81
2024 5 246,034 2.6% 3,152 1.7% 12.81
2025 10 341,785 3.6% 4,919 2.6% 14.39
2026 10 332,816 3.5% 4,554 2.4% 13.68
2027+ 31 1,239,933 13.3% 18,930 10.1% 15.27
151 5,200,839 55.3% 72,272$ 38.5% 13.90$
Non-Anchor Tenants Number of Leased Percent of Total Percent of ABR
Leases Expiring (2) GLA Total Leased GLA ABR Total ABR Per Sq. Ft.
2017 208 357,308 3.8% 10,448$ 5.6% 29.24$
2018 255 562,083 6.0% 16,076 8.6% 28.72
2019 262 578,540 6.2% 15,294 8.2% 26.43
2020 239 552,714 5.9% 15,016 8.0% 27.17
2021 259 599,757 6.4% 17,104 9.1% 28.52
2022 180 510,101 5.5% 13,822 7.4% 26.97
2023 52 161,470 1.7% 4,616 2.5% 28.59
2024 60 190,769 2.0% 5,016 2.7% 26.29
2025 45 173,442 1.8% 4,300 2.1% 24.79
2026 54 171,208 1.8% 4,987 2.7% 29.12
2027+ 71 325,220 3.6% 8,699 4.6% 26.75
1,685 4,182,612 44.7% 115,378$ 61.5% 27.59$
All Tenants Number of Leased Percent of Total Percent of ABR
Leases Expiring (2) GLA Total Leased GLA ABR Total ABR Per Sq. Ft.
2017 213 514,769 5.5% 12,050$ 6.5% 23.41$
2018 272 1,035,573 11.0% 23,394 12.5% 22.65
2019 277 1,024,605 11.0% 22,597 12.1% 22.05
2020 254 1,053,607 11.2% 20,724 11.0% 19.67
2021 272 1,072,799 11.4% 22,142 11.8% 20.64
2022 195 943,736 10.1% 19,342 10.3% 20.43
2023 67 717,155 7.6% 12,844 6.9% 17.91
2024 65 436,803 4.6% 8,168 4.4% 18.70
2025 55 515,227 5.4% 9,219 4.7% 17.89
2026 64 504,024 5.3% 9,541 5.1% 18.93
2027+ 102 1,565,153 16.9% 27,629 14.7% 17.65
1,836 9,383,451 100.0% 187,650$ 100.0% 20.00$
(1) Anchor tenants are leases equal to or greater than 15,000 square feet.
(2) Does not assume exercise of renewal options.
Supplemental Disclosure
Quarter Ended March 31, 2017Lease Expiration Schedule
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New Leases Non-Anchor Anchor Total Non-Anchor Anchor
Number of Leases 26 1 27 26 1
Gross Leasable Area (sq. ft.) 46,173 17,903 64,076 46,173 17,903
Initial Base Rent ($/sq. ft.) (1) 25.07$ 8.50$ 20.44$ 25.07$ 8.50$
Tenant Improvements ($/sq. ft.) 2.92$ -$ 2.11$ 2.92$ -$
Leasing Commissions ($/sq. ft.) 1.86$ 4.49$ 2.60$ 1.86$ 4.49$
Weighted Average Lease Term (Yrs.) (2) 5.0 10.8 6.6 5.0 10.8
Renewals Non-Anchor Anchor Total Non-Anchor Anchor
Number of Leases 55 1 56 55 1
Gross Leasable Area (sq. ft.) 99,128 29,887 129,015 99,128 29,887
Initial Base Rent ($/sq. ft.) (1) 33.38$ 18.19$ 29.86$ 33.38$ 18.19$
Tenant Improvements ($/sq. ft.) 1.11$ -$ 0.85$ 1.11$ -$
Leasing Commissions ($/sq. ft.) -$ -$ -$ -$ -$
Weighted Average Lease Term (Yrs.) (2) 4.9 5.0 4.9 4.9 5.0
Total Non-Anchor Anchor Total Non-Anchor Anchor
Number of Leases 81 2 83 81 2
Gross Leasable Area (sq. ft.) 145,301 47,790 193,091 145,301 47,790
Initial Base Rent ($/sq. ft.) (1) 30.73$ 14.56$ 26.73$ 30.73$ 14.56$
Tenant Improvements ($/sq. ft.) 1.68$ -$ 1.27$ 1.68$ -$
Leasing Commissions ($/sq. ft.) 0.59$ 1.68$ 0.86$ 0.59$ 1.68$
Weighted Average Lease Term (Yrs.) (2) 4.9 7.2 5.5 4.9 7.2
(1) Initial Base Rent is on a cash basis and is the initial contractual monthly rent, annualized.
(2) Does not assume exercise of renewal options.
For the Three Months Ended March 31, 2017 For the Three Months Ended M
Supplemental Disclosure
Quarter Ended March 31, 2017Leasing Summary
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New Leases Non-Anchor Anchor Total Non-Anchor Anchor
Comparative # of Leases 17 1 18 17 1
Comparative GLA (sq. ft.) (1) 29,611 17,903 47,514 29,611 17,903
Prior Base Rent ($/sq. ft.) (2) 25.11$ 3.72$ 17.05$ 25.11$ 3.72$
Initial Base Rent ($/sq. ft.) 28.78$ 8.50$ 21.14$ 28.78$ 8.50$
Percentage Change in Base Rents 14.6% 128.5% 24.0% 14.6% 128.5%
Tenant Improvements ($/sq. ft.) 3.27$ -$ 2.04$ 3.27$ -$
Leasing Commissions ($/sq. ft.) 1.74$ 4.49$ 2.78$ 1.74$ 4.49$
Weighted Average Lease Term (Yrs.) (3) 5.7 10.8 7.6 5.7 10.8
Renewals Non-Anchor Anchor Total Non-Anchor Anchor
Comparative # of Leases 55 1 56 55 1
Comparative GLA (sq. ft.) 99,128 29,887 129,015 99,128 29,887
Prior Base Rent ($/sq. ft.) (2) 30.51$ 16.93$ 27.37$ 30.51$ 16.93$
Initial Base Rent ($/sq. ft.) 33.38$ 18.19$ 29.86$ 33.38$ 18.19$
Percentage Change in Base Rents 9.4% 7.4% 9.1% 9.4% 7.4%
Tenant Improvements ($/sq. ft.) 1.11$ -$ 0.85$ 1.11$ -$
Leasing Commissions ($/sq. ft.) -$ -$ -$ -$ -$
Weighted Average Lease Term (Yrs.) (3) 4.9 5.0 4.9 4.9 5.0
Total Non-Anchor Anchor Total Non-Anchor Anchor
Comparative # of Leases 72 2 74 72 2
Comparative GLA (sq. ft.) (1) 128,739 47,790 176,529 128,739 47,790
Prior Base Rent ($/sq. ft.) (2) 29.27$ 11.98$ 24.59$ 29.27$ 11.98$
Initial Base Rent ($/sq. ft.) 32.32$ 14.56$ 27.51$ 32.32$ 14.56$
Percentage Change in Base Rents 10.4% 21.5% 11.9% 10.4% 21.5%
Tenant Improvements ($/sq. ft.) 1.60$ -$ 1.17$ 1.60$ -$
Leasing Commissions ($/sq. ft.) 0.40$ 1.68$ 0.75$ 0.40$ 1.68$
Weighted Average Lease Term (Yrs.) (3) 5.1 7.2 5.6 5.1 7.2
(1) Comparative GLA includes spaces that were vacant for less than 12 months, excluding spaces that were not leased at the time of acquisition.
(2) Prior Base Rent is on a cash basis and is the final monthly rent paid, annualized, for the prior tenant or the prior lease that was renewed.
(3) Does not assume exercise of renewal options.
For the Three Months Ended March 31, 2017 For the Three Months Ended M
Supplemental Disclosure
Quarter Ended March 31, 2017Same-Space Comparative Leasing Summary
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Equity Research Coverage
Baird Equity Research RJ Milligan 813.273.8252
Bank of America Merrill Lynch Craig Schmidt 646.855.3640
Bank of Montreal Paul Adornato 212.885.4170
BTIG Michael Gorman 212.738.6138
Canaccord Genuity Paul Morgan 415.325.4187
Capital One Securities, Inc. Chris Lucas 571.633.8151
Citi Michael Bilerman 212.816.1383
Christy McElroy 212.816.6981
D.A. Davidson & Co. James O. Lykins 503.603.3041
FBR & Co. Bryan Maher 646.885.5423
Green Street Daniel J. Busch 949.640.8780
J.P. Morgan Michael W. Mueller 212.622.6689
Jefferies George Hoglund 212.284.2226
KeyBanc Capital Markets Todd Thomas 917.368.2286
Raymond James Paul Puryear 727.567.2253
Collin Mings 727.567.2585
RBC Capital Markets Wes Golladay 440.715.2650
Wells Fargo Jeff Donnelly 617.603.4262
Fixed Income Research Coverage
J.P. Morgan Mark Streeter 212.834.5086
Ratings Agency Coverage
Moody’s Investors Service Dilara Sukhov 212.553.1438
S&P Global Ratings Michael Souers 212.438.2508
Supplemental Disclosure
Quarter Ended March 31, 2017Investor Information
Retail Opportunity Investments Corp.
www.roireit.net
NASDAQ: ROIC
8905 Towne Centre Drive, Suite 108
Transfer Agent:
Constance Adams
ComputerShare
constance.adams@computershare.com
Investor Relations:
Ashley Bulot
abulot@roireit.net
858.255.4913