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): July 25, 2023
(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 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§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 Exchange 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 July 25, 2023, Retail Opportunity Investments Corp. (the "Company") issued an earnings release announcing its financial results for the quarter ended June 30, 2023. A copy of the earnings release is attached as Exhibit 99.1 hereto and incorporated herein by reference. On July 25, 2023, in connection with this earnings release, the Company posted certain supplemental information regarding the Company's operations for the quarter ended June 30, 2023 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 | |||||
| 99.2 | |||||
| 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, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: July 25, 2023 | 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
Tuesday, July 25, 2023
Retail Opportunity Investments Corp. Reports
2023 Second Quarter Results
San Diego, CA, July 25, 2023 - Retail Opportunity Investments Corp. (NASDAQ:ROIC) announced today financial and operating results for the three and six months ended June 30, 2023.
HIGHLIGHTS
•$9.9 million of net income attributable to common stockholders ($0.08 per diluted share)
•$35.6 million in Funds From Operations (FFO)(1) ($0.27 per diluted share)
•FFO per diluted share guidance for 2023 reaffirmed ($1.05 - $1.11 per diluted share)
•3.2% increase in same-center cash net operating income (2Q‘23 vs. 2Q‘22)
•98.3% portfolio lease rate at 6/30/23 (matching all-time record high)
•429,687 square feet of leases executed (most active 2nd quarter on record)
•988,844 square feet of leases executed during first six months of 2023 (record activity)
•16.8% increase in same-space cash base rents on new leases (6.6% on renewals)
•6.5x net principal debt-to-annualized EBITDA ratio for 2Q‘23
•84.5% of total principal debt outstanding effectively fixed-rate at 6/30/23
•Environmental, Social & Governance annual report issued
•$0.15 per share cash dividend declared
_____________________________________
(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, “Demand for space across our portfolio continues to be consistent and strong. Capitalizing on the demand, during the second quarter we continued to lease space at a record pace and maintained our portfolio lease rate at an all-time high. Additionally, we continue to achieve solid releasing rent growth on new leases, as well as renewals.” Tanz added, “Our continued success with portfolio operations and leasing is underscored by the fundamental strength and appeal of our West Coast grocery-anchored shopping center portfolio and sound tenant base. We expect that to continue to drive our results in the second half of 2023.”
FINANCIAL RESULTS SUMMARY
For the three months ended June 30, 2023, GAAP net income attributable to common stockholders was $9.9 million, or $0.08 per diluted share, as compared to GAAP net income attributable to common stockholders of $11.5 million, or $0.09 per diluted share, for the three months ended June 30, 2022. For the six months ended June 30, 2023, GAAP net income attributable to common stockholders was $18.1 million, or $0.14 per diluted share, as compared to GAAP net income attributable to common stockholders of $23.1 million, or $0.19 per diluted share, for the six months ended June 30, 2022.
FFO for the second quarter of 2023 was $35.6 million, or $0.27 per diluted share, as compared to $36.7 million in FFO, or $0.28 per diluted share for the second quarter of 2022. FFO for the first six months of 2023 was $69.4 million, or $0.52 per diluted share, as compared to $72.9 million in FFO, or $0.55 per diluted share for the first six months of 2022. 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 second quarter of 2023, same-center net operating income (NOI) was $53.2 million, as compared to $51.5 million in same-center NOI for the second quarter of 2022, representing a 3.2% increase. For the first six months of 2023, same-center NOI increased 1.3% as compared to same-center NOI for the first six months of 2022. ROIC reports same-center NOI on a cash basis. A reconciliation of GAAP operating income to same-center NOI is provided at the end of this press release.
At June 30, 2023, ROIC had total real estate assets (before accumulated depreciation) of approximately $3.4 billion and approximately $1.4 billion of principal debt outstanding, of which approximately $1.3 billion was unsecured debt, including $63.0 million outstanding on its $600.0 million unsecured credit facility. For the second quarter of 2023, ROIC’s net principal debt-to-annualized EBITDA ratio was 6.5 times, and 84.5% of its total principal debt outstanding was effectively fixed-rate at June 30, 2023.
PROPERTY OPERATIONS SUMMARY
At June 30, 2023, ROIC’s portfolio was 98.3% leased. During the second quarter of 2023, ROIC executed 128 leases, totaling 429,687 square feet, including 45 new leases, totaling 88,830 square feet, achieving a 16.8% increase in same-space comparative base rent, and 83 renewed leases, totaling 340,857 square feet, achieving a 6.6% increase in base rent. ROIC reports same-space comparative new lease and renewal base rents on a cash basis.
ENVIRONMENTAL, SOCIAL & GOVERNANCE SUMMARY
In April 2023, ROIC was selected, for the third consecutive year, as a Green Lease Leader by the U.S. Department of Energy’s Better Buildings Alliance and the Institute for Market Transformation. Specifically, ROIC was awarded 2023 Green Lease Leader “Gold” level designation in recognition of its continued success in collaborating with tenants on energy efficiency, decarbonization, air quality and other environmental and social issues.
In June 2023, ROIC issued its fourth Environmental, Social and Governance (ESG) annual report, detailing it’s ESG achievements during 2022, as well as its ongoing initiatives and goals. The report was prepared in accordance with the Sustainability Accounting Standards Board (SASB) standards, the Task Force on Climate-related Financial Disclosures (TCFD) framework, and the United Nations Sustainable Development Goals (SDG). The report is available at: https://www.roireit.net/esg
DIVIDEND SUMMARY
On July 7, 2023, ROIC distributed a $0.15 per share cash dividend. On July 25, 2023, the Board declared a cash dividend of $0.15 per share, payable on October 6, 2023 to stockholders of record on September 15, 2023.
CONFERENCE CALL
ROIC will conduct a conference call to discuss its results on Wednesday, July 26, 2023 at 12:00 p.m. Eastern Time / 9:00 a.m. Pacific Time.
To participate in the conference call, click on the following link (ten minutes prior to the call) to register:
https://register.vevent.com/register/BI4b8698f12a6e4ed999de6434d0df2e87
Once registered, participants will have the option of: 1) dialing in from their phone (using a PIN); or 2) clicking the “Call Me” option to receive an automated call directly to their phone.
