UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
–––––––––––––
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 17, 2011
RETAIL OPPORTUNITY INVESTMENTS CORP.
(Exact Name of Registrant as Specified in Its Charter)
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Delaware
(State or other jurisdiction
of incorporation)
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001-33749
(Commission File Number)
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26-0500600
(I.R.S. Employer
Identification No.)
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3 Manhattanville Road, Purchase, NY
(Address of Principal Executive Offices)
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10577
(Zip Code)
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Registrant's telephone number, including area code: (914) 272-8080
Not applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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This Current Report on Form 8-K/A (this “Amendment”) is being filed to include disclosures that amend and supplement those disclosures made by Retail Opportunity Investments Corp. (the "Company"), in its Current Report on Form 8-K (the “Original Form 8-K”) filed with the Securities and Exchange Commission on February 23, 2011, as set forth below. The financial statements and pro forma financial information described in Item 9.01 below should be read in conjunction with the Original Form 8-K and this Amendment.
Item 2.01 Completion of Acquisition or Disposition of Assets.
On February 17, 2011, a subsidiary of the Company completed the acquisition of three shopping centers, Desert Springs Marketplace, Mills Shopping Center and Nimbus Winery Shopping Center, located in Palm Desert, CA, Rancho Cordova, CA and Rancho Cordova, CA, respectively (collectively, the “Properties”), from Lakha Properties-Sacramento, LLC, Lakha Properties-Sacramento II, LLC and Lakha Properties-Palm Desert, LLC (collectively, the “Sellers”), unaffiliated third parties. The Company obtained ownership of the Properties pursuant to a Conveyance in Lieu of Foreclosure Agreement, dated as of January 28, 2011, by and among the Sellers, Lakha Investments Co, LLC (together with the Sellers, “Borrowers”) and Amin S. Lakha (“Guarantor”), documenting defaults of four loans secured by the Properties (“Loans”) and the voluntary transfer through grant deeds in lieu of foreclosure of the Properties. The consideration for the title to the Lakha Properties included additional payments of approximately $2.3 million of costs. The aggregate balance of the Loans on the Company’s consolidated balance sheet at December 31, 2010 was approximately $50.0 million.
In connection with the acquisitions of the Properties, the Company filed the Original Form 8-K describing the acquisitions. The Company is now filing this Amendment to include the financial statements and pro forma financial information required by Item 9.01 of Form 8-K, to amend and supplement the disclosures in the Original Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
Desert Springs Marketplace
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·
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Independent Auditors’ Report
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·
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Statement of Revenues and Certain Expenses for the Year Ended December 31, 2010
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·
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Notes to Statement of Revenues and Certain Expenses for the Year Ended December 31, 2010
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(b) Financial Statements of Business Acquired.
Mills Shopping Center
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·
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Independent Auditors’ Report
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·
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Statement of Revenues and Certain Expenses for the Year Ended December 31, 2010
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·
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Notes to Statement of Revenues and Certain Expenses for the Year Ended December 31, 2010
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(c) Financial Statements of Business Acquired.
Nimbus Winery Shopping Center
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·
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Independent Auditors’ Report
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·
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Statement of Revenues and Certain Expenses for the Year Ended December 31, 2010
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·
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Notes to Statement of Revenues and Certain Expenses for the Year Ended December 31, 2010
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(d) Pro Forma Financial Information.
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Pro Forma Consolidated Balance Sheet as of December 31, 2010 (Unaudited)
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·
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Pro Forma Consolidated Statement of Operations for the Year Ended December 31, 2010 (Unaudited)
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·
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Notes to Pro Forma Consolidated Financial Statements (Unaudited)
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(e) Exhibits.
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Exhibit No.
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Description
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23.1
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Consent of Independent Auditor.
