ROIC - Earnings call transcript Q3 2019 | Retail Opportunity Investments Corp.

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Operator

Welcome to the Retail Opportunity Investments 2019 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 federal securities laws.

Although the company believes that the 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 and expressed may statements which results implied forward-looking and uncertainties unknown other future expectations. Such forward-looking such to differ

Information Participants the filings regarding refer are Commission, its encouraged with regarding in Report its Annual Exchange company’s SEC the most as company’s and such to such recent factors company’s Securities on described and and including factors, risks is operational the with Form well The be to information the as filings for more results. risks regarding the and website. financial can filings company’s found XX-K. on

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

Stuart Tanz

Thank and you morning, everyone. good

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

would Before to getting the briefly California I like started, wildfires. address

we the not is Needless we it has to While at nor situation impacted our say to serious it time. do very or business closely. expect continue situation this monitor the fortunately portfolio to

Now posted quarter another results. another operations active The the front. turning company very property productive again by lead quarter and our to quarter strong on third

with releasing solid portfolio continue and strong achieve We over growth same very spreads. space along XX% center our well same again NOI leased to at maintain

team the a In third fact, our new during on achieved quarter. XX% leases executed increase

the and we on making success Given across be strong activity. our leasing man years company have continues one continue most for to record strong that of releasing overall to good best performance say year-to-date the the spreads we’re terms on portfolio have track to and it. Safe in of potentially our the in to of

results, strategy the disposing deliver properties focused certain of execute continue exiting to to also continuing we with on strong non-core primarily property market. Sacramento operating Along our

million year-to-date bringing During quarter to $XX million. property we sold total $XX.X our the for third another

to also by close million about year-end. we under another property $XX for We expect have sell contract which to

just the releasing listed that well. have Sacramento, one bring as two to to to at Sacramento in center and space that completed with respect anchor remaining last of the the leasing, process respect properties properties an final market probably we the that were with will we the we once in the Beyond we property

two We in around proceeds Sacramento generate $XX completed. last will million these once total properties together sale expect

square Turning the of will thought is originally our progress X. report pleased crossroads enable densification a toward initiatives, to would in The development we are us that XX,XXX feet our City making to than we’re what which on as we Bellevue amount currently allow. retail city center, the fronts. of the terrific is of with from space our Phase retail build agreement had are along agreement finalizing with At perspective shopping agreement, good number we apartments XXX apartments on space greater of

the agreement are we with finalizing Additionally, development city. the

We finishing cost are we which detailed think engineering close could initial XX%. also our value design, our by to approximately the projections plan review reduce of

With a area pursuing San we're well. respect forward two to progress opportunities are of to working drawings quarter. in the with our in both Francisco current centers on at progressing Bay we starting preparing everything to position in that continues be should Assuming the as several move shopping currently first track, the the densification

multifamily at retail XX,XXX our design XXX the preparing of of with now from is our in feet who retired new many scheduled very process center, the shopping adding building we for we so the site also At apartments city of potentially planner to city weeks few a our now. XXX regarding square potentially have our to space. thankfully be to that to Nevada continue At are submitted recently were longtime XX,XXX we next around of We meeting XXX with meetings with the to city to of our productive apartments. drawings along shopping process (inaudible) planner center the supportive worked in the engaging densification years plans had

of above city densification portion lease our a Additionally, with of recently ground a Group us International prominent site. approached in the the Coal support

now of process multifamily the identification of along next So of in we plan we exploring in potentially are the incorporating with idea the be discussing city which month. the will part as detail hotel with greater

the these the in in and one both were two Beyond the Northwest opportunities of one also three densification we additional Portland. pursuing densification in beginning stages Seattle Pacific projects, in market

Seattle property, municipality The a that densification total together X,XXX interested for the properties. comprehensive with potentially along with on having could city more with a retail both is adjacent our highly space. plan include we apartments local At strategy developing in started an in working property coordinated

