4th QUARTER 2017 SUPPLEMENTAL INFORMATION Retail Opportunity Investments Corporation 8905 Towne Centre Drive Suite 108 San Diego, CA 92122 www.roireit.net
- 2 - Our Company 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 December 31, 2017, ROIC owned 91 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 and S&P Global Ratings. Additional information is available at www.roireit.net. Supplemental Information The enclosed information should be read in conjunction with ROIC's filings with the Securities and Exchange Commission, including but not limited to, its Form 10-Qs filed quarterly and Form 10-Ks filed annually. Additionally, the enclosed information does not purport to disclose all items under generally accepted accounting principles (“GAAP”). 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. Supplemental Disclosure Quarter Ended December 31, 2017Overview
- 3 - Page Balance Sheets……..……………………………………………………………..………………………………………………… 4 Income Statements .…………………………………………………………………………………..……..…………...………… 5 Funds From Operations …………………………………………………………………………………………………………… 6 Summary of Debt Outstanding .……………………………………………..…………………………………………………… 7 Selected Financial Analysis .……………………………………………………………………………………………………… 9 2017 Property Acquisitions ………………………….………………………...………………………………………………… 10 Property Portfolio ………………………………………………….……………………………………………………………… 11 Same-Center Cash Net Operating Income Analysis……………………………………………………………………………… 14 Top Ten Tenants ………………….…………….………………….……………………………………………………………… 15 Lease Expiration Schedule ……………………..………………………..…….………………………………………………… 16 Leasing Summary ………………………………………………………..…................................................................................ 17 Same-Space Comparative Leasing Summary ………………………………………………………..…...................................... 18 Investor Information …………………………………………………………..…………………………………………………… 19 Financial Data Portfolio Data Supplemental Disclosure Quarter Ended December 31, 2017Table of Contents
- 4 - (dollars in thousands, except par values and share amounts) 12/31/17 12/31/16 ASSETS: Real Estate Investments: Land 878,797$ 766,199$ Building and improvements 2,230,600 1,920,819 Less: accumulated depreciation (260,115) (193,021) Real Estate Investments, net 2,849,282 2,493,997 Cash and cash equivalents 11,553 13,125 Restricted cash 5,412 125 Tenant and other receivables, net 43,257 35,820 Deposits 500 - Acquired lease intangible assets, net 82,778 79,205 Prepaid expenses 2,853 3,317 Deferred charges, net 37,167 34,753 Other assets 6,396 2,627 TOTAL ASSETS 3,039,198$ 2,662,969$ LIABILITIES: Term loan 298,816$ 299,191$ Credit facility 140,329 95,654 Senior Notes Due 2027 248,751 - Senior Notes Due 2026 199,752 199,727 Senior Notes Due 2024 245,887 245,354 Senior Notes Due 2023 245,696 245,051 Mortgage notes payable 107,915 71,303 Acquired lease intangible liabilities, net 178,984 154,958 Accounts payable and accrued expenses 18,638 18,294 Tenants' security deposits 6,771 5,950 Other liabilities 18,018 11,922 TOTAL LIABILITIES 1,709,557 1,347,404 EQUITY: Common stock, $.0001 par value 500,000,000 shares authorized 11 11 Additional paid-in capital 1,412,590 1,357,910 Dividends in excess of earnings (210,490) (165,951) Accumulated other comprehensive income (loss) 1,856 (3,729) Total Retail Opportunity Investments Corp. stockholders' equity 1,203,967 1,188,241 Non-controlling interests 125,674 127,324 TOTAL EQUITY 1,329,641 1,315,565 TOTAL LIABILITIES AND EQUITY 3,039,198$ 2,662,969$ The Company's Form 10-Q for the quarters ended September 30, 2017, June 30, 2017 and March 31, 2017, and Form 10-K for the years ended December 31, 2017 and 2016 should be read in conjunction with the above information. Supplemental Disclosure Quarter Ended December 31, 2017Balance Sheets
