Retail Opportunity Investments Corp. Reports 2024 Third Quarter Results
SAN DIEGO, Oct. 22, 2024 (GLOBE NEWSWIRE) -- Retail Opportunity Investments Corp. (NASDAQ:ROIC) announced today financial and operating results for the three and nine months ended September 30, 2024.
HIGHLIGHTS
$32.1 million of net income attributable to common stockholders ($0.25 per diluted share)
$33.2 million in Funds From Operations (FFO)(1) ($0.25 per diluted share)
FFO per diluted share guidance for 2024 updated ($1.03 - $1.05 per diluted share)
$68.8 million of dispositions in 3Q‘24 ($26.7 million gain on sale of real estate)
97.1% portfolio lease rate at 9/30/24 (98.0% anchor lease rate, 96.0% non-anchor lease rate)
450,623 square feet of leasing activity during 3Q‘24 (most active quarter year-to-date)
1.2 million square feet of leasing activity year-to-date (2nd most active on record)
13.8% increase in same-space cash base rents on new leases in 3Q‘24 (7.0% on renewals)
2.1% decrease in same-center cash net operating income (NOI) (3Q‘24 vs. 3Q‘23)
1.5% increase in same-center cash NOI (1st 9 months of ‘24 vs. 1st 9 months of ‘23)
98.7% of total gross leasable area unencumbered at 9/30/24
6.3x net principal debt-to-annualized EBITDA ratio for 3Q‘24 (vs. 6.4x for 3Q‘23)
$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, "2024 continues to be one of our most productive years in terms of strong leasing activity. Year to date, we have already leased over 1.2 million square feet, including over 450,000 square feet in the third quarter alone. In step with the strong activity, we continue to achieve solid releasing rent growth, and are on track to post our 12th consecutive year of rent growth on both new and renewed leases." Tanz added, "Along with our strong leasing activity, we continue to advance our investment capital recycling program aimed at enhancing the long term value of our portfolio and business. Year to date, we have sold $68.8 million of properties, while acquiring $70.1 million."
FINANCIAL SUMMARY
For the three months ended September 30, 2024, GAAP net income attributable to common stockholders was $32.1 million, or $0.25 per diluted share, as compared to GAAP net income attributable to common stockholders of $8.4 million, or $0.07 per diluted share, for the three months ended September 30, 2023. For the nine months ended September 30, 2024, GAAP net income attributable to common stockholders was $50.5 million, or $0.39 per diluted share, as compared to GAAP net income attributable to common stockholders of $26.5 million, or $0.21 per diluted share, for the nine months ended September 30, 2023. Included in 2024 GAAP net income is $26.7 million of gain on sale of real estate for both the three and nine months ended September 30, 2024.
FFO for the third quarter of 2024 was $33.2 million, or $0.25 per diluted share, as compared to $36.0 million in FFO, or $0.27 per diluted share for the third quarter of 2023. FFO for the first nine months of 2024 was $105.3 million, or $0.78 per diluted share, as compared to $105.4 million in FFO, or $0.79 per diluted share for the first nine months 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.
For the third quarter of 2024, same-center NOI was $54.3 million, as compared to $55.4 million in same-center NOI for the third quarter of 2023, representing a 2.1% decrease. For the first nine months of 2024, same-center NOI increased 1.5%, as compared to the first nine months of 2023. A reconciliation of GAAP operating income to same-center comparative NOI is provided at the end of this press release.
At September 30, 2024, ROIC had total real estate assets (before accumulated depreciation) of approximately $3.5 billion and approximately $1.4 billion of principal debt outstanding, including $135.0 million outstanding on its $600.0 million unsecured credit facility. For the third quarter of 2024, ROIC's net principal debt-to-annualized EBITDA ratio was 6.3 times, and 98.7% of ROIC's total gross leasable area was unencumbered at September 30, 2024.
DISPOSITION SUMMARY
During the third quarter of 2024, ROIC sold two properties for a total of $68.8 million, recording a $26.7 million aggregate gain on sale of real estate.
