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Retail Opportunity Investments Partnership, Lp (1577230) SEC Filing 8-K Material Event for the period ending Tuesday, July 26, 2022

Retail Opportunity Investments Partnersh

CIK: 1577230

Retail Opportunity Investments Corp.                 TRADED: NASDAQ: ROIC
11250 El Camino Real, Suite 200
San Diego, CA 92130

FOR IMMEDIATE RELEASE
Tuesday, July 26, 2022

Retail Opportunity Investments Corp. Reports
2022 Second Quarter Results

San Diego, CA, July 26, 2022
- Retail Opportunity Investments Corp. (NASDAQ:ROIC) announced today financial and operating results for the three and six months ended June 30, 2022.

HIGHLIGHTS
$11.5 million of net income attributable to common stockholders ($0.09 per diluted share)
$36.7 million in Funds From Operations (FFO)(1) ($0.28 per diluted share)
FFO guidance for 2022 raised ($1.08 - $1.12 per diluted share)
$120.2 million of acquisitions lined up ($60.0 million closed, $60.2 million under contract)
$37.1 million property disposition under contract
714,380 square feet of leases executed during first six months of ‘22 (record activity)
97.6% portfolio lease rate at 6/30/22 (vs. 97.2% at 3/31/22 and 96.9% at 6/30/21)
16.7% increase in same-space cash base rents on 2Q‘22 new leases (10.5% renewal increase)
3.7% increase in same-center cash net operating income (2Q‘22 vs. 2Q‘21)
5.6% increase in same-center cash net operating income (first six months ‘22 vs. ‘21)
$25.2 million of common equity raised through ATM program during first six months
6.7x net principal debt-to-annualized EBITDA ratio for 2Q‘22
Awarded 2022 Green Lease Leader in recognition of ESG initiatives
$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, “Strong demand for space across our portfolio continues to drive our business forward. Building on our leasing momentum from the first quarter, we increased our portfolio lease rate during the second quarter and again posted solid double-digit rent growth on both same-space new leases and renewals. Additionally, we continue to steadily grow and enhance our portfolio. Year-to-date, we have lined up $120.2 million of grocery-anchored shopping center acquisitions.” Tanz added, “With our success during the first half of the year, we are well-positioned and firmly on track to achieve our key objectives for 2022.”
FINANCIAL RESULTS SUMMARY
For the three months ended June 30, 2022, GAAP net income attributable to common stockholders was $11.5 million, or $0.09 per diluted share, as compared to GAAP net income attributable to common stockholders of $16.5 million, or $0.14 per diluted share, for the three months ended June 30, 2021. For the six months ended June 30, 2022, GAAP net income attributable to common stockholders was $23.1 million, or $0.19 per diluted share, as compared to GAAP net income attributable to common stockholders of $23.9 million, or $0.20 per diluted share, for the six months ended June 30, 2021. Included in 2021 GAAP net income was a $9.5 million gain on sale of real estate.




FFO for the second quarter of 2022 was $36.7 million, or $0.28 per diluted share, as compared to $31.7 million in FFO, or $0.25 per diluted share for the second quarter of 2021. FFO for the first six months of 2022 was $72.9 million, or $0.55 per diluted share, as compared to $62.7 million in FFO, or $0.49 per diluted share for the first six months of 2021. 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 2022, same-center net operating income (NOI) was $49.6 million, as compared to $47.8 million in same-center NOI for the second quarter of 2021, representing a 3.7% increase. For the first six months of 2022, same-center NOI increased 5.6% as compared to same-center NOI for the first six months of 2021. 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 June 30, 2022, ROIC had total market capitalization of approximately $3.4 billion and approximately $1.4 billion of principal debt outstanding. As of June 30, 2022, 95.5% of ROIC’s principal debt outstanding was unsecured, including $46.0 million outstanding on its $600.0 million unsecured revolving credit facility. Additionally, ROIC’s interest coverage ratio and net principal debt-to-annualized EBITDA ratio for the second quarter of 2022 was 3.6 times and 6.7 times, respectively, and 96.6% of its portfolio was unencumbered at June 30, 2022, based on gross leasable area.

