Retail Opportunity Investments Corp. (NASDAQ:ROIC) announced today
financial and operating results for the three months ended March
31, 2024.
HIGHLIGHTS
- $11.0 million
of net income attributable to common stockholders
($0.09 per diluted
share)
- $37.9 million
in Funds From Operations (FFO)(1)
($0.28 per diluted
share)
- FFO per diluted share guidance
for 2024 reaffirmed ($1.03 - $1.09 per diluted share)
- 5.7%
increase in same-center cash net operating
income (1Q‘24 vs. 1Q‘23)
- 383,293
square feet of leases executed during 1Q‘24 (207,172 square
feet of anchor renewals)
- 96.4%
portfolio lease rate at 3/31/24 (40th consecutive quarter
above 96.0%)
- 179,464 square feet of anchor
space leasing currently lined up
- 12.2%
increase in same-space cash base rents on new leases
(6.7% on renewals)
- $70.1 million dual
grocery-anchored shopping center acquired in April
2024
- $68.2 million property
dispositions currently under contract
- 91.4% of
total principal debt outstanding effectively fixed-rate at
3/31/24
- 6.4x net principal
debt-to-annualized EBITDA ratio for 1Q‘24 (vs. 6.7x for
1Q‘23)
- $26.0 million mortgage retired
in April 2024
- Awarded 2024 Green Lease
Leader by U.S. Department of Energy
- $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, “As 2024
gets underway, we are off to a solid start. Demand for
space continues to be strong across our portfolio, particularly as
it relates to anchor space. During the first quarter we
renewed 207,172 square feet of longstanding, valued anchor
tenants. Additionally, we currently have all of our
available anchor space spoken for with new national tenants lined
up to lease the space.” Tanz further stated, “In terms
of our investment and capital recycling programs, we currently have
$68.2 million of property dispositions under contract and, through
our off-market sources, we recently acquired an excellent shopping
center, featuring two supermarkets, in the San Diego market for
$70.1 million. Overall, the longterm fundamentals of
our business and portfolio continue to be strong and we are on
track thus far to achieve our previously stated objectives for
2024.”
FINANCIAL SUMMARY
For the three months ended March 31, 2024, GAAP
net income attributable to common stockholders was $11.0 million,
or $0.09 per diluted share, as compared to GAAP net income
attributable to common stockholders of $8.1 million, or $0.06 per
diluted share, for the three months ended March 31,
2023. FFO for the first quarter of 2024 was $37.9
million, or $0.28 per diluted share, as compared to $33.8 million,
or $0.25 per diluted share for the first quarter of 2023. 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.
Included in GAAP net income attributable to
common stockholders and FFO for the first quarter of 2024 was $6.7
million of non-cash rental revenue amortization, as compared to
$2.9 million for the first quarter of 2023. The bulk of
the increase was attributable to an anchor space that expired
during the first quarter of 2024.
For the first quarter of 2024, same-center net
operating income (NOI) was $55.6 million, as compared to $52.6
million in same-center NOI for the first quarter of 2023,
representing a 5.7% increase. ROIC reports same-center
comparative NOI on a cash basis. A reconciliation of
GAAP operating income to same-center comparative NOI is provided at
the end of this press release.
At March 31, 2024, ROIC had total real estate
assets (before accumulated depreciation) of approximately $3.5
billion and approximately $1.4 billion of principal debt
outstanding, of which approximately $1.3 billion was unsecured
debt, including $68.0 million outstanding on its $600.0 million
unsecured credit facility. For the first quarter of
2024, ROIC’s net principal debt-to-annualized EBITDA ratio was 6.4
times, and 91.4% of its total principal debt outstanding was
effectively fixed-rate at March 31, 2024. In April
2024, ROIC retired a $26.0 million mortgage. As a
result, ROIC currently has one mortgage loan outstanding, totaling
$33.8 million, maturing in October 2025.
ACQUISITION & DISPOSITION
SUMMARY
Subsequent to the first quarter of 2024, ROIC
acquired the following grocery-anchored shopping center.
Bressi Ranch Village Center
In April 2024, ROIC acquired Bressi Ranch
Village Center for $70.1 million. The property is approximately
116,000 square feet and is anchored by two supermarkets, Trader
Joe’s and Stater Brothers Supermarket. The shopping center is part
of a master-planned community, located in Carlsbad, California,
within the San Diego metropolitan area.
ROIC currently has agreements to sell two
properties, in separate transactions, for approximately $68.2
million, in total, subject to the completion of customary closing
conditions.
PROPERTY OPERATIONS SUMMARY
At March 31, 2024, ROIC’s portfolio was 96.4%
leased. During the first quarter of 2024, ROIC executed
87 leases, totaling 383,293 square feet, including 26 new leases,
totaling 43,968 square feet, achieving a 12.2% increase in
same-space comparative base rent, and 61 renewed leases, totaling
339,325 square feet, achieving a 6.7% increase in base
rent. ROIC reports same-space comparative base
rent on a cash basis.