Additionally, centers local the in market, has the at shopping we which our recently one multifamily Portland about adding there the municipality a of embraced. approached component city

now focal point. the they our master are process of downtown as property the in In new fact plan with core developing a densification

stages densification in discussion, we by early far. the support While and just encouraged of are very these opportunities the city thus two civic are

three together currently Lastly, million. opportunities in around terms interesting that total to pleased of acquisitions, that $XX we we market have off are report are we pursuing which

properties located the One two of located other is Pacific in Northwest are in Southern the California. the and

and all our are in All well shopping cash grocery forward. team enhance three of for to amount opportunities value are flow have increase considerable excellent and anchored going three situated that centers locations

thus contract properties the potentially in process all the of currently discussions of the and have units seller encouraging are $XX our so Additionally or been conducting about one is of interested with due in under the so. having we at far three ROIC million valuation diligence properties, goal taking

Mike? Mike I'll financial call our you through take to the results. over to Now, turn

Michael Haines

Stuart. Thank you,

company the $XX million ended, million has revenues $XX.X operating total three and September in XXXX, months For XX, the in income.

and income. had million terms million months, the In in the revenues nine first operating $XX.X of the company in total $XXX.X

months the XXXX. income On million the quarter third of nine cash $XX.X X.X% increased for X% first net increased basis, by same-center to the by operating and for

or common million equating of $XX.X Turning per net attributable $XX.X for to to net third to diluted diluted per was first share. nine $X.XX $X.XX the net income the and for million quarter income, income share shareholders GAAP was XXXX, months GAAP

reduce In terms quarter which million capital sale that nine per share, third of totaled from we equating $X.XX With activities quarter our XXXX the to diluted the the raising to of from months to operations to $XX.X respect FFO FFO balance Stuart first during and share. for brings $X.XX for third utilized proceeds the the mentioned per that. sheet property company's funds

market months the pricing and of was $XX modest that permitted of of X% Additionally couple program in that over roughly past ATM XX-week to the conditions within as stock through is utilize series our raised million we the careful equity program a being about high. of trades

property with ATM the the we that. As sale reduce further to utilized proceeds

our we quarter down X.X. a EBITDA during As third net to debt result ratio the to lowered

ahead year now $X.X net would like that's account ratio debt end a as approximately the debt with paid total debt $X.X down our debt issue Looking the issuance of equating was Taking of and equity of XX, some we sale asset debt market the to into EBITDA roughly to billion of our equity XXXX. company X and cap goal cap lowering a at of further into total to permitting to additional we conditions head billion market outstanding with between XX%. market had September just below ratio

rate. debt is effectively billion $X.X the of to respect that XX% fixed of With

two that is credit $XX debt when the which just balance a our currently years only million floating XXth we fact our rate next representing well laddered. X% at In our line, our we for had the of beyond up have outstanding. for maturing no and debt are that line comes Furthermore September of renewal credit maturities total have

coverage Additionally our continues solid. to interest be

Specifically it quarter. X.X third was the times for

the accordingly of terms our remained equity the and seems new down equity not although it we've share year and on the do issue the fact that be the in range the full as sidelines that now disposition first of far year until to in that asset XXXX. issuance in also close of pay range and it The quarter. assumes light seems of debt mentioned acquisitions, between low Lastly for we FFO $X.XX year a adjusted the doesn't more thus FFO do and we $X.XX Stuart range now end high sales, end pending per end guidance terms guidance, this of we've

I'll to operations. the Rich property Rich? over call discuss Now to turn

Rich Schoebel

Thanks, Mike.

year expirations. As square the opportunities Year-to-date, release company. Stuart highlighted, the well leasing of to best our strong possibly of post of ahead proactive space success approach space scheduled on speaks front to the million out we to years one which of the are least hands very another on X feet of for seeking track record we’ve on on already

maintain to XX.X% full over at with anchored Stuart strong essentially strong leasing at lease our portfolio five at volume shop Including and years third rate now lease. especially our lease at on. been our quarter XX% we that XX% again noteworthy finishing as very continue space XXX% a Additionally, given our for over the space portfolio as touched our well is has

the connection function demand last XX.X% timing space. the posted on quarter. simply The the rate is we is While of slight XX.X% to in below efforts record that leases capitalize strong slightly through lease high a drop with between our

demand any are come sought highly in locations many space to letters for after may leasing today's environment of that continues retailers In for intent supply cases particularly where submitting available. outpace

to is at creatively fluctuate portfolio going continue in rate from capturing modestly quarter we out. to work the next our as we As demand, tenants move this and one to lease

Importantly All emerging the by segment. in-line within the space being factors. is increasingly demand three driven

of expand new retailer with First surrounding presence we are seeing a profile. growing market mortar right-sized stores their to bricks seeking communities West demographic and tailored traditional on the Coast format specifically to the number

new their to at to and we shopping are Second traditional They increasing well grocery-anchored business centers. retailers from starting and space And competitive out activity, locations mall more concept e-commerce well-located retailers more grocery-anchored complement position. third, as their seeking too continue physical in store are their as demand seeking branching grow in-line centers. online introduce strengthening to overall see and

Needless and trends factors clearly our it our business and shopping emerging bode to at evident continue in say are as focus space to on in-line enhance continued retailer base the diversify leasing ability our These to to for well results. mix our all relates strong demand center. especially these our tenant

of XX.X% XXX square executed were leases were on we months leases excel in In the cash for same-space space feet through XX% continue X a to blended leasing a XX the blended to an in-line total in-line same leased XXX increase In a third renewal total increase of we the and in activity. for during in In Year-to-date of terms space. increase new space year-to-date leases strong new poised are finish which have front XX% XXXX. achieving increase renewals. we total which XX our million and we an leases summary, for on square executed and first XXX,XXX on of quarter Specifically achieving we leased feet X.X% nine space.

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

Stuart Tanz

Thanks Rich.

you provide our was may When know ago, operations a years a REIT grocery as celebrated serve shopping and a with centers As stable our as build strong carefully opportunities center flow long-term growth some anniversary would to foundation XXth shopping a just come. of comprised objective balance we portfolio decade we anchored cash commenced of for of that and company a good to the

centers. Starting REIT October Coast. shopping a properties over anchored XX on with today feet built shopping center portfolio the over years grocery back West recognized square XX focused Totaling the as largest the zero exclusively million ROIC stands with we've XXXX, of in at that

widely unique over We've shopping have to built focusing we our in as portfolio by what not value but marketed time identifiable locations by strong precisely irreplaceable is seeking done chasing carefully with consistently situated team enhance market deals for our evidenced centers on opportunities our which off by results. portfolio out opportunities instead

every quarters example, NOI now, began statistics, for center we've property to XX when and back grown XXXX quarter. For consecutive reporting same we turning each

XX we've increased well every quarters lease strong at cash single or releasing space XX% portfolio quarter maintained rents and now. same consecutive above as for rate have a very we Additionally, a

operation of XX to say, we is unparallel as past Coast of years knowledge indicative are and embark focused discipline, accomplishments ROIC. proud experience. second our and strong consistently of forward the on we over our to we performance Needless market and strategy look our the decade at Our future West

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

Operator

[Operator we you. compile Please Q&A the while roster. Instructions] Thank standby,

with from comes Collin Raymond question Mings James. first Our

now is open. line Your

Collin Mings

Thanks. Good everyone. Morning,

Stuart Tanz

Good morning, Collin.

Collin Mings

me. Hey, Stuart. for good of questions Couple morning,

prior Just guidance the to guidance, the incorporated elaborate some activity? can given changes, just you first, just Mike already back and ATM just going on that disposition

Stuart Tanz

little change are it’s originally of a function partly a Well, couple slower a really things; sales asset is being kind of by of our in we the thought. than driven guidance

we than that earlier bit change. little two we equity the thought would. drivers the issued primary also We Those are caused

Michael Haines

market in million another is the And if quarter. there that us the $XX fourth of for Collin, equity, include, does

Collin Mings

Got it.

guess I here, maybe just versus below lines, those And of there. leverage? more decision utilize you estimates to to can the ATM NAV helpful to discuss Okay, reduce Stuart, along market maybe just consensus assets just modestly bringing the kind again, the

Stuart Tanz

felt the the dispositions as finish out was as some know, as to felt it growing and to the We was important year, markets, equity get XXXX Michael tap We it for continue equity articulated, we important it the prepare all off to FFO. to balance as relates to growing was that of into company laid the well to our us sheet high just for – high. really our our XX-week you

Collin Mings

of over. in you how that those million off-market a some on together? Stuart, Understood. in highlighted little And just remarks. of just that Can pursuing, last $XX expand you me prepared maybe that maybe opportunities come it of for I'll opportunities you're bit more turn the context just one does and

at some upper could again acquisition finish this $XX only guidance quickly these for context million end suggesting the year deals How the in get on especially of of just front? across line, the

Stuart Tanz

that finally number deals couple sellers three in warming last market decades. actually relationships out they're from with to markets were long-term discussions deals. off the In up very the of of the had A eye where selling transacting. Sure. of these for And really on is us the transaction we've years two at we've relationship to third that is point that one a our now a willing at in look Seattle, coming many OP had he's is property seller a for got which up an the on through we've

of expect we subject diligence So to two probably in part year these transactions the towards Northwest do Pacific first end due southern California year. one the and of in the the to next close

Collin Mings

Thanks the Stuart. I over. I'll color. All right. appreciate turn it

Stuart Tanz

Thank you.

Operator

next McElroy our comes Citi. from question And you. Christy Thank with

Your line now is open.

Christy McElroy

Hey…

Stuart Tanz

Good morning.

Christy McElroy

of up so and Good morning you be the funding question but Collin's discussed thinking end how guys. are from year, Hey sort acquisitions, on year towards you about on the the of it’ll discussed. OP sounds of million the follow those next $XX aside like just you close units to that’ll the the into

sounds you've that's price So bit OP get stock like you how more additional mentioned equity it what able guess about trades, debt of to so a of there? the you units than issuance that kind are your because pricing earmarked I and but thinking higher historically been reduction little two for a where parter the a

Stuart Tanz

the units now Sure all OP I'll but have Mike address the or the first of price in discussion right bit higher. is a part question, $X,XXX a the of around terms of

Michael Haines

as be of in going very our issuance combination equity to to a proceeds ratio sales funding assuming permit a issuance asset focus reducing through it's Yes, ours of market been all in a resources, fact it's for the net going debt keeping that has keeping far while equity about mean we're asset from in which likely. AGM as and a that combination the I and be mind now sensitive so EBITDA sales and our conditions check leverage the of

Christy McElroy

with year? of terms the positive Okay space about great. your Rich commencements Maybe where still move and And could I occupancy the expected so on demand have declining. that lease more a to occupancy give just on of then there have higher sounds the expect quarter like comments little it instead you're the would teed rate bit a follow-up quarter-over-quarter bit to you recapture detail of up offsets build you build you would occupancy to in some front the little during end on

Michael Haines

year will fourth be it been $X has million meaning relatively it we'd another quarter that the each $X.X this about in would We that of expect commence expect million consistent as to quarter.

for ahead it's the to we're think than releasing a rent the doing waiting offline Well well touch I of opportunistic tenant all in we're where be anticipated. may lease driven would new we that by coming have many come expirations cases in. a earlier

Christy McElroy

Okay.

but more and of of offline – coming incremental you're commencement there that because expect we expecting sort that is offset occupancy or another in fall you than rather results spaces there's space then right or that lower of million that recaptured terms commencing if you disconnect that a of in lease that out that’s that right, to have also offsetting $X is there's moving other higher So have be kind space should

Michael Haines

I no, agree. Yes,

to I think function little bit being that hard it's – predict. really of just a a timing it's and

there's and be the that in is You that the timing know know to tenants we're place needing be it with variability to hard just to to are you know some of – lease But quarter constantly predict. repositioned working you very always replacement it's and quarter. into you some know going

Stuart Tanz

the as on we're we're constantly we're it out to forward. and is Coast, obviously going why know at we you of still that base releasing In – terms we're you're words, going offense working aggressively tenant real mark-to-market of inconsistency estate tenant noted as the our in in getting, But know still we're really our we can playing the as base relates the which this offense other still nice quick that's get that with to to there own. West Christy, capture some playing you that but spreads

Christy McElroy

you. Okay. Thank

Operator

Thank you.

with question next Gorman Michael comes Our BTIG. from

open. line Your is now

Michael Gorman

Yes.

Stuart Tanz

Good morning, Michael.

Michael Gorman

Good morning, how guys. Good morning, you? are

Stuart Tanz

yourself? about How Good.

Michael Gorman

some in versus about about think you Can the it reduction? Maybe ATM just thanks. talk can market, with have the deals, in we if and about $XX the the but just market, of got you Good at as on what's you equity the equity secondary the you Can the guys ATM for efficient, some million a as secondary what's a based thinking more could for think about deal start lot marked the before flow? on – debt stick looking of maybe under your talk you basis to a you you've what quarterly ATMs minute. terms potential capacity obviously do kind about

Stuart Tanz

flow you were said I to accelerate as Well, depends it the think most flow is us. we using deal raise on ATM we XXXX certainly for all to equity the ATM. our hit the If move is consider our deal into when Right how it way you bottom, secondary as the deal would obviously now flow. then efficient we I on mean looking. versus

Michael Haines

like fund a that. larger quarter you not, a enough I have the transaction (inaudible) given candidate for to in any that Right. that stronger would to if it's acquisition you obviously with agree one mean off not know raise down Yes, come to portfolio difficult deal. market a a road,

Michael Gorman

Okay.

Michael Haines

we are, we equity sensitive again, that to we has where are because Mike issued, don’t been know. as But

Michael Gorman

Mike, remind current you And left Sure. much have how us can APM? just you under the

Michael Haines

was original I $XXX got at million $XXX plan think million The a program planning. not we've least still

Michael Gorman

negotiated their what talk Okay. renew were expiration. term one that Rich, the in spreads? tenants just from renewal early early, some leases your looking Got about pulled these Are And they came there to of XXXX it. options that are in of out of quarter I this maybe can of or terms of maybe with are forward then renewals you maybe $XXX,XXX think conversations are conversations you kind leases for the you what kind having about or

Michael Haines

you some exercise continue Yes, be Sure. of options. to know early

earlier we're where be you they're of discussion, that And there's once may and the you required tenants lot know have us we pull in-place, replacement know the come the tenant keep give in-place other you but to know exercising you not in know forward them trigger in tenant we you circumstances re-tenanting a know you a just know terms the to. know than there's and then space You of so and timing. back cases which brings really willing you us we a while then those know out to

Michael Gorman

Okay. Got guys. it. Thanks,

Michael Haines

you. Thank

Stuart Tanz

Okay. Good bye.

Operator

Thank you.

next comes Davidson. from Our question with Barry Oxford D.A.

now is open. Your line

Stuart Tanz

Good morning, Barry.

Barry Oxford

because want of kind Great. know on cap but to talk you don’t I about $XX Thanks, to guys. any, million rates, (inaudible) the not anyway. in Not

of the there out given at marketplace, of is environment in that looking when what range this rates we you're have? stronger kind you're retail cap the But

Stuart Tanz

today What product have down. sector. drug seeing widely as deals the deals grocery to focus and anchored centers two there it into rates is It's market. have supply sector. lot Coast grocery So shopping begun Number valuations out one, of creep for cap drug grocery those And off widely reasons. on actually relates marketed the number of two in is continuing the the marketed deploying to a to West go have drive There's nothing anchored retail both to contracted. combination on the is begun market downwards we're the of the really not but cap a dominant is that segment retail rates of capital or for

XXX believe some over XX the we fact In rate we, that cap days. we've seen compression to last

continue very move XXXX we what we head more bit for in the importantly why that the of as off strong in that short a over going deliver that's downwards. that finding pipeline in believe time potentially that we assets. we're building growth we're but active it’s markets these are after now a period don't, own to buying would more And NOI into market valuations to for transactions we right And us really

Barry Oxford

development that know Given bit a more might on why your compressing push be so? cap little more, not you rates

Stuart Tanz

bit on a working we are of that… Well

Barry Oxford

The acquisition pipeline? deal

Stuart Tanz

bit are that a on working Sure, densification. we aspect through

development backyard. longer and However, anchored that costs spending through we experience typically in why on business three of on the really of of and or developing years the Coast that a those our in development combination markets, NOI is sideline so the development dominant barrier keeps are our of you need the your these find we three lot least other business. a and development of is going an perspective we really the takes stabilize us for thought grocery center can in in answer, are West to four income reasons number lot a The process higher a business at than reality not lot most without in high terms the we of time the from terms what through are all also a in in entitlement not markets

platform management the the to has take operating ability to development. away those platform Our of yields risk doing or really drive

it's on work that has the terms development through our to Coast the we continue at all importantly really building IC of be proved to in we're West all And on in So out business. successful shareholder the a years of that why formula not of as the more operating to very value. formula

Barry Oxford

for That's a me Great. it thanks guys mill.