Year to date, ROIC has issued approximately 1.3 million shares of common stock through its ATM program, raising $25.2 million in gross proceeds, including issuing approximately 0.7 million shares of common stock during the first quarter, and approximately 0.6 million shares during the second quarter.
ACQUISITION & DISPOSITION SUMMARY
Year-to-date, ROIC has lined up $120.2 million of grocery-anchored shopping center acquisitions, including the following three grocery-anchored shopping centers acquired during the second quarter, totaling $60.0 million.

Powell Valley Junction
In April 2022, ROIC acquired Powell Valley Junction for $17.6 million. The shopping center is approximately 109,000 square feet and is anchored by Walmart Neighborhood Market. The property is located in Gresham, Oregon, within the Portland metropolitan area, and is currently 99.0% leased.
Olympia Square North
In April 2022, ROIC acquired Olympia Square North for $18.4 million. The shopping center is approximately 90,000 square feet and is anchored by Albertsons Supermarket. The property is located in Olympia, Washington, within the Seattle metropolitan area, and is currently 100% leased.
Village Oaks Shopping Center
In May 2022, ROIC acquired Village Oaks Shopping Center for $24.0 million. The shopping center is approximately 80,000 square feet and is anchored by Save Mart (Lucky California) Supermarket and Rite Aid Pharmacy (NAP). The property is located in Martinez, California, within the San Francisco metropolitan area, and is currently 97.9% leased.
Additionally, ROIC currently has a contract involving a three property transaction, including selling one ROIC property for $37.1 million, while acquiring the following two grocery-anchored shopping centers for a total of $60.2 million.
Ballinger Village
ROIC has a contract to acquire Ballinger Village for $29.2 million. The shopping center is approximately 113,000 square feet and is anchored by Thriftway Supermarket and Rite Aid Pharmacy. The property is located in Shoreline, Washington, within the Seattle metropolitan area, and is currently 89.1% leased.
Thomas Lake Shopping Center
ROIC has a contract to acquire Thomas Lake Shopping Center for $31.0 million. The shopping center is approximately 111,000 square feet and is anchored by Albertsons Supermarket and Rite Aid Pharmacy. The property is located in Mill Creek, Washington, within the Seattle metropolitan area, and is currently 100% leased.



PROPERTY OPERATIONS SUMMARY
At June 30, 2022, ROIC’s portfolio was 97.6% leased. During the second quarter of 2022, ROIC executed 93 leases, totaling 297,741 square feet, including 38 new leases, totaling 83,276 square feet, achieving a 16.7% increase in same-space comparative base rent, and 55 renewed leases, totaling 214,465 square feet, achieving a 10.5% increase in base rent. ROIC reports same-space comparative new lease and renewal base rents on a cash basis.
ENVIRONMENTAL, SOCIAL & GOVERNANCE SUMMARY
In May 2022, ROIC was selected as a 2022 Green Lease Leader by the U.S. Department of Energys Better Buildings Alliance and the Institute for Market Transformation. Specifically, ROIC was awarded “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.

Subsequent to the second quarter, in July 2022, ROIC released its annual Environmental, Social and Governance (ESG) report, detailing the company’s ESG achievements during 2021, as well as its ongoing initiatives and long term strategic 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: http://www.roireit.net/assets/001/5927.pdf.
CASH DIVIDEND
On July 8, 2022, ROIC distributed a $0.13 per share cash dividend. On July 26, 2022, ROIC’s board of directors declared a cash dividend of $0.15 per share, payable on October 7, 2022 to stockholders of record on September 16, 2022.
2022 GUIDANCE SUMMARY
ROIC currently estimates that GAAP net income for 2022 will be within the range of $0.31 to $0.36 per diluted share, and FFO will be within the range of $1.08 to $1.12 per diluted share.

