Retail Opportunity Investments (ROIC) 24 Oct 182018 Q3 Earnings call transcript

Company Profile

Participants

Stuart Tanz	President, Chief Executive Officer
Michael Haines	Chief Financial Officer
Richard Schoebel	Chief Operating Officer
Collin Mings	Raymond James & Associates
Jeremy Metz	BMO Capital Markets
Brian Hawthorne	RBC Capital Markets
Michael Gorman	BTIG
RJ Milligan	Baird
Todd Thomas	KeyBanc
Christy McElroy	Citi
Jeff Donnelly	Wells Fargo
Chris Lucas	Capital One
Michael Muller	JPMorgan
Craig Schmidt	Bank of America

Call transcript

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Operator

Good day and welcome to Retail Opportunity Investments 2018 Third Quarter conference call. Participants are currently in a listen-only mode.

Following the company's prepared comments, the call will be opened up for questions. Please note that certain matters discussed in this call today constitute forward-looking statements within the meaning of the federal securities laws.

Although the company believes that expectations reflected in such forward-looking statements are based upon reasonable assumptions, the company can give no assurance that these expectations will be achieved. by known cause risks, materially actual results or involve factors, and from statements statements expressed may looking which results implied forward-looking and uncertainties unknown other future and Such expectations. forward such to differ described XX-K. risk the filings Exchange including is and Annual recent the its company's Information regarding most factors Report in such Commission and with Securities on Form the such for to encouraged company's filings regarding regarding to more SEC well as refer the financial results. risks are operational factors Participants the and and company's information with The its company's filings website. can be found on

would Now company's to I Executive like the introduce Stuart Chief Tanz, Officer.

Stuart Tanz

everyone. morning Good

Here Chief our Chief Operating with Financial our Michael Schoebel, Rick me today Officer. is Officer Haines, and

the ending We executed are a renewed new achieved quarter activity active while posted XX.X%. a another growth. on the very achieving good high strong leases rent space, and XXX We with that of quarter. lease portfolio quarter a we to mix solid record pleased at rate company the during the report over Capitalizing demand also for new

As thus a the far lease on to space track of amount record up has year. shaken we are it for

In third down to raising during strengthened sheet our and our the we the success balance front, addition leasing paying debt. also equity quarter on

we year. had of and cautious in In jump half again; that continue however, signs the back in brought first begun terms the we marketplace the the interest market saw of of to acquisitions conditions patient. uncertainty the recent show during to becoming favorable Therefore, rates be has

mixed group shopping to the feasibility quarter, our introduced use our a last analyze are opportunities centers. we continuing we that to having multifamily of to a component namely redevelopment on the Turning select of call

on Thus currently and furthering multifamily feasible competitive think we we adding aimed up range. three the three are process our of unlevered X% those far with are entitlement the we component. one shopping preliminary the centers Of of at is Francisco $XXX portfolio. potentially represent have Seattle. opportunities two underway enhancing our investment analysis, these in million strategy our position on of the opportunities, shopping XX mid in with term and that identified intrinsic yield XX, underlying specifically a value properties projected San the Based area centers at for Our about long in a Bay altogether

San have adjacent this site. One center fortunately in only quarter on to that third ahead is could Very involves in the long year's of Kmart a of control this Kmart we that this two acquired just we the had Francisco is site which our during a important, the entire filing shopping portfolio. we lost of opportunities the ground our Pinole. term where redeveloping lease had bankruptcy exposure Kmart site

risk. intend market where mitigate has considerable and development As specifically to properties we relationships municipalities. our these To markets the building goal is to we multifamily three move on carefully knowledge a opportunities capitalize experience with multifamily expertise can in that seasoned the end, partner we and these with forward our best with combined developer local that in

key contributing several position. more variety arrangements a of as from ranging with the players discussions in exploring larger equal simply contribution currently equity are We a taking our a to land partnership

our take we sales. look asset meaningful through a would to in fund do we more Assuming part noncore stake, potentially investment certain capital

that $XX third the in during million. of lone was dispositions, owned border east of Nevada on sold for quarter we we Sacramento. the property Speaking the one California It property

including we property are potential asset this in contemplating sales have few that also we a Sacramento. properties additional other Beyond

certain in lease then and as shape. take as Our orderly as redevelopment redeploy long we to markets, goal term an capital core and opportunities the the exit fashion as Sacramento well is they market other in objectives complete

results financial Michael to over through our quarter. Mike? the for Now, I'll call the turn to third Haines you take

Michael Haines

Thanks Stuart.