Stuart Tanz

Thank you.

Operator

Thank you.

question Capital Jeremy next Our Markets. from with Metz BMO comes

line now Your is open.

Stuart Tanz

Jeremy. morning Good

Michael Haines

Jeremy. Hey

Jeremy Metz

to in how gets Good seems pretty some getting at come point to Hey, to goal past here and nothing months held Stuart the just It XX stuff cost line fruition you're dug you've going mentioned here sensitive your guess morning quite up less back yet. monitoring as that really guys. hoop capital right sounds bucket in you're next the know I number in that all times that goal confident and in as ultimately been the are past, comfortable you you’ve terms gauge of million, line? the $XX leverage. you maybe this I around again sellers it's them what like a XX getting acquisitions to this to across of all the and been is has you've China just like and Thanks. of close here $XX re-trading the it more million the

Stuart Tanz

terms in Well, of to the cognizant been debt of we've balance side, sheet. the the certainly leverage EBITDA really net

the really the do and it's performing forward, with reluctant that itself. been given opportunities of transactions the those price move those the importantly, we obviously it's been more in not our but recently, deals, our certainly equity but cost to the equity. certainly way But we just been were cognizant price very around have – discussions to earlier We had stock PE of our year, stock and some

relative deals You for assets. a in acquisitions of sit we works either is tenant of or they or issues pipeline changes and know base the because the number a months a the retail on and then our sometimes to sudden that of income of come of the work don't the all fruition way to can or overall sector series

But because getting and number we're the the being to these and trigger to really pull more move on forward a our this earnings playing versus at in the we are importantly, keeping XXXX, our more actually can and that offense we're holding believe we sheet where year. start growing it deals having where some balance play enough we're and point up stay more stride we so eye at point, excited where a at really we've patience, acquisitions, continue the this looking on right comfortable eye XXXX terms that fundamentals if ROIC – importantly offense flat had they've we're for of our importantly, well earnings was that's hit now. will of then to our having as done

Jeremy Metz

Yes.

too close year, you to others two the the the is front? and next any how Pacific in is densification to little realistic you earlier tell detailed talked say about getting you next of early just starting then of in two Francisco about the Northwest, so And which context, early just that on on ground here side from it chance mentioned XXXX those started and Crossroads just obviously in get the San that and year or – to it

Stuart Tanz

terms have Well online NOI a growth densification, terms couple of come we do in pads will realistically that crossroads of But year. us the in come not that will next online help certainly will and of that alone to because two build got And at going XXXX stabilize you've to take least through project years. you've a drawings it. year you've process to got to the is to and working in got go

terms the to would look see to at densification. but I begin to that XXXX, year densification all real it it as wouldn't hard I when doing work at XXXX XXXX the you’ll been all So, of relates we've relates as look impact is our in

Jeremy Metz

but on not, more ones year in? year, next Yes, and both the or focused starting San that’s of not guess those one ground getting sorry, next of those was I just I delivering Francisco started out

Stuart Tanz

follow end should hopefully the of mean come not could looks we'll right like the and it two at beginning of the year I right it shortly the XXXX? Yes, thereafter, the year out next other be at of so it's ground crossroads the

Jeremy Metz

it. made guess thinking on to a in the Got would a benefit And then but acute a should guidance. one other the early just those little one more back just bit. I the a quarter, and I through some quick be each like comments slower little feel is maybe Mike little that it have asset here you sales, you it get fourth offset the equitations

impacting in we that So is anything the need that the could move else guide? think there to about be here

Stuart Tanz

No that's I primarily yet change was, timing it’s dispositions drivers. the primary the as just and the in rates the equity excuse AGM, through of me,

Jeremy Metz

All right, thanks guys.

Stuart Tanz

you. Thank

Michael Haines

you. Thank

Operator

Thank you.

comes Our RBC Markets. question with Wes next Capital Golladay from

Your line is now open.

Wes Golladay

guys. good Hey, morning

Stuart Tanz

Wes. morning, Good

Wes Golladay

Hey, good morning Stuart.

at expect your expirations guess coming XXXX I Is mark-to-markets any them due. the – you and of there XX do large to that over you through anchor have Looking space? recapturing

Stuart Tanz

is – some expect certainly we Yes Rich. this

Some have And there to depend the recapture lot tenants options be that's those. could we in where in on terms flat. to mark-to-market we’re remaining – going that and on expect process of working the could of currently be of a

market of to expect are are So have little rent over coming have really we control some out there's significantly very we good are those. up are lifts. and there below some options our that that But where

Wes Golladay

in densification can elaborate said and you by the what been going And XX%. on where cost hear you happened Okay back reduced you to I if so then Did Seattle. there? has correctly, the

Stuart Tanz

we and now in of the on right what as have is talking of I design we what overseeing well project embarked venture construction so, doing details joint the in what where companies we in as getting building one them a of from call who the into you're early the a we're largest stages would And the call with Again engineering the with standpoint. partner are really a country. Sure. you're construction

project. be doing a having And just that they're close doing under of project table that do the lot certainly the they've because doing on less are they bring would currently $XX got normally deliver cost it in basically the ability of billion partner of amount to than volume is as one normally of at construction the than things and one under they what of to or the to less currently a actual going either

lot savings a we're will built done savings right But ongoing. the good and So business a they that's and that's I news hassle to us lot the that much of those know that communicating details they've don't they're present in is the time. They believe given and that. digging a lot cost how were the deliver to to have from. deeply that, Seattle of you very add is at anything want into with coming a construction if And us to what now.

Michael Haines

conservatively I part the No, I look we we think start other is this at this of when that very path. that mean down

pro-forma what possible. So fine getting And about the tuning we're underwriting realistic our low everything as now we're we're forward is but it. to as be the can original we and keep this saying to utilizing try to that closer cost moving we as

Wes Golladay

Got guys. it thanks

Michael Haines

you. Thank

Operator

Thank you our question KeyBanc Thomas Capital Markets. next comes Todd and from with

line now open. Your is

Michael Haines

morning. Good

Stuart Tanz

Hey Todd.

Todd Thomas

Hi good morning.

the on up following questions of couple a investments. just So

for you going additional like in teed does your for there cause your million sale being appetite incremental assets And assets about beyond and. up differently are the those investments once sold your are other two that's and that curious acquisition today beyond think dispositions the Just does efforts forward? to activity, what's the Sacramento pipeline then investment $XX two

Stuart Tanz

I specific Well in terms present of dispositions the nothing at mean time.

hard properties those we whether downside and relates point term it as objective we our year properties. look of that sort each take entire a we portfolio to growth potentials However profiles will determined long sell at and versus risk near each at

So right terms Todd and that XXXX. we're in now going through of

there's it as sits right up. now so yet nothing teed So

up the disposition may we again bit a on side. more But tee

like we're outside for of staying TJ that is away or to free that's terms if anything the side, there or those that's there anchor buying third And Rock a be in to our than only drug, more either value the having there changed to elements. is buying really gym criteria focus gross a criteria. three a tenants really and On got out be of is there one acquisition the primarily your of be what's

both on So side. side basis than from sides on a more the continue a equation. the a look we're acquisition from to and on excited about of XXXX, disposition net probably But that acquisition at you'll we'll again see disposition

Todd Thomas

have these pricing assets you or here, hurdles that underwriting in commented potential cap you changed terms And in compression Okay. rate then at your to you're or you're value all assets sort growth return looking at or, expecting or your of as see embedded underwriting of is more little today the or a you're as know today? add you there that you you're

Stuart Tanz

like X after X.X the XXX basis we've paying bought typically it's or underwriting asset cap an do mean of how platform within line a increase period time the criteria. the said month of Todd our or that bottom a I about or all is XX offering part see can X.X cap cap ownership. fact point about That's know and of what the growth. to that's It’s we’re we is you

in for that high Sometimes really long-term in quality we growth the creation don't finding and and or sometimes really meet most value NOI. assets that we but offer ability cases it's

Todd Thomas

same-store, also. moving Okay Mike over to and maybe the just comment then Rich can

the NOI So growth in rental of of base X.X%. income the consisted was same-store growth quarter

You're running dragged for heading and what's little that below there recoveries that's and the net other about Can at also talk and X.X% rents income minimum and rent being property just and you expectation by into a happening down XXXX? XQ bit year-to-date the minimum line.

Stuart Tanz

haven't really… Well, I don't think we

Todd Thomas

Sorry, other the sort those volatility of potential the line? of primarily some both around lines below minimum rent in

Stuart Tanz

to out. really always than play challenging talked pool. we factored items is one NOI, And it's NOI from is who same-center timing the overall about The actions into driver which biggest more often calculation line a the how cash those don't next. the new to All not know of tenants Rich quarter it's the predict going to precisely number taking for

thought During better conversely second we for quarter it thought, based X% we the the it's our quarter moves proactive had the upon still was it kind third solid of We're tenant and slower this at X% than the during we're than of comfortable a how budgets. based around X% tracking was range on still But it for would on year. dependent really base to the very quarter releasing initiatives. be

Todd Thomas

in rents to Okay. Would I fourth the you the year? forecast was part minimum earlier expect accelerate into the of that think quarter? see

Stuart Tanz

supposed I that cash I tenants anchor bring paying are should there's to number so up. start We large rent in think a yes, would back QX. couple that

Todd Thomas

you. Thank Okay.

Stuart Tanz

you. Thank

Operator

Thank And Green Tibone Street our Vince comes with next you. from Advisors. question

Your line is open. now

Stuart Tanz

Good morning, Vince.

Vince Tibone

have Hey, more a in the have you curious, on any few Good many these one Do comfortable risk morning. I densification parameter side. of just at projects developing be would you or time? how I'm total that of trying get active dollar just one which could total a at time? maybe pipeline, you sense a of put threshold work is amount place of to the many a how these to

Stuart Tanz

how – in as – next terms look many two at time, could could I be have into the point of XXXX, there time. mean one Well, three or are some you terms of at late these these I in happening going you one of at XXXX, know you of mean

partner most However, one it's project going building of moving we’re to not from up will business still coming oversee piece have that cases, on is not finish business. still we a multi-family. on just We're of not start But – because in We're in the obviously partner the every our to them. around. and

a expect structure. capital, much relates you moving on of the a more comment if sort drawing sort that? want a board. program from right these that's can that perspective, on venture it So of to Obviously are other the joint capital potentially of and our forward to now the three less that's now but Mike, From perspective, as you two

Michael Haines

say, incidental to incremental is can be business because it's our business any I our can our not that also core to developments Well, competencies.

undertake a – to development overall balance any is to our developments be that sheet. number we not material So going

incidental. that’s – it’s incremental but So it's also

Vince Tibone

at Okay. the on I'm going a to lock consider selling No, sites, curious to that developing any just in value over that would the of versus you years just table? these makes today sense. is land, And few potentially in title

Michael Haines

Yes.

Vince Tibone

That's fair Okay, I enough. all have.

Michael Haines

you. Thank

Stuart Tanz

Thank you.

Operator

Thank of from Schmidt America. you and question Craig next our comes with Bank

line is open. now Your

Stuart Tanz

Craig. morning Good

Michael Haines

Good morning Craig.

Craig Schmidt

Thank you.

XXXX the impacted factors? by leases On space. percent non-anchor those of wonder what impacting three in emerging I non-anchor be factors the may emerging

Stuart Tanz

coming always think demand to – that is where but the it's predict I it's from. hard is tenant

think large are percentage see So a a that I coming you'll probably categories. those from that

Craig Schmidt

a was that one new lease then the anchor? anchor grocery-anchor or general a merchandise Okay and

Stuart Tanz

was fitness. It a

Michael Haines

Very strong fitness operator Craig.

Craig Schmidt

Okay you appreciate thank it.

Operator

no I'm at in showing Tanz. Thank time. turn Stuart back queue you this the questions further call to like and I’d to the

Stuart Tanz

if contact quarterly on on you. Rich us to our In you website. which Also I or posted company's all have today additional thank can Mike, information the closing please you like any of for supplemental me Thank joining would is additional questions directly. you package find

weeks Lastly seeing we again Nareit’s for attending in Los to have a in Thanks Conference few forward there. great those you a Angeles Annual look you of and everyone. day

Operator

today's this for Ladies concludes participating. call. you Thank and gentlemen conference

You may now disconnect.

Retail Opportunity Investments (ROIC) 29 Oct 192019 Q3 Earnings call transcript