Year Ended December 31, 2022
PreviousCurrent
Low EndHigh EndLow EndHigh End
(unaudited, amounts in thousands except per share and percentage data)
GAAP net income applicable to stockholders$29,501 $40,494 $37,546 $44,907 
Funds from operations (FFO) – diluted$137,280 $148,500 $142,560 $150,080 
GAAP net income per diluted share$0.24 $0.32 $0.31 $0.36 
FFO per diluted share$1.04 $1.10 $1.08 $1.12 
Key Drivers
General and administrative expenses$22,000 $21,000 $22,500 $21,500 
Straight-line rent$500 $500 $2,400 $2,400 
Amortization of above- and below-market rent$10,400 $10,400 $11,300 $11,300 
Bad debt$3,000 $2,000 $3,000 $2,000 
Acquisitions$100,000 $300,000 $120,000 $200,000 
Dispositions$50,000 $30,000 $70,000 $100,000 
Same-center cash NOI growth (vs. 2021)3.0 %4.0 %4.0 %5.0 %
ROIC’s management will discuss guidance, and the underlying assumptions, on ROIC’s July 27, 2022 conference call. ROICs guidance is a forward-looking statement and is subject to risks and other factors noted elsewhere in this press release.



CONFERENCE CALL
ROIC will conduct a conference call to discuss its results on Wednesday, July 27, 2022 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:

http://register.vevent.com/register/BI62b17b0b4d274c8ba58b978c41bb4c2f

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: http://edge.media-server.com/mmc/p/ehpn5ywt

The conference call will be archived and available for replay for approximately 90 days at: http://www.roireit.net/
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, 2022, ROIC owned 92 shopping centers encompassing approximately 10.4 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, 2022
 (unaudited)
December 31, 2021
ASSETS  
Real Estate Investments:  
Land$934,687 $915,861 
Building and improvements2,419,177 2,350,294 
 3,353,864 3,266,155 
Less:  accumulated depreciation546,043 510,836 
2,807,821 2,755,319 
Mortgage note receivable4,831 4,875 
Real Estate Investments, net2,812,652 2,760,194 
Cash and cash equivalents5,632 13,218 
Restricted cash1,730 2,145 
Tenant and other receivables, net52,619 55,787 
Acquired lease intangible assets, net52,296 50,139 
Prepaid expenses1,950 5,337 
Deferred charges, net25,358 25,017 
Other assets16,473 17,007 
Total assets$2,968,710 $2,928,844 
LIABILITIES AND EQUITY  
Liabilities:  
Term loan$299,071 $298,889 
Credit facility46,000 — 
Senior Notes946,035 945,231 
Mortgage notes payable61,339 85,354 
Acquired lease intangible liabilities, net141,577 136,608 
Accounts payable and accrued expenses38,632 48,598 
Tenants’ security deposits7,561 7,231 
Other liabilities40,271 40,580 
Total liabilities1,580,486 1,562,491 
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; 124,341,618 and 122,685,266 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively
12 12 
Additional paid-in capital1,604,495 1,577,837 
Dividends in excess of earnings(307,039)(297,801)
Accumulated other comprehensive loss(5)(3,154)
Total Retail Opportunity Investments Corp. stockholders’ equity1,297,463 1,276,894 
Non-controlling interests90,761 89,459 
Total equity1,388,224 1,366,353 
Total liabilities and equity$2,968,710 $2,928,844 