- 5 - (in thousands, except per share amounts) 3 Months Ended (Unaudited) 12 Months Ended 12/31/17 12/31/16 12/31/17 12/31/16 REVENUES: Base rents 55,686$ 48,401$ 210,564$ 183,330$ Recoveries from tenants 15,718 13,812 58,818 51,454 Other income 1,350 857 3,878 2,405 TOTAL REVENUES 72,754 63,070 273,260 237,189 OPERATING EXPENSES: Property operating 10,521$ 8,440$ 39,151$ 32,201$ Property taxes 7,862 6,756 29,663 25,058 Depreciation and amortization 24,926 22,503 96,256 88,359 General and administrative expenses 3,312 3,065 14,103 13,120 Acquisition transaction costs - 211 4 824 Other expense 103 95 418 456 TOTAL OPERATING EXPENSES 46,724 41,070 179,595 160,018 OPERATING INCOME 26,030 22,000 93,665 77,171 NON-OPERATING EXPENSES: Interest expense and other finance expenses (13,917) (11,348) (50,977) (40,741) TOTAL NON-OPERATING EXPENSES (13,917) (11,348) (50,977) (40,741) NET INCOME 12,113$ 10,652$ 42,688$ 36,430$ NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS (1,264) (1,031) (4,211) (3,676) NET INCOME ATTRIBUTABLE TO RETAIL OPPORTUNITY INVESTMENTS CORP. 10,849$ 9,621$ 38,477$ 32,754$ NET INCOME PER COMMON SHARE - BASIC 0.10$ 0.09$ 0.35$ 0.31$ NET INCOME PER COMMON SHARE - DILUTED 0.10$ 0.09$ 0.35$ 0.31$ Weighted average common shares outstanding - basic 109,834 108,872 109,400 104,072 Weighted average common shares outstanding - diluted 123,412 120,791 121,744 116,040 The Company's Form 10-Q for the quarters ended September 30, 2017, June 30, 2017 and March 31, 2017, and Form 10-K for the years ended December 31, 2017 and 2016 should be read in conjunction with the above information. Supplemental Disclosure Quarter Ended December 31, 2017Income Statements
- 6 - (in thousands, except per share amounts) 3 Months Ended (Unaudited) 12 Months Ended 12/31/17 12/31/16 12/31/17 12/31/16 Funds from Operations (FFO) (1) : Net income attributable to ROIC common stockholders 10,849$ 9,621$ 38,477$ 32,754$ Plus: Depreciation and amortization expense 24,926 22,503 96,256 88,359 FUNDS FROM OPERATIONS - BASIC 35,775$ 32,124$ 134,733$ 121,113$ Net income attributable to non-controlling interests 1,264 1,031 4,211 3,676 FUNDS FROM OPERATIONS - DILUTED 37,039$ 33,155$ 138,944$ 124,789$ FUNDS FROM OPERATIONS PER SHARE - BASIC 0.33$ 0.30$ 1.23$ 1.16$ FUNDS FROM OPERATIONS PER SHARE - DILUTED 0.30$ 0.27$ 1.14$ 1.08$ Weighted average common shares outstanding - basic 109,834 108,872 109,400 104,072 Weighted average common shares outstanding - diluted 123,412 120,791 121,744 116,040 Common dividends per share 0.1875$ 0.1800$ 0.7500$ 0.7200$ FFO Payout Ratio 62.5% 66.7% 65.8% 66.7% The above does not purport to disclose all items required under GAAP. (1) - Funds from operations ("FFO"), is a widely-recognized non GAAP financial measure for REITs that ROIC believes, when considered with financial statements determined 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. ROIC 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 shareholders (determined in accordance with GAAP) excluding gains or losses from debt restructuring and sales of property, plus real estate related depreciation and amortization, and after adjustments for partnerships and unconsolidated joint ventures. Supplemental Disclosure Quarter Ended December 31, 2017Funds From Operations
- 7 - (unaudited, dollars in thousands) Outstanding GAAP Maturity Percent of Balance Interest Rate Interest Rate Date Total Indebtedness Fixed Rate Debt Mortgage Debt: Santa Teresa Village 10,138$ 6.20% 3.26% 02/01/18 0.7% Magnolia Shopping Center 8,951 5.50% 3.86% 10/01/18 0.6% Casitas Plaza Shopping Center 7,307 5.32% 4.20% 06/01/22 0.5% Riverstone Marketplace 18,424 4.96% 3.80% 07/01/22 1.2% Fullerton Crossroads 26,000 4.73% 3.82% 04/06/24 1.7% Diamond Hills Plaza 35,500 3.55% 3.61% 10/01/25 2.4% Net unamortized premiums/deferred financing charges 1,595 Total Mortgage Debt 107,915$ 4.6% 3.7% 5.3 Years (WA) 7.1% Unsecured Senior Notes: Senior Notes Due 2023 250,000$ 5.00% 5.21% 12/15/23 16.7% Net unamortized discount/deferred financing charges (4,304) Senior Notes Due 2023, net 245,696 Senior Notes Due 2024 250,000 4.00% 4.21% 12/15/24 16.7% Net unamortized discount/deferred financing charges (4,113) Senior Notes Due 2024, net 245,887 Senior Notes Due 2026 200,000 3.95% 3.95% 09/22/26 13.3% Net unamortized deferred financing charges (248) Senior Notes Due 2026, net 199,752 Senior Notes Due 2027 250,000 4.19% 4.19% 12/15/27 16.7% Net unamortized deferred financing charges (1,249) Senior Notes Due 2027, net 248,751 Total Unsecured Senior Notes 940,086$ 4.30% 4.41% 7.9 Years (WA) 63.4% Interest rate swaps 100,000$ 1.96% 1.96% 1/31/2019 6.7% Interest rate swaps 200,000 2.84% 2.84% 8/31/2022 13.3% Total Fixed Rate Debt 1,348,001$ 3.94% 3.95% 7.6 Years (WA) 90.5% Variable Rate Debt Credit Facility 143,500$ 2.54% 2.54% 09/08/21 9.5% Net unamortized deferred financing charges (3,171) Credit Facility, net 140,329 Term Loan 300,000 2.67% 2.67% 09/08/22 20.0% Net unamortized deferred financing charges (1,184) Term Loan, net 298,816 Interest rate swaps (300,000) (20.0)% Total Variable Rate Debt 139,145$ 2.63% 2.63% 4.4 Years (WA) 9.5% TOTAL DEBT 1,487,146$ 3.16% 4.35% 6.6 Years (WA) 100.0% Net unamortized premiums on mortgages (1,921) Net unamortized discount on notes 5,315 Net unamortized deferred financing charges 9,280 Total Principal Debt 1,499,820$ (1) Does not include extension options available to ROIC. Supplemental Disclosure Quarter Ended December 31, 2017Summary of Debt Outstanding (1)