for of first one-time For With equating approximately the nine with quarter totaled the respect a operations $X.XX connection nine to basis company million terms to for diluted first million Net and And in net attributable quarter diluted million and per common per operating cash diluted million XX, XXXX income to results by share months was months of and equating revenues lease XXXX, financial income, comparative that to With GAAP of per million $X.XX total same and respect for per company total XXXX X.X% million the quarter share. NOI share. in shareholders from $XX.X in totaled the recaptured. first months we XXXX $XX.X $X.XX of third nine XXXX. had in in increased of to net for the expense share million center level $XXX,XXX roughly approximately year. funds FFO for or for had totaling income. an property on a the $X.XX $XXX of or operating $XXX income. the ended terms months X.X% $XX.X three operating the million of FFO first total $XX.X $XX.X XXXX in in by $XX.X in the months Included in income of third for quarter was anchor nine the FFO September the our has revenues company diluted the third the

this have already take up to we a notable rent. discuss new will tenant at a space in lined Rich As increase

expense, been the X% the quarter would have in same closer for NOI the center both Excluding to year-to-date. and increase

in raising $X the equity the third common on, through balance. raised by $XX.X Stuart credit mortgage $XX we the X.XX sale the third including million our equity million million As retiring spoke quarter ATM some we with of, Taking that Stuart reduced during total during program. proceeds proceeds. reducing In a million quarter our we approximately together our along asset gross touched shares debt with line issued

unsecured. at of the was vast XX, which As a September result, $X.X of had billion company outstanding a approximately debt majority

comes secured of debt our of is XX% we over line have out other than XX down is line, to next $XXX balance now lowering of currently renewal. the debt, for third interest the quarter And XX million million properties. September three when centers during the with lowered to our credit returning maturing our shopping increased by our mortgage that third times $XX portfolio, in now up with And less $XX outstanding our quarter. one X.X as zero In to credit just step our our million we down years words, fact, unencumbered. four to debt And for for In encumbering respect XX. of our coverage

to accounting effect G&A impact next of leasing change adding roughly than $X.X about only our financials to will the takes year share accounting the internal our be when X% is $X.X Finally, FASB costs $X.XX our to expensed rather annual to of FFO. million the less which in change requiring terms to to per equating capitalized, modest than million annually be

our the Rich to to operations. Schoebel, turn over property I'll Now, Rich? call COO, discuss

Richard Schoebel

Mike. Thanks

space As proactively other being anchor on across on this and and necessity in seek underperforming Stuart our occupancy national anchor well out oriented daily and we regional continues West to capitalize demand. order be as noted, retailers to value for demand our Notwithstanding space continue at to opportunities relocation XXX% as Coast. to any expansion grocers the portfolio continues strong. seek

an only as achieving them expanding grocer with in also three significant XXXX us third been we Not now shopping to square that enabling mentioned, the an a during close tenant restriction tenant rent, removed was replacing what additional increase the paying, example, As times is an the build are the to old previous on recaptured previous strong marketplace. the pad an are anchor in quarter and value-oriented we a had Mike the foot space at property that’s center.

In that format thread our Internet organic, for these are terms common all a users users these all looking health by ideal day conveniently perspective, facilities. key variety oriented are with aspects. several centers wellness small restaurants tenants, all consumers. users located children is to from demand target their they driven the fitness including learning are From predominantly concepts, of us and care format to The of smaller focused service centers for and to ranging be shopping tenants resilient continues and in they

to to spaces to in remaining their which XXX% several fill we to our properties full a format at those quarter. hard leased are fact last us properties accomplished lease we Given certain of able during small third enabling bring bit of the

consistent leased XXX% XXX% as tenants. third anchor or leased. I leasing record XX at we for results a to centers, Breaking traffic the the consecutive Additionally, as weekdays space foot which particularly serves consecutive quarter our you company ending of with new our occupancy, the daily quarter, activity which at achieved draw evening non-anchor noted, seventh users anchor necessity through sales the is bolster at quarter our and the third our these and mentioned specific To take space, at to for XX.X% and Stuart continues now during quarter the XX.X% types to be starting larger down between XX%. and above high anchor

terms space work available we have we at portfolio. the our In across of space, continue leasing shop hard to our

quarter we during in-line our of space fact, of a high new increased XX.X% as In the third XX. September to leased

largely square total the cash feet executed driven base same XXX,XXX rent a With leases in respect achieved totalling third square on an XXX% anchor third by XXX,XXX we feet XX.X% during lease achieving rent was on a average. new we leases, leases same of nearly signed space During quarter base quarter cash we in during the XX.X% increase comparative totalling in that achieving quarter the That to a increase where XXX we increase executed third average. rent. space XX increase

a and small upon releasing not during majority many is That the quarter. square during the market shop space, was released the to XXXX were quarter were feet, that the function the the tenants. where close of can shop released third vary that of leases the of than depending were is in-line a specific widely space terms of rolled a It perspective increase. specifically there rolled less Much rents indicative the only nominal In essentially that and during space spaces, spaces the simply quarter so trend. of

continue Looking ahead we achieving going growth rent forward. solid fully expect to

at lastly, of third and economic the basis. not the commence third rent feet XXX,XXX the of cash spread rent, lease an terms and space on average. stood start annual between the cash meaning the achieving activity, of in yet build And in quarter million quarter additional during In occupancy have executed rent spread XX terms in at a X.X% base signed square paying $X.X newly totalling taken we renewal that on renewals increase tenants

million. third $X started XX during activity leasing quarter, remaining the representing paying $XXX,XXX received that million rent $X.X of September $X.X Taking about quarter. quarter $X.X with in the third million tenants of our spread was the the third was which together incremental of During million about the as

turn back Stuart. I'll call the over Now to

Stuart Tanz

is It Rich. this say Thanks that unusual been year an us. for has safe to

relates we it As year. XXX acquisitions, million million to to acquiring to are each XXX accustomed

noted continue number of proactively transactions. in That my we we market environment. we continue in However, explore always cautious off out current as a be to this are remarks, I to and have being opportunities as opening said, interesting seeking