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,
 2022202120222021
Revenues  
Rental revenue$77,218 $70,114 $152,255 $139,018 
Other income1,007 616 2,443 899 
Total revenues78,225 70,730 154,698 139,917 
Operating expenses
Property operating12,672 10,766 24,763 21,325 
Property taxes8,416 8,332 16,936 16,938 
Depreciation and amortization24,350 23,507 48,112 46,547 
General and administrative expenses5,702 5,232 10,942 9,607 
Other expense488 331 667 484 
Total operating expenses51,628 48,168 101,420 94,901 
Gain on sale of real estate— 9,460 — 9,460 
Operating income26,597 32,022 53,278 54,476 
Non-operating expenses  
Interest expense and other finance expenses(14,283)(14,337)(28,498)(28,817)
Net income12,314 17,685 24,780 25,659 
Net income attributable to non-controlling interests(807)(1,201)(1,632)(1,760)
Net Income Attributable to Retail Opportunity Investments Corp.$11,507 $16,484 $23,148 $23,899 
Earnings per share – basic and diluted$0.09 $0.14 $0.19 $0.20 
Dividends per common share$0.13 $0.11 $0.26 $0.22 






CALCULATION OF FUNDS FROM OPERATIONS
(Unaudited)
(In thousands)

Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Net income attributable to ROIC$11,507 $16,484 $23,148 $23,899 
Plus:  Depreciation and amortization24,350 23,507 48,112 46,547 
Less: Gain on sale of real estate— (9,460)— (9,460)
Funds from operations – basic35,857 30,531 71,260 60,986 
Net income attributable to non-controlling interests807 1,201 1,632 1,760 
Funds from operations – diluted$36,664 $31,732 $72,892 $62,746 

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,
20222021$ Change% Change20222021$ Change% Change
Number of shopping centers included in same-center analysis85 85 85 85 
Same-center occupancy97.6 %97.0 %0.6 %97.6 %97.0 %0.6 %
Revenues:
Base rents$51,589 $49,619 $1,970 4.0 %$102,816 $99,069 $3,747 3.8 %
Percentage rent142 (9)151 (1,677.8)%330 174 156 89.7 %
Recoveries from tenants17,416 16,445 971 5.9 %34,992 33,157 1,835 5.5 %
Other property income825 445 380 85.4 %1,854 554 1,300 234.7 %
Bad debt(136)127 (263)(207.1)%(700)(1,425)725 (50.9)%
Total Revenues69,836 66,627 3,209 4.8 %139,292 131,529 7,763 5.9 %
Operating Expenses
Property operating expenses12,365 10,636 1,729 16.3 %24,120 21,100 3,020 14.3 %
Property taxes7,887 8,195 (308)(3.8)%16,094 16,604 (510)(3.1)%
Total Operating Expenses20,252 18,831 1,421 7.5 %40,214 37,704 2,510 6.7 %
Same-Center Cash Net Operating Income$49,584 $47,796 $1,788 3.7 %$99,078 $93,825 $5,253 5.6 %




SAME-CENTER CASH NET OPERATING INCOME RECONCILIATION
(Unaudited)
(In thousands)

Three Months Ended June 30,Six Months Ended June 30,
 2022202120222021
GAAP operating income$26,597 $32,022 $53,278 $54,476 
Depreciation and amortization24,350 23,507 48,112 46,547 
General and administrative expenses5,702 5,232 10,942 9,607 
Other expense488 331 667 484 
Gain on sale of real estate— (9,460)— (9,460)
Straight-line rent(915)(294)(1,366)(312)
Amortization of above- and below-market rent(3,254)(2,214)(6,311)(4,446)
Property revenues and other expenses (1)
(265)(52)(589)(181)
Total Company cash NOI52,703 49,072 104,733 96,715 
Non same-center cash NOI(3,119)(1,276)(5,655)(2,890)
Same-center cash NOI$49,584 $47,796 $99,078 $93,825 
____________________
(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


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CIK: 1577230
Form Type: 8-K Corporate News
Accession Number: 0001407623-22-000070
Submitted to the SEC: Tue Jul 26 2022 4:22:07 PM EST
Accepted by the SEC: Tue Jul 26 2022
Period: Tuesday, July 26, 2022
Industry: Real Estate Investment Trusts
Events:
  1. Earnings Release
  2. Financial Exhibit

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