- 8 - (unaudited, dollars in thousands) Summary of Principal Maturities Senior Total Principal Percentage of Credit Facility Term Loan Unsecured Notes Payments Debt Maturing 18,900$ -$ -$ -$ 19,612$ 1.3% - - - - 550 0.1% - - - - 577 0.1% - 143,500 - - 144,217 9.6% 23,130 - 300,000 - 324,133 21.6% - - - 250,000 250,686 16.7% 26,000 - - 250,000 276,708 18.4% 32,787 - - - 33,337 2.2% - - - 200,000 200,000 13.3% - - - 250,000 250,000 16.7% 100,817$ 143,500$ 300,000$ 950,000$ 1,499,820$ 100.0% Summary of Unencumbered/Encumbered Properties Percentage GLA of GLA Unencumbered properties 9,682,881 92.4% Encumbered properties 793,137 7.6% 10,476,018 100.0% Summary of Unsecured Debt/Secured Debt Percentage of Total Principal Debt Unsecured principal debt 1,393,500$ 92.9% Secured principal debt 106,320 7.1% Total Principal Debt 1,499,820$ 100.0% (1) Does not include extension options available to ROIC. Amount 2018 712$ Mortgage Principal 2020 577 2021 717 2022 1,003 2023 686 2024 708 Year Payments 2019 550 Mortgage Principal due at Maturity 91 2025 550 2026 - 2027 - 5,503$ Number of Properties 85 6 Supplemental Disclosure Quarter Ended December 31, 2017Summary of Debt Outstanding, continued (1)
- 9 - (unaudited, in thousands, except per share amounts) 12/31/17 09/30/17 06/30/17 03/31/17 12/31/16 Debt coverage ratios, three months ending: Interest coverage ratio (EBITDA/interest expense) 3.7x 3.7x 3.7x 4.0x 4.0x Debt service coverage (EBITDA/(interest expense + scheduled principal payments)) 3.6x 3.7x 3.6x 3.9x 3.9x Net principal debt (Total principal debt less cash & equivalents)/Annualized EBITDA 7.3x 7.1x 7.2x 6.7x 6.4x Debt/equity ratios, at period end: Total principal debt/total market capitalization 37.8% 37.5% 36.7% 33.1% 31.4% Total principal debt/total equity market capitalization 60.8% 60.0% 57.9% 49.4% 45.9% Total principal debt/total book assets 49.3% 48.2% 47.5% 45.8% 43.9% Total principal debt/undepreciated book value 45.5% 44.5% 44.0% 42.5% 40.9% Secured principal debt/undepreciated book value 3.2% 2.0% 2.0% 2.4% 2.4% Market capitalization calculations, at period end: Common shares outstanding 111,886 109,267 109,267 109,263 108,891 Operating partnership units (OP units) outstanding 11,679 11,679 11,679 11,686 11,668 Common stock price per share 19.95$ 19.01$ 19.19$ 21.03$ 21.13$ Total equity market capitalization 2,465,116$ 2,299,192$ 2,320,960$ 2,543,568$ 2,547,411$ Total principal debt 1,499,820 1,379,042 1,343,185 1,257,494 1,168,683 TOTAL MARKET CAPITALIZATION 3,964,936$ 3,678,234$ 3,664,145$ 3,801,062$ 3,716,094$ Unsecured Senior Notes Financial Covenants: (1) Total debt to total assets not to exceed 60% 47.4% 46.3% 45.9% 44.3% 42.7% Total secured debt to total assets not to exceed 40% 3.4% 2.1% 2.2% 2.5% 2.6% Total unencumbered assets to total unsecured debt not to be less than 150% 208.7% 214.5% 216.6% 225.4% 234.3% Consolidated income available for debt service to interest expense not to be less than 1.5:1 3.7x 3.8x 3.9x 4.0x 4.1x (1) Calculated in accordance with GAAP pursuant to underlying bond indentures. Supplemental Disclosure Quarter Ended December 31, 2017Selected Financial Analysis
- 10 - (dollars in thousands) Date Owned Shopping Centers Location Acquired Purchase Amount GLA 1Q 2017 PCC Community Markets Plaza Edmonds, WA 01/25/17 8,600$ 34,459 The Terraces Rancho Palos Verdes, CA 03/17/17 54,100 172,922 Santa Rosa Southside Shopping Center Santa Rosa, CA 03/24/17 28,810 85,535 Total 1Q 2017 91,510$ 292,916 2Q 2017 Division Center Portland, OR 04/05/17 33,000$ 121,904 Highland Hill Shopping Center Tacoma, WA 05/09/17 47,350 163,926 Total 2Q 2017 80,350$ 285,830 3Q 2017 3Q 2017 Monta Loma Plaza Mountain View, CA 09/19/17 30,000$ 48,078 4Q 2017 Fullerton Crossroads Fullerton, CA 10/11/17 64,000$ 219,785 Riverstone Marketplace Vancouver, WA 10/11/17 32,500 95,774 North Lynnwood Shopping Center Lynnwood , WA 10/19/17 13,250 63,606 The Village at Nellie Gail Ranch Laguna Hills, CA 11/30/17 46,000 88,486 Total 4Q 2017 155,750$ 467,651 Total 2017 Acquisitions 357,610$ 1,094,475 Supplemental Disclosure Quarter Ended December 31, 20172017 Property Acquisitions
