Retail Opportunity Investments (ROIC) 24 Jul 242024 Q2 Earnings call transcript

Company Profile

Participants

Lauren Silveira	executive
Stuart A. Tanz	executive
Michael B. Haines	executive
Richard K. Schoebel	executive
Dori Kesten	analyst
Todd Thomas	analyst
Craig Mailman	analyst
Juan Sanabria	analyst
Andrew Reale	analyst
Wesley Golladay	analyst
Hong Zhang	analyst
Linda Yu Tsai	analyst
Paulina Rojas Schmidt	analyst

Call transcript

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Operator

Welcome to Retail Opportunity Investments Second Quarter 2024 Conference Call. [Operator Instructions] I would now like to introduce Lauren Silveira, the company's Chief Accounting Officer.

Lauren Silveira

Thank you.

Before we begin, please note that certain matters, which we will discuss on today's call are forward-looking statements within the meaning of Federal Securities Laws. These forward-looking statements involve risks and other factors, which can cause actual results to differ significantly from future results that are expressed or implied by such forward-looking statements. Participants should refer to the company's filings with the SEC, including our most recent annual report on Form 10-K to learn more about these risks and other factors.

be non-GAAP will today's results we call. addition, discussing financial certain on In non-GAAP GAAP posted results found of financial Reconciliation these to company's supplemental, website. in quarterly results which our is on the be can

I'll Executive Stuart? Chief the the Officer. over Stuart to Now Tanz, turn company's call

Stuart A. Tanz

Thank Lauren, day, everyone. you, good and

to Here and Haines, portfolio near hard Demand Chief for space work across me our Financial we Chief Officer; most Michael and leasing with our Officer. is and to record Operating strong, be continues continue Lauren today the it, making our Rich Schoebel, at pace. space of a at

In XXX,XXX over fact, square already Year-to-date, we've feet. leased

Additionally, for over dating we back we centers. a leases the posting second commenced growth to when quarter shopping XX-plus years, we XXth re-leasing property when continue extending XXXX to first statistics representing in rent quarter, owned new XX% increase reporting XX on our just achieve consecutive

for threefold every With achieved our second consistently since, quarter in portfolio have we've the acquisitions, to through last respect and As year on call, as we early long-standing acquired relationship, nearly grown we our we off-market reported growth every shopping property a as rent a the irreplaceable estate. re-leasing quarter. most center. primary in Diego, core excellent submarkets serves San that anchoring $XX as truly master-planned real shopping in The center Bressi known one of an the community Ranch million, situated grocery-anchored is sought-after affluent

ours. strong just X which Stater X supermarkets, not long-standing both features but are Joe's center of Trader of The Brothers, tenants and

the for It's respect mix grow already of enhancing flow a early working days we $XX the ROIC. re-leasing the in are we on. a to million. value Looking the as and space, approximately enhance below-market as through number dispositions, a acquired sold us cash for to back that well there which ahead, of in-line we're With tenant opportunities recently center center's underlying property

along center, cash appropriate today, ahead, were the sell goals initial this looking to repositioned center property. increasing and we've we way, the the growth significantly an projections. property and flow our the years, substantially stable remerchandised was Notwithstanding time prospects the now felt the Over surpassing a particular and limited being

essentially acquiring our our irreplaceable time property, same growing asset ability strength while continue like selling an this we doubt going enhances long-term were the Bressi, that to at as and portfolio our forward. of From as well no perspective, cash flow the overall appeal

months. Haines our Now Michael the to second I'll results Mike? call X through financial turn the over quarter for to you the first take and

Michael B. Haines

Stuart. Thanks,

XX, revenues XXXX, For the had million company in in $XX months the ended June total income. million X and $XX operating

per And per diluted $X.XX diluted increased of there X discussed the first equating increased revenues share. XXXX first Customer X% X and or per ongoing or range diluted $XXX for XXXX, to the X.X% same-center million of is the $X.XX the in as per diluted for totaled year cash guidance. GAAP between call, of operating X GAAP totaled $X.XX however, share. above our And space quarter XXXX, half basis, to the operations XXXX $XX.X had we million months the second first of our $XX.X X%, is of million months. year On net shareholders to some in income equating by second total the in activity, last quarter guidance X.X% For million X.X% first The FFO months for income. the increase $XX.X was company XXXX, which for attributable XXXX, to be net income million, for income X totaled of common a operating anchor million NOI the $XX of net leases, of full share. will and second reflected months for quarter for on $X.X the first share. re-leasing given same-center downtime our for the by the $X.XX

balance our to Turning sheet.