The conference call will also be available live (in a listen-only mode) at: https://edge.media-server.com/mmc/p/5u6nvqev
The conference call will be recorded and available for replay following the conclusion of the live broadcast and will be accessible up to one year on ROIC’s website, specifically on its Investor Relations Events & Presentations page:
https://investor.roicreit.com/events-presentations
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 June 30, 2023, ROIC owned 93 shopping centers encompassing approximately 10.6 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, S&P Global Ratings and Fitch Ratings, Inc. 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)
| June 30, 2023 (unaudited) | December 31, 2022 | ||||||||||
| ASSETS | |||||||||||
| Real Estate Investments: | |||||||||||
| Land | $ | 958,397 | $ | 958,236 | |||||||
| Building and improvements | 2,467,962 | 2,452,857 | |||||||||
| 3,426,359 | 3,411,093 | ||||||||||
| Less: accumulated depreciation | 615,501 | 578,593 | |||||||||
| 2,810,858 | 2,832,500 | ||||||||||
| Mortgage note receivable | 4,741 | 4,786 | |||||||||
| Real Estate Investments, net | 2,815,599 | 2,837,286 | |||||||||
| Cash and cash equivalents | 5,296 | 5,598 | |||||||||
| Restricted cash | 2,069 | 1,861 | |||||||||
| Tenant and other receivables, net | 57,336 | 57,546 | |||||||||
| Deposits | — | 500 | |||||||||
| Acquired lease intangible assets, net | 48,564 | 52,428 | |||||||||
| Prepaid expenses | 2,251 | 5,957 | |||||||||
| Deferred charges, net | 30,011 | 26,683 | |||||||||
| Other assets | 17,433 | 16,420 | |||||||||
| Total assets | $ | 2,978,559 | $ | 3,004,279 | |||||||
| LIABILITIES AND EQUITY | |||||||||||
| Liabilities: | |||||||||||
| Term loan | $ | 299,435 | $ | 299,253 | |||||||
| Credit facility | 63,000 | 88,000 | |||||||||
| Senior Notes | 947,673 | 946,849 | |||||||||
| Mortgage notes payable | 60,486 | 60,917 | |||||||||
| Acquired lease intangible liabilities, net | 145,685 | 152,117 | |||||||||
| Accounts payable and accrued expenses | 43,733 | 22,885 | |||||||||
| Tenants’ security deposits | 7,894 | 7,701 | |||||||||
| Other liabilities | 42,722 | 41,959 | |||||||||
| Total liabilities | 1,610,628 | 1,619,681 | |||||||||
| 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; 126,003,795 and 124,538,811 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively | 13 | 12 | |||||||||
| Additional paid-in capital | 1,625,667 | 1,612,126 | |||||||||
| Accumulated dividends in excess of earnings | (335,755) | (315,984) | |||||||||
| Accumulated other comprehensive income | 1,337 | 14 | |||||||||
| Total Retail Opportunity Investments Corp. stockholders’ equity | 1,291,262 | 1,296,168 | |||||||||
| Non-controlling interests | 76,669 | 88,430 | |||||||||
| Total equity | 1,367,931 | 1,384,598 | |||||||||
| Total liabilities and equity | $ | 2,978,559 | $ | 3,004,279 | |||||||
RETAIL OPPORTUNITY INVESTMENTS CORP.
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Rental revenue | $ | 79,630 | $ | 77,218 | $ | 158,629 | $ | 152,255 | |||||||||||||||
| Other income | 2,410 | 1,007 | 2,707 | 2,443 | |||||||||||||||||||
| Total revenues | 82,040 | 78,225 | 161,336 | 154,698 | |||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Property operating | 13,581 | 12,672 | 27,783 | 24,763 | |||||||||||||||||||
| Property taxes | 8,924 | 8,416 | 17,768 | 16,936 | |||||||||||||||||||
| Depreciation and amortization | 25,126 | 24,350 | 50,230 | 48,112 | |||||||||||||||||||
| General and administrative expenses | 5,776 | 5,702 | 11,096 | 10,942 | |||||||||||||||||||
| Other expense | 482 | 488 | 654 | 667 | |||||||||||||||||||
| Total operating expenses | 53,889 | 51,628 | 107,531 | 101,420 | |||||||||||||||||||
| Operating income | 28,151 | 26,597 | 53,805 | 53,278 | |||||||||||||||||||
| Non-operating expenses | |||||||||||||||||||||||
| Interest expense and other finance expenses | (17,633) | (14,283) | (34,591) | (28,498) | |||||||||||||||||||
| Net income | 10,518 | 12,314 | 19,214 | 24,780 | |||||||||||||||||||
| Net income attributable to non-controlling interests | (589) | (807) | (1,143) | (1,632) | |||||||||||||||||||
| Net Income Attributable to Retail Opportunity Investments Corp. | $ | 9,929 | $ | 11,507 | $ | 18,071 | $ | 23,148 | |||||||||||||||
| Earnings per share – basic and diluted | $ | 0.08 | $ | 0.09 | $ | 0.14 | $ | 0.19 | |||||||||||||||
| Dividends per common share | $ | 0.15 | $ | 0.13 | $ | 0.30 | $ | 0.26 | |||||||||||||||
CALCULATION OF FUNDS FROM OPERATIONS
(Unaudited)
(In thousands)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| Net income attributable to ROIC | $ | 9,929 | $ | 11,507 | $ | 18,071 | $ | 23,148 | |||||||||||||||
| Plus: Depreciation and amortization | 25,126 | 24,350 | 50,230 | 48,112 | |||||||||||||||||||
| Funds from operations – basic | 35,055 | 35,857 | 68,301 | 71,260 | |||||||||||||||||||
| Net income attributable to non-controlling interests | 589 | 807 | 1,143 | 1,632 | |||||||||||||||||||
| Funds from operations – diluted | $ | 35,644 | $ | 36,664 | $ | 69,444 | $ | 72,892 | |||||||||||||||
SAME-CENTER CASH NET OPERATING INCOME ANALYSIS
(Unaudited)
(In thousands, except number of shopping centers and percentages)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
| 2023 | 2022 | $ Change | % Change | 2023 | 2022 | $ Change | % Change | |||||||||||||||||||||||||||||||||||||||||||
| Number of shopping centers included in same-center analysis | 89 | 89 | 87 | 87 | ||||||||||||||||||||||||||||||||||||||||||||||
| Same-center leased rate | 98.3 | % | 97.7 | % | 0.6 | % | 98.3 | % | 97.7 | % | 0.6 | % | ||||||||||||||||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Base rents | $ | 55,206 | $ | 53,459 | $ | 1,747 | 3.3 | % | $ | 108,530 | $ | 105,560 | $ | 2,970 | 2.8 | % | ||||||||||||||||||||||||||||||||||
| Percentage rent | 269 | 157 | 112 | 71.3 | % | 634 | 356 | 278 | 78.1 | % | ||||||||||||||||||||||||||||||||||||||||
| Recoveries from tenants | 19,464 | 18,237 | 1,227 | 6.7 | % | 38,580 | 36,155 | 2,425 | 6.7 | % | ||||||||||||||||||||||||||||||||||||||||
| Other property income | 1,288 | 827 | 461 | 55.7 | % | 1,402 | 1,873 | (471) | (25.1) | % | ||||||||||||||||||||||||||||||||||||||||
| Bad debt | (864) | (133) | (731) | 549.6 | % | (1,674) | (718) | (956) | 133.1 | % | ||||||||||||||||||||||||||||||||||||||||
| Total Revenues | 75,363 | 72,547 | 2,816 | 3.9 | % | 147,472 | 143,226 | 4,246 | 3.0 | % | ||||||||||||||||||||||||||||||||||||||||
| Operating Expenses | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Property operating expenses | 13,524 | 12,785 | 739 | 5.8 | % | 27,128 | 24,737 | 2,391 | 9.7 | % | ||||||||||||||||||||||||||||||||||||||||
| Property taxes | 8,681 | 8,276 | 405 | 4.9 | % | 17,033 | 16,540 | 493 | 3.0 | % | ||||||||||||||||||||||||||||||||||||||||
| Total Operating Expenses | 22,205 | 21,061 | 1,144 | 5.4 | % | 44,161 | 41,277 | 2,884 | 7.0 | % | ||||||||||||||||||||||||||||||||||||||||
| Same-Center Cash Net Operating Income | $ | 53,158 | $ | 51,486 | $ | 1,672 | 3.2 | % | $ | 103,311 | $ | 101,949 | $ | 1,362 | 1.3 | % | ||||||||||||||||||||||||||||||||||
SAME-CENTER CASH NET OPERATING INCOME RECONCILIATION
(Unaudited)
(In thousands)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| GAAP operating income | $ | 28,151 | $ | 26,597 | $ | 53,805 | $ | 53,278 | |||||||||||||||