- 11 - (dollars in thousands) Date Owned % Southern California City State Acquired GLA Leased ABR (1) Major Tenants Los Angeles metro area Paramount Plaza * Paramount CA 12/22/09 95,062 98.0% 1,765$ Grocery Outlet Supermarket, 99¢ Only Stores, Rite Aid Pharmacy Claremont Promenade * Claremont CA 09/23/10 92,297 97.2% 2,368 Super King Supermarket Gateway Village * Chino Hills CA 12/17/10 96,959 96.2% 2,824 Sprouts Market Seabridge Marketplace * Oxnard CA 05/31/12 95,830 99.5% 1,797 Safeway (Vons) Supermarket Glendora Shopping Center * Glendora CA 08/01/12 106,535 95.8% 1,276 Albertson's Supermarket Redondo Beach Plaza * Redondo Beach CA 12/28/12 110,509 100.0% 2,180 Safeway (Vons) Supermarket, Petco Diamond Bar Town Center * Diamond Bar CA 02/01/13 100,342 100.0% 2,280 Walmart Neighborhood Market, Crunch Fitness Diamond Hills Plaza * Diamond Bar CA 04/22/13 139,505 97.1% 3,482 H-Mart Supermarket, Rite Aid Pharmacy Plaza de la Cañada * La Cañada Flintridge CA 12/13/13 100,408 95.9% 2,382 Gelson's Supermarket, TJ Maxx, Rite Aid Pharmacy Fallbrook Shopping Center * Los Angeles CA 06/13/14 755,299 99.6% 12,443 Sprouts Market, Trader Joe's, Kroger (Ralph's) Supermarket(2), TJ Maxx Moorpark Town Center * Moorpark CA 12/03/14 133,547 98.3% 2,045 Kroger (Ralph's) Supermarket, CVS Pharmacy Ontario Plaza * Ontario CA 01/06/15 150,149 99.1% 2,161 El Super Supermarket, Rite Aid Pharmacy Park Oaks Shopping Center * Thousand Oaks CA 01/06/15 110,092 96.2% 2,684 Safeway (Vons) Supermarket, Dollar Tree Warner Plaza * Woodland Hills CA 12/31/15 110,918 96.1% 4,337 Sprouts Market, Kroger (Ralph's) Supermarket (2), Rite Aid Pharmacy (2) Magnolia Shopping Center * Santa Barbara CA 03/10/16 116,360 91.5% 2,094 Kroger (Ralph's) Supermarket Casitas Plaza Shopping Center * Carpinteria CA 03/10/16 97,407 98.6% 1,494 Albertson's Supermarket, CVS Pharmacy Bouquet Center * Santa Clarita CA 04/28/16 148,903 97.8% 3,311 Safeway (Vons) Supermarket, CVS Pharmacy, Ross Dress For Less North Ranch Shopping Center * Westlake Village CA 06/01/16 146,625 90.0% 4,558 Kroger (Ralph's) Supermarket, Trader Joe's, Rite Aid Pharmacy, Petco The Knolls Long Beach CA 10/03/16 52,021 100.0% 1,411 Trader Joe's, Pet Food Express The Terraces Rancho Palos Verdes CA 03/17/17 172,922 90.8% 3,241 Trader Joe's, Marshall's, LA Fitness Los Angeles metro area total 2,931,690 97.2% 60,133$ Orange County metro area Santa Ana Downtown Plaza * Santa Ana CA 01/26/10 105,536 94.1% 2,065$ Kroger (Food 4 Less) Supermarket, Marshall's Sycamore Creek * Corona CA 09/30/10 74,198 100.0% 1,746 Safeway (Vons) Supermarket, CVS Pharmacy (2) Desert Springs Marketplace * Palm Desert CA 02/17/11 113,718 96.3% 2,734 Kroger (Ralph's) Supermarket, Rite Aid Pharmacy Cypress Center West * Cypress CA 12/04/12 107,246 96.5% 1,902 Kroger (Ralph's) Supermarket, Rite Aid Pharmacy Harbor Place Center * Garden Grove CA 12/28/12 119,821 100.0% 1,628 AA Supermarket, Ross Dress For Less 5 Points Plaza * Huntington Beach CA 09/27/13 160,536 99.7% 4,316 Trader Joe's, Pier 1 Peninsula Marketplace * Huntington Beach CA 10/15/13 95,416 100.0% 2,474 Kroger (Ralph's) Supermarket, Planet Fitness Fullerton Crossroads Fullerton CA 10/11/17 219,785 99.4% 3,374 Kroger (Ralph's) Supermarket, Kohl's, Jo-Ann Fabrics and Crafts The Village at Nellie Gail Ranch Laguna Hills CA 11/30/17 88,486 98.5% 2,822 Smart & Final Extra Supermarket Orange Country metro area total 1,084,742 98.4% 23,061$ San Diego metro area Marketplace Del Rio * Oceanside CA 01/03/11 177,195 88.4% 3,119$ Stater Brothers Supermarket, Walgreens Renaissance Towne Centre * San Diego CA 08/03/11 53,074 100.0% 2,516 CVS Pharmacy Euclid Plaza * San Diego CA 03/29/12 77,044 96.8% 1,399 Vallarta Supermarket, Walgreens Bay Plaza * San Diego CA 10/05/12 73,324 97.9% 1,879 Seafood City Supermarket Bernardo Heights Plaza * Rancho Bernardo CA 02/06/13 37,729 96.3% 892 Sprouts Market Hawthorne Crossings * San Diego CA 06/27/13 141,288 100.0% 3,264 Mitsuwa Supermarket, Ross Dress For Less, Staples Creekside Plaza * Poway CA 02/28/14 128,852 98.9% 2,750 Stater Brothers Supermarket, AMC Theatres San Diego metro area total 688,506 96.0% 15,819$ Southern California Totals 4,704,938 97.3% 99,013$ (1) ABR is equal to annualized base rent on a cash basis for all leases in-place at period end. (2) These retailers are not tenants of ROIC. *Denotes properties in same center pool for 4Q 2017. Supplemental Disclosure Quarter Ended December 31, 2017Property Portfolio