retired we $XX quarter, a second the in million full During mortgage.

result, XX of are GLA, now. to our XX a equating centers X unencumbered, the XX As we and months matures our currently that of million, for remaining meaning only about XX% shopping remaining mortgage in mortgage total have loan portfolio last from $XX

bond With Depending long-term respect year, December, we XX-year $XXX second notes bond loan. may during on half interest is senior term our public refinance of million market look $XXX to at how our time a bonds to the the same million that objective the or possibly deal. preferably the of rates mature in refinance offering, the also to the evolves through

other and Assuming next mortgage, debt ahead, maturing no have would we we the do X-plus years. million looking than $XX the for

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

Richard K. Schoebel

Mike. Thanks,

As Stuart strong, our across coming existing and both space highlighted, demand portfolio tenants. from prospective for is

academic, from of coming demand there's In robotic themed terms exercise concepts, prospective broad enrichment new children shortage tenants, a notably destination of tenants no and most of concepts. especially range

concepts. the to tenants self-care destination and expand fitness, mainstay new only well sectors along restaurants in digital wellness traditional including restaurants, kitchen with continue as Additionally, as

these There tenants. themes amongst are diverse two common

serve select are First, space the And shopping of to Coast, on which they our to again destination seeking focus these well established our offers. strategically portfolio where is necessity natural centers West perspective, necessity specific grocery-anchored a to exactly they are our the that seeking markets From highly portfolio are and protected communities, we in second, have strong in lease presence. daily business. expand value-add very situated as only tenants diverse mature in a markets what centric complement

of As Stuart commented, we the make most continue to demand. the

square is square XXX,XXX on XXX,XXX square leased for XX the active quarter Breaking XXX,XXX we company. a the achieving signed feet in base highlighted. second down, new leases feet, we quarter, increase Stuart totaling second feet, rent, the record most second as which XX% the During same-space

of renewal base did XXX,XXX Additionally, the notwithstanding long-standing feet many which bulk in renewed early. of the tenants increase options, a achieving tenant being X% exercised we renewals square that of so valued rent, fixed

anchor rate second June of and XX% as portfolio that space In was XX. XX% activity, leased. our quarter to down space increased with space, was our Breaking anchor shop our and step XX% strong between lease our leasing leased shop

of getting terms base representing their paying annual another successful specifically, upwards commenced during on we second incremental basis quarter. open, had businesses $X active and tenants the a In open rent tenants rent million cash quarter, of new

haven't Additionally, rent June in approximately step incremental with leases quarter new yet signed strong $X.X new our of over second leasing our million leases rent million the as bringing annual during XX. to $X.X activity, base total added that of commenced from incremental

just already next scheduled Lastly, at June leases anchor year XXXX. the renewed Two recently. XX here we mature XX, of to in XX had have

tenant speaks the on we currently and XX XX, expect portfolio anchors the other of discussions our of to of and base. anchor which based again XX XX renew date, at the that strength could, strength to all to will tenant possibly least As the our

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

Stuart A. Tanz

first core of on performance during the portfolio together the our of second what have with in guidance. FFO solid Thanks, the on initial our year, Rich. the of lower portfolio year, with we half Based see raised half we horizon the our the end

part activity terms portfolio the on of was our year, guidance, was start in in which increasing acquisition on would at we on the the our another prove driven back initial In the rates higher initial would by potentially the market, was interest of the growing largely productive there front, based to and that set of that momentum year soon. Based expected guidance XXXX be cut acquisition building, expectation accordingly. be market's our end the that we

cap have However, in as the year rates terms not pricing of costs has and not seller have and financing expectations debt progressed, come down moved.