| Depreciation and amortization | 25,126 | 24,350 | 50,230 | 48,112 | |||||||||||||||||||
| General and administrative expenses | 5,776 | 5,702 | 11,096 | 10,942 | |||||||||||||||||||
| Other expense | 482 | 488 | 654 | 667 | |||||||||||||||||||
| Straight-line rent | (979) | (915) | (1,326) | (1,366) | |||||||||||||||||||
| Amortization of above- and below-market rent | (2,609) | (3,254) | (5,473) | (6,311) | |||||||||||||||||||
Property revenues and other expenses (1) | (634) | (32) | (629) | (129) | |||||||||||||||||||
| Total Company cash NOI | 55,313 | 52,936 | 108,357 | 105,193 | |||||||||||||||||||
| Non same-center cash NOI | (2,155) | (1,450) | (5,046) | (3,244) | |||||||||||||||||||
| Same-center cash NOI | $ | 53,158 | $ | 51,486 | $ | 103,311 | $ | 101,949 | |||||||||||||||
____________________
(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:
Nicolette O’Leary
Director of Investor Relations
858-677-0900
noleary@roireit.net
2nd QUARTER 2023 SUPPLEMENTAL INFORMATION Retail Opportunity Investments Corp. 11250 El Camino Real, Suite 200 San Diego, CA 92130 www.roireit.net
Supplemental Disclosure Quarter Ended June 30, 2023 -2- Overview 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 June 30, 2023, ROIC owned 93 shopping centers encompassing approximately 10.6 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, S&P Global Ratings and Fitch Ratings, Inc. 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 (rental revenue and other income), 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 and extraordinary items. 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 June 30, 2023 -3- Page Financial Data 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 Footnotes .......................................................................................................................................................... 19 Investor Information ....................................................................................................................................... 20 Table of Contents
Supplemental Disclosure Quarter Ended June 30, 2023 -4- Balance Sheets (unaudited, dollars in thousands, except par values and share amounts) 06/30/23 12/31/22 ASSETS: Real Estate Investments: Land $ 958,397 $ 958,236 Building and improvements 2,467,962 2,452,857 3,426,359 3,411,093 Less: accumulated depreciation 615,501 578,593 2,810,858 2,832,500 Mortgage note receivable 4,741 4,786 Real Estate Investments, net 2,815,599 2,837,286 Cash and cash equivalents 5,296 5,598 Restricted cash 2,069 1,861 Tenant and other receivables, net 57,336 57,546 Deposits — 500 Acquired lease intangible assets, net 48,564 52,428 Prepaid expenses 2,251 5,957 Deferred charges, net 30,011 26,683 Other assets 17,433 16,420 TOTAL ASSETS $ 2,978,559 $ 3,004,279 LIABILITIES: Term loan $ 299,435 $ 299,253 Credit facility 63,000 88,000 Senior Notes 947,673 946,849 Mortgage notes payable 60,486 60,917 Acquired lease intangible liabilities, net 145,685 152,117 Accounts payable and accrued expenses 43,733 22,885 Tenants’ security deposits 7,894 7,701 Other liabilities 42,722 41,959 TOTAL LIABILITIES 1,610,628 1,619,681 EQUITY: Common stock, $0.0001 par value, 500,000,000 shares authorized 13 12 Additional paid-in capital 1,625,667 1,612,126 Accumulated dividends in excess of earnings (335,755) (315,984) Accumulated other comprehensive income 1,337 14 Total Retail Opportunity Investments Corp. stockholders’ equity 1,291,262 1,296,168 Non-controlling interests 76,669 88,430 TOTAL EQUITY 1,367,931 1,384,598 TOTAL LIABILITIES AND EQUITY $ 2,978,559 $ 3,004,279 The Company's Form 10-Q for the quarter ended June 30, 2023, and Form 10-K for the year ended December 31, 2022 should be read in conjunction with the above information.
Supplemental Disclosure Quarter Ended June 30, 2023 -5- Income Statements Three Months Ended Six Months Ended 06/30/23 06/30/22 06/30/23 06/30/22 REVENUES: Rental revenue $ 79,630 $ 77,218 $ 158,629 $ 152,255 Other income 2,410 1,007 2,707 2,443 TOTAL REVENUES 82,040 78,225 161,336 154,698 OPERATING EXPENSES: Property operating 13,581 12,672 27,783 24,763 Property taxes 8,924 8,416 17,768 16,936 Depreciation and amortization 25,126 24,350 50,230 48,112 General and administrative expenses 5,776 5,702 11,096 10,942 Other expense 482 488 654 667 TOTAL OPERATING EXPENSES 53,889 51,628 107,531 101,420 OPERATING INCOME 28,151 26,597 53,805 53,278 NON-OPERATING EXPENSES: Interest expense and other finance expenses (17,633) (14,283) (34,591) (28,498) NET INCOME 10,518 12,314 19,214 24,780 NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS (589) (807) (1,143) (1,632) NET INCOME ATTRIBUTABLE TO RETAIL OPPORTUNITY INVESTMENTS CORP. $ 9,929 $ 11,507 $ 18,071 $ 23,148 NET INCOME PER COMMON SHARE - BASIC AND DILUTED $ 0.08 $ 0.09 $ 0.14 $ 0.19 Weighted average common shares outstanding - basic 125,125 123,537 124,679 122,977 Weighted average common shares outstanding - diluted 133,044 132,581 133,069 132,042 RENTAL REVENUE Base rents $ 57,160 $ 54,629 $ 113,807 $ 108,262 Recoveries from tenants 19,868 18,641 40,032 37,165 Straight-line rent 979 915 1,326 1,366 Amortization of above- and below-market rent 2,609 3,254 5,473 6,311 Bad debt (986) (221) (2,009) (849) TOTAL RENTAL REVENUE $ 79,630 $ 77,218 $ 158,629 $ 152,255 (unaudited, in thousands, except per share amounts) The Company’s Form 10-Q for the quarters ended June 30, 2023 and June 30, 2022 should be read in conjunction with the above information.
Supplemental Disclosure Quarter Ended June 30, 2023 -6- Funds From Operations (unaudited, in thousands, except per share amounts) Three Months Ended Six Months Ended 06/30/23 06/30/22 06/30/23 06/30/22 Funds from Operations (FFO): Net income attributable to ROIC common stockholders $ 9,929 $ 11,507 $ 18,071 $ 23,148 Plus: Depreciation and amortization expense 25,126 24,350 50,230 48,112 FUNDS FROM OPERATIONS - BASIC 35,055 35,857 68,301 71,260 Net income attributable to non-controlling interests 589 807 1,143 1,632 FUNDS FROM OPERATIONS - DILUTED $ 35,644 $ 36,664 $ 69,444 $ 72,892 FUNDS FROM OPERATIONS PER SHARE - BASIC $ 0.28 $ 0.29 $ 0.55 $ 0.58 FUNDS FROM OPERATIONS PER SHARE - DILUTED $ 0.27 $ 0.28 $ 0.52 $ 0.55 Weighted average common shares outstanding - basic 125,125 123,537 124,679 122,977 Weighted average common shares outstanding - diluted 133,044 132,581 133,069 132,042 Common dividends per share $ 0.15 $ 0.13 $ 0.30 $ 0.26 FFO Payout Ratio 55.6 % 46.4 % 57.7 % 47.3 % Additional Disclosures: Non Cash Expense (Income) Straight line rent $ (979) $ (915) $ (1,326) $ (1,366) Above/below market rent amortization, net (2,609) (3,254) (5,473) (6,311) Non-cash interest income (1) (14) (15) (28) Deferred financing costs and mortgage premiums, net 1,094 670 1,836 1,213 Stock based compensation 3,430 3,028 6,357 5,600 Capital Expenditures Tenant improvements $ 6,548 $ 7,412 $ 11,422 $ 16,347 Leasing commissions 366 461 895 900 Building improvements 1,078 168 1,585 202 Reimbursable property improvements 878 778 1,262 1,365 Pad and other development 2,314 2,610 4,295 6,488 Value enhancing tenant improvements 12 1,906 109 4,356 The above does not purport to disclose all items required under GAAP.