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99.1
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Financial statements and pro forma financial information referenced above under paragraphs (a), (b), (c) and (d) of this Item 9.01.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| RETAIL OPPORTUNITY INVESTMENTS CORP. | |||
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Dated: April 15, 2011
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By: |
/s/ John B. Roche
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John B. Roche
Chief Financial Officer
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EXHIBIT INDEX
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Exhibit No.
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Description
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23.1
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Consent of Independent Auditor.
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99.1
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Financial Statements of Properties Acquired and Pro Forma Financial Information.
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Exhibit 23.1
CONSENT OF INDEPENDENT AUDITOR
We consent to the incorporation by reference in the Registration Statement (No. 333-163866) on Form S-3 and the Registration Statement on Form S-8 (No. 333-170692) of Retail Opportunity Investments Corp. of our report dated April 15, 2011, relating to our audit of the Statements of Revenues and Certain Expenses of Desert Springs Marketplace, Mills Shopping Center and Nimbus Winery Shopping Center, for the year ended December 31, 2010, included in this Current Report on Form 8-K/A.
/s/ PKF LLP
New York, New York
April 15, 2011
Exhibit 99.1
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Page
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Desert Springs Marketplace
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Mills Shopping Center
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Nimbus Winery Shopping Center
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INDEPENDENT AUDITORS’ REPORT
To the Board of Directors and Stockholders
We have audited the accompanying Statement of Revenues and Certain Expenses of the property known as Desert Springs Marketplace, located in Palm Desert, California (the “Property”) for the year ended December 31, 2010 (the “financial statement”). The financial statement is the responsibility of the Property's management. Our responsibility is to express an opinion on the financial statement based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes consideration of internal controls over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Property's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
The accompanying financial statement was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission as described in note 2 and is not intended to be a complete presentation of the Property's revenues and expenses.
In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenues and certain expenses of the Property for the year ended December 31, 2010, in conformity with accounting principles generally accepted in the United States of America.
/s/ PKF LLP
New York, New York
April 15, 2011
F-1
DESERT SPRINGS MARKETPLACE
STATEMENT OF REVENUES AND CERTAIN EXPENSES
(Dollar amounts in thousands)
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For the Year
Ended
December 31,
2010
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||||
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Revenues
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||||
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Rental income (note 3)
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$ | 2,386 | ||
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Other income
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3 | |||
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Total revenues
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2,389 | |||
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Certain Expenses
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||||
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Utilities
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49 | |||
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Cleaning services
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51 | |||
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Repairs, maintenance, and supplies
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131 | |||
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Real estate taxes
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163 | |||
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Insurance
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12 | |||
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General & administrative
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8 | |||
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Bad debt expenses
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15 | |||
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Total expenses
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429 | |||
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Excess of revenues over certain expenses
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$ | 1,960 | ||
See accompanying notes to statement of revenues and certain expenses.
F-2
DESERT SPRINGS MARKETPLACE
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2010
1.Business and Organization
Desert Springs Marketplace (the “Property”) is a shopping center located in Palm Desert, California. The Property was owned by Lakha Properties-Palm Desert, LLC. The Property, which has one anchor tenant, has an aggregate gross rentable area of approximately 105,000 square feet. The anchor tenant occupies approximately 47,000 square feet.
On February 17, 2011, the Property was acquired by ROIC CA Notes II, LLC, a wholly-owned subsidiary of Retail Opportunity Investments Corp. (the “Company”).
2.Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation
The Statement of Revenues and Certain Expenses (the “financial statement”) has been prepared for the purpose of complying with the provisions of Rule 3-14 of Regulation S-X promulgated by the Securities and Exchange Commission (the “SEC”), which requires certain information with respect to real estate operations to be included with certain filings with the SEC. The financial statement includes the historical revenues and certain expenses of the Property, exclusive of rental income related to parcels not acquired by the Company, interest income, depreciation and amortization, rental income relating to the allocation of purchase price of the Property to above/below market leases and management and advisory fees, which may not be comparable to the corresponding amounts reflected in the future operations of the Property.