In two terms have and same this there our impacted factors have performance. year, of underlying NOI our center that been FFO

the from deliver delay never years slow municipalities, experienced which which we've our increasingly in to stores ability it these in our process off it deliver the has commencement we once final backlog is permitting First In this as our NOI. with ability in XX relates in GAAP results. the cash the space newly ties various tenants turn which to sign our made challenging forecast it as of of city our open both terms their space ties relates markets and of when to to type to operating then to leased do the getting to

ties The extended permitting process to second factor between which the the is slow leases. downtime

higher originally impacts is asset XX% rent, proving to a relates issuance property year terms amount had and it year in downtime in be rents It to growth XXXX. together factors well the quarter permitting which to it spreads, unfortunately does based budgeting total that for total level is lease we recoveries. as not we are the range still longer leasing, and our as sales, for our GAAP the original equity the thus short $X.XX. slower downtime. be bit FFO progressed To the than Notwithstanding process leasing As anticipated with been being would slow the GAAP term in now with added to of the achieved averaging our record year as far process what pace based permitting year along is third on the cash our Taking FFO we though, which had this and than both mean into of additional this terms CAM the together be projected the expected space and for growth clear had with cash new have downtime record we center account growth achieving is NOI. on $X.XX guidance same these a to of budgeting in

In between expect terms NOI increase we of center year-over-year be the same X%. and X.X% to

an year, has markets, remains unusual our been portfolio our this and fundamentals our While of sound. the business

highlighted, As continue with on Coast. retailers West Rich push expansion the to forward plans

fact, few In Coast. the they And we West Los about upbeat weeks Conference. met ICSC all presence I key remain the many at tell very on can of just you growing a with ago Angeles tenants our that their

in markets core the Additionally, highly among markets supply country. constrained most our remain metro the protected,

in as a and our we look XXXX turning future, forward term long We our completing business to continue confident prospects overall. situation sights is of beyond. that and be portfolio backdrop Our in to our With markets. XXXX portfolio to the these and well

Now, call we'll the Operator? open for up questions. your

Operator

[Operator Instructions] first our from question comes of Collin the Raymond Mings line from James. And

line now Your is open.

Stuart Tanz

Collin. morning, Good

Collin Mings

about just outlined about the talk versus sharing redevelopment projects just that more in pretty how may for Stuart projects, three you been can between trade potentially story? of options opportunities the you stake having the upside Hey, straightforward a from kind you're the as and complicating on just first question historically you be off bit has what a me, larger a explore thinking

Stuart Tanz

in multifamily the business. getting present the we into intention time have no at Collin,

very proud transparency simplicity of company. and straightforwardness are of and We the the

moving we the at looking in land haven’t yet of just fee plane move structure – are point really So the still roll determined to this forward. but and transactions, as of a process forward now we bit we their final that terms these we're contributing this right

done options, really which but can't past straightforwardness, for what of and basis key simplicity, is there to is the in get, the keeping of So decision I we've on are that lots us really transparency. the

Collin Mings

just is Okay, in be historically are the in strategy kind a a lot so go it making like of sounds are here, now the that you option there you've is of but done, that as terms focus forward may remarks of a that fair? prepared point, what

Stuart Tanz

That correct. is

Collin Mings

had that to and are part moving can forecast? of as more midpoint we really guidance as just in second the is really talk some pieces all there, just I just the municipalities lower it previously kind that think about I some a parts mean been going of that, Okay, how of as forward? this terms the when other clarifying, reduction, $X.XX then reduction constituents move appreciate to you bit far the the with you details relates and so little at NOI And the getting process and of the working then of quicker two

Stuart Tanz

detail. the Rich which and let answer and is jump more I'll in share municipalities questions of Mike Well, the the then you can part second

Rich Schoebel

components you've the are on know different stuff of there from picked press things Obviously a couple of the going as the guidance as far the Collin, on. of release. you most Hey lowering,

raised QX so and year-to-date. some in QX we sale We the asset so had NOI to going know that asset going and equity the You is that's in to be QX. nonexistent for impact

well. has did You continued quarter, anchor the third to the the from tenants know that's going also delays taking recapture getting to one account we're got And revenue anchor we the that in due open. permitting impact into the in we're coming downtime then

a those of factors what to lower primary re-guide four kind us number. are to So caused

Michael Haines

terms use available. One permitting of is we different to several expediters we the trying when get And in process, then things. of ahead do

to an hire that like the I in something those their municipalities when also require get the submit to think appointment, then have the for expediter And don’t months certain process. we permitting takes before, to like in an it just scheduling have are six on so we where we appointments touched intake we're City queue. We Seattle just tenants of even

So as shorten we're we every that proactive opportunity for can, trying to as be looking timeframe. to

Collin Mings

in by deleveraging just times Mike, focus touched or past just right below end All from on being at still should the, and the end? below before times sorry, we you by goal on the additional this just closing think I'm year me, about year X point sales asset then one is how on year the that year and X one last of guys end,

Stuart Tanz

you part got again Mike's sales our probably the the of will taken year Asset guidance, see on before that more that into question. first and of consideration but end we've

Michael Haines

$XX that's year communicated far actually as de-levering halfway there. million to end We we'll do we're to subject see the we And Well, market can the to wise before of see $XX actually plays as be would to as originally year, if see end. before million we more price obviously the like market out we'll more, conditions. going

Collin Mings

it I’ll over. turn Alright, Thanks guys.