Supplemental Disclosure Quarter Ended June 30, 2023 -7- Summary of Debt Outstanding (unaudited, dollars in thousands) Outstanding GAAP Maturity Percent of Balance Interest Rate Interest Rate Date Total Indebtedness Fixed Rate Debt Mortgage Debt: Fullerton Crossroads $ 26,000 4.73 % 3.82 % 4/6/2024 1.9 % Diamond Hills Plaza 34,389 3.55 % 3.61 % 10/1/2025 2.5 % Total Mortgage Debt 60,389 4.06 % 3.70 % 1.6 Years (WA) 4.4 % Unsecured Senior Notes: Senior Notes Due 2023 250,000 5.00 % 5.21 % 12/15/2023 18.2 % Senior Notes Due 2024 250,000 4.00 % 4.21 % 12/15/2024 18.2 % Senior Notes Due 2026 200,000 3.95 % 3.95 % 9/22/2026 14.6 % Senior Notes Due 2027 250,000 4.19 % 4.19 % 12/15/2027 18.2 % Total Unsecured Senior Notes 950,000 4.30 % 4.41 % 2.4 Years (WA) 69.2 % Term Loan: Interest rate swap 100,000 5.58 % 5.58 % 8/31/2024 7.3 % Interest rate swap 50,000 5.13 % 5.13 % 8/31/2024 3.6 % Total Term Loan 150,000 5.43 % 5.43 % 10.9 % Total Fixed Rate Debt 1,160,389 4.44 % 4.51 % 2.3 Years (WA) 84.5 % Variable Rate Debt Credit Facility 63,000 6.11 % 6.11 % 3/2/2027 4.6 % Term Loan 300,000 6.26 % 6.26 % 1/20/2025 10.9 % Interest rate swaps - Term Loan (150,000) Total Variable Rate Debt 213,000 6.22 % 6.22 % 1.9 Years (WA) 15.5 % TOTAL PRINCIPAL DEBT $ 1,373,389 4.71 % 4.77 % 2.2 Years (WA) 100.0 % Net unamortized premiums on mortgages 180 Net unamortized discounts on notes (849) Net unamortized deferred financing charges (3) (2,126) Total Debt $ 1,370,594 (1) (1) (2)
Supplemental Disclosure Quarter Ended June 30, 2023 -8- Summary of Debt Outstanding, continued (unaudited, dollars in thousands) Summary of Principal Maturities Mortgage Principal Mortgage Principal Senior Total Principal Percentage of Year Payments due at Maturity Credit Facility (2) Term Loan Unsecured Notes Payments Debt Maturing 2023 $ 344 $ — $ — $ — $ 250,000 $ 250,344 18.2 % 2024 708 26,000 — — 250,000 276,708 20.1 % 2025 550 32,787 — 300,000 — 333,337 24.3 % 2026 — — — — 200,000 200,000 14.6 % 2027 — — 63,000 — 250,000 313,000 22.8 % Thereafter — — — — — — — % $ 1,602 $ 58,787 $ 63,000 $ 300,000 $ 950,000 $ 1,373,389 100.0 % Summary of Unencumbered/Encumbered Properties Number of Percentage Properties GLA of GLA Unencumbered properties 91 10,203,295 96.6 % Encumbered properties 2 359,354 3.4 % 93 10,562,649 100.0 % Summary of Unsecured Debt/Secured Debt Percentage of Total Amount Principal Debt Unsecured principal debt $ 1,313,000 95.6 % Secured principal debt 60,389 4.4 % Total Principal Debt $ 1,373,389 100.0 %
Supplemental Disclosure Quarter Ended June 30, 2023 -9- Selected Financial Analysis (unaudited, in thousands, except per share amounts) 06/30/23 03/31/23 12/31/22 09/30/22 06/30/22 Debt coverage ratios, three months ending: Interest coverage ratio (EBITDA/interest expense) 3.0x 3.0x 3.2x 3.5x 3.6x Debt service coverage (EBITDA/(interest expense + scheduled principal payments)) 3.0x 3.0x 3.2x 3.5x 3.5x Net principal debt (Total principal debt less cash & equivalents)/Annualized EBITDA 6.5x 6.7x 6.6x 6.6x 6.7x Net principal debt (Total principal debt less cash & equivalents)/TTM EBITDA 6.5x 6.6x 6.8x 6.7x 6.9x Debt/book value ratios, at period end: Total principal debt/total book assets 46.1 % 45.9 % 46.6 % 45.4 % 45.7 % Total principal debt/undepreciated book value 38.2 % 38.3 % 39.0 % 38.3 % 38.6 % Secured principal debt/undepreciated book value 1.7 % 1.7 % 1.7 % 1.7 % 1.7 % Market capitalization calculations, at period end: Common shares outstanding 125,256 124,228 123,815 123,813 123,613 Operating partnership units (OP units) outstanding 7,437 8,447 8,447 8,447 8,647 Common stock price per share $ 13.51 $ 13.96 $ 15.03 $ 13.76 $ 15.78 Total equity market capitalization $ 1,792,684 $ 1,852,151 $ 1,987,894 $ 1,819,900 $ 2,087,066 Total principal debt 1,373,389 1,377,557 1,398,731 1,362,899 1,357,063 TOTAL MARKET CAPITALIZATION $ 3,166,073 $ 3,229,708 $ 3,386,625 $ 3,182,799 $ 3,444,129 Unsecured Senior Notes Financial Covenants: (4) Total debt to total assets not to exceed 60% 40.1 % 40.3 % 41.1 % 40.3 % 40.6 % Total secured debt to total assets not to exceed 40% 1.8 % 1.8 % 1.8 % 1.8 % 1.8 % Total unencumbered assets to total unsecured debt not to be less than 150% 251.2 % 250.3 % 245.0 % 250.5 % 248.3 % Consolidated income available for debt service to interest expense not to be less than 1.5:1 3.2x 3.3x 3.5x 3.5x 3.4x
Supplemental Disclosure Quarter Ended June 30, 2023 -10- Property Portfolio (dollars in thousands) Date Owned % Metro Area City State Acquired GLA Leased ABR (5) Major Tenants Los Angeles metro area Paramount Plaza Paramount CA 12/22/09 95,062 96.4 % $ 1,910 Grocery Outlet Supermarket, 99¢ Only Stores, Rite Aid Pharmacy Claremont Promenade Claremont CA 09/23/10 92,177 85.7 % 2,253 Super King Supermarket Gateway Village Chino Hills CA 12/17/10 96,959 91.6 % 2,965 Sprouts Market Seabridge Marketplace Oxnard CA 05/31/12 98,348 93.6 % 1,951 Safeway (Vons) Supermarket Glendora Shopping Center Glendora CA 08/01/12 106,535 100.0 % 1,554 Albertsons Supermarket Redondo Beach Plaza Redondo Beach CA 12/28/12 110,509 98.9 % 2,445 Safeway (Vons) Supermarket, Petco Diamond Bar Town Center Diamond Bar CA 02/01/13 100,342 100.0 % 2,501 Walmart Neighborhood Market, Crunch Fitness Diamond Hills Plaza Diamond Bar CA 04/22/13 139,455 99.2 % 4,205 H-Mart Supermarket, Planet Fitness Plaza de la Cañada La Cañada Flintridge CA 12/13/13 100,425 97.3 % 2,648 Gelson’s Supermarket, TJ Maxx, Rite Aid Pharmacy Fallbrook Shopping Center Los Angeles CA 06/13/14 755,164 99.1 % 13,928 Sprouts Market, Trader Joes, Kroger (Ralph’s) Supermarket *, TJ Maxx Moorpark Town Center Moorpark CA 12/03/14 133,547 92.8 % 2,092 Kroger (Ralph’s) Supermarket, CVS Pharmacy Ontario