As a has largely market result, idle. the been

the In making market, acquisition Additionally, of sit now factors, be lowered we of of were economy second the we selling favorable. here $XX half pick no unclear uncertain respect guidance. again couple half in the totaling the year. year, initial do continues become weigh with of we these dispositions, are acquisition and assuming when million, market our forward it only back that more FFO assuming the of to to the the may With for on Accordingly, our move today around high the terms guidance properties to sold. during up both of additional a end second we but activity have could light we properties as have

remains maturities. market our remarks on opportunities on Rich's upcoming growth core expanding within muted, to continue anchor acquisition the While focus regarding portfolio, we

Going not have several do anchor the years, remaining any next our maturing over a tenants exercise. auctions forward, long-standing growing to number renewal of

say, we are the portfolio markets. on significantly ago, below to Given of market long-term over time most sought that years are re-leasing necessity-based Safe and many our the these opportunities these intend much to were anchor XX a of some and ago, protected time of by grocery-anchored, strength today. originated XX leases anchor to as long capitalizing appeal leases highly these after make as

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

Operator

Kesten Securities. our be [Operator coming will Instructions] from Fargo Today, first Dori Wells question of

Dori Kesten

deceleration that evenly the same-store QX point you is implied that's second spread differentiated of anything to NOI year, maybe by Is among out in quarter? want or there The growth as X? for the half

Michael B. Haines

Well, second the the same-store X.X% quarter for is...

Dori Kesten

the of the half mean year. I No. second

Michael B. Haines

first the of We're year to back half, be just keeping results. we're as to because half. way of guidance year. the not half X% this second year's obviously, strong because Yes, same-store Oh, comparing numbers X% the were as the of expecting the to last it

Dori Kesten

[ of have you your Okay. -- stores guess, of you there stat updated a I to on and dispositions guys ]. operated I ] list from the us by perspective? then or, your think there team give of an [ situation operating of Albertsons updated out the And potentially concerns? Kroger, be Can does potentially number number the of view new And ease

Stuart A. Tanz

in in of mean only two CNS, are in with being of from that and I Washington. a XX total are XX we that California X to have being leases we right sold None Albertsons, in are and CNS. the to sold which now have have Kroger Kroger Albertsons and Yes. lease with are perspective, X Oregon leases

the business continue terms of the Kroger in of and communicate Albertsons, we transaction, conduct quarter. and both as in their with to including usual, leases renewing one second And

the to they're haven't the CNS. to spoken merger goes because they're in to still and However, see we if not position a through, waiting discuss merger,

Operator

be next Todd coming from of Markets. our KeyBanc question Thomas And will Capital

Todd Thomas

of questions. rate comments again first, activity later your the forward. and about talking into We're about I investment cuts now of guess, Stuart, level couple going A lower year XXXX. in net

and and uncertainty what transact where bit prices? about bid-ask today? more talk the delayed? is just can spread unwilling current previously sort of investment a sort given rate cuts unanticipated little you So it activity that was about is sellers And Or the are just is around of to timing that

Stuart A. Tanz

to reluctant yes, given fact are to And rate environment interest still their the are somewhat Sure. is I reluctant timing bring it's the the and think as to comments, -- it I my as idle, said market sellers I relates still mean, in interest Well, properties sellers market. rates. to that

Going a at will in anticipate more. comments forward interest the a rates, looking to we do in acquisition into -- more assuming the some pick start 'XX, halt that said see hopefully rates that that quickly. bit We But that up year, as of do interest and when rates. market came we movement down, interest didn't come very And we the certainly came activity. the anticipated

are the So on now, half move things still year. sidelines the on the how sellers of right and second see we'll

Todd Thomas

And Okay. net did assuming equity the amount the discuss updated to now that the expectations, prior of you're and guidance investment to lower the impact with you guidance? can not from issuance, the what capital Mike, which your levels relative raising to activity

Michael B. Haines

Yes.

for last our net we're pulled the FFO, in we added how why the million, why $X.XX since of going of acquisition every about guidance. that's I year, call, down balance removing activity the which investment we it of we $XXX forward high talked about for of the activity, end is think the all

Todd Thomas

side. then And Okay. the operational over just to shifting

So little been an concerns. I'm of tenant just in bit some credit there's curious, a increase

we've that midpoint. of of debt a any ago? bad You the forward on about you the Are some talk And outlook, more your just took these to the or little there are changes sort the bit announced outlook bankruptcies today announcements. store seen X of at Can versus of closure the recently? these down expense health announcements tenant months based base some slightly