- 12 - (dollars in thousands) Date Owned % Northern California City State Acquired GLA Leased ABR (1) Major Tenants San Francisco metro area Pleasant Hill Marketplace * Pleasant Hill CA 04/08/10 69,715 100.0% 1,471$ Total Wine and More, Buy Buy Baby, Basset Furniture Pinole Vista Shopping Center * Pinole CA 01/06/11 223,369 96.9% 2,960 SaveMart (Lucky) Supermarket, Planet Fitness, Kmart Country Club Gate Center * Pacific Grove CA 07/08/11 109,331 94.9% 2,014 SaveMart (Lucky) Supermarket, Rite Aid Pharmacy Marlin Cove Shopping Center * Foster City CA 05/04/12 73,943 95.5% 2,163 99 Ranch Market The Village at Novato * Novato CA 07/24/12 20,081 100.0% 551 Trader Joe's, Pharmaca Pharmacy Santa Teresa Village * San Jose CA 11/08/12 124,306 93.2% 2,495 Raleys (Nob Hill) Supermarket, Dollar Tree Granada Shopping Center * Livermore CA 06/27/13 69,325 100.0% 1,304 SaveMart (Lucky) Supermarket Country Club Village * San Ramon CA 11/26/13 111,093 99.0% 2,084 Walmart Neighborhood Market, CVS Pharmacy North Park Plaza * San Jose CA 04/30/14 76,697 100.0% 2,301 H-Mart Supermarket Winston Manor * South San Francisco CA 01/07/15 49,852 100.0% 1,446 Grocery Outlet Supermarket Jackson Square * Hayward CA 07/01/15 114,220 100.0% 2,158 Safeway Supermarket, CVS Pharmacy, 24 Hour Fitness Gateway Centre * San Ramon CA 09/01/15 112,553 98.6% 2,580 SaveMart (Lucky) Supermarket, Walgreens Iron Horse Plaza * Danville CA 12/04/15 61,860 96.3% 2,073 Lunardi's Market Monterey Center * Monterey CA 07/14/16 25,798 100.0% 1,076 Trader Joe's, Pharmaca Pharmacy Santa Rosa Southside Shopping Center Santa Rosa CA 03/24/17 88,535 100.0% 1,672 REI, Cost Plus World Market Monta Loma Plaza Mountain View CA 09/19/17 48,078 100.0% 1,353 Safeway Supermarket San Francisco metro area total 1,378,756 97.9% 29,701$ Sacramento metro area Norwood Shopping Center * Sacramento CA 04/06/10 85,693 100.0% 1,381$ Viva Supermarket, Rite Aid Pharmacy, Citi Trends Mills Shopping Center * Rancho Cordova CA 02/17/11 235,314 86.4% 2,426 Viva Supermarket, Ross Dress For Less (dd's Discounts), Dollar Tree Morada Ranch * Stockton CA 05/16/11 101,842 95.1% 2,198 Raleys Supermarket Round Hill Square Shopping Center * Zephyr Cove NV 09/21/11 115,984 94.1% 1,877 Safeway Supermarket, Dollar Tree, US Postal Service Green Valley Station * Cameron Park CA 06/15/12 52,245 74.4% 834 CVS Pharmacy Sacramento metro area total 591,078 90.3% 8,716$ Northern California Totals 1,969,834 95.6% 38,417$ (1) ABR is equal to annualized base rent on a cash basis for all leases in-place at period end. *Denotes properties in same center pool for 4Q 2017. Supplemental Disclosure Quarter Ended December 31, 2017Property Portfolio, continued
- 13 - (dollars in thousands) Date Owned % Pacific Northwest City State Acquired GLA Leased ABR (1) Major Tenants Seattle metro area Meridian Valley Plaza * Kent WA 02/01/10 51,597 96.9% 620$ Kroger (QFC) Supermarket The Market at Lake Stevens * Lake Stevens WA 03/11/10 74,130 100.0% 1,461 Albertson's (Haggen) Supermarket Canyon Park Shopping Center * Bothell WA 07/29/11 123,592 98.4% 2,340 PCC Community Markets, Rite Aid Pharmacy, Petco Hawks Prairie Shopping Center * Lacey WA 09/09/11 157,529 100.0% 1,823 Safeway Supermarket, Dollar Tree, Big Lots The Kress Building * Seattle WA 09/30/11 74,616 100.0% 1,814 IGA Supermarket, TJMaxx Gateway Shopping Center * Marysville WA 02/16/12 104,298 90.4% 2,391 WinCo Foods (2), Rite Aid Pharmacy, Ross Dress For Less Aurora Square * Shoreline WA 05/02/12 38,030 100.0% 342 Central Supermarket Canyon Crossing * Puyallup WA 04/15/13 120,508 96.3% 2,511 Safeway Supermarket Crossroads Shopping Center * Bellevue WA 2010/2013 463,541 100.0% 10,385 Kroger (QFC) Supermarket, Bed Bath & Beyond, Dick's Sporting Goods Aurora Square II * Shoreline WA 05/22/14 70,720 97.5% 1,284 Marshall's, Pier 1 Imports Bellevue Marketplace * Bellevue WA 12/10/15 113,758 100.0% 3,087 Asian