Stuart Tanz

Thank you.

Operator

question comes from from Metz Jeremy BMO And the next Capital the of Markets. line

is line Your open. now

Stuart Tanz

Jeremy. morning, Good

Jeremy Metz

morning. guys, Hey good

Going back kind to the out three of closed that XX of identification already bigger you've identified. picture are you are there mentioned here, the initially

XX how we maybe about Just to next the that? say much how close more realistically wondering at call being how XX plan, XX versus months, expect these think you're we projects looking it type over bigger other should can year I'd of a are some XX the of

Stuart Tanz

it to complete vary Well, for that three working the generally on or process to each but it's around entitlement give that going will we're XX speaking, months now. the project, currently we on take expect take

we'll But from just lands, these most quickly of only the NOI NOI projects in we Kmart the our an in is on the of guidance going projects, from to come the consideration developing is really terms comment tenants else of opportunities, is is of impact number of then these of perspective, only in forward these why a more no quarter. that to anchor excess projects detail because XX, these a need terms on renegotiated, the one into fast next mention come our and balance we're what terms the currently other the of are that's will impacted impact we're, our of some of balance Kmart to taken there of from on talking projects, thing so terminated able downtime with complicated, because these these In reason tenants' so these the terms NOI. that of of terms the hopefully early three in and in And three and get give leases fourth balance the of bought in and that which you simple bit it's more has those that to the makes too will how everything call. sort to the be this course of in opportunities the be

Jeremy Metz

again. appreciate it Okay, last looking some at I acquisitions, button then and hitting like if you now give seeing a little color Stuart, bit least call? sounds you what maybe on sellers activity we sounded like that at go it there increased can back last you more on and because you're are the just seeing things few a on the a pause close are out mentioned little quarter

Stuart Tanz

of grocery, the to Coast the Sure, the Coast, West sought be product most markets or after segment the one drug most capital. being of continue I sought of terms retail certainly West in after mean assets with anchor

marketed, sub just the cap to high trade seeing, continued very have widely of terms what in five In assets quality we're certainly range.

transactions. interest these the market and on in pop on do see of will terms itself. though, up the either us pricing depending the uncertainty market when work timing to coming rates, what both continuing fluctuate dealing are to is better or OP and continuing that to And with interest sellers we rates of at forward sellers Going

acquiring. to we're today be you, it's sit hard tell and going So what here to

that haven't se. to it our our to as to foot to relationships off being and underwriting accretive We relates our the taken want capital. to We're per will use risk be importantly pedal buy just we really focused very transactions more continue

Jeremy Metz

the And have here in changes months? call your past there it been in underwriting any XX

Stuart Tanz

to more have lot gotten make I have we third a store grocery be is our that's risk And top really more retailers future. look believe conservative in at would more anchors out been have that than acquisition, to do to to a possible a value anchor what haven't continue we in we two from but do looking buying look call the one we conservative we and if a drug something it's that We be at will more well don't there store. than sure a perspective the of at if got underwriting, want as the we a what into - to

Jeremy Metz

guys. Thanks

Stuart Tanz

you. Thank

Operator

question Hawthorne Brian next our the comes line from RBC from Markets. And of Capital

Your open. now line is

Stuart Tanz

Good morning Brian.

Brian Hawthorne

spread you in question on Good and how of are the to least morning. is just occupied expecting My kind trend that first guys XXXX?

Richard Schoebel

to it's in order going really as to some a that the of past seen took on we time tenancy we be NOI and take getting downtime that three leased NOI. that's with touched upside the leasing but and you've in is similar in for we're the going As what about, for to the associated out I XXX% where the to have. in going dictated looking to script, rent, some we anchor activity anchor think times come get in period to the talked offline it but space opportunities always those The circumstances it's by upgrade we we're

that it's probably consistent I really with to that be, it think been it year. hard but this levels has would So the predict,

Stuart Tanz

Those the quarter, is I'd that Brian this third to we when company Yes, decisions I recapture make to in on situation be something rents a the short the third we impact to situation. term, find for does going decisions close time for where still the long make like are West long you're while some on where decisions did And opportunity point the term. like playing to lift we're XXX% shareholders of an in to going pop made up, very very term. guess it this that able for at offense Coast, to in make have is opportunity we although the quickly saw once one at but this a quickly, the we're to we so during like being we're the by quarter, particular same going to going

the bit real a issue quarter thing we But value the the importantly, estate. managing long for that more that would of we we're one So aggressive our real cause estate hit proactive, be knew term. to way an the manage would create shareholders

that's we when So got really portfolio leased have as those focus that’s that as today in the why a that's on things what, you've are well we terms of playing offense.