Richard K. Schoebel

The tenant are Todd. base with Receivables continues historic well, averages. consistent to perform

out the had where to. names leases. accepted the either names I or news, bankruptcy think and we've you've exposure we've been kept purchased the of of tenant been tenants heard in have little A very process come lot we -- leases exposure, or And bankruptcy very have through the have fortunate. the

little very impact been there's the tenants news. the from So in

Todd Thomas

Okay. Kohl's Got update it. the backfill Fallbrook. Any on at

able 'XX very think any potential I you the or to there to Is extent this there update early were there? year that rent progress commence get around a was to signed. for either the late lease

Richard K. Schoebel

Sure. Yes.

XXX,XXX XXX,XXX we this the feet second of point, to, of largest signed which the square space. in LOI during feet Kohl's available referring pending space about totaling is That remaining. feet XX,XXX quarter, at anchor the a think have currently the leaves square signed leases XXX,XXX I square a square feet. We space, you're

to remaining contemplating space. splitting work tenant to we're X, XX,XXX the lease a X tenant with discussions tenants the long-term continue finalize in We into who's now on with national we're And right and of the ours. feet, prospective space square that the prospective

Operator

of Our next Citi. question Mailman is coming from Craig

Craig Mailman

in rent I you OCRs early of to least here? it's bigger maybe on Can back be, want know on what on up but your spreads just start to hard think renewals? to indicate us exactly and of to you point give anchor where know these could what of extension some or least finally you've that here. at you rents of been these some Stuart. leasing sense in where type terms options to get the analysis go some opportunity, think Just talks could I could are give excited at follow a chunks without you

Stuart A. Tanz

want you or down broken non-anchor versus just anchor? the that anchor And Sure. around

Craig Mailman

guys the anchor the bit two. some issues around signed same-store trying commencements sense just to mean, a -- I Just side are I'm this because you timing I that on get year little around on a impacted both by leases. mean

feels spreads like what's maybe opportunity the some have of leasing benefit then of next into on an to premium and looking we're of some get As get the commencement you these it year, leases. you

reaccelerate to to without to the up trying little could same-store all sense out of look look trying just get year? could what build 'XX of next a a just -- the to the pieces But get into So of as we sort where for guidance bit like you. maybe strips kind growth

Stuart A. Tanz

Well, these mark-to-market leases with anchor in that the on left in on we Sure. large we mid-single the starting currently, have working are terms digits. because currently leases of the vacancies quite what are rents we're on the

So assuming are extremely mark-to-market XX the that we which anticipating the do leases get is next days, these strong. over executed,

a next look as tell higher year, 'XX, on basis, blended anchor on are that into forward I move articulated of at below the you anchor probably on going Going we Rich looking spaces, side. But again, 'XX what would trend these you number leases as the a well be over into market. is to

general, line higher through expiring move it into this what will In that and I'm 'XX. space, also of vary on the depending anticipating to is we get and where, as balance but in year trend

articulated, strong. on West underlying the continues ground the that strength, we're seeing strength extremely the Coast and on Rich As the to be demand

'XX, we growth sides as we're look strong balance So that and the pretty the into expecting of on to year both equation. of

Craig Mailman

Or give are same-store potentially that as we sense what next of kind far as teens year, or maybe year? there the this you have total everything XX% X% and And your guys you if mean the about to same-store to I what if of about burns commencement year about off would X% mean, the that of into Is think drag we're so talking that looking a to want think up Mike, sort blend Assuming timing. the on a above about it? low way I spreads are don't puts So then year, into X% that hits? drag of decent we know is takes this which, the did 'XX? next X% I by blended of could other should been GLA.