Revenue Recognition
The Property’s operations consist of rental income earned from tenants under leasing arrangements which generally provide for minimum rents and tenant reimbursements. All leases are classified as operating leases. Minimum rents are recognized by amortizing the aggregate lease payments on a straight-line basis over the terms of the lease (including rent holidays). Tenant reimbursements for real estate taxes, common area maintenance and other recoverable costs are recognized as rental income in the period that the expenses are incurred.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Property’s management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Accounts Receivable
Bad debts are recorded under the specific identification method, whereby uncollectible receivables are reserved for when identified.
Repairs and Maintenance
Repairs and maintenance costs are expensed as incurred, while significant improvements, renovations and replacements are capitalized.
3.Leases
F-3
The Property is subject to non-cancelable lease agreements, subject to various escalation clauses, with tenants for retail space. As of December 31, 2010, the future minimum rentals on non-cancelable operating leases expiring in various years are as follows:
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Year ending December 31
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Amounts
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2011
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$ | 2,099,130 | ||
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2012
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2,051,464 | |||
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2013
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1,968,406 | |||
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2014
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1,065,240 | |||
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2015
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689,767 | |||
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Thereafter
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888,092 | |||
| $ | 8,762,099 | |||
The tenant leases provide for annual rentals that include the tenants’ proportionate share of real estate taxes and certain property operating expenses. The Property’s tenant leases generally include tenant renewal options that can extend the lease terms.
Rental income on the financial statement includes the effect of amortizing the aggregate minimum lease payments on a straight-line basis over the entire terms of the leases, which amounted to a decrease of $222,500 in rental income for the year ended December 31, 2010.
4.Commitments and Contingencies
None.
F-4
INDEPENDENT AUDITORS’ REPORT
To the Board of Directors and Stockholders
We have audited the accompanying Statement of Revenues and Certain Expenses of the property known as Mills Shopping Center, located in Rancho Cordova, California (the “Property”) for the year ended December 31, 2010 (the “financial statement”). The financial statement is the responsibility of the Property's management. Our responsibility is to express an opinion on the financial statement based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes consideration of internal controls over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Property's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
The accompanying financial statement was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission as described in note 2 and is not intended to be a complete presentation of the Property's revenues and expenses.
In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenues and certain expenses of the Property for the year ended December 31, 2010, in conformity with accounting principles generally accepted in the United States of America.
/s/ PKF LLP
New York, New York
April 15, 2011
F-5
MILLS SHOPPING CENTER
STATEMENT OF REVENUES AND CERTAIN EXPENSES
(Dollar amounts in thousands)
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For the Year
Ended
December 31,
2010
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Revenues
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||||
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Rental income (note 3)
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$ | 2,029 | ||
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Other income
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15 | |||
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Total revenues
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2,044 | |||
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Certain Expenses
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||||
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Utilities
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88 | |||
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Cleaning services
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23 | |||
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Repairs, maintenance, and supplies
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333 | |||
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Real estate taxes
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275 | |||
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Insurance
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22 | |||
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General & administrative
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8 | |||
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Total expenses
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749 | |||
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Excess of revenues over certain expenses
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$ | 1,295 | ||
See accompanying notes to statement of revenues and certain expenses.
F-6
MILLS SHOPPING CENTER
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2010
1.Business and Organization
Mills Shopping Center (the “Property”) is a shopping center located in Rancho Cordova, California. The Property was owned by Lakha Properties-Sacramento, LLC. The Property, which has one anchor tenant, has an aggregate gross rentable area of approximately 253,000 square feet. The anchor tenant occupies approximately 55,000 square feet.
On February 17, 2011, the Property was acquired by ROIC CA Notes II, LLC, a wholly-owned subsidiary of Retail Opportunity Investments Corp. (the “Company”).