Family Market Four Corner Square * Maple Valley WA 12/21/15 119,560 100.0% 2,534 Grocery Outlet Supermarket, Walgreens, Johnsons Home & Garden Bridle Trails Shopping Center Kirkland WA 10/17/16 105,486 100.0% 2,052 Grocery Outlet Supermarket, Bartell Drugs, Dollar Tree PCC Community Markets Plaza Edmonds WA 01/25/17 34,459 100.0% 646 PCC Community Markets Highland Hill Shopping Center Tacoma WA 05/09/17 163,926 95.9% 2,656 Safeway Supermarket, LA Fitness, Dollar Tree, Petco North Lynnwood Shopping Center Lynnwood WA 10/19/17 63,606 91.3% 801 Kroger (QFC) Supermarket Seattle metro area total 1,879,356 98.3% 36,747$ Portland metro area Vancouver Market Center * Vancouver WA 06/17/10 118,385 97.0% 1,365$ Skyzone Happy Valley Town Center * Happy Valley OR 07/14/10 138,662 100.0% 3,514 New Seasons Supermarket Wilsonville Old Town Square * Wilsonville OR 2010/2012 49,937 100.0% 1,819 Kroger (Fred Meyer) Supermarket (2) Cascade Summit Town Square * West Linn OR 08/20/10 94,934 97.3% 1,637 Safeway Supermarket Heritage Market Center * Vancouver WA 09/23/10 107,468 98.3% 1,718 Safeway Supermarket, Dollar Tree Division Crossing * Portland OR 12/22/10 103,561 98.8% 1,197 Rite Aid Pharmacy, Ross Dress For Less, Ace Hardware Halsey Crossing * Gresham OR 12/22/10 99,428 96.3% 1,283 24 Hour Fitness, Dollar Tree Hillsboro Market Center * Hillsboro OR 11/23/11 156,021 100.0% 2,498 Albertson's Supermarket, Dollar Tree, Ace Hardware Robinwood Shopping Center * West Linn OR 08/23/13 70,831 100.0% 1,050 Walmart Neighborhood Market Tigard Marketplace * Tigard OR 02/18/14 136,889 99.3% 1,955 H-Mart Supermarket, Bi-Mart Pharmacy Wilsonville Town Center * Wilsonville OR 12/11/14 167,829 97.9% 2,675 Safeway Supermarket, Rite Aid Pharmacy, Dollar Tree Tigard Promenade * Tigard OR 07/28/15 88,043 100.0% 1,464 Safeway Supermarket Sunnyside Village Square * Happy Valley OR 07/28/15 92,278 100.0% 1,552 Grocery Outlet Supermarket, 24 Hour Fitness, Ace Hardware Johnson Creek Center * Happy Valley OR 11/09/15 108,588 100.0% 2,208 Trader Joe's, Walgreens, Sportsman's Warehouse Rose City Center * Portland OR 09/15/16 60,680 100.0% 675 Safeway Supermarket Division Center Portland OR 04/05/17 121,904 100.0% 1,938 Grocery Outlet Supermarket, Rite Aid Pharmacy, Petco Riverstone Marketplace Vancouver WA 10/11/17 95,774 98.5% 2,109 Kroger (QFC) Supermarket Portland metro area total 1,811,212 99.0% 30,657$ Pacific Northwest Totals 3,690,568 98.6% 67,404$ TOTAL SHOPPING CENTERS 10,365,340 97.5% 204,834$ (1) ABR is equal to annualized base rent on a cash basis for all leases in-place at period end. (2) These retailers are not tenants of ROIC. Note: Property Portfolio excludes one shopping center that is currently under contract to be sold (slated for new multi-family development). *Denotes properties in same center pool for 4Q 2017. Supplemental Disclosure Quarter Ended December 31, 2017Property Portfolio, continued
- 14 - (unaudited, dollars in thousands) Three Months Ended 12 Months Ended 12/31/17 12/31/16 $ Change % Change 12/31/17 12/31/16 $ Change % Change Number of shopping centers included in same-center analysis (1) 78 78 72 72 Same-center occupancy 97.5% 97.6% (0.1)% 97.7% 97.4% 0.3% REVENUES: Base rents 43,457$ 42,119$ 1,338$ 3.2% 158,816$ 153,157$ 5,659$ 3.7% Percentage rent 1,024 1,019 5 0.5% 1,265 1,423 (158) (11.1)% Recoveries from tenants 13,844 13,528 316 2.3% 50,146 48,013 2,133 4.4% Other property income 1,279 651 628 96.5% 3,670 2,037 1,633 80.2% TOTAL REVENUES 59,604 57,317 2,287 4.0% 213,897 204,630 9,267 4.5% OPERATING EXPENSES: Property operating expenses 9,298$ 8,668$ 630$ 7.3% 33,563$ 30,891$ 2,672$ 8.6% Bad debt expense 436 142 294 207.0% 1,542 1,089 453 41.6% Property taxes 6,703 6,558 145 2.2% 24,087 22,527 1,560 6.9% TOTAL OPERATING EXPENSES 16,437 15,368 1,069 7.0% 59,192 54,507 4,685 8.6% SAME-CENTER CASH NET OPERATING INCOME 43,167$ 41,949$ 1,218$ 2.9% 154,705$ 150,123$ 4,582$ 3.1% SAME-CENTER CASH NET OPERATING INCOME RECONCILIATION GAAP Operating Income 26,030$ 22,000$ 93,665$ 77,171$ Depreciation and amortization 24,926 22,503 96,256 88,359 General and administrative expenses 3,312 3,065 14,103 13,120 Acquisition transaction costs - 211 4 824 Other expense 103 95 418 456 Property revenues and other expenses (2) (5,500) (4,117) (22,404) (17,636) TOTAL COMPANY CASH NET OPERATING INCOME 48,871 43,757 182,042 