Plaza Ontario CA 01/06/15 150,149 97.2 % 2,435 El Super Supermarket, Rite Aid Pharmacy Park Oaks Shopping Center Thousand Oaks CA 01/06/15 110,092 97.2 % 2,791 Safeway (Vons) Supermarket, Dollar Tree Warner Plaza Woodland Hills CA 12/31/15 110,918 95.3 % 4,577 Sprouts Market, Kroger (Ralph’s) Supermarket *, Rite Aid Pharmacy * Magnolia Shopping Center Santa Barbara CA 03/10/16 116,089 99.0 % 2,480 Kroger (Ralph’s) Supermarket Casitas Plaza Shopping Center Carpinteria CA 03/10/16 105,118 100.0 % 1,995 Albertsons Supermarket, CVS Pharmacy Bouquet Center Santa Clarita CA 04/28/16 148,903 98.9 % 3,903 Safeway (Vons) Supermarket, CVS Pharmacy, Ross Dress For Less North Ranch Shopping Center Westlake Village CA 06/01/16 146,444 90.1 % 4,616 Kroger (Ralph’s) Supermarket, Trader Joe’s The Knolls Long Beach CA 10/03/16 52,021 96.2 % 1,385 Trader Joe’s, Pet Food Express The Terraces Rancho Palos Verdes CA 03/17/17 172,922 93.1 % 3,662 Trader Joe’s, Marshall’s, LA Fitness Los Angeles metro area total 2,941,179 96.7 % $ 66,296 Seattle metro area Meridian Valley Plaza Kent WA 02/01/10 51,597 98.1 % $ 879 Kroger (QFC) Supermarket The Market at Lake Stevens Lake Stevens WA 03/11/10 74,130 100.0 % 1,699 Albertsons (Haggen) Supermarket Canyon Park Shopping Center Bothell WA 07/29/11 123,592 100.0 % 2,676 PCC Community Markets, Rite Aid Pharmacy, Petco Hawks Prairie Shopping Center Lacey WA 09/09/11 157,529 99.4 % 2,015 Safeway Supermarket, Dollar Tree, Big Lots, Ace Hardware Gateway Shopping Center Marysville WA 02/16/12 104,298 100.0 % 2,713 WinCo Foods *, Rite Aid Pharmacy, Ross Dress For Less Canyon Crossing Puyallup WA 04/15/13 120,398 100.0 % 2,947 Safeway Supermarket Crossroads Shopping Center Bellevue WA 2010/2013 473,131 99.3 % 12,740 Kroger (QFC) Supermarket, Dick’s Sporting Goods, Edgeworks Climbing Bellevue Marketplace Bellevue WA 12/10/15 113,758 100.0 % 3,691 Asian Family Market Four Corner Square Maple Valley WA 12/21/15 119,531 100.0 % 2,735 Grocery Outlet Supermarket, Walgreens, Johnsons Home & Garden Bridle Trails Shopping Center Kirkland WA 10/17/16 110,257 100.0 % 2,494 Grocery Outlet Supermarket, Rite Aid (Bartell) Pharmacy, 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 99.0 % 3,063 WinCo Foods, LA Fitness, Dollar Tree, Petco North Lynnwood Shopping Center Lynnwood WA 10/19/17 63,606 100.0 % 1,143 Grocery Outlet Supermarket, Dollar Tree Stadium Center Tacoma WA 02/23/18 48,888 100.0 % 1,121 Thriftway Supermarket Summerwalk Village Lacey WA 12/13/19 61,545 100.0 % 989 Walmart Neighborhood Market South Point Plaza Everett WA 11/10/21 189,960 100.0 % 2,413 Grocery Outlet Supermarket, Rite Aid Pharmacy, Hobby Lobby, Pep Boys Olympia West Center Olympia WA 12/06/21 69,212 100.0 % 1,556 Trader Joe’s, Petco Olympia Square North Olympia WA 04/01/22 89,884 100.0 % 1,128 Albertsons Supermarket, Crunch Fitness Thomas Lake Shopping Center Mill Creek WA 08/19/22 111,311 100.0 % 2,056 Albertsons Supermarket, Rite Aid Pharmacy Ballinger Village Shoreline WA 08/19/22 112,228 100.0 % 2,511 Thriftway Supermarket, Rite Aid Pharmacy Seattle metro area total 2,393,240 99.7 % $ 51,259 * These retailers are not tenants of ROIC.
Supplemental Disclosure Quarter Ended June 30, 2023 -11- Property Portfolio, continued (dollars in thousands) Date Owned % Metro Area City State Acquired GLA Leased ABR (5) Major Tenants Portland metro area Happy Valley Town Center Happy Valley OR 07/14/10 138,397 100.0 % $ 4,125 New Seasons Market Wilsonville Old Town Square Wilsonville OR 2010/2012 49,980 100.0 % 1,989 Kroger (Fred Meyer) Supermarket * Cascade Summit Town Square West Linn OR 08/20/10 94,934 100.0 % 2,105 Safeway Supermarket, U.S. Postal Service Heritage Market Center Vancouver WA 09/23/10 107,468 100.0 % 1,907 Safeway Supermarket, Dollar Tree Division Crossing Portland OR 12/22/10 103,561 100.0 % 1,343 Rite Aid Pharmacy, Ross Dress For Less, Ace Hardware Halsey Crossing Gresham OR 12/22/10 99,428 100.0 % 1,511 24 Hour Fitness, Dollar Tree Hillsboro Market Center Hillsboro OR 11/23/11 156,021 100.0 % 2,746 Albertsons Supermarket, Dollar Tree, Ace Hardware Robinwood Shopping Center West Linn OR 08/23/13 70,831 100.0 % 1,182 Walmart Neighborhood Market Tigard Marketplace Tigard OR 02/18/14 136,889 100.0 % 2,275 H-Mart Supermarket, Bi-Mart Wilsonville Town Center Wilsonville OR 12/11/14 167,829 100.0 % 3,102 Safeway Supermarket, Rite Aid Pharmacy, Dollar Tree Tigard Promenade Tigard OR 07/28/15 88,043 100.0 % 1,608 Safeway Supermarket, Petco Sunnyside Village Square Happy Valley OR 07/28/15 92,278 100.0 % 1,690 Grocery Outlet Supermarket, Snap Fitness, Ace Hardware Johnson Creek Center Happy Valley OR 11/09/15 108,588 100.0 % 2,338 Trader Joe’s, Walgreens, Sportsman's Warehouse Rose City Center Portland OR 09/15/16 60,680 100.0 % 805 Safeway Supermarket Division Center Portland OR 04/05/17 118,122 99.0 % 2,122 Grocery Outlet Supermarket, Rite Aid Pharmacy, Petco Riverstone Marketplace Vancouver WA 10/11/17 95,774 100.0 % 2,411 Kroger (QFC) Supermarket King City Plaza King City OR 05/18/18 62,676 99.2 % 1,022 Grocery Outlet Supermarket, Anytime Fitness Powell Valley Junction Gresham OR 04/01/22 108,639 100.0 % 1,242 Walmart Neighborhood Market Portland metro area total 1,860,138 99.9 % $ 35,523 San Francisco metro area Pleasant Hill Marketplace Pleasant Hill CA 04/08/10 69,715 100.0 % $ 1,524 Total Wine and More, Buy Buy Baby, Basset Furniture Pinole Vista Shopping Center Pinole CA 01/06/11 141,093 95.8 % 3,085 Save Mart (Lucky California) Supermarket, Planet Fitness Country Club Gate Center Pacific Grove CA 07/08/11 109,331 97.1 % 2,368 Save Mart (Lucky California) Supermarket, Rite Aid Pharmacy Marlin Cove Shopping Center Foster City CA 05/04/12 