Brian Hawthorne

then, how how so NOI recapture you on I and about quarter? fourth talk mean, happened Okay, that that of then, in come kind much we will can did, assume when much out and the should

Stuart Tanz

had during So property. tenant third had was the some the shopping this obviously the done the would been rest with prior where of location on impact dark, subpar, paying. for have They the which it It quarter center. an proposed sitting but bringing well not having in occurred this into subtenants property

out. the we them to opportunity take took So

other The other us particular to locations covenant, at for received consideration there a this of lot so was this as with we tenant operating do that this incentive of part transaction an deal. include which

rent XX that the just As the years market. will NOI old as impact the lease was given low, large was rent of we low way mentioned the This situations and other be as this paying. not tenant so about below very was

Brian Hawthorne

up? coming more that I Sure. And of then opportunities you guess, see those of guys any so kind

Stuart Tanz

Absolutely, yes.

somewhere the not year. more tenant significantly we we remain leases to that particular that are somewhere this more range longer the the likely options so has will large box few as in market below any coming mid activity no like one, not and want they we as know stay, expect are that to this yes currently but a have working We in on

Brian Hawthorne

Okay, thank for guys. taking you my questions

Stuart Tanz

you. Thank

Operator

And the our from Michael line of question comes from next BTIG. Gorman

line is Your now open.

Stuart Tanz

Mike. morning, Good

Michael Gorman

the morning question you I leasing was the guys. mentioned just some of impacting that. the back Stuart, Quick to go if that on timing recovery ratio could Good

ratio expect look move I as in back should timing averaged the as normalized portfolio or over here kind leasing recovery it of was resolves kind recovery the rate the that where kind which to we history at what's XXXX level? up as for that towards of Just ratio has run and a XX% over of

Richard Schoebel

Rich. as come is that up ratio this will leases online. new see Yes, these recovery Yes, come definitely of you

of you form our more leasing administrative I language lease allowing in fees all and think including broader know many which fees. recover management is new items done it us our is much recovery on to

So we that go continue will expect up. to that

Michael Gorman

I the if and back pricing Sacramento Hill quarter and you the it, on you're achieved the we apologize of some Round guys great missed Okay, assets you I through move the could at as that looking year? like mention what of

Stuart Tanz

X probably X.X the Sub and Sacramento. on Lake in of Tahoe on the properties around balance a to X.X

Michael Gorman

up store XXXX XXXX, great the Can numbers acquisition acquisitions because pipeline we guys or more then with on the in environment to in upside with assets recent active me of happens back obviously what potential a some and kind level Okay, opportunities? if quarters more kind it to team, from again, of acquisition you store and just then right? strategic Stuart, kind to those a gets them feeding years the from managing of saw focused have same next lot free your in one acquiring of on into the of doesn't capital if upside last just without few the same stabilized environment kind curious of get is we X% X% the in the them platform, markets a way of bringing your improve in that

Stuart Tanz

basis and to been, to that store offence, good as markets to assuming continue Well, be occupied even same portfolio a probably range. continuing will X% in highly with they've the as stay the play such on a X% the NOI run rate

Michael Gorman

guys. Thanks great. Okay,

Stuart Tanz

Thank you, Mike.

Operator

And of our next question line Baird. RJ comes Milligan from the from

now is line open. Your

Stuart Tanz

RJ. morning, Good

RJ Milligan

Hey, morning good guys.

tenants you versus and giving AFFO one [ph] XXX% occupied anchor might sort paying guys question XXXX, [ph] year about CapEx last Mike get charges a not fact sort being obviously quick as I'm obviously curious probably are what so the think we year-over-year anticipate you XXXX, the you rent up and you think that where of those rate quarter that as lower fourth in there, growth that space, this CapEx without you but on the XXXX? for maybe year TIS Just in curious for into deduct, of for lot I'm trend of just TIS replacing guidance into given

Stuart Tanz

first say where been repositioning reinvestment tenants like the But now, is thing. on on the anchor I dollars for guess of initiative of this those to years that. the we’ve for a end is of that couple back lagging tail kind to tier I'd

cash the payments by that's So going out quarter.

trailing So down. to I would those be expect

space line the that's the use well far dollar. what the shop restaurant a in drives a on going function user, terms type that to As of as TIS is, it's that in tenant be

don’t know want basically if average lease, are TIS? - Rich to as the I that what's as left jump what to on So you far in

Richard Schoebel

Yes, is categories restaurant as challenge restaurant and biggest I The type return. you able on we touches that's have going continue Mike predicting the one achieve rents best think of to because I there the we know convert to tenants right are retail we’re velocity highest the and mean the space forward. now to where

into line that that has shop with would year what expect last going of it would sort space I XXXX. So be been in

RJ Milligan

me Okay, that’s guys. all helpful. That’s from

Stuart Tanz

you. thank Great,

Operator

of line KeyBanc. Next question comes the Todd from from Thomas

open. now is line Your

Stuart Tanz

Todd. morning Good

Michael Haines

Good Todd. morning

Todd Thomas

are you Hi, good that evidence is market circling prepared back interest having transaction any an to you the today? rising remarks just there in can in from that rates, impact you're impact and seeing rates your rise on that discuss the Stuart, morning. market just some mentioned the

Stuart Tanz

transactions but the things a dramatically, gone that mean power segment interest of to markets tertiary to centers, secondary quite transactions are is I that those in in under have up fallen have or or seen quite transactions quickly tougher continues rates we've more that. were that contract of is on retailing that number be nature, typically like what are out, Sure, malls,

