Retail Opportunity Investments Corp (ROIC)

[Enterprising Investor]

Retail Opportunity Investments Corp. Reports Strong Second Quarter Results (7/29/15)

9.5% Increase in FFO Per Diluted Share

$278.2 Million of Acquisitions Committed YTD

Record 2Q Occupancy & Same-Space Releasing Increase

SAN DIEGO, July 29, 2015 (GLOBE NEWSWIRE) -- Retail Opportunity Investments Corp. (NASDAQ:ROIC) announced today financial and operating results for the three months ended June 30, 2015.

HIGHLIGHTS

•GAAP Net income of $5.2 million, or $0.05 per diluted share

•9.5% increase in FFO(1) per diluted share to $0.23 (2Q'15 vs. 2Q'14)

•$193.3 million of acquisitions completed year-to-date

•$84.9 million of acquisitions currently under contract

•97.3% portfolio leased rate at 6/30/15 (50 bps increase vs. 6/30/14)

•53.5% increase in same-space comparative cash base rents on new leases

•4.4% increase in same-center cash net operating income (1) (2Q'15 vs. 2Q'14)

•36.0% debt-to-total market capitalization ratio at 6/30/15

•3.7 times interest coverage for 2Q'15

•91.5% of portfolio GLA unencumbered at 6/30/15

•Quarterly cash dividend of $0.17 per share declared


Stuart A. Tanz, President and Chief Executive Officer of Retail Opportunity Investments Corp. stated, "During the second quarter our leasing team again achieved excellent results, driving occupancy to a new, second quarter high and posting an all-time, record high in same-space releasing rents. Additionally, capitalizing on our off-market sources we continued to expand our portfolio across our core West Coast markets. In total, thus far in 2015 we have secured $278.2 million of grocery-anchored shopping center acquisitions." Tanz commented further, "Building upon our strong results during the first six months of 2015, we are heading into the second half with great momentum and are poised to achieve another strong year of growing our business, enhancing value and delivering solid results."

FINANCIAL SUMMARY

For the three months ended June 30, 2015, GAAP net income attributable to common stockholders was $5.2 million, or $0.05 per diluted share, as compared to GAAP net income of $5.8 million, or $0.07 per diluted share for the three months ended June 30, 2014. Included in GAAP net income for the three month period ended June 30, 2014 was a $3.3 million gain on sale of real estate.

FFO attributable to common stockholders for the second quarter of 2015 was $22.3 million, or $0.23 per diluted share, as compared to $17.0 million in FFO, or $0.21 per diluted share for the second quarter of 2014, representing a 9.5% increase on a per diluted share basis. ROIC reports FFO attributable to common stockholders 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 applicable to common stockholders is provided at the end of this press release.

At June 30, 2015, ROIC had a total market capitalization of approximately $2.4 billion with $855.1 million of debt outstanding, equating to a 36.0% debt-to-total market capitalization ratio. ROIC's debt outstanding was comprised of $76.1 million of mortgage debt and $779.0 million of unsecured debt. At June 30, 2015, ROIC had $286.0 million outstanding on its unsecured credit facility. For the second quarter of 2015, ROIC's interest coverage was 3.7 times and 91.5% of its portfolio was unencumbered (based on gross leasable area) as of June 30, 2015.

ACQUISITION SUMMARY

Year-to-date in 2015, ROIC has committed a total of $278.2 million in grocery-anchored shopping center acquisitions, including: $99.2 million acquired during the first quarter; $23.1 million acquired during the second quarter, $71.0 million acquired thus far in the third quarter and $84.9 million currently under contract.

Pinole Vista & Canyon Park

In May 2015, ROIC acquired key anchor spaces at two of its existing shopping centers for $23.1 million, including a 58,500 square foot space at its Pinole Vista Shopping Center, located in Pinole, California, and a 35,000 square foot leasehold interest at its Canyon Park Shopping Center, located in Bothell, Washington.

Gateway Centre

ROIC has a binding contract to acquire Gateway Centre for $42.5 million. The shopping center is approximately 110,000 square feet and is anchored by Savemart (Lucky) Supermarket and Walgreens. The property is located in San Ramon, California, within the San Francisco metropolitan area, and is currently 94.0% leased.

Iron Horse Plaza

ROIC has a binding contract to acquire Iron Horse Plaza for $42.4 million. The shopping center is approximately 62,000 square feet and is anchored by Lunardi's Markets, a San Francisco-based grocer. The property is located in Danville, California, within the San Francisco metropolitan area, and is currently 100% leased. ROIC expects to fund the acquisition in part with the issuance of approximately $16.4 million in ROIC common equity in the form of operating partnership units, based on a value of $17.25 per unit.