73,943 95.9 % 2,545 99 Ranch Market The Village at Novato Novato CA 07/24/12 20,081 78.3 % 458 Trader Joe’s Santa Teresa Village San Jose CA 11/08/12 131,263 97.0 % 3,344 Grocery Outlet Supermarket, Dollar Tree, MedVet Silicon Valley Granada Shopping Center Livermore CA 06/27/13 71,525 100.0 % 1,548 Save Mart (Lucky California) Supermarket Country Club Village San Ramon CA 11/26/13 111,093 96.7 % 2,203 Walmart Neighborhood Market, CVS Pharmacy North Park Plaza San Jose CA 04/30/14 76,697 97.3 % 2,711 H-Mart Supermarket Winston Manor South San Francisco CA 01/07/15 49,852 94.0 % 1,772 Grocery Outlet Supermarket Jackson Square Hayward CA 07/01/15 114,220 100.0 % 2,473 Safeway Supermarket, CVS Pharmacy, 24 Hour Fitness Gateway Centre San Ramon CA 09/01/15 112,553 95.5 % 2,720 Save Mart (Lucky California) Supermarket, Walgreens Iron Horse Plaza Danville CA 12/04/15 61,915 100.0 % 2,388 Lunardi’s Market Monterey Center Monterey CA 07/14/16 25,626 100.0 % 1,106 Trader Joe’s Santa Rosa Southside Shopping Center Santa Rosa CA 03/24/17 88,606 100.0 % 1,850 REI, Cost Plus World Market, DSW Monta Loma Plaza Mountain View CA 09/19/17 49,694 100.0 % 1,624 Safeway Supermarket Canyon Creek Plaza San Jose CA 09/01/21 64,662 100.0 % 2,217 New Seasons Market Village Oaks Shopping Center Martinez CA 05/17/22 79,875 97.9 % 1,482 Save Mart (Lucky California) Supermarket, Rite Aid Pharmacy * San Francisco metro area total 1,451,744 97.5 % $ 37,418 * These retailers are not tenants of ROIC.
Supplemental Disclosure Quarter Ended June 30, 2023 -12- Property Portfolio, continued (dollars in thousands) Date Owned % Metro Area City State Acquired GLA Leased ABR (5) Major Tenants Orange County metro area Santa Ana Downtown Plaza Santa Ana CA 01/26/10 105,536 100.0 % $ 2,490 Kroger (Food 4 Less) Supermarket, Marshall’s Sycamore Creek Corona CA 09/30/10 74,198 98.2 % 1,926 Safeway (Vons) Supermarket, CVS Pharmacy * Desert Springs Marketplace Palm Desert CA 02/17/11 113,718 97.0 % 2,873 Kroger (Ralph’s) Supermarket, Rite Aid Pharmacy Cypress Center West Cypress CA 12/04/12 112,080 98.4 % 2,316 Kroger (Ralph’s) Supermarket, Rite Aid Pharmacy Harbor Place Center Garden Grove CA 12/28/12 122,636 94.5 % 1,789 AA Supermarket, Ross Dress For Less, AutoZone Mega Hub 5 Points Plaza Huntington Beach CA 09/27/13 161,170 99.1 % 4,880 Trader Joe’s Peninsula Marketplace Huntington Beach CA 10/15/13 95,416 100.0 % 2,559 Kroger (Ralph’s) Supermarket, Planet Fitness Fullerton Crossroads Fullerton CA 10/11/17 219,899 100.0 % 3,699 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 98.2 % 3,109 Smart & Final Extra Supermarket Orange Country metro area total 1,093,694 98.5 % $ 25,641 San Diego metro area Marketplace Del Rio Oceanside CA 01/03/11 183,787 95.7 % $ 3,644 Stater Brothers Supermarket, Walgreens, Planet Fitness Renaissance Towne Centre San Diego CA 08/03/11 52,866 99.1 % 2,760 CVS Pharmacy Bay Plaza San Diego CA 10/05/12 73,324 93.6 % 2,118 Seafood City Supermarket Bernardo Heights Plaza Rancho Bernardo CA 02/06/13 37,729 100.0 % 986 Sprouts Market Hawthorne Crossings San Diego CA 06/27/13 141,288 100.0 % 3,575 Mitsuwa Supermarket, Ross Dress For Less, Staples Creekside Plaza Poway CA 02/28/14 133,914 99.2 % 3,426 Stater Brothers Supermarket, AMC Theatres Palomar Village Temecula CA 10/12/21 125,130 98.4 % 2,146 Albertsons Supermarket, CVS Pharmacy San Diego metro area total 748,038 97.8 % $ 18,655 Number of Owned % Metro Area Summary Centers GLA Leased ABR (5) Los Angeles 20 2,941,179 96.7 % $ 66,296 Seattle 20 2,393,240 99.7 % 51,259 Portland 18 1,860,138 99.9 % 35,523 San Francisco 18 1,451,744 97.5 % 37,418 Orange County 9 1,093,694 98.5 % 25,641 San Diego 7 748,038 97.8 % 18,655 TOTAL SHOPPING CENTER PORTFOLIO 92 10,488,033 98.3 % $ 234,792 * These retailers are not tenants of ROIC. Note: Property Portfolio excludes one shopping center that is currently planned for redevelopment.
Supplemental Disclosure Quarter Ended June 30, 2023 -13- Three Months Ended Six Months Ended 06/30/23 06/30/22 $ Change % Change 06/30/23 06/30/22 $ Change % Change Number of shopping centers included in same-center analysis (6) 89 89 87 87 Same-center leased rate 98.3 % 97.7 % 0.6 % 98.3 % 97.7 % 0.6 % REVENUES: Base rents $ 55,206 $ 53,459 $ 1,747 3.3 % $ 108,530 $ 105,560 $ 2,970 2.8 % Percentage rent 269 157 112 71.3 % 634 356 278 78.1 % Recoveries from tenants 19,464 18,237 1,227 6.7 % 38,580 36,155 2,425 6.7 % Other property income 1,288 827 461 55.7 % 1,402 1,873 (471) (25.1) % Bad debt (864) (133) (731) 549.6 % (1,674) (718) (956) 133.1 % TOTAL REVENUES 75,363 72,547 2,816 3.9 % 147,472 143,226 4,246 3.0 % OPERATING EXPENSES: Property operating expenses 13,524 12,785 739 5.8 % 27,128 24,737 2,391 9.7 % Property taxes 8,681 8,276 405 4.9 % 17,033 16,540 493 3.0 % TOTAL OPERATING EXPENSES 22,205 21,061 1,144 5.4 % 44,161 41,277 2,884 7.0 % SAME-CENTER CASH NET OPERATING INCOME $ 53,158 $ 51,486 $ 1,672 3.2 % $ 103,311 $ 101,949 $ 1,362 1.3 % SAME-CENTER CASH NET OPERATING INCOME RECONCILIATION GAAP Operating Income $ 28,151 $ 26,597 $ 53,805 $ 53,278 Depreciation and amortization 25,126 24,350 50,230 48,112 General and administrative expenses 5,776 5,702 11,096 10,942 Other expense 482 488 654 667 Straight-line rent (979) (915) (1,326) (1,366) Amortization of above- and below-market rent (2,609) (3,254) (5,473) (6,311) Property revenues and other expenses (7) (634) (32) (629) (129) TOTAL COMPANY CASH NET OPERATING INCOME 55,313 52,936 108,357 105,193 Non Same-Center Cash NOI (2,155) (1,450) (5,046) (3,244) SAME-CENTER CASH NET OPERATING INCOME $ 53,158 $ 51,486 $ 103,311 $ 101,949 Same-Center Cash Net Operating Income Analysis (unaudited, dollars in thousands) .
Supplemental Disclosure Quarter Ended June 30, 2023 -14- Top Ten Tenants (dollars in thousands) Percent Number of Leased of Total Percent of Tenant Leases GLA Leased GLA ABR (5) Total ABR 1 Albertsons / Safeway Supermarkets 21 1,052,996 10.2 % $ 13,312 5.7 % 2 Kroger Supermarkets 11 488,735 4.8 % 7,690 3.3 % 3 Rite Aid Pharmacy 15 280,038 2.7 % 3,993 1.7 % 4 Save Mart Supermarkets 5 234,713 2.3 % 3,495 1.5 % 5 Trader Joe’s 9 113,097 1.1 % 3,403 1.4 % 6 Grocery Outlet Supermarkets 10 225,004 2.2 % 3,119 1.3 % 7 JP Morgan Chase 21 86,848 0.8 % 3,108 1.3 % 8 H-Mart Supermarkets 3 147,040 1.4 % 2,684 1.1 % 9 Sprouts Markets 4 145,777 1.4 % 2,676 1.1 % 10 Ross Dress For Less / dd’s Discounts 6 166,703 1.6 % 2,552 1.1 % Top 10 Tenants Total 105 2,940,951 28.5 % $ 46,032 19.5 % Other Tenants 1,939 7,367,030 71.5 % 188,760 80.5 % Total Portfolio 2,044 10,307,981 100.0 % $ 234,792 100.0 %
Supplemental Disclosure Quarter Ended June 30, 2023 -15- Lease Expiration Schedule (dollars in thousands) Anchor Tenants (8) Number of Leased Percent of Total Percent of ABR Leases Expiring (9) GLA Total Leased GLA ABR (5) Total ABR Per Sq. Ft. 2023 2 39,994 0.4 % $ 397 0.2 % $ 9.93 2024 12 456,664 4.4 % 6,962 3.0 % 15.25 2025 21 701,150 6.8 % 9,709 4.1 % 13.85 2026 24 784,371 7.6 % 10,260 4.4 % 13.08 2027 14 460,659 4.5 % 5,364 2.3 % 11.64 2028 29 957,099 9.3 % 17,120 7.2 % 17.89 2029 16 552,186 5.4 % 9,192 3.9 % 16.65 2030 11 382,128 3.7 % 6,485 2.8 % 16.97 2031 11 357,669 3.5 % 5,430 2.3 % 15.18 2032 7 236,380 2.3 % 3,463 1.5 % 14.65 2033+ 23 848,530 8.2 % 13,249 5.6 % 15.61 170 5,776,830 56.1 % $ 87,631 37.3 % $ 15.17 Non-Anchor Tenants Number of Leased Percent of Total Percent of ABR Leases Expiring (9) GLA Total Leased GLA ABR Total ABR Per Sq. Ft. 2023 110 172,402 1.7 % $ 6,105 2.6 % $ 35.41 2024 277 559,419 5.4 % 18,632 7.9 % 33.31 2025 283 611,351 5.9 % 19,488 8.3 % 31.88 2026 297 674,542 6.5 % 21,558 9.3 % 31.96 2027 290 688,133 6.7 % 22,411 9.6 % 32.57 2028 243 596,091 5.8 % 19,992 8.5 % 33.54 2029 86 265,025 2.6 % 7,849 3.3 % 29.62 2030 55 172,073 1.7 % 5,834 2.5 % 33.90 2031 49 166,224 1.6 % 5,274 2.2 % 31.73 2032 75 249,804 2.4 % 8,015 3.4 % 32.09 2033+ 109 376,087 3.6 % 12,003 5.1 % 31.91 1,874 4,531,151 43.9 % $ 147,161 62.7 % $ 32.48 All Tenants Number of Leased Percent of Total Percent of ABR Leases Expiring (9) GLA Total Leased GLA ABR Total ABR Per Sq. Ft. 2023 112 212,396 2.1 % $ 6,502 2.8 % $ 30.61 2024 289 1,016,083 9.8 % 25,594 10.9 % 25.19 2025 304 1,312,501 12.7 % 29,197 12.4 % 22.25 2026 321 1,458,913 14.1 % 31,818 13.7 % 21.81 2027 304 1,148,792 11.2 % 27,775 11.9 % 24.18 2028 272 1,553,190 15.1 % 37,112 15.7 % 23.89 2029 102 817,211 8.0 % 17,041 7.2 % 20.85 2030 66 554,201 5.4 % 12,319 5.3 % 22.23 2031 60 523,893 5.1 % 10,704 4.5 % 20.43 2032 82 486,184 4.7 % 11,478 4.9 % 23.61 2033+ 132 1,224,617 11.8 % 25,252 10.7 % 20.62 2,044 10,307,981 100.0 % $ 234,792 100.0 % $ 22.78
Supplemental Disclosure Quarter Ended June 30, 2023 -16- Leasing Summary For the Three Months Ended June 30, 2023 For the Six Months Ended June 30, 2023 New Leases Non-Anchor Anchor (8) Total Non-Anchor Anchor (8) Total Number of Leases 44 1 45 78 1 79 Gross Leasable Area (sq. ft.) 71,130 17,700 88,830 118,483 17,700 136,183 Initial Base Rent ($/sq. ft.) (10) $ 39.36 $ 5.42 $ 32.60 $ 37.43 $ 5.42 $ 33.27 Tenant Improvements ($/sq. ft.) $ 0.20 $ — $ 0.16 $ 1.05 $ — $ 0.91 Leasing Commissions ($/sq. ft.) $ 5.91 $ — $ 4.73 $ 4.87 $ — $ 4.23 Weighted Average Lease Term (Yrs.) (9) 8.9 0.3 7.2 8.0 0.3 7.0 Renewals Non-Anchor Anchor Total Non-Anchor Anchor Total Number of Leases 78 5 83 139 17 156 Gross Leasable Area (sq. ft.) 178,405 162,452 340,857 306,270 546,391 852,661 Initial Base Rent ($/sq. ft.) (10) $ 33.79 $ 19.06 $ 26.77 $ 33.66 $ 19.81 $ 24.79 Tenant Improvements ($/sq. ft.) $ 0.09 $ — $ 0.05 $ 0.15 $ — $ 0.05 Leasing Commissions ($/sq. ft.) $ — $ — $ — $ 0.01 $ — $ — Weighted Average Lease Term (Yrs.) (9) 5.1 4.7 4.9 4.9 5.0 5.0 Total Non-Anchor Anchor Total Non-Anchor Anchor Total Number of Leases 122 6 128 217 18 235 Gross Leasable Area (sq. ft.) 249,535 180,152 429,687 424,753 564,091 988,844 Initial Base Rent ($/sq. ft.) (10) $ 35.38 $ 17.72 $ 27.98 $ 34.71 $ 19.36 $ 25.95 Tenant Improvements ($/sq. ft.) $ 0.12 $ — $ 0.07 $ 0.40 $ — $ 0.17 Leasing Commissions ($/sq. ft.) $ 1.68 $ — $ 0.98 $ 1.36 $ — $ 0.59 Weighted Average Lease Term (Yrs.) (9) 6.2 4.2 5.4 5.8 4.8 5.2
Supplemental Disclosure Quarter Ended June 30, 2023 -17- Same-Space Comparative Leasing Summary For the Three Months Ended June 30, 2023 For the Six Months Ended June 30, 2023 New Leases Non-Anchor Anchor (8) Total Non-Anchor Anchor (8) Total Comparative # of Leases 19 1 20 40 1 41 Comparative GLA (sq. ft.) (11) 30,993 17,700 48,693 67,528 17,700 85,228 Prior Base Rent ($/sq. ft.) (12) $ 35.11 $ 2.39 $ 23.22 $ 31.41 $ 2.39 $ 25.39 Initial Base Rent ($/sq. ft.) (10) $ 39.50 $ 5.42 $ 27.11 $ 35.16 $ 5.42 $ 28.98 Percentage Change in Base Rents 12.5 % 126.8 % 16.8 % 11.9 % 126.8 % 14.2 % Tenant Improvements ($/sq. ft.) $ 0.47 $ — $ 0.30 $ 1.84 $ — $ 1.46 Leasing Commissions ($/sq. ft.) $ 5.55 $ — $ 3.53 $ 4.31 $ — $ 3.41 Weighted Average Lease Term (Yrs.) (9) 10.0 0.3 6.5 8.1 0.3 6.5 Renewals Non-Anchor Anchor Total Non-Anchor Anchor Total Comparative # of Leases 78 5 83 139 17 156 Comparative GLA (sq. ft.) (11) 178,405 162,452 340,857 306,270 546,391 852,661 Prior Base Rent ($/sq. ft.) (12) $ 31.54 $ 18.06 $ 25.11 $ 31.55 $ 18.68 $ 23.30 Initial Base Rent ($/sq. ft.) (10) $ 33.79 $ 19.06 $ 26.77 $ 33.66 $ 19.81 $ 24.79 Percentage Change in Base Rents 7.1 % 5.6 % 6.6 % 6.7 % 6.1 % 6.4 % Tenant Improvements ($/sq. ft.) $ 0.09 $ — $ 0.05 $ 0.15 $ — $ 0.05 Leasing Commissions ($/sq. ft.) $ — $ — $ — $ 0.01 $ — $ — Weighted Average Lease Term (Yrs.) (9) 5.1 4.7 4.9 4.9 5.0 5.0 Total Non-Anchor Anchor Total Non-Anchor Anchor Total Comparative # of Leases 97 6 103 179 18 197 Comparative GLA (sq. ft.) (11) 209,398 180,152 389,550 373,798 564,091 937,889 Prior Base Rent ($/sq. ft.) (12) $ 32.07 $ 16.52 $ 24.88 $ 31.53 $ 18.16 $ 23.49 Initial Base Rent ($/sq. ft.) (10) $ 34.63 $ 17.72 $ 26.81 $ 33.93 $ 19.36 $ 25.17 Percentage Change in Base Rents 8.0 % 7.3 % 7.8 % 7.6 % 6.6 % 7.1 % Tenant Improvements ($/sq. ft.) $ 0.14 $ — $ 0.08 $ 0.45 $ — $ 0.18 Leasing Commissions ($/sq. ft.) $ 0.82 $ — $ 0.44 $ 0.79 $ — $ 0.31 Weighted Average Lease Term (Yrs.) (9) 5.8 4.2 5.1 5.5 4.8 5.1 .
Supplemental Disclosure Quarter Ended June 30, 2023 -18- Leased vs. Billed Summary (dollars in thousands) 06/30/23 03/31/23 12/31/22 09/30/22 % leased at beginning of quarter 98.3 % 98.1 % 97.8 % 97.6 % % billed at beginning of quarter 95.1 % 94.2 % 93.3 % 93.7 % ABR of new leases signed/not yet commenced - at beginning of quarter (5) $ 6,485 $ 7,625 $ 9,115 $ 7,921 less: ABR of new leases commenced during quarter (1,920) (2,142) (3,385) (1,377) less: ABR of new leases related to disposed properties — — — (152) plus: ABR of new leases signed during quarter 2,648 1,002 1,895 2,723 ABR of new leases signed/not yet commenced - at end of quarter $ 7,213 $ 6,485 $ 7,625 $ 9,115 % leased at end of quarter 98.3 % 98.3 % 98.1 % 97.8 % % billed at end of quarter 95.7 % 95.1 % 94.2 % 93.3 % ABR of new leases commenced during quarter - amount billed $ 182 $ 274 $ 430 $ 231
Supplemental Disclosure Quarter Ended June 30, 2023 -19- Footnotes 1. Weighted Average (WA) excludes interest rate swap maturity dates. 2. Does not include extension options available to ROIC. 3. Net unamortized deferred financing charges for the Term Loan, Senior Notes and Mortgages. 4. Calculated in accordance with GAAP pursuant to underlying bond indentures. 5. ABR is equal to annualized base rent on a cash basis for all leases in-place at period end. 6. Same centers are those shopping centers which were owned for the entirety of the current and comparable prior year period, except for one shopping center that is currently planned for redevelopment and is no longer being managed as a retail asset. 7. Includes anchor lease termination fees net of contractual amounts, if any, expense and recovery adjustments related to prior periods and other miscellaneous adjustments. 8. Anchor tenants are leases equal to or greater than 15,000 square feet. 9. Does not assume exercise of renewal options. 10. Initial Base Rent is on a cash basis and is the initial contractual monthly rent, annualized. 11. Comparative GLA includes spaces that were vacant for less than 12 months, excludes spaces that were not leased at the time of acquisition. 12. 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.
Supplemental Disclosure Quarter Ended June 30, 2023 -20- Investor Information Retail Opportunity Investments Corp. Investor Relations: Transfer Agent: www.roireit.net Nicolette O'Leary Syed Hussaini NASDAQ: ROIC noleary@roireit.net Computershare 11250 El Camino Real, Suite 200 858.255.4913 syed.hussaini@computershare.com San Diego, CA 92130 Equity Research Coverage Bank of America Merrill Lynch Craig Schmidt 646.855.3640 Bank of Montreal John P. Kim 212.885.4115 Juan Sanabria 312.845.4074 Baird Wes Golladay 216.737.7510 BTIG Michael Gorman 212.738.6138 Citi Nicholas Joseph 212.816.1909 Craig Mailman 212.816.4471 Green Street Paulina Rojas Schmidt 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 RJ Milligan 908.447.4493 Wells Fargo Securities Dori Kesten 617.603.4233 Cesar Bracho 515.398.6000 Fixed Income Research Coverage J.P. Morgan Mark Streeter 212.834.5086 Ratings Agency Coverage Fitch Ratings, Inc. Christopher Wimmer 646.582.3412 Moody’s Investors Service Bill Fahy 212.553.1687 S&P Global Ratings Michael Souers 212.438.2508