Stuart A. Tanz

that will to anticipating Yes. higher. move those continue Again, we're spreads

now of focus really same-store, we're what will leased year have into or I'd leasing comes this of the -- benefit Mike, mid-'XX. that say, terms In

late real next will NOI. tenants finally We're next So benefit fast stronger in the 'XX, should you'll to of obviously, given get vacated, to same-store benefit into full back up of what than in some from run going year now a 'XX after terms spaces a the this in moving perspective. that year fact open. a though get be that rate pretty The 'XX from we're doing 'XX, same-store because punch at the how acres and these real you're But anticipating year X% these depending on higher year, a maybe hits quickly leasing that that can to same-store range next bit we're we point. get come did X% certainly these come

Craig Mailman

Okay. Then one for last one Mike.

a XXX of mature a August, that the you where today Kind loan assume to debt? and revert half mid-Xs refinances. the about of are the is the unsecured on swaps the about think loan kind spreads And of we in term where should On modeling also, debt back you then from as year, we just term kind just think back of perspective? do

Michael B. Haines

goal on refinanced swap time at bond. all, its possibly of to term first we side, Well, refinance is the our the loan the December same

intending So to swaps. replace we're not the

So those you're say, to spreads some low, with at the like us, there. credit going we and in going X.X%. priced to deal revert today, the where to the But you're around pickup so loan, floating X, X.X%, for is term be probably on rate when get the looking a XX-year

bring eye on X% the and that range. So 'XX refinance, loan we're the about obviously, potentially bonds down to term just market of ] X.X% the the keeping to [ overall same kind high an time at to and

Stuart A. Tanz

if we right? I'm sheet if do Mike, for did that, years. And balance several due Is our nothing that have we correct, finance on

Michael B. Haines

is one not Just meaningful. year, which mortgage that next Yes.

Operator

be And Capital Juan of our question Markets. Sanabria BMO from will next coming

Juan Sanabria

was I stores, expect up on from when that the color of close list, term fees to give any may that earlier. can that of question and the following the closure you think, potential one Just you'd in backfills? Any any insights lot line on or potential on Lacey big on

Richard K. Schoebel

Sure. Yes.

we heard Big closure. is the have we that location in potential know, you And center already portfolio. the Lots Lacey, the the we substantially That not years. on as space As but market. have has directly, do we and the now, Washington officially been rent X we've from leased a And below past for only XXX% understand offers in one up Lots Big of have is

termination uptick big as we the in fee rent, see So between a any this and risk. don't the

Juan Sanabria

And on of that term just fee? how quantum of the get to left much is a potential sense term the

Richard K. Schoebel

about exercised think, just they've a ago. option, I -- about There's an year

So years good been in shape. store the I It's remaining, there's think has just renovated. X about

we expect and limited over turn can with We downtime. little this dollars TI very

Juan Sanabria

restaurants Okay. the potential Great. increase broadly just in demand a California. general, I Pizza the with regards you news or MOD are And kind this on minimum tenants? I was on then just that after bought to in that broke. health of news the in seeing some theres about with mean subsequently guess waging of what bankruptcy

the on through with So you're just and health their from just costs what curious income particularly higher tenants statements? hearing running

Richard K. Schoebel

any it portfolio Obviously, They're MOD that. the something rent. Pizza's very base MOD comes negotiate clearly, that X modern in Sure. of Pizza up. spaces. base X.X% definitely only I mean, our We on, to it's but up, account total right? tenant brings less highlighted have that angle So they'll than use our for all

on our have very multiple to like one perspective, said, LOIs came get it leased to not you our order rent But we having buying go dense available. is but that people As normally are restaurant up really prices it's for looks anything in would this, the have because in highly that that on cover going huge to from a the impact resolved. markets properties spaces,

Operator

Jeffrey Securities. Spector be next our from of question will And America of Bank coming

Andrew Reale

Jeff Reale on this got Andrew morning. You for

you delta had disposed Is million million. agreement. quarter, be under property last the for under one, something In that Just $XX July, of changed X million sold or still to dispositions $XX believe there? agreement $XX you I

Stuart A. Tanz

contract. Yes. yes. expect the use be yesterday. of dispositions a in one may year-end, have have under month couple proceeds, we is a down do one balance by We to pay just in still of answer we'll debt on We But the couple to We as August, at to $XX both on still sheet close potentially assets of do the with. close another tap, which expect million about least and of we're certainly

Andrew Reale

rate? Okay. And at a X low was still that cap July disposition

Stuart A. Tanz

sold? The one we just that

Andrew Reale

Yes.

Stuart A. Tanz

Yes, low Xs, Jeff.