2.Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation
The Statement of Revenues and Certain Expenses (the “financial statement”) has been prepared for the purpose of complying with the provisions of Rule 3-14 of Regulation S-X promulgated by the Securities and Exchange Commission (the “SEC”), which requires certain information with respect to real estate operations to be included with certain filings with the SEC. The financial statement includes the historical revenues and certain expenses of the Property, exclusive of rental income related to parcels not acquired by the Company, interest income, depreciation and amortization, rental income relating to the allocation of purchase price of the Property to above/below market leases and management and advisory fees, which may not be comparable to the corresponding amounts reflected in the future operations of the Property.
Revenue Recognition
The Property’s operations consist of rental income earned from tenants under leasing arrangements which generally provide for minimum rents and tenant reimbursements. All leases are classified as operating leases. Minimum rents are recognized by amortizing the aggregate lease payments on a straight-line basis over the terms of the lease (including rent holidays). Tenant reimbursements for real estate taxes, common area maintenance and other recoverable costs are recognized as rental income in the period that the expenses are incurred.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Property’s management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Accounts Receivable
Bad debts are recorded under the specific identification method, whereby uncollectible receivables are reserved for when identified.
Repairs and Maintenance
Repairs and maintenance costs are expensed as incurred, while significant improvements, renovations and replacements are capitalized.
3.Leases
F-7
The Property is subject to non-cancelable lease agreements, subject to various escalation clauses, with tenants for retail space. As of December 31, 2010, the future minimum rentals on non-cancelable operating leases expiring in various years are as follows:
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Year ending December 31
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Amounts
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|||
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2011
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$ | 1,618,229 | ||
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2012
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1,215,014 | |||
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2013
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961,783 | |||
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2014
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787,036 | |||
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2015
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678,197 | |||
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Thereafter
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1,148,332 | |||
| $ | 6,408,591 | |||
The tenant leases provide for annual rentals that include the tenants’ proportionate share of real estate taxes and certain property operating expenses. The Property’s tenant leases generally include tenant renewal options that can extend the lease terms.
Rental income on the financial statement includes the effect of amortizing the aggregate minimum lease payments on a straight-line basis over the entire terms of the leases, which amounted to a decrease of $137,200 in rental income for the year ended December 31, 2010.
4.Commitments and Contingencies
None.
F-8
INDEPENDENT AUDITORS’ REPORT
To the Board of Directors and Stockholders
We have audited the accompanying Statement of Revenues and Certain Expenses of the property known as Nimbus Winery Shopping Center, located in Rancho Cordova, California (the “Property”) for the year ended December 31, 2010 (the “financial statement”). The financial statement is the responsibility of the Property's management. Our responsibility is to express an opinion on the financial statement based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes consideration of internal controls over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Property's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
The accompanying financial statement was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission as described in note 2 and is not intended to be a complete presentation of the Property's revenues and expenses.
In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenues and certain expenses of the Property for the year ended December 31, 2010, in conformity with accounting principles generally accepted in the United States of America.
/s/ PKF LLP
New York, New York
April 15, 2011
F-9
NIMBUS WINERY SHOPPING CENTER
STATEMENT OF REVENUES AND CERTAIN EXPENSES
(Dollar amounts in thousands)
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For the Year
Ended
December 31,
2010
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||||
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Revenues
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||||
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Rental income (note 3)
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$ | 981 | ||
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Other income
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6 | |||
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Total revenues
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987 | |||
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Certain Expenses
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||||
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Utilities
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75 | |||
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Cleaning services
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15 | |||
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Repairs, maintenance, and supplies
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160 | |||
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Real estate taxes
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119 | |||
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Insurance
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10 | |||
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General & administrative
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8 | |||
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Total expenses
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387 | |||
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Excess of revenues over certain expenses
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$ | 600 | ||
See accompanying notes to statement of revenues and certain expenses.