As it be those seen and segment market. grocery, the most we relates anchored to of assets, in drug deterioration after continue in the sought market product that really haven't to yet the any

I second to So of really what it we versus buy. type really call a it what would center is, tier goes typically shopping of more

Todd Thomas

rates to you see Okay, widen from expect little here? do bit cap a

Stuart Tanz

think I markets the after to a valuations in most rates well Given in the tight are cap in and country, range. for going demand our stay sought pretty the product

go in comes the over and but months. think pretty they all that all will up on how in think the next I down go spread I market, tight they product much some depending several cases could remain could to

the basis market. where rates even of if further, are, that change on interest see could to but the they stay they in either a continue All course go up you

Todd Thomas

then and here. could and policy a was dividend I thinking you Stuart are things the board about if bit, how wondering comment Okay just about the you

you're that year? is You the suggest does we since see not raised seeing increase just growth external year slowing this every an that, today, IPO, might that there a

Stuart Tanz

can comment that's point cash improve all XXXX really Well is we the policy this of so course move that cash continuing But Michael is going is again will flow our give which believe the at through do at policy driven emphasis point, but we think think board, in this free raise at our at as I driven to point. I flow looking I some as to board, we the dividend. XXXX by articulated certainly move the really this as by

Todd Thomas

thank Okay, you.

Stuart Tanz

you. Thank

Operator

from line question And Christy of the comes McElroy Citi. our next from

line open. now Your is

Stuart Tanz

Good morning Christy.

Christy McElroy

on projects share value the a contribute that just value just I'm the the does would on that wondering value question spend what to morning. include you then plan And similar million contributing the terms maybe yield, or $XXX or that incremental land clarity there, land more in the yield would of you're be that include Good little spend and X% the three there? incremental? around the of bit is with land regards does your

Stuart Tanz

does terms from transactions of out. we course was be of in in numbers going moving And we that that is of value the minimal in land the of that that to included land a is to contribution The the forward. amount and so different terms equity contribute required property, the have goal threw these the land, our include yield but there

Christy McElroy

Okay, got the value million? land on it and that what’s your of estimate $XXX

Stuart Tanz

have just the point. range, in but numbers, call I give that this definite you definitely but number, probably I terms by our of $XX would again something to more a you Chris you at that hopefully something guestimate exact you can’t million tell will in more give next

Christy McElroy

and for of into a in any leverage the priority you about as flow does funding free of versus cash some question, allocation think dispositions, of priorities your debt point? just then capital then how non-core your play dispositions with you any and pipeline at today? is to Okay more down deleveraging back terms And that sort Todd's pay coming

Stuart Tanz

Well that. about de-levering is no question certainly important to us. There is

from de-levering We as perspective. on a again to balance will work continue, mentioned Mike think I sheet the

Mike, we'll terms to capital year even assets may be, hopefully terms of we it depending really on point the want to price capital know and not that these it’s a equity. redeploying our of to at allocation to if terms selling some going the this add of bit as more of going if and in allocation look relates capital allocation? do year stock capital don��t I in In in at you next that

Michael Haines

we number to the I that when one de-lever focus equity balance last year to replace held we the try reiterate should would at up sheet my is just transaction. that to [indiscernible] obviously were have raised

So given or to if I'd the so. sense makes market conditions ATMs use more equity it some raise to like do

Christy McElroy

I are levels and ability What think about $XX Bellamy had estimates during The and you you quarter. talking circuit the NAVs street assuming I range has identify third comfortable lower, are sort in of a level our incremental what obviously at? low the it’s XX speaking, are raised an the you've guess tad been equity redevelopment Michael so value to

Stuart Tanz

Obviously around important opportunity number about, a just that we the did we to was it Well, we've issue think what it I lot I raise equity up around terms some quarter, in was that Mike number. opened during [ph] equity. third felt the would like to higher. of when But was for or think us so that XXXX

of precious issuing be equity how Going certainly that our are cognizant importantly forward, to we above NAV. we that and that is equity want more

management's touch a So than is. I really what lower are everyone. current NAV that at but different issued at NAV equity on obviously or was mean, certainly thoughts that, NAVs is with our we think

So are situation we of issued. importantly cognizant terms and we how the very but equity and much will keep when that monitoring more gets how in

Christy McElroy

very but equity Street right, and when commit. today where to guess the when And have then a potentially was and be much know than because simplicity you don't fund going issuing your stock be about de-lever you on quality your area joint you what want you would commitments? how right, is I to that well to to you using NAV low of the equity an be than you the incremental instead weaker think so equity below bunch you on know expecting, rather assets? don't And results was that don't that so assets ventures, able like of like at your rates towards additional you of recognize some do recover is higher in would terms market liquefying down I using capital look your it could cap as capital

Stuart Tanz

capital Yes, contribute I no the really in is from virtually put and little standpoint redevelopment, the mean equity. commitment look, of or land in there terms a goal to very

then, continue that’s do it's real joint And continuing capital no our do and and on now, take and to terms what at of point our really to it relates redeploying long looking and to at estate this just growing and manage play the our create offense in but portfolio to of West XXXX really for equity to in allocation terms going of assets. term combination we of as in which shareholders we interest selling We're selling terms of have ventures. XXXX. Coast, doing value best in right the of So some goal is advantage a