162,294 Non Same-Center Cash NOI (5,704) (1,808) (27,337) (12,171) SAME-CENTER CASH NET OPERATING INCOME 43,167$ 41,949$ 154,705$ 150,123$ (1) Same centers are those properties which were owned for the entirety of the current and comparable prior year period. (2) Includes straight-line rents, amortization of above and below-market lease intangibles, anchor lease termination fees net of contractual amounts, and expense and recovery adjustments related to prior periods. Note: Analysis excludes one shopping center that is currently under contract to be sold (slated for new multi-family development). Supplemental Disclosure Quarter Ended December 31, 2017Same-Center Cash Net Operating Income Analysis
- 15 - (dollars in thousands) Percent Number of Leased of Total Percent of Tenant Leases GLA Leased GLA ABR Total ABR 1 Albertson's / Safeway Supermarkets 21 1,032,829 10.2% 12,386$ 6.0% 2 Kroger Supermarkets 12 511,240 5.0% 7,054 3.4% 3 Rite Aid Pharmacy 14 266,921 2.6% 3,331 1.6% 4 JP Morgan Chase 22 98,473 1.0% 3,029 1.5% 5 SaveMart Supermarkets 4 187,639 1.8% 2,813 1.4% 6 Marshall's / TJMaxx 6 178,195 1.8% 2,649 1.3% 7 Sprouts Markets 4 159,163 1.6% 2,568 1.2% 8 Ross Dress For Less / dd's Discounts 7 191,703 1.9% 2,558 1.2% 9 Trader Joe's 8 96,714 1.0% 2,492 1.2% 10 H-Mart Supermarkets 3 147,040 1.4% 2,400 1.2% Top 10 Tenants Total 101 2,869,917 28.3% 41,280$ 20.0% Other Tenants 1,863 7,300,670 71.7% 164,828 80.0% Total Portfolio 1,964 10,170,587 100.0% 206,108$ 100.0% Supplemental Disclosure Quarter Ended December 31, 2017Top Ten Tenants
- 16 - (dollars in thousands) Anchor Tenants (1) Number of Leased Percent of Total Percent of ABR Leases Expiring (2) GLA Total Leased GLA ABR Total ABR Per Sq. Ft. 2018 7 240,284 2.4% 3,644$ 1.8% 15.17$ 2019 15 474,450 4.7% 7,485 3.6% 15.78 2020 17 553,496 5.4% 6,451 3.1% 11.66 2021 14 494,281 4.9% 5,246 2.5% 10.61 2022 18 551,606 5.4% 6,930 3.4% 12.56 2023 25 803,885 7.8% 11,576 5.6% 14.40 2024 6 270,824 2.7% 3,487 1.7% 12.88 2025 10 341,785 3.4% 4,919 2.4% 14.39 2026 11 389,933 3.8% 5,235 2.5% 13.42 2027 9 231,234 2.3% 3,694 1.8% 15.98 2028+ 33 1,326,833 13.0% 20,609 10.0% 15.53 165 5,678,611 55.8% 79,276$ 38.4% 13.96$ Non-Anchor Tenants Number of Leased Percent of Total Percent of ABR Leases Expiring (2) GLA Total Leased GLA ABR Total ABR Per Sq. Ft. 2018 258 465,583 4.6% 14,233$ 6.9% 30.57$ 2019 266 564,119 5.5% 15,419 7.5% 27.33 2020 275 639,028 6.3% 17,471 8.5% 27.34 2021 271 631,223 6.2% 18,154 8.8% 28.76 2022 270 648,061 6.4% 19,067 9.2% 29.42 2023 140 402,940 4.0% 10,777 5.3% 26.74 2024 70 231,991 2.3% 6,067 2.9% 26.15 2025 57 211,253 2.1% 5,587 2.7% 26.45 2026 61 189,410 1.9% 5,627 2.7% 29.71 2027 58 176,945 1.7% 5,301 2.6% 29.96 2028+ 73 331,423 3.2% 9,129 4.5% 27.54 1,799 4,491,976 44.2% 126,832$ 61.6% 28.23$ All Tenants Number of Leased Percent of Total Percent of ABR Leases Expiring (2) GLA Total Leased GLA ABR Total ABR Per Sq. Ft. 2018 265 705,867 7.0% 17,877$ 8.7% 25.33$ 2019 281 1,038,569 10.2% 22,904 11.1% 22.05 2020 292 1,192,524 11.7% 23,922 11.6% 20.06 2021 285 1,125,504 11.1% 23,400 11.3% 20.79 2022 288 1,199,667 11.8% 25,997 12.6% 21.67 2023 165 1,206,825 11.8% 22,353 10.9% 18.52 2024 76 502,815 5.0% 9,554 4.6% 19.00 2025 67 553,038 5.5% 10,506 5.1% 19.00 2026 72 579,343 5.7% 10,862 5.2% 18.75 2027 67 408,179 4.0% 8,995 4.4% 22.04 2028+ 106 1,658,256 16.2% 29,738 14.5% 17.93 1,964 10,170,587 100.0% 206,108$ 100.0% 20.27$ (1) Anchor tenants are leases equal to or greater than 15,000 square feet. (2) Does not assume exercise of renewal options. Supplemental Disclosure Quarter Ended December 31, 2017Lease Expiration Schedule
- 17 - New Leases Non-Anchor Anchor Total Non-Anchor Anchor Total Number of Leases 36 2 38 150 5 155 Gross Leasable Area (sq. ft.) 65,480 30,326 95,806 312,102 85,113 397,215 Initial Base Rent ($/sq. ft.) (1) 30.47$ 13.00$ 24.94$ 25.26$ 14.23$ 22.90$ Tenant Improvements ($/sq. ft.) 6.70$ -$ 4.58$ 4.47$ 8.70$ 5.38$ Leasing Commissions ($/sq. ft.) 3.63$ -$ 2.48$ 2.50$ 2.68$ 2.54$ Weighted Average Lease Term (Yrs.) (2) 8.3 11.0 9.2 7.2 10.6 8.0 Renewals Non-Anchor Anchor Total Non-Anchor Anchor Total Number of Leases 57 7 64 249 16 265 Gross Leasable Area (sq. ft.) 126,682 170,718 297,400 520,632 437,074 957,706 Initial Base Rent ($/sq. ft.) (1) 28.71$ 16.41$ 21.64$ 31.25$ 14.70$ 23.70$ Tenant Improvements ($/sq. ft.) 0.91$ 