Subsequent to the second quarter, ROIC acquired a three-property portfolio, totaling $71.0 million.

Jackson Square

In July 2015, ROIC acquired Jackson Square for $32.5 million. The shopping center is approximately 114,000 square feet and is anchored by Safeway Supermarket and CVS Pharmacy. The property is located in Hayward, California, within the San Francisco metropolitan area, and is currently 100% leased.

Tigard Promenade

In July 2015, ROIC acquired Tigard Promenade for $21.0 million. The shopping center is approximately 88,000 square feet and is anchored by Safeway Supermarket. The property is located in Tigard, Oregon, within the Portland metropolitan area and is currently 94.2% leased.

Sunnyside Village Square

In July 2015, ROIC acquired Sunnyside Village Square for $17.5 million. The shopping center is approximately 89,000 square feet and is anchored by Haggen Supermarket. The property is located in Happy Valley, Oregon, within the Portland metropolitan area and is currently 100% leased.

PROPERTY OPERATIONS SUMMARY

At June 30, 2015, ROIC's portfolio was 97.3% leased, representing a 30 basis point increase as compared to March 31, 2015 and a 50 basis point increase as compared to June 30, 2014.

For the second quarter of 2015, same-center net operating income ("NOI") was $24.5 million, as compared to $23.4 million in same-center NOI for the second quarter of 2014, representing a 4.4% increase. Same-center NOI includes all of the properties owned by ROIC as of April 1, 2014, totaling 55 shopping centers. ROIC reports same-center NOI on a cash basis. A reconciliation of same-center NOI to GAAP operating income is provided at the end of this press release.

During the second quarter of 2015, ROIC executed 93 leases, totaling 242,693 square feet, achieving a 25.8% increase in same-space comparative base rent, including 37 new leases, totaling 147,116 square feet, achieving a 53.5% increase in same-space comparative base rent, and 56 renewed leases, totaling 95,577 square feet, achieving a 9.9% increase in base rent. ROIC reports same-space comparative base rent on a cash basis.

CASH DIVIDEND

On June 30, 2015, ROIC distributed a $0.17 per share cash dividend. On July 29, 2015, ROIC's board of directors declared a cash dividend of $0.17 per share, payable on September 29, 2015 to stockholders of record on September 15, 2015.

2015 FFO GUIDANCE

ROIC currently estimates that FFO applicable to common stockholders for 2015 will be within the range of $0.91 to $0.94 per diluted share, and GAAP net income to be within the range of $0.24 to $0.25 per diluted share. The following table provides a reconciliation of GAAP net income to FFO applicable to common stockholders (in thousands).


ROIC's estimates are based on numerous underlying assumptions. ROIC's management will discuss the company's guidance and underlying assumptions on its July 30, 2015 conference call. ROIC's guidance is a forward-looking statement and is subject to risks and other factors described elsewhere in this press release.

CONFERENCE CALL

ROIC will conduct a conference call and audio webcast to discuss its quarterly results on Thursday, July 30, 2015 at 10:00 a.m. Eastern Time / 7:00 a.m. Pacific Time. Those interested in participating in the conference call should dial [phone] (domestic), or [phone] (international) at least ten minutes prior to the scheduled start of the call. When prompted, provide the Conference ID: 50515877. A live webcast will also be available in listen-only mode at http://www.roireit.net/. The conference call will be recorded and available for replay beginning at 1:00 p.m. Eastern Time on July 30, 2015 and will be available until 11:59 p.m. Eastern Time on August 6, 2015. To access the conference call recording, dial [phone] (domestic) or [phone] (international) and use the Conference ID: 50515877. The conference call will also be archived on http://www.roireit.net/ for approximately 90 days.

ABOUT RETAIL OPPORTUNITY INVESTMENTS CORP.

Retail Opportunity Investments Corp. (NASDAQ:ROIC), is a fully-integrated, self-managed real estate investment trust (REIT) that specializes in the acquisition, ownership and management of grocery-anchored shopping centers located in densely-populated, metropolitan markets across the West Coast. As of June 30, 2015, ROIC owned 64 shopping centers encompassing approximately 7.7 million square feet. ROIC is the largest publicly-traded, grocery-anchored shopping center REIT focused exclusively on the West Coast. ROIC is a member of the S&P SmallCap 600 Index and has investment-grade corporate debt ratings from Moody's Investor Services and Standard & Poor's. Additional information is available at: www.roireit.net.

http://www.nasdaq.com/press-release/retail-opportunity-investments-corp-reports-strong-second-quarter-results-20150729-01336