Christy McElroy

like terms lease in just team's pieces one? is you're actually have each more guidance and you basically each then this what out management the of expectations the given or what of Number quarter thoughts, I lag you your different you disclosure the market of providing sat communication may be to and in disclosure supplemental And your have industry? statistics rate breed put occupancy when results sort get be and number those reevaluated of surprised two best in re-thought were, between quarter terms back and components to in the guidance maybe I'd from of the so of putting renting economic guess not out that

Stuart Tanz

answer of Maybe we Look the a best think perspective, continue in important the we give details can offline disclosure. but what better? more does and Mike, and and bottom Sure, is practices. at will at from we our line disclose. we Can best job company we some practices what can is a terms do we about yes look I do of the you the we we best call in look to talked but Haines terms do and Michael great of your

Christy McElroy

guidance in economic leased where respectfully has The your relative to of understand disclosure peer can I that right? terms rates, supplemental. would every has set really all in quarter. the The so set the of spread of we disagree peer just the got peer set occupancy is not components their that

that happy best the of are of terms early in at do there's goes plans, the there lot swap and that report the practices areas, with of and that think year, just different low some it's the So you rate there's a that's that, think I but to through rate, in go to share our interest a role Last pretty next Street what how certainly room. at your beginning of expiring X% sitting about where question we ’XX? should

Michael Haines

around toward the XX years period interest $XXX lately. far as have We’ve that for kind as a a little term off burns swap around the are bit about that's the of million and January. internally that changed of loan. time in been relation re-swapping swap of or rates end the that's talking short of been of Well, maturity [Indiscernible] end The and moving a either rates bouncing bit. through about in the

basis $XXX XX see months. So rates that to to swaping, not current we're are time of a committing maybe million re-swapping really XX next to anything, the at going term but the where looking shorter over on

Christy McElroy

$XXX Is that a million? dilutive event that for

Michael Haines

currently locked the is so than Well, yes, expense. in interest where in, higher Yes. higher to currently some swap be going dilutions there rate that will be it's

Christy McElroy

Okay, thank you.

Michael Haines

you. Thank

Stuart Tanz

Thank you.

Operator

Donnelly from And Jeff the from Wells our next question Fargo. comes line

open. Your line is now

Stuart Tanz

Good morning Jeff.

Jeff Donnelly

Stuart. morning Good

I'm for what’s sense I'm your a the secondarily, guess you Rich, close in trend you with markets may the that kind chain follow-ups, two curious going I overhang ultimately the of shop if market is see of small rents on guess one guys how part, their on you change? really in? curious significant all could impact the to discernible last thing And stores? operate then few what gut Sears I asking for if there few think in space a an be do anchor rents or of curious months Just asking Kmart maybe decide be any

Stuart Tanz

have are already those the markets West traded over the market stores time assets Coast. West has what strongest of you terms the the about last Sears the Yes, the metro and then part question. the the redeveloped certainly really at of Sears Sears a being on that let in into in, say of I'm number terms of the and and happened talk I A first very Rich don't we lot referring much most on if Coast. look in several the of owned But markets Kmart see present at the impact I mean closure that to of dive I’ll years, in issue, currently so, metro when the

traded I now Coast, assets see into several most being those were don't where so don't Coast, West in that redeveloped much of right is shadow see a of the out much markets. market Jeff. really I Step years our it's West on and ago assets impact whole impact. currently best different the story supply really So the But again the

Richard Schoebel

that top even important rents, out very shop were all up tenants of And us prepared opportunity opportunities leasing on the remarks, shop pad coming ICSC certain of to Stuart was looking our the then we're their in think relationships taking available the on tell to just I'm it going back the of location. as space where into LA to with the at touched the terms and the that I It meetings list hadn't pulling that to and and that sure then trying that tenants were Coast. make available pad limited where use they're locations, and they is people are dividing there's And mean aside an a leaving we for to speaking people come I it point very West good positive, get in that to were I in get of the yet. very

still good a So of forward. going that support space will for see rents lot demand we which

Jeff Donnelly

consider outpost And right and right, just bit exiting say for area comment would one that am a just you of I I'm Stockton, three exiting have I you more also the little is or market disconcerting guys about Sacramento, in should I to an if assets you think guys also two that too?

Stuart Tanz

right on Yes, a do that's Jeff. those absolutely you're currently yes. Stockton, negotiating number assets three correct, include so two right answer We're now The or is of assets.

Jeff Donnelly

thanks Okay, guys.

Stuart Tanz

Thank you.

Operator

One. Lucas And our the next Chris question line of Capital from comes from

Your is now open. line

Stuart Tanz

Chris. morning Good

Chris Lucas

good Hey guys. morning

question and detail that still of sort to Is paying rent Pinole the Just of the that is to when the occur? closer at open, you Kmart expect that's impact one then do store related Vista.

Stuart Tanz

the is closing. anticipated Well, mean store I that. We

have We be exactly when we end shutting they year. agreement but the store, down, I our expect the of in know don't of the they're terms gone to by mean

Michael Haines

Correct.

Chris Lucas

that so Okay, will point? rent at cease

Stuart Tanz

getting bit between should the rent. a was we time but bankruptcy, is in lost standard have that are may going we bankrupt which companies in company but the the between be then the and of for just correct rent position, Yes, rent and due hopefully that

Michael Haines

just bankruptcy And unusual file. filed pay had Yes, they completely of and are the the planning just end a was the paid actually, it's base up for the the they the triple obligated they of already the the the year. the which for to to really rent somewhat us part we as the month end so through through termination, tenant of rent year. actually component taxes And settled they nets because that's rent

Chris Lucas

picture Mike expirations that what following the next question I just just simply change. to Okay, light lease appreciate year's years. great the comparatively a in thanks. I topic And accounting is lease we'll next guess is see on bigger on several then schedule guidance the

it's that or about recognizing, number and footage but to the should out about square your of relatively either how small ABR how volume increasing that drivers number As model is how be over in we number, whether to that in a number to just impactful leases think time? decreasing thinking number case we it's

Stuart Tanz

relatively expiration one internal on velocity things schedule. leases A they of listing our even I on staff to they the expirations is of based expect would that not the on stay drivers on. It's times the consistent. the of that number lot and leasing are work the work

forward. real change I just in it's going don't expect that So any meaningful number

Michael Haines

we already 'XX we of the with And come already some have the terms starting, compensation a for way little to being broker this isn't may working think we're off them tighter had necessarily dealt that's reason year of ahead leased so able look in one cost velocity on those one internally for renewals if a but of control some that of better than year, commission. a I one

Chris Lucas

should or And expect where expense item? line then to expense just we from a operating presentation perspective Michael, a that that lineup, is G&A an

Michael Haines

It will versus operating. expense increase a be G&A

Chris Lucas

Thank Okay, great. I it. you, appreciate

Stuart Tanz

Chris. Thanks,

Chris Lucas

That’s all I have.

Stuart Tanz

Thank you.

Operator

line from And Michael JPMorgan. of comes our Muller from question next the

now Your line is open.

Stuart Tanz

Good morning Mike.

Michael Muller

Hey good morning.

that or multifamily to of projects, building it? there portion be there Just or the building be more a components can is adding components way you or investor three that a redevelopment a contributing land naturally going of more to solely you'd other direct deciding the the put and into scope it question capital where just and going in picture to resi center is three or loan will existing by of - all either be back retail the

Stuart Tanz

Well it depends municipality. the on

Some right we're be on retail, forward and retail what small multifamily. bit so moving On very now component of want to municipalities it's it's a won't. some will of a going primarily

Michael Muller

bare again it in if is is that stake unless to investment decide contribute minimum of the $XXX route is think return at million just you the the that a it? case your a a of land right it $XX on in do bigger Okay way you the take and the low end million at X.X% base project, to sounds like

Stuart Tanz

sheet, put of think the onto about you so that that balance we Mike numbers. side, side, or capital a the Yes, the although balance but to we the may debt equity as if our portion terms it of so bit so very as well on have put relates in yes, to of top close you're sheet

Michael Muller

it. Got

was Okay, very it. Thank that you much.

Stuart Tanz

you. Thank

Operator

Bank of And our from the from comes last America. question Craig Schmidt of line

open now is line Your

Stuart Tanz

Good morning, Craig.

Craig Schmidt

mix looking are I formats? exclusively examining just identification hospitality residential wondered Good at you used you use other or the efforts, mix morning. on or [ph] are office,

Stuart Tanz

Craig I we the and from the at that perspective. we obviously, we're offers when operators, NOI have NOI different looked because but in up hotel say but different. lot Well, have sort the less a economics I capital looking land don't lot a line from whole a hospitality is of, hospitality at lease know is it's a

terms municipalities remember have to building And other rent these multifamily as the both there is and alternatives, in municipalities key the a importantly in Coast Because That's country we're and some you'll sought of certainly the we is entitlements. get however of at municipalities So we timing went growth to said strong housing. certainly in NOI relates of more they are. but these after in antidevelopment it here getting how the of markets that highly there's how place on and come need West most looked where go. growth more lot to because never importantly very and constrained identify where really permit these the a

terms of the through this process. how gone of sort overview in we've that's So

Craig Schmidt

is Okay point so pretty the well. at entitlement going this and process

Stuart Tanz

It is.

two We ago. to those close we started almost are getting process phase at years crossroads We're further because very that two down road a bit the getting entitlements.

our The that entitlement the but stages, from discussions other believe quickly. process go pretty the municipalities and will two we partners are with at the beginning potential

Craig Schmidt

you. thank Ok,

Stuart Tanz

you. Thank

Operator

are And at this further questions. time there no

Stuart Tanz

would I of closing today. us to joining you In like all for thank

Mike, If information directly. any package posted you additional me the or Rich, find on questions, website. you additional can please is have on contact our which supplemental Also quarterly company’s

Annual in have a Lastly, in a for great those Thanks you forward we that seeing San weeks Conference few Navis everyone. day again there. are look to attending and Francisco

Operator

program you a and conclude participation today’s day. all thank for Everyone in great have your disconnect. the you conference. may gentlemen, does and This Ladies

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