2.08$ 1.58$ 0.53$ 0.06$ 0.32$ Leasing Commissions ($/sq. ft.) 0.08$ 0.15$ 0.12$ 0.02$ 0.06$ 0.04$ Weighted Average Lease Term (Yrs.) (2) 5.2 5.5 5.4 5.2 5.4 5.3 Total Non-Anchor Anchor Total Non-Anchor Anchor Total Number of Leases 93 9 102 399 21 420 Gross Leasable Area (sq. ft.) 192,162 201,044 393,206 832,734 522,187 1,354,921 Initial Base Rent ($/sq. ft.) (1) 29.31$ 15.89$ 22.45$ 29.00$ 14.62$ 23.46$ Tenant Improvements ($/sq. ft.) 2.88$ 1.76$ 2.31$ 2.01$ 2.10$ 2.04$ Leasing Commissions ($/sq. ft.) 1.29$ 0.13$ 0.70$ 0.95$ 0.49$ 0.77$ Weighted Average Lease Term (Yrs.) (2) 6.3 6.3 6.3 6.0 6.2 5.9 (1) Initial Base Rent is on a cash basis and is the initial contractual monthly rent, annualized. (2) Does not assume exercise of renewal options. For the Three Months Ended December 31, 2017 For the Twelve Months Ended December 31, 2017 Supplemental Disclosure Quarter Ended December 31, 2017Leasing Summary
- 18 - New Leases Non-Anchor Anchor Total Non-Anchor Anchor Total Comparative # of Leases 23 2 25 92 4 96 Comparative GLA (sq. ft.) (1) 42,727 30,326 73,053 203,850 66,229 270,079 Prior Base Rent ($/sq. ft.) (2) 30.12$ 11.25$ 22.28$ 22.44$ 9.01$ 19.15$ Initial Base Rent ($/sq. ft.) 34.23$ 13.00$ 25.42$ 27.93$ 12.87$ 24.23$ Percentage Change in Base Rents 13.7% 15.6% 14.1% 24.4% 42.8% 26.6% Tenant Improvements ($/sq. ft.) 5.26$ -$ 3.08$ 5.26$ 11.18$ 6.71$ Leasing Commissions ($/sq. ft.) 3.77$ -$ 2.21$ 2.69$ 2.30$ 2.59$ Weighted Average Lease Term (Yrs.) (3) 7.6 11.0 9.0 7.7 10.6 8.4 Renewals Non-Anchor Anchor Total Non-Anchor Anchor Total Comparative # of Leases 57 7 64 249 16 265 Comparative GLA (sq. ft.) 126,682 170,718 297,400 520,632 437,074 957,706 Prior Base Rent ($/sq. ft.) (2) 26.16$ 15.18$ 19.86$ 28.22$ 13.77$ 21.62$ Initial Base Rent ($/sq. ft.) 28.71$ 16.41$ 21.64$ 31.25$ 14.70$ 23.70$ Percentage Change in Base Rents 9.7% 8.1% 9.0% 10.7% 6.8% 9.6% Tenant Improvements ($/sq. ft.) 0.91$ 2.08$ 1.58$ 0.53$ 0.81$ 0.66$ Leasing Commissions ($/sq. ft.) 0.08$ 0.15$ 0.12$ 0.02$ 0.06$ 0.04$ Weighted Average Lease Term (Yrs.) (3) 5.2 5.5 5.4 5.2 5.4 5.3 Total Non-Anchor Anchor Total Non-Anchor Anchor Total Comparative # of Leases 80 9 89 341 20 361 Comparative GLA (sq. ft.) (1) 169,409 201,044 370,453 724,482 503,303 1,227,785 Prior Base Rent ($/sq. ft.) (2) 27.16$ 14.59$ 20.34$ 26.59$ 13.14$ 21.08$ Initial Base Rent ($/sq. ft.) 30.10$ 15.89$ 22.39$ 30.31$ 14.46$ 23.82$ Percentage Change in Base Rents 10.8% 8.9% 10.1% 14.0% 10.0% 13.0% Tenant Improvements ($/sq. ft.) 2.00$ 1.76$ 1.87$ 1.86$ 2.18$ 1.99$ Leasing Commissions ($/sq. ft.) 1.01$ 0.13$ 0.53$ 0.77$ 0.35$ 0.60$ Weighted Average Lease Term (Yrs.) (3) 5.8 6.3 6.1 5.9 6.1 6.0 (1) Comparative GLA includes spaces that were vacant for less than 12 months, excluding spaces that were not leased at the time of acquisition. (2) Prior Base Rent is on a cash basis and is the final monthly rent paid, annualized, for the prior tenant or the prior lease that was renewed. (3) Does not assume exercise of renewal options. For the Three Months Ended December 31, 2017 For the Twelve Months Ended December 31, 2017 Supplemental Disclosure Quarter Ended December 31, 2017Same-Space Comparative Leasing Summary
- 19 - Equity Research Coverage Baird Equity Research RJ Milligan 813.273.8252 Bank of America Merrill Lynch Craig Schmidt 646.855.3640 BTIG Michael Gorman 212.738.6138 Capital One Securities, Inc. Chris Lucas 571.633.8151 Citi Michael Bilerman 212.816.1383 Christy McElroy 212.816.6981 D.A. Davidson & Co. James O. Lykins 503.603.3041 Green Street Daniel J. Busch 949.640.8780 J.P. Morgan Michael W. Mueller 212.622.6689 Jefferies George Hoglund 212.284.2226 KeyBanc Capital Markets Todd Thomas 917.368.2286 Raymond James Paul Puryear 727.567.2253 Collin Mings 727.567.2585 RBC Capital Markets Wes Golladay 440.715.2650 Wells Fargo Jeff Donnelly 617.603.4262 Fixed Income Research Coverage J.P. Morgan Mark Streeter 212.834.5086 Ratings Agency Coverage Moody’s Investors Service Dilara Sukhov 212.553.1438 S&P Global Ratings Michael Souers 212.438.2508 Supplemental Disclosure Quarter Ended December 31, 2017Investor Information Retail Opportunity Investments Corp. www.roireit.net NASDAQ: ROIC 8905 Towne Centre Drive, Suite 108 Transfer Agent: Constance Adams ComputerShare constance.adams@computershare.com Investor Relations: Ashley Rubino arubino@roireit.net 858.255.4913