PROPERTY OPERATIONS SUMMARY
At September 30, 2024, ROIC's portfolio was 97.1% leased. During the third quarter of 2024, ROIC executed 110 leases, totaling 450,623 square feet, including 35 new leases, totaling 110,464 square feet, achieving a 13.8% increase in same-space comparative base rent, and 75 renewed leases, totaling 340,159 square feet, achieving a 7.0% increase in base rent. For the first nine months of 2024, ROIC executed 328 leases, totaling 1,226,662 square feet, including 101 new leases, totaling 271,083 square feet, achieving a 12.9% increase in same-space comparative base rent, and 227 renewed leases, totaling 955,579 square feet, achieving a 6.5% increase in base rent. ROIC reports same-space comparative base rent on a cash basis.
DIVIDEND SUMMARY
On October 4, 2024, ROIC distributed a $0.15 per share cash dividend. On October 22, 2024, the Board declared a cash dividend of $0.15 per share, payable on January 10, 2025 to stockholders of record on December 20, 2024.
2024 GUIDANCE SUMMARY
ROIC currently estimates that GAAP net income for 2024 will be within the range of $0.45 to $0.47 per diluted share, and FFO will be within the range of $1.03 to $1.05 per diluted share.
Year Ended December 31, 2024
Previous (7/23/24)
Current
Low End
High End
Low End
High End
(unaudited, amounts in thousands except per share and percentage data)
GAAP net income applicable to stockholders
$
31,374
$
35,336
$
56,880
$
59,506
Funds From Operations, diluted
$
139,360
$
143,380
$
138,535
$
141,225
GAAP net income per diluted share
$
0.25
$
0.28
$
0.45
$
0.47
Funds From Operations per diluted share
$
1.04
$
1.07
$
1.03
$
1.05
Key Drivers
General and administrative expenses
$
23,000
$
22,500
$
23,500
$
23,200
Interest expense and other finance expenses
$
80,000
$
78,000
$
80,000
$
78,500
Straight-line rent
$
600
$
1,500
$
600
$
1,000
Amortization of above-market and below-market rent
$
14,300
$
14,300
$
14,600
$
14,600
Bad debt
$
4,000
$
3,000
$
3,000
$
3,000
Acquisitions (net of dispositions)
$
13,500
$
13,500
$
1,300
$
1,300
Equity issued
$
—
$
—
$
—
$
—
Same-center NOI growth
1.0
%
2.0
%
1.0
%
2.0
%
ROIC's management will discuss guidance, and the underlying assumptions, on ROIC's October 23, 2024 conference call. ROIC's 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, October 23, 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/BI1159e29665c0441fb6af478fc52e86a9
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/4i9ibu36
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 September 30, 2024, ROIC owned 93 shopping centers encompassing approximately 10.5 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)
September 30, 2024(unaudited)
December 31, 2023
ASSETS
Real Estate Investments:
Land
$
971,609
$
967,251
Building and improvements
2,525,268
2,500,647
3,496,877
3,467,898
Less: accumulated depreciation
693,690
654,543
2,803,187
2,813,355
Mortgage note receivable
4,622
4,694
Real Estate Investments, net
2,807,809
2,818,049
Cash and cash equivalents
61,338
6,302
Restricted cash
—
2,116
Tenant and other receivables, net
59,986
61,193
Deposit on real estate acquisition
200
—
Acquired lease intangible assets, net
42,364
42,791
Prepaid expenses
1,932
3,354
Deferred charges, net
26,032
27,294
Other assets
16,500
16,541
Total assets
$
3,016,161
$
2,977,640
LIABILITIES AND EQUITY
Liabilities:
Term loan
$
199,927
$
199,745
Credit facility
135,000
75,000
Senior Notes
1,044,992
1,043,593
Mortgage notes payable
33,481
60,052
Acquired lease intangible liabilities, net
128,520
137,820
Accounts payable and accrued expenses
63,265
50,598
Tenants' security deposits
8,382
8,205
Other liabilities
41,821
39,420
Total liabilities
1,655,388
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; 128,648,870 and 126,904,085 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively
13
13
Additional paid-in capital