ENVIRONMENTAL ACCOLADE
ROIC has been selected as a 2024 Green Lease
Leader by the U.S. Department of Energy’s Better Buildings Alliance
and the Institute for Market Transformation. For the fourth
consecutive year, ROIC was awarded “Gold” level designation in
recognition of its continued success in collaborating with tenants
on energy efficiency, decarbonization, air quality and other
critical environmental issues.
DIVIDEND SUMMARY
On April 5, 2024, ROIC distributed a $0.15 per
share cash dividend. On April 23, 2024, the Board declared a
cash dividend of $0.15 per share, payable on July 10, 2024 to
stockholders of record on June 14, 2024.
CONFERENCE CALL
ROIC will conduct a conference call to discuss
its results on Wednesday, April 24, 2024 at 9:00 a.m. Eastern
Time / 6:00 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/BI4cf1b9c86202419e9d9f2cbfe332a738
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/a853xbur
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 March 31, 2024, ROIC owned 94 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) |
|
|
March 31, 2024 (unaudited) |
|
December 31, 2023 |
ASSETS |
|
|
|
Real Estate Investments: |
|
|
|
Land |
$ |
965,516 |
|
|
$ |
967,251 |
|
Building and improvements |
|
2,501,886 |
|
|
|
2,500,647 |
|
|
|
3,467,402 |
|
|
|
3,467,898 |
|
Less: accumulated depreciation |
|
666,875 |
|
|
|
654,543 |
|
|
|
2,800,527 |
|
|
|
2,813,355 |
|
Mortgage note receivable |
|
4,670 |
|
|
|
4,694 |
|
Real Estate Investments, net |
|
2,805,197 |
|
|
|
2,818,049 |
|
Cash and cash equivalents |
|
1,768 |
|
|
|
6,302 |
|
Restricted cash |
|
2,393 |
|
|
|
2,116 |
|
Tenant and other receivables, net |
|
60,781 |
|
|
|
61,193 |
|
Deposit on real estate acquisition |
|
5,000 |
|
|
|
— |
|
Acquired lease intangible assets, net |
|
41,787 |
|
|
|
42,791 |
|
Prepaid expenses |
|
4,898 |
|
|
|
3,354 |
|
Deferred charges, net |
|
27,199 |
|
|
|
27,294 |
|
Other assets |
|
17,692 |
|
|
|
16,541 |
|
Total assets |
$ |
2,966,715 |
|
|
$ |
2,977,640 |
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
Liabilities: |
|
|
|
Term loan |
$ |
199,805 |
|
|
$ |
199,745 |
|
Credit facility |
|
68,000 |
|
|
|
75,000 |
|
Senior Notes |
|
1,044,057 |
|
|
|
1,043,593 |
|
Mortgage notes payable |
|
59,831 |
|
|
|
60,052 |
|
Acquired lease intangible liabilities, net |
|
133,700 |
|
|
|
137,820 |
|
Accounts payable and accrued expenses |
|
60,807 |
|
|
|
50,598 |
|
Tenants’ security deposits |
|
8,340 |
|
|
|
8,205 |
|
Other liabilities |
|
38,529 |
|
|
|
39,420 |
|
Total liabilities |
|
1,613,069 |
|
|
|
1,614,433 |
|
|
|
|
|
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;
127,457,854 and 126,904,085 shares issued and outstanding at
March 31, 2024 and December 31, 2023, respectively |
|
13 |
|
|
|
13 |
|
Additional paid-in capital |
|
1,643,300 |
|
|
|
1,643,908 |
|
Accumulated dividends in excess of earnings |
|
(365,300 |
) |
|
|
(357,160 |
) |
Accumulated other comprehensive income |
|
521 |
|
|
|
559 |
|
Total Retail Opportunity Investments Corp. stockholders’
equity |
|
1,278,534 |
|
|
|
1,287,320 |
|
Non-controlling interests |
|
75,112 |
|
|
|
75,887 |
|
Total equity |
|
1,353,646 |
|
|
|
1,363,207 |
|
Total liabilities and equity |
$ |
2,966,715 |
|
|
$ |
2,977,640 |
|
|
|
|
|
RETAIL OPPORTUNITY INVESTMENTS CORP.Consolidated
Statements of Operations(Unaudited)(In thousands, except per share
data) |
|
|
|
Three Months Ended March 31, |
|
|
|
2024 |
|
|
|
2023 |
|
Revenues |
|
|
|
|
Rental revenue |
|
$ |
84,560 |
|
|
$ |
78,999 |
|
Other income |
|
|
770 |
|
|
|
297 |
|
Total revenues |
|
|
85,330 |
|
|
|
79,296 |
|
|
|
|
|