Operator

question next coming is Golladay the And of Wes Baird. from

Wesley Golladay

us on what up Can following tell question. asset that Just was last you sold?

Stuart A. Tanz

sold. exit in San The the asset It center low rate Diego Xs. again, oceanside. that was was that was the here market. in The in was was sold And cap we the located

Wesley Golladay

Okay.

Okay. That helps.

have X landlord any Going back a to maybe rights or... a if potential the CNS do you as fee termination properties,

Stuart A. Tanz

Yes.

Wesley Golladay

Can on you okay. elaborate that? Yeah,

Stuart A. Tanz

but number want and terms terminate go to Sure. news are if very to we to leases leases continue leases. terms we right a are have discussions low, is number do with may Albertsons of some might fluid. We're that and we Yes, best that rents term. currently, we quite the of the those what the Kroger in do this discussions in headway -- we own, through. do we with properties long have where, do a very of currently situation in these is leases what transaction still in take are the good high-quality place, making with were assets these The And these and of to

all we'll to So from of might there up. of where sort terms monitor end and go this in continue things

Wesley Golladay

continues the to hopefully can sales. Crossroads? there upward. update contemplating an then more industry goes I'm give multifamily and that expansion, where And the you've update hopefully, seen if then I but sure any I'm at outparcel us you potential in specifically, bottom were your here out curious And is interest believe Okay. went. an an they if not just more

Stuart A. Tanz

to the in mean Crossroads, terms the -- construction we continue I Yes. Crossroads, in of the of all at we've completed pulling terms permits. work the

us conditions permits. market project the the X-year supporter light granted is big the a our pulling a a the discussions, who for until so bit more city do In of get favorable. window to waiting we're However, of

lot, increasing of the the specifically location densification the Crossroads prime happened they're Bellevue. in In engaged couple been about But Crossroads what's city given for the the addition, of the keenly Crossroads at of has really the additional center's and over last in in terms by the within proactively development density interested city a future, at multifamily the months.

As in fact Council going years it the that relates the a we a density approval, now whole is create next is designated be XX going really look property City for to value long term subject to to high lot X the the forward of property. to to as

we're So terms several that there very about excited in happened last months. the over of what's

Wesley Golladay

Got then the did big renewals point leases mark-to-markets having make it. And you about the anchor and there. no

you're if better going curious on to terms also get Just reimbursements?

Richard K. Schoebel

Yes. I when mean co-tenancies we triple leakage nets lease the wholesale look may at those the at opportunity entire we address lease we opportunity, restrictions plug be relates have when to to to the it look any we that the have any the as or absolutely. leases, in

Operator

next Our from coming JPMorgan. of Zhang will Hongliang question be

Hong Zhang

have your on that centers? kitchens you in the the your guess, possibility the stores question -- any mentioned on of in studies you or Do digital any I in shopping I data customers the around call. other cross have a shopping those

Richard K. Schoebel

dinner. that someone delivery DoorDash the expect same do the all bringing we their up the it their kitchens cross these their up data on give kitchens orders. I services. really them when shopping not just shopping And can coming this people at are to also But kitchens. pick just No But centers is and These picking are type time about they're customers that go they're are on specific will up. digital pick app call. groceries other Obviously, ordering that up to picking the they where you and mostly to commissary

Operator

be next question will from Tsai Our coming Instructions] of Linda [Operator Jefferies.

Linda Yu Tsai

to other follow-up of some Just questions. a the

you Kohl's, based know the the LOI for XXX,XXX you you're the would split. the So info square could signed What's on then earliest feet remaining working rent I and for today? space, commence on the have which

Stuart A. Tanz

extensive XQ it's why executed T's to -- make lease, 'XX a construction. the I longer taken cross that we anticipating now, sure We're next to I's you, of all rent the but we next to gets is XX the about, late want it's if get a TI right the is TI tell would executed it relates an extensive the to which year looks pretty we're it would package Well, the touch as lease commence. and in days like

not Sorry, 'XX. of 'XX,

Linda Yu Tsai

good the Big your would current then backfill? it. fee a And lease a term And Got be in for potential Lacey, what then incorporated guidance? in is Lots

Stuart A. