UNITED STATES
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
Date of Report (Date of earliest event reported): April 22, 2020
(Exact Name of Registrant as Specified in Its Charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||
(Exact Name of Registrant as Specified in Its Charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||
| (Address of Principal Executive Offices) | (Zip Code) | |||||||||||||
(858 ) 677-0900
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, 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:
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)
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. ☐
Securities registered pursuant to Section 12(b) of the Act:
| Name of Registrant | Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||
| Retail Opportunity Investments Corp. | |||||||||||
| Retail Opportunity Investments Partnership, LP | None | None | None | ||||||||
Item 2.02. Results of Operations and Financial Condition.
On April 22, 2020, Retail Opportunity Investments Corp. (the "Company") issued an earnings release announcing its financial results for the quarter ended March 31, 2020. A copy of the earnings release is attached as Exhibit 99.1 hereto and incorporated herein by reference. On April 22, 2020, in connection with this earnings release, the Company posted certain supplemental information regarding the Company's operations for the quarter ended March 31, 2020 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 | ||||
| 101 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document | ||||
| 104 | The cover page from this Current Report on Form 8-K, formatted in Inline XBRL (and contained in Exhibit 101) | ||||
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.
Dated: April 22, 2020 | RETAIL OPPORTUNITY INVESTMENTS CORP. | ||||||||||
| By: | /s/ Michael B. Haines | ||||||||||
| Name: Michael B. Haines | |||||||||||
| Title: Chief Financial Officer | |||||||||||
| RETAIL OPPORTUNITY INVESTMENTS 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
11250 El Camino Real, Suite 200
San Diego, CA 92130
FOR IMMEDIATE RELEASE
Wednesday, April 22, 2020
Retail Opportunity Investments Corp. Reports
2020 First Quarter Results & Provides COVID-19 Update
San Diego, CA, April 22, 2020 – Retail Opportunity Investments Corp. (NASDAQ:ROIC) announced today financial and operating results for the three months ended March 31, 2020, and provided information regarding financial and operational activities in light of the ongoing COVID-19 pandemic.
FIRST QUARTER 2020
▪ $12.0 million of net income attributable to common stockholders ($0.10 per diluted share)
▪ $37.4 million of Funds From Operations (FFO)(1) ($0.29 per diluted share)
▪ 97.7% portfolio lease rate at March 31, 2020
▪ 22.5% increase in same-space comparative cash rents on new leases (8.0% on renewals)
▪ 3.3% increase in same-center cash net operating income (1Q‘20 vs. 1Q‘19)
▪ $0.20 per share quarterly cash dividend paid
COVID-19 UPDATE (as of April 17, 2020)
▪ All 88 shopping centers are open and operating
▪ 78.8% of tenants, based on gross leasable area (GLA), are designated “essential businesses”
▪ 89.4% of essential businesses are open and operating (based on GLA)
▪ 70.4% of total tenants are open and operating (based on GLA)
▪ 67.5% of total April 2020 base rent and CAM has been paid to date
▪ $133.5 million cash & cash equivalents currently on balance sheet
▪ No material debt maturing for approximately the next 4 years
▪ Acquisition activity suspended
▪ 2020 FFO guidance withdrawn
▪ Quarterly dividend temporarily suspended
________________________________________
(1) A reconciliation of GAAP net income to FFO is provided at the end of this press release.
Stuart A. Tanz, President and Chief Executive Officer of Retail Opportunity Investments Corp. stated, “While our first quarter results came in as expected, we now find ourselves in the midst of a truly unprecedented crisis that continues to rapidly evolve. Most important to us during this time is protecting the health and well-being of our employees, tenants and the communities that we together serve, which we are all working expeditiously to do.” Tanz added, “In terms of ongoing property operations, given that our tenant base is focused on providing basic necessities, and 98% of our portfolio
is anchored by grocery and/or drugstores, our shopping centers have remained active during this crisis. That said, we are not immune to the extraordinary challenges that landlords are currently facing, including temporary store closings. During this difficult time, we continue to work diligently and thoughtfully with our valued tenants toward building a strong recovery for us all in the time ahead.”
FIRST QUARTER 2020 SUMMARY
For the three months ended March 31, 2020, GAAP net income attributable to common stockholders was $12.0 million, or $0.10 per diluted share, as compared to GAAP net income attributable to common stockholders of $13.3 million, or $0.12 per diluted share, for the three months ended March 31, 2019. Included in GAAP net income for the first quarter of 2019 was a $2.6 million gain on sale in connection with a property disposition.
FFO for the first quarter of 2020 was $37.4 million, or $0.29 per diluted share, as compared to $36.7 million in FFO, or $0.29 per diluted share for the first quarter of 2019. First quarter 2020 FFO reflects $62.6 million in net property dispositions completed during 2019. 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.
For the first quarter of 2020, same-center net operating income (NOI) was $49.8 million, as compared to $48.2 million in same-center NOI for the first quarter of 2019, representing a 3.3% increase. 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 2020, ROIC executed 73 leases, totaling 297,935 square feet, including 17 new leases, totaling 79,655 square feet, achieving a 22.5% increase in same-space comparative base rent, and 56 renewed leases, totaling 218,280 square feet, achieving an 8.0% increase in base rent. ROIC reports same-space comparative base rent on a cash basis.
On February 18, 2020, ROIC’s board of directors declared a cash dividend of $0.20 per share, which was distributed on March 30, 2020.
From February 28, 2020 through March 13, 2020, ROIC repurchased 673,868 shares of its common stock through open market transactions at an average price of $13.13 per share, totaling approximately $8.8 million.
At March 31, 2020, ROIC had total real estate assets (before accumulated depreciation) of approximately $3.1 billion and approximately $1.4 billion of principal debt outstanding (net of cash and cash equivalents). As of March 31, 2020, 94.2% of ROIC’s principal debt outstanding was unsecured. Additionally, ROIC’s interest coverage for the first quarter 2020 was 3.5 times and 94.5% of its portfolio was unencumbered at March 31, 2020, based on GLA.
COVID-19 UPDATE SUMMARY
The following portfolio and tenant statistics are as of April 17, 2020, to the best of ROIC’s knowledge. ROIC expects that the following statistics will change, potentially significantly, going forward. All of ROIC’s 88 shopping centers are open and are operating in compliance with federal, state and local COVID-19 guidelines and mandates. All of ROIC’s shopping centers feature necessity-based tenants, with 86 of its 88 properties being anchored by grocery and/or drugstores. In terms of ROIC’s tenant base, 78.8% (based on GLA) have been designated as “essential businesses” per state guidelines, of which 89.4% are open and operating. Additionally, 70.4% of ROIC’s total tenants (based on GLA) are open and operating and 29.6% are temporarily closed. ROIC management is communicating with all of its tenants and is proactively engaged with those tenants temporarily closed. To date, ROIC has received 67.5% of its April billed receivables (includes contractual base rent and common area maintenance reimbursables).
To enhance its liquidity position and maintain financial flexibility, ROIC has drawn $130.0 million on its $600 million unsecured credit facility. ROIC currently has $133.5 million in cash and cash equivalents, and an additional $366.5 million available on its unsecured credit facility. In terms of future debt maturities, ROIC has no unsecured debt maturing
for approximately the next four years, through late 2023. Additionally, ROIC has no secured debt maturing for the next two years, $23.1 million maturing in mid-2022, and no secured debt maturing in 2023.
As previously disclosed on April 3, 2020, ROIC has withdrawn its 2020 FFO Guidance. Additionally, ROIC has suspended all acquisition activity, including a previously disclosed pending transaction.
Given the current uncertainty of the COVID-19 pandemic’s near and potential long term impact on ROIC’s business, and in order to preserve its liquidity position, ROIC’s board of directors has temporarily suspended quarterly dividend distributions. Going forward, ROIC’s board of directors will continue to evaluate dividend declarations each quarter. ROIC intends to maintain compliance with REIT taxable income distribution requirements.
CONFERENCE CALL
ROIC will conduct a conference call and audio webcast to discuss its results on Thursday, April 23, 2020 at 12:00 p.m. Eastern Time / 9:00 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: 8928949. A live webcast will also be available in listen-only mode at https://www.roireit.net/. The conference call will be recorded and available for replay beginning at 3:00 p.m. Eastern Time on April 23, 2020 and will be available until 3:00 p.m. Eastern Time on April 30, 2020. To access the conference call recording, dial (855) 859-2056 (domestic) or (404) 537-3406 (international) and use the Conference ID: 8928949. The conference call will also be archived on https://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, 2020, ROIC owned 88 shopping centers encompassing approximately 10.1 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, 2020 (unaudited) | December 31, 2019 | ||||||||||
| ASSETS | |||||||||||
| Real Estate Investments: | |||||||||||
| Land | $ | 881,615 | $ | 879,540 | |||||||
| Building and improvements | 2,255,917 | 2,252,301 | |||||||||
| 3,137,532 | 3,131,841 | ||||||||||
| Less: accumulated depreciation | 404,583 | 390,916 | |||||||||
| 2,732,949 | 2,740,925 | ||||||||||
| Mortgage note receivable | 13,000 | 13,000 | |||||||||
| Real Estate Investments, net | 2,745,949 | 2,753,925 | |||||||||
| Cash and cash equivalents | 63,077 | 3,800 | |||||||||
| Restricted cash | 1,851 | 1,658 | |||||||||
| Tenant and other receivables, net | 47,344 | 45,821 | |||||||||
| Acquired lease intangible assets, net | 57,978 | 59,701 | |||||||||
| Prepaid expenses | 3,067 | 3,169 | |||||||||
| Deferred charges, net | 26,786 | 27,652 | |||||||||
| Other assets | 17,839 | 18,031 | |||||||||
| Total assets | $ | 2,963,891 | $ | 2,913,757 | |||||||
| LIABILITIES AND EQUITY | |||||||||||
| Liabilities: | |||||||||||
| Term loan | $ | 298,412 | $ | 298,330 | |||||||
| Credit facility | 150,436 | 80,743 | |||||||||
| Senior Notes | 943,206 | 942,850 | |||||||||
| Mortgage notes payable | 87,271 | 87,523 | |||||||||
| Acquired lease intangible liabilities, net | 139,999 | 144,757 | |||||||||
| Accounts payable and accrued expenses | 28,277 | 17,562 | |||||||||
| Tenants’ security deposits | 7,184 | 7,177 | |||||||||
| Other liabilities | 49,759 | 42,987 | |||||||||
| Total liabilities | 1,704,544 | 1,621,929 | |||||||||
| Commitments and contingencies | |||||||||||
| Equity: | |||||||||||
| Preferred stock, $0.0001 par value 50,000,000 shares authorized; none issued and outstanding | — | — | |||||||||
Common stock, $0.0001 par value, 500,000,000 shares authorized; 116,120,704 and 116,496,016 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively | 12 | 12 | |||||||||
| Additional paid-in capital | 1,472,546 | 1,481,466 | |||||||||
| Dividends in excess of earnings | (309,325) | (297,998) | |||||||||
| Accumulated other comprehensive loss | (12,849) | (4,132) | |||||||||
| Total Retail Opportunity Investments Corp. stockholders’ equity | 1,150,384 | 1,179,348 | |||||||||
| Non-controlling interests | 108,963 | 112,480 | |||||||||
| Total equity | 1,259,347 | 1,291,828 | |||||||||
| Total liabilities and equity | $ | 2,963,891 | $ | 2,913,757 | |||||||
RETAIL OPPORTUNITY INVESTMENTS CORP.
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data)
| Three Months Ended March 31, | |||||||||||
| 2020 | 2019 | ||||||||||
| Revenues | |||||||||||
| Rental revenue | $ | 74,197 | $ | 75,367 | |||||||
| Other income | 675 | 686 | |||||||||
| Total revenues | 74,872 | 76,053 | |||||||||
| Operating expenses | |||||||||||
| Property operating | 10,604 | 11,061 | |||||||||
| Property taxes | 7,989 | 8,238 | |||||||||
| Depreciation and amortization | 24,278 | 24,761 | |||||||||
| General and administrative expenses | 3,944 | 4,276 | |||||||||
| Other expense | 64 | 93 | |||||||||
| Total operating expenses | 46,879 | 48,429 | |||||||||
| Gain on sale of real estate | — | 2,638 | |||||||||
| Operating income | 27,993 | 30,262 | |||||||||
| Non-operating expenses | |||||||||||
| Interest expense and other finance expenses | (14,857) | (15,679) | |||||||||
| Net income | 13,136 | 14,583 | |||||||||
| Net income attributable to non-controlling interests | (1,134) | (1,333) | |||||||||
| Net Income Attributable to Retail Opportunity Investments Corp. | $ | 12,002 | $ | 13,250 | |||||||
| Earnings per share – basic and diluted | $ | 0.10 | $ | 0.12 | |||||||
| Dividends per common share | $ | 0.2000 | $ | 0.1970 | |||||||
CALCULATION OF FUNDS FROM OPERATIONS
(Unaudited)
(In thousands)
| Three Months Ended March 31, | |||||||||||
| 2020 | 2019 | ||||||||||
| Net income attributable to ROIC | $ | 12,002 | $ | 13,250 | |||||||
| Plus: Depreciation and amortization | 24,278 | 24,761 | |||||||||
| Less: Gain on sale of real estate | — | (2,638) | |||||||||
| Funds from operations – basic | 36,280 | 35,373 | |||||||||
| Net income attributable to non-controlling interests | 1,134 | 1,333 | |||||||||
| Funds from operations – diluted | $ | 37,414 | $ | 36,706 | |||||||
SAME-CENTER CASH NET OPERATING INCOME ANALYSIS
(Unaudited)
(In thousands, except number of shopping centers and percentages)
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| 2020 | 2019 | $ Change | % Change | |||||||||||||||||||||||
| Number of shopping centers included in same-center analysis | 87 | 87 | ||||||||||||||||||||||||
| Same-center occupancy | 97.7 | % | 97.8 | % | (0.1) | % | ||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||
| Base rents | $ | 51,778 | $ | 50,218 | $ | 1,560 | 3.1 | % | ||||||||||||||||||
| Percentage rent | 93 | 87 | 6 | 6.9 | % | |||||||||||||||||||||
| Recoveries from tenants | 17,232 | 16,767 | 465 | 2.8 | % | |||||||||||||||||||||
| Other property income | 328 | 593 | (265) | (44.7) | % | |||||||||||||||||||||
| Bad debt | (486) | (605) | 119 | (19.7) | % | |||||||||||||||||||||
| Total Revenues | 68,945 | 67,060 | 1,885 | 2.8 | % | |||||||||||||||||||||
| Operating Expenses | ||||||||||||||||||||||||||
| Property operating expenses | 11,125 | 10,827 | 298 | 2.8 | % | |||||||||||||||||||||
| Property taxes | 8,030 | 8,017 | 13 | 0.2 | % | |||||||||||||||||||||
| Total Operating Expenses | 19,155 | 18,844 | 311 | 1.7 | % | |||||||||||||||||||||
| Same-Center Cash Net Operating Income | $ | 49,790 | $ | 48,216 | $ | 1,574 | 3.3 | % | ||||||||||||||||||
SAME-CENTER CASH NET OPERATING INCOME RECONCILIATION
(Unaudited)
(In thousands)
| Three Months Ended March 31, | |||||||||||
| 2020 | 2019 | ||||||||||
| GAAP operating income | $ | 27,993 | $ | 30,262 | |||||||
| Depreciation and amortization | 24,278 | 24,761 | |||||||||
| General and administrative expenses | 3,944 | 4,276 | |||||||||
| Other expense | 64 | 93 | |||||||||
| Gain on sale of real estate | — | (2,638) | |||||||||
| Straight-line rent | 89 | (1,180) | |||||||||
| Amortization of above- and below-market rent | (5,478) | (6,478) | |||||||||
Property revenues and other expenses (1) | (149) | 254 | |||||||||
| Total Company cash NOI | 50,741 | 49,350 | |||||||||
| Non same-center cash NOI | (951) | (1,134) | |||||||||
| Same-center cash NOI | $ | 49,790 | $ | 48,216 | |||||||
____________________
(1)Includes anchor lease termination fees, net of contractual amounts, if any, expense and recovery adjustments related to prior periods and other miscellaneous adjustments.