|
Operating expenses |
|
|
|
|
Property operating |
|
|
14,083 |
|
|
|
14,202 |
|
Property taxes |
|
|
8,560 |
|
|
|
8,844 |
|
Depreciation and amortization |
|
|
26,269 |
|
|
|
25,104 |
|
General and administrative expenses |
|
|
5,682 |
|
|
|
5,320 |
|
Other expense |
|
|
152 |
|
|
|
172 |
|
Total operating expenses |
|
|
54,746 |
|
|
|
53,642 |
|
|
|
|
|
|
Operating income |
|
|
30,584 |
|
|
|
25,654 |
|
Non-operating expenses |
|
|
|
|
Interest expense and other finance expenses |
|
|
(18,919 |
) |
|
|
(16,958 |
) |
Net income |
|
|
11,665 |
|
|
|
8,696 |
|
Net income attributable to non-controlling interests |
|
|
(647 |
) |
|
|
(554 |
) |
Net Income Attributable to Retail Opportunity Investments
Corp. |
|
$ |
11,018 |
|
|
$ |
8,142 |
|
|
|
|
|
|
Earnings per share – basic and diluted |
|
$ |
0.09 |
|
|
$ |
0.06 |
|
|
|
|
|
|
Dividends per common share |
|
$ |
0.15 |
|
|
$ |
0.15 |
|
|
|
|
|
|
CALCULATION OF FUNDS FROM OPERATIONS(Unaudited)(In
thousands) |
|
|
|
Three Months Ended March 31, |
|
|
|
2024 |
|
|
|
2023 |
|
Net income attributable to ROIC |
|
$ |
11,018 |
|
|
$ |
8,142 |
|
Plus: Depreciation and amortization |
|
|
26,269 |
|
|
|
25,104 |
|
Funds from operations – basic |
|
|
37,287 |
|
|
|
33,246 |
|
Net income attributable to non-controlling interests |
|
|
647 |
|
|
|
554 |
|
Funds from operations – diluted |
|
$ |
37,934 |
|
|
$ |
33,800 |
|
|
|
|
|
|
SAME-CENTER CASH NET OPERATING INCOME
ANALYSIS(Unaudited)(In thousands, except number of
shopping centers and percentages) |
|
|
|
|
Three Months Ended March 31, |
|
|
|
|
2024 |
|
|
|
2023 |
|
|
$ Change |
|
% Change |
Number of shopping centers included in same-center analysis |
|
|
92 |
|
|
|
92 |
|
|
|
|
|
Same-center leased rate |
|
|
96.3 |
% |
|
|
98.3 |
% |
|
|
|
(2.0 |
)% |
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
Base rents |
|
$ |
57,545 |
|
|
$ |
56,260 |
|
|
$ |
1,285 |
|
|
2.3 |
% |
|
Recoveries from tenants |
|
|
20,437 |
|
|
|
20,169 |
|
|
|
268 |
|
|
1.3 |
% |
|
Other property income |
|
|
574 |
|
|
|
120 |
|
|
|
454 |
|
|
378.3 |
% |
|
Bad debt |
|
|
(529 |
) |
|
|
(911 |
) |
|
|
382 |
|
|
(41.9 |
)% |
Total Revenues |
|
|
78,027 |
|
|
|
75,638 |
|
|
|
2,389 |
|
|
3.2 |
% |
Operating Expenses |
|
|
|
|
|
|
|
|
|
Property operating expenses |
|
|
14,018 |
|
|
|
14,307 |
|
|
|
(289 |
) |
|
(2.0 |
)% |
|
Property taxes |
|
|
8,416 |
|
|
|
8,751 |
|
|
|
(335 |
) |
|
(3.8 |
)% |
Total Operating Expenses |
|
|
22,434 |
|
|
|
23,058 |
|
|
|
(624 |
) |
|
(2.7 |
)% |
Same-Center Cash Net Operating Income |
|
$ |
55,593 |
|
|
$ |
52,580 |
|
|
$ |
3,013 |
|
|
5.7 |
% |
|
|
|
|
|
|
|
|
|
|
SAME-CENTER CASH NET OPERATING INCOME
RECONCILIATION(Unaudited)(In thousands) |
|
|
|
Three Months Ended March 31, |
|
|
|
2024 |
|
|
|
2023 |
|
GAAP operating income |
|
$ |
30,584 |
|
|
$ |
25,654 |
|
Depreciation and amortization |
|
|
26,269 |
|
|
|
25,104 |
|
General and administrative expenses |
|
|
5,682 |
|
|
|
5,320 |
|
Other expense |
|
|
152 |
|
|
|
172 |
|
Straight-line rent |
|
|
(192 |
) |
|
|
(347 |
) |
Amortization of above-market and below-market rent, net |
|
|
(6,657 |
) |
|
|
(2,864 |
) |
Property revenues and other expenses (1) |
|
|
106 |
|
|
|
36 |
|
Total Company cash NOI |
|
|
55,944 |
|
|
|
53,075 |
|
Non same-center cash NOI |
|
|
(351 |
) |
|
|
(495 |
) |
Same-center cash NOI |
|
$ |
55,593 |
|
|
$ |
52,580 |
|
|
|
|
|
|
_________________________(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’LearyDirector of Investor
Relations858-677-0900noleary@roireit.net
Retail Oppurtunity Inves... (NASDAQ:ROIC)
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