F-10
NIMBUS WINERY SHOPPING CENTER
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2010
1.Business and Organization
Nimbus Winery Shopping Center (the “Property”) is a shopping center located in Rancho Cordova, California. The Property was owned by Lakha Properties-Sacramento II, LLC. The Property has an aggregate gross rentable area of approximately 75,000 square feet.
On February 17, 2011, the Property was acquired by ROIC CA Notes II, LLC, a wholly-owned subsidiary of Retail Opportunity Investments Corp. (the “Company”).
2.Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation
The Statement of Revenues and Certain Expenses (the “financial statement”) has been prepared for the purpose of complying with the provisions of Rule 3-14 of Regulation S-X promulgated by the Securities and Exchange Commission (the “SEC”), which requires certain information with respect to real estate operations to be included with certain filings with the SEC. The financial statement includes the historical revenues and certain expenses of the Property, exclusive of rental income related to parcels not acquired by the Company, interest income, depreciation and amortization, rental income relating to the allocation of purchase price of the Property to above/below market leases and management and advisory fees, which may not be comparable to the corresponding amounts reflected in the future operations of the Property.
Revenue Recognition
The Property’s operations consist of rental income earned from tenants under leasing arrangements which generally provide for minimum rents and tenant reimbursements. All leases are classified as operating leases. Minimum rents are recognized by amortizing the aggregate lease payments on a straight-line basis over the terms of the lease (including rent holidays). Tenant reimbursements for real estate taxes, common area maintenance and other recoverable costs are recognized as rental income in the period that the expenses are incurred.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Property’s management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Accounts Receivable
Bad debts are recorded under the specific identification method, whereby uncollectible receivables are reserved for when identified.
Repairs and Maintenance
Repairs and maintenance costs are expensed as incurred, while significant improvements, renovations and replacements are capitalized.
3.Leases
The Property is subject to non-cancelable lease agreements, subject to various escalation clauses, with tenants for retail space. As of December 31, 2010, the future minimum rentals on non-cancelable operating leases expiring in various years are as follows:
F-11
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Year ending December 31
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Amounts
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|||
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2011
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$ | 755,827 | ||
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2012
|
715,797 | |||
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2013
|
601,152 | |||
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2014
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609,716 | |||
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2015
|
615,696 | |||
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Thereafter
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2,236,628 | |||
| $ | 5,534,816 | |||
The tenant leases provide for annual rentals that include the tenants’ proportionate share of real estate taxes and certain property operating expenses. The Property’s tenant leases generally include tenant renewal options that can extend the lease terms.
Rental income on the financial statement includes the effect of amortizing the aggregate minimum lease payments on a straight-line basis over the entire terms of the leases, which amounted to an increase of $38,414 in rental income for the year ended December 31, 2010.
4.Commitments and Contingencies
None.
F-12
RETAIL OPPORTUNITY INVESTMENTS CORP.
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The unaudited pro forma consolidated statement of operations for the year ended December 31, 2010 is presented as if Retail Opportunity Investments Corp. (the “Company”) had completed the acquisitions of Desert Springs Marketplace, Mills Shopping Center and Nimbus Winery Shopping Center (collectively, the “Properties”) on January 1, 2010. Additionally, the pro forma consolidated balance sheet as of December 31, 2010 has been presented as if the acquisitions had been completed on December 31, 2010.
The purchase price allocation is calculated based on a 20/80 allocation to Land and Building, respectively. As of the date of this report, the Company is in the process of evaluating the purchase price allocation in accordance with the Accounting Standards Codification 805. The purchase price allocation is preliminary and could be subject to change.
The pro forma consolidated financial statements should be read in conjunction with the Company’s 2010 Annual Report on Form 10-K. The pro forma consolidated financial statements do not purport to represent the Company’s financial position or results of operations that would actually have occurred assuming the completion of the acquisition of the Properties had occurred on January 1, 2010; nor do they purport to project the Company’s results of operations as of any future date or for any future period.
F-13
RETAIL OPPORTUNITY INVESTMENTS CORP.
PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 2010
(UNAUDITED)
(in thousands)
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Company
Historical(1)
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Pro Forma
Adjustments
|
Company
Pro Forma
|
||||||||||
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ASSETS:
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||||||||||||
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Real Estate Investments:
|
||||||||||||
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Land
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$ | 85,473 | $ | 10,460 | (2) | $ | 95,933 | |||||
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Building and improvements
|
187,260 | 41,838 | (2) | 229,098 | ||||||||
| 272,733 | 52,298 | 325,031 | ||||||||||
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Less: accumulated depreciation
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3,078 | — | 3,078 | |||||||||
| 269,655 | 52,298 | 321,953 | ||||||||||
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Mortgage Notes Receivables
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57,778 | (49,978 | )(2) | 7,800 | ||||||||
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Investment in and advances to
unconsolidated joint venture
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16,779 | — | 16,779 | |||||||||
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Real Estate Investments, net
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344,212 | 2,320 | 346,532 | |||||||||
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Cash and cash equivalents
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84,736 | (1,900 | )(2) | 82,836 | ||||||||
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Restricted cash
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2,838 | — | 2,838 | |||||||||
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Tenant and other receivables
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2,056 | — | 2,056 | |||||||||
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Deposits
|
1,500 | — | 1,500 | |||||||||
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Acquired lease intangible asset, net of
accumulated amortization
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17,673 | — | 17,673 | |||||||||
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Prepaid expenses
|
799 | — | 799 | |||||||||
|
Deferred charges, net of accumulated
amortization
|
9,577 | — | 9,577 | |||||||||
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Other
|
802 | — | 802 | |||||||||
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Total assets
|
$ | 464,193 | $ | 420 | $ | 464,613 | ||||||
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LIABILITIES AND EQUITY
|
||||||||||||
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Liabilities:
|
||||||||||||
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Mortgage notes payable
|
$ | 42,417 | $ | — | $ | 42,417 | ||||||
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Acquired lease intangible liability, net
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20,996 | — | 20,996 | |||||||||
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Accrued expenses
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4,889 | 420 | (2) | 5,309 | ||||||||
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Tenants’ security deposit
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860 | — | 860 | |||||||||
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Other liabilities
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4,508 | — | 4,508 | |||||||||
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Total liabilities
|
$ | 73,670 | $ | 420 | $ | 74,090 | ||||||
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Equity:
|
||||||||||||
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Preferred stock
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— | — | — | |||||||||
|
Common stock
|
4 | — | 4 | |||||||||
|
Additional-paid-in capital
|
403,916 | — | 403,916 | |||||||||
|
Accumulated deficit
|
(12,881 | ) | — | (12,881 | ) | |||||||
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Accumulated other comprehensive loss
|
(518 | ) | — | (518 | ) | |||||||
|
Total Retail Opportunity Investments Corp.
shareholders’ equity
|
390,521 | — | 390,521 | |||||||||
|
Noncontrolling interests
|
2 | — | 2 | |||||||||
|
Total equity
|
390,523 | — | 390,523 | |||||||||
|
Total liabilities and equity
|
$ | 464,193 | $ | 420 | $ | 464,613 | ||||||
See accompanying notes to pro forma consolidated financial statements
F-14
RETAIL OPPORTUNITY INVESTMENTS CORP.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2010
(UNAUDITED)
(in thousands, except per share data)
|
Company
Historical(1)
|
Desert
Springs
Marketplace
|
Mills
Shopping
Center
|
Nimbus
Winery
Shopping
Center
|
Pro Forma
Adjustments
|
Company
Pro Forma
|
|||||||||||||||||||
|
Revenue
|
||||||||||||||||||||||||
|
Base rents
|
$ | 12,381 | $ | 1,928 | $ | 1,538 | $ | 770 | $ | 474 | (3) | $ | 17,091 | |||||||||||
|
Recoveries from tenants
|
2,879 | 458 | 491 | 211 | 4,039 | |||||||||||||||||||
|
Mortgage interest
|
1,069 | (238 | )(7) | 831 | ||||||||||||||||||||
|
Total revenues
|
16,329 | 2,386 | 2,029 | 981 | 236 | 21,961 | ||||||||||||||||||
| Operating expenses | ||||||||||||||||||||||||
|
Property operating
|
2,848 | 258 | 466 | 260 | 3,832 | |||||||||||||||||||
|
Property taxes
|
1,697 | 163 | 275 | 119 | 2,254 | |||||||||||||||||||
|
Depreciation and amortization
|
6,081 | 1,025 | (4) | 7,106 | ||||||||||||||||||||
|
General & Administrative Expenses
|
8,381 | 8 | 8 | 8 | 8,405 | |||||||||||||||||||
|
Acquisition transaction costs
|
2,636 | 35 | (5) | 2,671 | ||||||||||||||||||||
|
Total operating expenses
|
21,643 | 429 | 749 | 387 | 1,060 | 24,268 | ||||||||||||||||||
|
Operating (loss) income
|
(5,314 | ) | 1,957 | 1,280 | 594 | (824 | ) | (2,307 | ) | |||||||||||||||
|
Non-operating income (expenses)
Interest expense
|
(324 | ) | (324 | ) | ||||||||||||||||||||
|
Gain on bargain purchase
|
2,217 | 2,217 | ||||||||||||||||||||||
|
Equity in earnings from unconsolidated
joint ventures
|
38 | 38 | ||||||||||||||||||||||
|
Interest income
|
1,109 | (180 | )(6) | 929 | ||||||||||||||||||||
|
Other income
|
1,873 | 3 | 15 | 6 | 1,897 | |||||||||||||||||||
|
Net (loss) income attributable to Retail
Opportunity Investments Corp.
|
$ | (401 | ) | $ | 1,960 | $ | 1,295 | $ | 600 | $ | (1,004 | ) | $ | 2,450 | ||||||||||
|
Pro forma weighted average shares
outstanding – basic and diluted
|
41,582 | 41,582 | ||||||||||||||||||||||
|
Pro forma (loss) Income per share
Basic and diluted:
|
$ | (0.01 | ) | $ | 0.06 | |||||||||||||||||||
| Pro forma dividends per common share: | $ | 0.18 | $ | 0.18 | ||||||||||||||||||||
See accompanying notes to pro forma consolidated financial statements
F-15
RETAIL OPPORTUNITY INVESTMENTS CORP.
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Dollar amounts in thousands, except per share data)
Adjustments to the Pro Forma Consolidated Balance Sheet
|
1.
|
Derived from the Company’s audited financial statements for the year ended December 31, 2010.
|
|
2.
|
Reflects the pro forma adjustment for the Conveyance in Lieu of Foreclosure to obtain ownership of the Properties for approximately $52,000.
|
Adjustments to the Pro Forma Consolidated Statement of Operations
|
3.
|
Reflects the pro forma adjustment of $474 for the year ended December 31, 2010, to record operating rents on a straight-line basis beginning January 1, 2010.
|
|
4.
|
Reflects the estimated depreciation for the Properties based on estimated values allocated to building at the beginning period presented. Depreciation expense is computed on a straight-line basis over the estimated useful life of the assets as follows:
|
|
Estimated Useful
Life
|
Year Ended
December 31, 2010
Depreciation
Expense
|
||||
|
Building
|
39 years
|
$ | 1,025 | ||
|
5.
|
Reflects the pro forma adjustment for estimated costs related to the acquisition of the Properties.
|
|
6.
|
Reflects the pro forma adjustment to interest income to assume the acquisition has been made on the first day of the periods presented.
|
|
7.
|
Reflects the reversal of mortgage interest income on the loans.
|
F-16