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
858-677-0900
arubino@roireit.net
1st QUARTER 2020 SUPPLEMENTAL INFORMATION Retail Opportunity Investments Corporation 11250 El Camino Real, Suite 200 San Diego, CA 92130 www.roireit.net
Supplemental Disclosure Overview Quarter Ended March 31, 2020 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, 2020, ROIC owned 88 shopping centers encompassing approximately 10.1 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. - 2 -
Supplemental Disclosure Table of Contents Quarter Ended March 31, 2020 Financial Data Page Balance Sheets……..……………………………………………………………..………………………………………………… 4 Income Statements .…………………………………………………………………………………..……..…………...………… 5 Funds From Operations …………………………………………………………………………………………………………… 6 Summary of Debt Outstanding .……………………………………………..…………………………………………………… 7 Selected Financial Analysis .……………………………………………………………………………………………………… 9 Portfolio Data Property Portfolio ………………………………………………….……………………………………………………………… 10 Same-Center Cash Net Operating Income Analysis……………………………………………………………………………… 13 Top Ten Tenants ………………….…………….………………….……………………………………………………………… 14 Lease Expiration Schedule ……………………..………………………..…….………………………………………………… 15 Leasing Summary ………………………………………………………..…................................................................................ 16 Same-Space Comparative Leasing Summary ………………………………………………………..…...................................... 17 Leased vs. Billed Summary …………………………...………….……………………..…......................................................... 18 COVID-19 Status of Tenants ………………………...………………………………..…............................................................ 19 Investor Information …………………………………………………………..…………………………………………………… 20 - 3 -
Supplemental Disclosure Balance Sheets Quarter Ended March 31, 2020 (unaudited, dollars in thousands, except par values and share amounts) 03/31/20 12/31/19 ASSETS: Real Estate Investments: Land $ 881,615 $ 879,540 Building and improvements 2,255,917 2,252,301 3,137,532 3,131,841 Less: accumulated depreciation 404,583 390,916 2,732,949 2,740,925 Mortgage note receivable 13,000 13,000 Real Estate Investments, net 2,745,949 2,753,925 Cash and cash equivalents 63,077 3,800 Restricted cash 1,851 1,658 Tenant and other receivables, net 47,344 45,821 Acquired lease intangible assets, net 57,978 59,701 Prepaid expenses 3,067 3,169 Deferred charges, net 26,786 27,652 Other assets 17,839 18,031 TOTAL ASSETS $ 2,963,891 $ 2,913,757 LIABILITIES: Term loan $ 298,412 $ 298,330 Credit facility 150,436 80,743 Senior Notes 943,206 942,850 Mortgage notes payable 87,271 87,523 Acquired lease intangible liabilities, net 139,999 144,757 Accounts payable and accrued expenses 28,277 17,562 Tenants' security deposits 7,184 7,177 Other liabilities 49,759 42,987 TOTAL LIABILITIES 1,704,544 1,621,929 EQUITY: Common stock, $.0001 par value 500,000,000 shares authorized 12 12 Additional paid-in capital 1,472,546 1,481,466 Dividends in excess of earnings (309,325) (297,998) Accumulated other comprehensive loss (12,849) (4,132) Total Retail Opportunity Investments Corp. stockholders' equity 1,150,384 1,179,348 Non-controlling interests 108,963 112,480 TOTAL EQUITY 1,259,347 1,291,828 TOTAL LIABILITIES AND EQUITY $ 2,963,891 $ 2,913,757 The Company's Form 10-Q for the quarter ended March 31, 2020, and Form 10-K for the year ended December 31, 2019 should be read in conjunction with the above information. - 4 -
Supplemental Disclosure Income Statements Quarter Ended March 31, 2020 (unaudited, in thousands, except per share amounts) Three Months Ended Three Months En 03/31/20 03/31/19 03/31/20 REVENUES: Rental revenue (1) $ 74,197 $ 75,367 $ 291,263 Other income 675 686 3,777 TOTAL REVENUES 74,872 76,053 295,040 OPERATING EXPENSES: Property operating 10,604 11,061 43,662 Property taxes 7,989 8,238 32,388 Depreciation and amortization 24,278 24,761 97,559 General and administrative expenses 3,944 4,276 17,831 Other expense 64 93 1,405 TOTAL OPERATING EXPENSES 46,879 48,429 192,845 Gain on sale of real estate - 2,638 13,175 OPERATING INCOME 27,993 30,262 115,370 NON-OPERATING EXPENSES: Interest expense and other finance expenses (14,857) (15,679) (61,687) NET INCOME 13,136 14,583 53,683 NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS (1,134) (1,333) (4,839) NET INCOME ATTRIBUTABLE TO RETAIL OPPORTUNITY INVESTMENTS CORP. $ 12,002 $ 13,250 $ 48,844 NET INCOME PER COMMON SHARE - BASIC $ 0.10 $ 0.12 $ 0.42 NET INCOME PER COMMON SHARE - DILUTED $ 0.10 $ 0.12 $ 0.42 Weighted average common shares outstanding - basic 115,970 113,681 114,178 Weighted average common shares outstanding - diluted 127,181 125,441 125,741 (1) RENTAL REVENUE Base rents $ 52,106 $ 51,278 $ 206,816 Recoveries from tenants 17,417 17,298 67,715 Straight-line rent (89) 1,180 3,083 Amortization of above- and below-market rent 5,478 6,478 15,618 Bad debt (715) (867) (1,969) TOTAL RENTAL REVENUE $ 74,197 $ 75,367 $ 291,263 The Company's Form 10-Q for the quarters ended March 31, 2020 and March 31, 2019 should be read in conjunction with the above information. - 5 -
Supplemental Disclosure Funds From Operations Quarter Ended March 31, 2020 (unaudited, in thousands, except per share amounts) Three Months Ended Three Month 03/31/20 03/31/19 03/31/20 Funds from Operations (FFO) (1) : Net income attributable to ROIC common stockholders $ 12,002 $ 13,250 $ 47,596 Plus: Depreciation and amortization expense 24,278 24,761 97,076 Less: Gain on sale of real estate - (2,638) (10,537) FUNDS FROM OPERATIONS - BASIC 36,280 35,373 134,135 Net income attributable to non-controlling interests 1,134 1,333 4,640 FUNDS FROM OPERATIONS - DILUTED $ 37,414 $ 36,706 $ 138,775 FUNDS FROM OPERATIONS PER SHARE - BASIC $ 0.31 $ 0.31 $ 1.17 FUNDS FROM OPERATIONS PER SHARE - DILUTED $ 0.29 $ 0.29 $ 1.10 Weighted average common shares outstanding - basic 115,970 113,681 114,178 Weighted average common shares outstanding - diluted 127,181 125,441 125,741 Common dividends per share $ 0.2000 $ 0.1970 $ 0.7880 FFO Payout Ratio 69.0% 67.9% Additional Disclosures: Non Cash Expense (Income) Straight line rent $ 89 $ (1,180) Above/below market rent amortization, net (5,478) (6,478) Non-cash interest expense 73 301 Deferred financing costs and mortgage premiums, net 526 515 Stock based compensation 1,856 1,651 Capital Expenditures Tenant improvements $ 5,877 $ 5,026 Leasing commissions 497 318 Building improvements 229 (167) Reimbursable property improvements 387 761 Pad and other development 2,906 1,593 Value enhancing tenant improvements 2,080 2,256 (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. The above does not purport to disclose all items required under GAAP. - 6 -
Supplemental Disclosure Summary of Debt Outstanding Quarter Ended March 31, 2020 (unaudited, dollars in thousands) Outstanding GAAP Maturity Percent of Balance Interest Rate Interest Rate Date Total Indebtedness Fixed Rate Debt Mortgage Debt: Casitas Plaza Shopping Center $ 6,960 5.32% 4.20% 06/01/22 0.5% Riverstone Marketplace 17,555 4.96% 3.80% 07/01/22 1.2% Fullerton Crossroads 26,000 4.73% 3.82% 04/06/24 1.7% Diamond Hills Plaza 35,500 3.55% 3.61% 10/01/25 2.4% Net unamortized premiums/deferred financing charges 1,256 Total Mortgage Debt 87,271 4.34% 3.76% 4.1 Years (WA) 5.8% Unsecured Senior Notes: Senior Notes Due 2023 250,000 5.00% 5.21% 12/15/23 16.8% Senior Notes Due 2024 250,000 4.00% 4.21% 12/15/24 16.8% Senior Notes Due 2026 200,000 3.95% 3.95% 09/22/26 13.4% Senior Notes Due 2027 250,000 4.19% 4.19% 12/15/27 16.8% Net unamortized discounts/deferred financing charges (6,794) Total Unsecured Senior Notes 943,206 4.30% 4.41% 5.6 Years (WA) 63.8% Term Loan: Interest rate swaps 100,000 3.59% 3.59% 8/31/2022 6.7% Interest rate swaps 200,000 2.74% 2.74% 8/31/2022 13.4% Total Term Loan 300,000 3.02% 3.02% 20.1% Total Fixed Rate Debt 1,330,477 4.02% 4.06% 5.5 Years (WA) 89.7% Variable Rate Debt Credit Facility 153,500 1.83% 1.83% 02/20/24 (1) 10.3% Net unamortized deferred financing charges (3,064) Credit Facility, net 150,436 Term Loan 300,000 01/20/25 Net unamortized deferred financing charges (1,588) Term Loan, net 298,412 Interest rate swaps - Term loan (300,000) Total Variable Rate Debt 148,848 1.83% 1.83% 4.5 Years (WA) 10.3% TOTAL DEBT $ 1,479,325 3.79% 3.83% 5.2 Years (WA) 100.0% Net unamortized premiums on mortgages (1,473) Net unamortized discounts on notes 3,630 Net unamortized deferred financing charges 8,033 Total Principal Debt $ 1,489,515 (1) Does not include extension options available to ROIC. - 7 -
Supplemental Disclosure Summary of Debt Outstanding, continued Quarter Ended March 31, 2020 (unaudited, dollars in thousands) Summary of Principal Maturities Mortgage Principal Mortgage Principal Senior Total Principal Percentage of Year Payments due at Maturity Credit Facility Term Loan Unsecured Notes Payments Debt Maturing 2020 $ 435 $ - $ - $ - $ - $ 435 0.0% 2021 717 - - - - 717 0.0% 2022 1,003 23,129 - - - 24,132 1.7% 2023 686 - - - 250,000 250,686 16.8% 2024 708 26,000 153,500 (1) - 250,000 430,208 28.9% 2025 550 32,787 - 300,000 - 333,337 22.4% 2026 - - - - 200,000 200,000 13.4% 2027 - - - - 250,000 250,000 16.8% 2028 - - - - - - 0.0% $ 4,099 $ 81,916 $ 153,500 $ 300,000 $ 950,000 $ 1,489,515 100.0% Summary of Unencumbered/Encumbered Properties Number of Percentage Properties GLA of GLA Unencumbered properties 84 9,508,893 94.5% Encumbered properties 4 552,471 5.5% 88 10,061,364 100.0% Summary of Unsecured Debt/Secured Debt Percentage of Total Amount Principal Debt Unsecured principal debt $ 1,403,500 94.2% Secured principal debt 86,015 5.8% Total Principal Debt $ 1,489,515 100.0% (1) Does not include extension options available to ROIC. - 8 -
Supplemental Disclosure Selected Financial Analysis Quarter Ended March 31, 2020 (unaudited, in thousands, except per share amounts) 03/31/20 12/31/19 09/30/19 06/30/19 03/31/19 Debt coverage ratios, three months ending: Interest coverage ratio (EBITDA/interest expense) 3.5x 3.4x 3.2x 3.1x 3.4x Debt service coverage (EBITDA/(interest expense + scheduled principal payments)) 3.5x 3.3x 3.2x 3.1x 3.3x Net principal debt (Total principal debt less cash & equivalents)/Annualized EBITDA 7.0x 7.0x 7.2x 7.5x 7.3x Net principal debt (Total principal debt less cash & equivalents)/TTM EBITDA 7.1x 7.0x 7.0x 7.2x 7.1x Debt/book value ratios, at period end: Total principal debt/total book assets 50.3% 48.7% 48.7% 50.1% 49.4% Total principal debt/undepreciated book value 44.2% 43.0% 43.2% 44.7% 44.3% Secured principal debt/undepreciated book value 2.6% 2.6% 2.6% 2.6% 2.6% Market capitalization calculations, at period end: Common shares outstanding 115,440 115,871 114,700 113,681 113,681 Operating partnership units (OP units) outstanding 10,934 11,051 11,227 11,407 11,407 Common stock price per share $ 8.29 $ 17.66 $ 18.23 $ 17.13 $ 17.34 Total equity market capitalization $ 1,047,648 $ 2,241,442 $ 2,295,641 $ 2,142,752 $ 2,169,021 Total principal debt 1,489,515 1,420,157 1,428,298 1,487,435 1,478,570 TOTAL MARKET CAPITALIZATION $ 2,537,163 $ 3,661,599 $ 3,723,939 $ 3,630,187 $ 3,647,591 Unsecured Senior Notes Financial Covenants: (1) Total debt to total assets not to exceed 60% 46.9% 45.4% 45.8% 46.5% 46.1% Total secured debt to total assets not to exceed 40% 2.7% 2.8% 2.8% 2.8% 2.8% Total unencumbered assets to total unsecured debt not to be less than 150% 213.5% 221.2% 219.0% 215.5% 217.7% Consolidated income available for debt service to interest expense not to be less than 1.5:1 3.3x 3.3x 3.3x 3.3x 3.3x (1) Calculated in accordance with GAAP pursuant to underlying bond indentures. - 9 -
Supplemental Disclosure Property Portfolio Quarter Ended March 31, 2020 (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 98.0% $ 1,855 Grocery Outlet Supermarket, 99¢ Only Stores, Rite Aid Pharmacy Claremont Promenade * Claremont CA 09/23/10 92,297 98.8% 2,467 Super King Supermarket Gateway Village * Chino Hills CA 12/17/10 96,959 98.5% 3,016 Sprouts Market Seabridge Marketplace * Oxnard CA 05/31/12 98,348 95.3% 1,859 Safeway (Vons) Supermarket Glendora Shopping Center * Glendora CA 08/01/12 106,535 95.9% 1,345 Albertson's Supermarket Redondo Beach Plaza * Redondo Beach CA 12/28/12 110,509 100.0% 2,298 Safeway (Vons) Supermarket, Petco Diamond Bar Town Center * Diamond Bar CA 02/01/13 100,342 96.4% 2,328 Walmart Neighborhood Market, Crunch Fitness Diamond Hills Plaza * Diamond Bar CA 04/22/13 139,505 98.9% 3,961 H-Mart Supermarket, Planet Fitness Plaza de la Cañada * La Cañada Flintridge CA 12/13/13 100,425 100.0% 2,668 Gelson's Supermarket, TJ Maxx, Rite Aid Pharmacy Fallbrook Shopping Center * Los Angeles CA 06/13/14 755,299 100.0% 13,319 Sprouts Market, Trader Joe's, Kroger (Ralph's) Supermarket(2), TJ Maxx Moorpark Town Center * Moorpark CA 12/03/14 133,547 95.4% 2,065 Kroger (Ralph's) Supermarket, CVS Pharmacy Ontario Plaza * Ontario CA 01/06/15 150,149 94.4% 2,304 El Super Supermarket, Rite Aid Pharmacy Park Oaks Shopping Center * Thousand Oaks CA 01/06/15 110,092 88.4% 2,489 Safeway (Vons) Supermarket, Dollar Tree Warner Plaza * Woodland Hills CA 12/31/15 110,918 94.3% 4,476 Sprouts Market, Kroger (Ralph's) Supermarket (2), Rite Aid Pharmacy (2) Magnolia Shopping Center * Santa Barbara CA 03/10/16 116,360 85.9% 2,096 Kroger (Ralph's) Supermarket Casitas Plaza Shopping Center * Carpinteria CA 03/10/16 105,118 96.9% 1,778 Albertson's Supermarket, CVS Pharmacy Bouquet Center * Santa Clarita CA 04/28/16 148,903 95.5% 3,272 Safeway (Vons) Supermarket, CVS Pharmacy, Ross Dress For Less North Ranch Shopping Center * Westlake Village CA 06/01/16 146,448 93.7% 4,938 Kroger (Ralph's) Supermarket, Trader Joe's, Rite Aid Pharmacy, Petco The Knolls * Long Beach CA 10/03/16 52,021 95.2% 1,268 Trader Joe's, Pet Food Express The Terraces * Rancho Palos Verdes CA 03/17/17 172,922 93.5% 3,432 Trader Joe's, Marshall's, LA Fitness Los Angeles metro area total 2,941,759 96.6% $ 63,234 Orange County metro area Santa Ana Downtown Plaza * Santa Ana CA 01/26/10 105,536 97.9% $ 2,256 Kroger (Food 4 Less) Supermarket, Marshall's Sycamore Creek * Corona CA 09/30/10 74,198 100.0% 1,895 Safeway (Vons) Supermarket, CVS Pharmacy (2) Desert Springs Marketplace * Palm Desert CA 02/17/11 113,718 97.7% 2,911 Kroger (Ralph's) Supermarket, Rite Aid Pharmacy Cypress Center West * Cypress CA 12/04/12 107,246 95.5% 2,017 Kroger (Ralph's) Supermarket, Rite Aid Pharmacy Harbor Place Center * Garden Grove CA 12/28/12 119,821 98.8% 2,735 AA Supermarket, Ross Dress For Less 5 Points Plaza * Huntington Beach CA 09/27/13 160,536 92.5% 4,518 Trader Joe's, Pier 1 Peninsula Marketplace * Huntington Beach CA 10/15/13 95,416 100.0% 2,477 Kroger (Ralph's) Supermarket, Planet Fitness Fullerton Crossroads * Fullerton CA 10/11/17 219,785 97.6% 3,353 Kroger (Ralph's) Supermarket, Kohl's, Jo-Ann Fabrics and Crafts The Village at Nellie Gail Ranch * Laguna Hills CA 11/30/17 89,041 93.4% 2,807 Smart & Final Extra Supermarket Orange Country metro area total 1,085,297 96.8% $ 24,969 San Diego metro area Marketplace Del Rio * Oceanside CA 01/03/11 183,787 96.6% $ 3,451 Stater Brothers Supermarket, Walgreens Renaissance Towne Centre * San Diego CA 08/03/11 53,272 100.0% 2,689 CVS Pharmacy Euclid Plaza * San Diego CA 03/29/12 77,044 100.0% 1,485 Vallarta Supermarket, Walgreens Bay Plaza * San Diego CA 10/05/12 73,324 100.0% 2,103 Seafood City Supermarket Bernardo Heights Plaza * Rancho Bernardo CA 02/06/13 37,729 100.0% 946 Sprouts Market Hawthorne Crossings * San Diego CA 06/27/13 141,288 92.3% 3,067 Mitsuwa Supermarket, Ross Dress For Less, Staples Creekside Plaza * Poway CA 02/28/14 131,252 95.4% 3,077 Stater Brothers Supermarket, AMC Theatres San Diego metro area total 697,696 96.7% $ 16,818 Southern California Totals 4,724,752 96.6% $ 105,021 (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 2020. - 10 -
Supplemental Disclosure Property Portfolio, continued Quarter Ended March 31, 2020 (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 Total Wine and More, Buy Buy Baby, Basset Furniture Pinole Vista Shopping Center * Pinole CA 01/06/11 135,962 99.3% 2,835 SaveMart (Lucky) Supermarket, Planet Fitness Country Club Gate Center * Pacific Grove CA 07/08/11 109,331 97.1% 2,238 SaveMart (Lucky) Supermarket, Rite Aid Pharmacy Marlin Cove Shopping Center * Foster City CA 05/04/12 73,943 100.0% 2,422 99 Ranch Market The Village at Novato * Novato CA 07/24/12 20,081 100.0% 558 Trader Joe's, Pharmaca Pharmacy Santa Teresa Village * San Jose CA 11/08/12 127,888 92.3% 2,865 Grocery Outlet Supermarket, Dollar Tree Granada Shopping Center * Livermore CA 06/27/13 69,325 100.0% 1,366 SaveMart (Lucky) Supermarket Country Club Village * San Ramon CA 11/26/13 111,093 98.8% 2,458 Walmart Neighborhood Market, CVS Pharmacy North Park Plaza * San Jose CA 04/30/14 76,697 99.1% 2,540 H-Mart Supermarket Winston Manor * South San Francisco CA 01/07/15 49,852 100.0% 1,706 Grocery Outlet Supermarket Jackson Square * Hayward CA 07/01/15 114,220 100.0% 2,237 Safeway Supermarket, CVS Pharmacy, 24 Hour Fitness Gateway Centre * San Ramon CA 09/01/15 112,553 100.0% 2,737 SaveMart (Lucky) Supermarket, Walgreens Iron Horse Plaza * Danville CA 12/04/15 61,915 100.0% 2,345 Lunardi's Market Monterey Center * Monterey CA 07/14/16 25,626 93.7% 1,021 Trader Joe's, Pharmaca Pharmacy Santa Rosa Southside Shopping Center * Santa Rosa CA 03/24/17 88,535 95.9% 1,577 REI, Cost Plus World Market, DSW Monta Loma Plaza * Mountain View CA 09/19/17 48,078 100.0% 1,508 Safeway Supermarket San Francisco metro area total 1,294,814 98.4% $ 31,884 Sacramento metro area Mills Shopping Center * Rancho Cordova CA 02/17/11 235,514 87.9% $ 2,616 Viva Supermarket, Ross Dress For Less (dd's Discounts), Dollar Tree Green Valley Station * Cameron Park CA 06/15/12 52,245 90.9% 991 CVS Pharmacy Sacramento metro area total 287,759 88.4% $ 3,607 Northern California Totals 1,582,573 96.6% $ 35,491 (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 2020. - 11 -
Supplemental Disclosure Property Portfolio, continued Quarter Ended March 31, 2020 (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 51,597 100.0% $ 854 Kroger (QFC) Supermarket The Market at Lake Stevens * Lake Stevens WA 03/11/10 74,130 100.0% 1,663 Albertson's (Haggen) Supermarket Canyon Park Shopping Center * Bothell WA 07/29/11 123,592 100.0% 2,475 PCC Community Markets, Rite Aid Pharmacy, Petco Hawks Prairie Shopping Center * Lacey WA 09/09/11 157,529 100.0% 1,912 Safeway Supermarket, Dollar Tree, Big Lots The Kress Building * Seattle WA 09/30/11 74,616 100.0% 1,969 IGA Supermarket, TJMaxx Gateway Shopping Center * Marysville WA 02/16/12 104,298 96.1% 2,551 WinCo Foods (2), Rite Aid Pharmacy, Ross Dress For Less Aurora Square * Shoreline WA 2012/2014 108,558 100.0% 1,837 Central Supermarket, Marshall's Canyon Crossing * Puyallup WA 04/15/13 120,398 100.0% 2,839 Safeway Supermarket Crossroads Shopping Center * Bellevue WA 2010/2013 475,413 98.5% 11,391 Kroger (QFC) Supermarket, Bed Bath & Beyond, Dick's Sporting Goods Bellevue Marketplace * Bellevue WA 12/10/15 113,758 100.0% 3,338 Asian Family Market Four Corner Square * Maple Valley WA 12/21/15 119,531 100.0% 2,622 Grocery Outlet Supermarket, Walgreens, Johnsons Home & Garden Bridle Trails Shopping Center * Kirkland WA 10/17/16 109,800 100.0% 2,339 Grocery Outlet Supermarket, Bartell Drugs, Dollar Tree PCC Community Markets Plaza * Edmonds WA 01/25/17 34,459 100.0% 690 PCC Community Markets Highland Hill Shopping Center * Tacoma WA 05/09/17 163,926 100.0% 2,894 Safeway Supermarket, LA Fitness, Dollar Tree, Petco North Lynnwood Shopping Center * Lynnwood WA 10/19/17 63,606 95.8% 1,084 Grocery Outlet Supermarket Stadium Center * Tacoma WA 02/23/18 48,888 100.0% 1,032 Thriftway Supermarket Summerwalk Village Lacey WA 12/13/19 58,484 97.9% 808 Walmart Neighborhood Market Seattle metro area total 2,002,583 99.3% $ 42,298 Portland metro area Happy Valley Town Center * Happy Valley OR 07/14/10 138,397 100.0% $ 3,770 New Seasons Supermarket Wilsonville Old Town Square * Wilsonville OR 2010/2012 49,937 100.0% 1,848 Kroger (Fred Meyer) Supermarket (2) Cascade Summit Town Square * West Linn OR 08/20/10 94,934 100.0% 1,788 Safeway Supermarket Heritage Market Center * Vancouver WA 09/23/10 107,468 100.0% 1,772 Safeway Supermarket, Dollar Tree Division Crossing * Portland OR 12/22/10 103,561 100.0% 1,302 Rite Aid Pharmacy, Ross Dress For Less, Ace Hardware Halsey Crossing * Gresham OR 12/22/10 99,428 100.0% 1,399 24 Hour Fitness, Dollar Tree Hillsboro Market Center * Hillsboro OR 11/23/11 156,021 100.0% 2,603 Albertson's Supermarket, Dollar Tree, Ace Hardware Robinwood Shopping Center * West Linn OR 08/23/13 70,831 100.0% 1,077 Walmart Neighborhood Market Tigard Marketplace * Tigard OR 02/18/14 136,889 100.0% 2,066 H-Mart Supermarket, Bi-Mart Wilsonville Town Center * Wilsonville OR 12/11/14 167,829 98.9% 2,823 Safeway Supermarket, Rite Aid Pharmacy, Dollar Tree Tigard Promenade * Tigard OR 07/28/15 88,043 100.0% 1,503 Safeway Supermarket Sunnyside Village Square * Happy Valley OR 07/28/15 92,278 100.0% 1,601 Grocery Outlet Supermarket, 24 Hour Fitness, Ace Hardware Johnson Creek Center * Happy Valley OR 11/09/15 108,588 100.0% 2,277 Trader Joe's, Walgreens, Sportsman's Warehouse Rose City Center * Portland OR 09/15/16 60,680 100.0% 833 Safeway Supermarket Division Center * Portland OR 04/05/17 118,122 100.0% 2,106 Grocery Outlet Supermarket, Rite Aid Pharmacy, Petco Riverstone Marketplace * Vancouver WA 10/11/17 95,774 100.0% 2,228 Kroger (QFC) Supermarket King City Plaza * King City OR 05/18/18 62,676 95.1% 941 Grocery Outlet Supermarket Portland metro area total 1,751,456 99.7% $ 31,937 Pacific Northwest Totals 3,754,039 99.5% $ 74,235 TOTAL SHOPPING CENTERS 10,061,364 97.7% $ 214,747 (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 2020. - 12 -
Supplemental Disclosure Same-Center Cash Net Operating Income Analysis Quarter Ended March 31, 2020 (unaudited, dollars in thousands) Three Months Ended Three Month 03/31/20 03/31/19 $ Change % Change 03/31/20 03/31/19 Number of shopping centers included in same-center analysis (1) 87 87 85 85 Same-center occupancy 97.7% 97.8% (0.1)% 97.9% 97.7% REVENUES: Base rents $ 51,778 $ 50,218 $ 1,560 3.1% $ 201,118 $ 193,930 Percentage rent 93 87 6 6.9% 1,316 1,545 Recoveries from tenants 17,232 16,767 465 2.8% 65,603 63,400 Other property income 328 593 (265) (44.7)% 2,943 2,577 Bad debt (486) (605) 119 (19.7)% (1,416) - TOTAL REVENUES 68,945 67,060 1,885 2.8% 269,564 261,452 OPERATING EXPENSES: Property operating expenses 11,125 10,827 298 2.8% 43,721 41,684 Property taxes 8,030 8,017 13 0.2% 31,434 31,271 TOTAL OPERATING EXPENSES 19,155 18,844 311 1.7% 75,155 72,955 SAME-CENTER CASH NET OPERATING INCOME $ 49,790 $ 48,216 $ 1,574 3.3% $ 194,409 $ 188,497 SAME-CENTER CASH NET OPERATING INCOME RECONCILIATION GAAP Operating Income $ 27,993 $ 30,262 $ 115,370 $ 109,254 Depreciation and amortization 24,278 24,761 97,559 100,838 General and administrative expenses 3,944 4,276 17,831 14,918 Other expense 64 93 1,405 478 Gain on sale of real estate - (2,638) (13,175) (5,890) Straight-line rent 89 (1,180) (3,083) (5,380) Amortization of above- and below-market rent (5,478) (6,478) (15,618) (13,965) Property revenues and other expenses (2) (149) 254 (269) (711) TOTAL COMPANY CASH NET OPERATING INCOME 50,741 49,350 200,020 199,542 Non Same-Center Cash NOI (951) (1,134) (5,611) (11,889) SAME-CENTER CASH NET OPERATING INCOME $ 49,790 $ 48,216 $ 194,409 $ 187,653 (1) Same centers are those properties which were owned for the entirety of the current and comparable prior year period. (2) Includes anchor lease termination fees net of contractual amounts, if any, expense and recovery adjustments related to prior periods and other miscellaneous adjustments. - 13 -
Supplemental Disclosure Top Ten Tenants Quarter Ended March 31, 2020 (dollars in thousands) Percent Number of Leased of Total Percent of Tenant Leases GLA Leased GLA ABR Total ABR 1 Albertson's / Safeway Supermarkets 19 951,600 9.7% $ 11,866 5.5% 2 Kroger Supermarkets 11 483,455 4.9% 7,335 3.4% 3 JP Morgan Chase 21 95,163 1.0% 3,094 1.4% 4 Rite Aid Pharmacy 12 232,586 2.4% 3,080 1.4% 5 SaveMart Supermarkets 4 187,639 1.9% 2,901 1.4% 6 Marshall's / TJMaxx 6 178,195 1.8% 2,819 1.3% 7 Trader Joe's 8 96,714 1.0% 2,773 1.3% 8 Sprouts Markets 4 159,163 1.6% 2,747 1.3% 9 Ross Dress For Less / dd's Discounts 7 191,703 2.0% 2,693 1.3% 10 Grocery Outlet Supermarkets 9 194,443 2.0% 2,662 1.2% Top 10 Tenants Total 101 2,770,661 28.3% $ 41,970 19.5% Other Tenants 1,836 7,052,879 71.7% 172,777 80.5% Total Portfolio 1,937 9,823,540 100.0% $ 214,747 100.0% - 14 -
Supplemental Disclosure Lease Expiration Schedule Quarter Ended March 31, 2020 (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. 2020 1 39,956 0.4% $ 535 0.2% $ 13.40 2021 13 393,554 4.0% 4,595 2.1% 11.68 2022 18 530,799 5.4% 7,055 3.3% 13.29 2023 26 836,758 8.5% 13,312 6.2% 15.91 2024 16 595,384 6.1% 9,669 4.5% 16.24 2025 20 684,653 7.0% 9,009 4.2% 13.16 2026 10 367,994 3.7% 5,206 2.4% 14.15 2027 7 144,682 1.5% 2,084 1.0% 14.40 2028 14 514,446 5.2% 9,360 4.4% 18.19 2029 11 354,143 3.6% 6,394 3.0% 18.06 2030+ 27 1,001,633 10.2% 15,320 7.1% 15.30 163 5,464,002 55.6% $ 82,539 38.4% $ 15.11 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. 2020 159 312,649 3.2% $ 9,107 4.2% $ 29.13 2021 296 596,578 6.1% 18,071 8.4% 30.29 2022 280 616,955 6.3% 18,916 8.8% 30.66 2023 282 647,502 6.6% 20,089 9.4% 31.03 2024 253 602,583 6.1% 18,665 8.7% 30.98 2025 192 513,470 5.2% 14,422 6.7% 28.09 2026 68 214,307 2.2% 6,395 3.0% 29.84 2027 66 210,697 2.1% 6,169 2.9% 29.28 2028 57 183,155 1.9% 6,393 3.0% 34.91 2029 46 149,472 1.5% 4,825 2.2% 32.28 2030+ 75 312,170 3.2% 9,322 4.3% 29.86 1,774 4,359,538 44.4% $ 132,374 61.6% $ 30.36 All Tenants Number of Leased Percent of Total Percent of ABR Leases Expiring (2) GLA Total Leased GLA ABR Total ABR Per Sq. Ft. 2020 160 352,605 3.6% $ 9,642 4.4% $ 27.35 2021 309 990,132 10.1% 22,666 10.5% 22.89 2022 298 1,147,754 11.7% 25,971 12.1% 22.63 2023 308 1,484,260 15.1% 33,401 15.6% 22.50 2024 269 1,197,967 12.2% 28,334 13.2% 23.65 2025 212 1,198,123 12.2% 23,431 10.9% 19.56 2026 78 582,301 5.9% 11,601 5.4% 19.92 2027 73 355,379 3.6% 8,253 3.9% 23.22 2028 71 697,601 7.1% 15,753 7.4% 22.58 2029 57 503,615 5.1% 11,219 5.2% 22.28 2030+ 102 1,313,803 13.4% 24,642 11.4% 18.76 1,937 9,823,540 100.0% $ 214,913 100.0% $ 21.88 (1) Anchor tenants are leases equal to or greater than 15,000 square feet. (2) Does not assume exercise of renewal options. - 15 -
Supplemental Disclosure Leasing Summary Quarter Ended March 31, 2020 For the Three Months Ended March 31, 2020 For the Three Months Ended M New Leases Non-Anchor Anchor Total Non-Anchor Anchor Number of Leases 16 1 17 - - Gross Leasable Area (sq. ft.) 26,480 53,175 79,655 - - Initial Base Rent ($/sq. ft.) (1) $ 37.70 $ 12.69 $ 21.01 $ - $ - Tenant Improvements ($/sq. ft.) $ 3.54 $ 9.40 $ 7.45 #DIV/0! $ - Leasing Commissions ($/sq. ft.) $ 3.39 $ - $ 1.13 $ - $ - Weighted Average Lease Term (Yrs.) (2) 6.4 21.4 16.4 6.4 21.4 Renewals Non-Anchor Anchor Total Non-Anchor Anchor Number of Leases 52 4 56 - - Gross Leasable Area (sq. ft.) 105,959 112,321 218,280 Total - Initial Base Rent ($/sq. ft.) (1) $ 30.64 $ 11.88 $ 20.99 $ - $ - Tenant Improvements ($/sq. ft.) $ 0.56 $ - $ 0.27 #VALUE! #DIV/0! Leasing Commissions ($/sq. ft.) $ 0.54 $ - $ 0.26 $ - $ - Weighted Average Lease Term (Yrs.) (2) 5.1 5.0 5.0 5.1 5.0 Total Non-Anchor Anchor Total Non-Anchor Anchor Number of Leases 68 5 73 - - Gross Leasable Area (sq. ft.) 132,439 165,496 297,935 - - Initial Base Rent ($/sq. ft.) (1) $ 32.05 $ 12.14 $ 20.99 $ - $ - Tenant Improvements ($/sq. ft.) $ 1.16 $ 3.02 $ 2.19 #DIV/0! #DIV/0! Leasing Commissions ($/sq. ft.) $ 1.11 $ - $ 0.49 $ - $ - Weighted Average Lease Term (Yrs.) (2) 5.4 10.3 8.1 5.4 10.3 (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. - 16 -
Supplemental Disclosure Same-Space Comparative Leasing Summary Quarter Ended March 31, 2020 For the Three Months Ended March 31, 2020 For the Three Months Ended M New Leases Non-Anchor Anchor Total Non-Anchor Anchor Comparative # of Leases 9 1 10 - - Comparative GLA (sq. ft.) (1) 16,113 53,175 69,288 - - Prior Base Rent ($/sq. ft.) (2) $ 34.13 $ 9.57 $ 15.28 $ - check (s/b=0) Initial Base Rent ($/sq. ft.) $ 38.59 $ 12.69 $ 18.71 $ - $ - Percentage Change in Base Rents 13.1% 32.6% 22.5% - - Tenant Improvements ($/sq. ft.) $ 3.33 $ 9.40 $ 7.99 #VALUE! $ - Leasing Commissions ($/sq. ft.) $ 2.71 $ - $ 0.63 $ PSF $ PSF Weighted Average Lease Term (Yrs.) (3) 6.8 21.4 18.0 6.8 21.4 Renewals Non-Anchor Anchor Total Non-Anchor Anchor Comparative # of Leases 52 4 56 - - Comparative GLA (sq. ft.) 105,959 112,321 218,280 Total - Prior Base Rent ($/sq. ft.) (2) $ 27.84 $ 11.51 $ 19.44 $ - $ - Initial Base Rent ($/sq. ft.) $ 30.64 $ 11.88 $ 20.99 $ - $ - Percentage Change in Base Rents 10.1% 3.2% 8.0% - - Tenant Improvements ($/sq. ft.) $ 0.56 $ - $ 0.27 #VALUE! #VALUE! Leasing Commissions ($/sq. ft.) $ 0.54 $ - $ 0.26 $ PSF $ PSF Weighted Average Lease Term (Yrs.) (3) 5.1 5.0 5.0 5.1 5.0 Total Non-Anchor Anchor Total Non-Anchor Anchor Comparative # of Leases 61 5 66 - - Comparative GLA (sq. ft.) (1) 122,072 165,496 287,568 #VALUE! - Prior Base Rent ($/sq. ft.) (2) $ 28.67 $ 10.89 $ 18.43 $ - $ - Initial Base Rent ($/sq. ft.) $ 31.69 $ 12.14 $ 20.44 $ - $ - Percentage Change in Base Rents 10.5% 11.5% 10.9% - - Tenant Improvements ($/sq. ft.) $ 0.93 $ 3.02 $ 2.13 #VALUE! #VALUE! Leasing Commissions ($/sq. ft.) $ 0.83 $ - $ 0.35 $ PSF $ PSF Weighted Average Lease Term (Yrs.) (3) 5.3 10.3 8.2 5.3 10.3 (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. - 17 -
Supplemental Disclosure Leased vs. Billed Summary Quarter Ended March 31, 2020 (dollars in thousands) 03/31/20 12/31/19 09/30/19 06/30/19 % leased at beginning of quarter 97.9% 97.7% 97.9% 97.8% % billed at beginning of quarter 94.4% 95.1% 95.3% 95.2% ABR of new leases signed/not yet commenced - at beginning of quarter $ 6,482 $ 5,945 $ 6,247 $ 6,520 less: ABR of new leases commenced during quarter (954) (1,370) (2,156) (1,872) plus: ABR of new leases signed during quarter 1,513 1,907 1,854 1,599 ABR of new leases signed/not yet commenced - at end of quarter $ 7,041 $ 6,482 $ 5,945 $ 6,247 % leased at end of quarter 97.7% 97.9% 97.7% 97.9% % billed at end of quarter 93.9% 94.4% 95.1% 95.3% ABR of new leases commenced during quarter - actual cash received $ 169 $ 222 $ 247 $ 371 - 18 -
Supplemental Disclosure COVID-19 IMPACT - Status of Tenant Base Quarter Ended March 31, 2020 as of April 17, 2020 (1) Tenant Type GLA % Open (1) Grocery 3,102,530 100.0% Drug Stores 497,411 100.0% Pet Supply 172,569 100.0% Anchor & Non-Anchor Automotive Supply 106,439 99.2% GLA % Open (1) Off-Price 247,622 96.9% Anchor Tenants 5,355,935 78.4% Postal Services 68,191 96.9% Non-Anchor Tenants 4,279,886 60.4% (2) Home Improvement 302,802 92.7% Total 9,635,821 70.4% Sporting Goods 197,465 88.1% Electronics 17,448 79.7% Financial Services 332,543 74.7% Restaurants 1,272,136 72.1% Local Services 315,367 69.8% National, Regional & Local Wireless 64,645 67.7% GLA % Open (1) Non-retail 86,250 64.0% National 6,917,232 74.6% General Retail 158,415 54.5% Regional 499,233 83.5% Medical & Dental 323,652 53.1% Local 2,219,355 54.6% (2) Home Décor 315,269 43.7% Total 9,635,821 70.4% Apparel 828,952 20.0% Education 140,350 17.7% Salons 405,845 11.0% Fitness 518,590 3.3% Entertainment 161,329 0.0% (2) Total 9,635,821 70.4% (1) Data is to the best of ROIC’s knowledge as of April 17, 2020. ROIC expects this data to change, potentially significantly, going forward. (2) Excludes recently signed new tenants that have not yet taken occupancy and commenced being billed rent. - 19 -
Supplemental Disclosure Investor Information Quarter Ended March 31, 2020 Retail Opportunity Investments Corp. Investor Relations: Transfer Agent: www.roireit.net Ashley Rubino Constance Adams NASDAQ: ROIC arubino@roireit.net ComputerShare 11250 El Camino Real, Suite 200 858.255.4913 constance.adams@computershare.com San Diego, CA 92130 Equity Research Coverage Baird Equity Research RJ Milligan 813.273.8252 Bank of America Merrill Lynch Craig Schmidt 646.855.3640 Bank of Montreal Jeremy Metz 212.885.4053 BTIG Michael Gorman 212.738.6138 Capital One Securities, Inc. Chris Lucas 571.633.8151 Citi Michael Bilerman 212.816.1383 Christy McElroy 212.816.6981 D.A. Davidson & Co. Barry Oxford 212.240.9871 Green Street Vince Tibone 949.640.8780 J.P. Morgan Michael W. Mueller 212.622.6689 Jefferies Linda Tsai 212.778.8011 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 Tamara Fique 617.603.4262 Fixed Income Research Coverage J.P. Morgan Mark Streeter 212.834.5086 Ratings Agency Coverage Moody’s Investors Service Juan Acosta 212.553.4849 S&P Global Ratings Michael Souers 212.438.2508 - 20 -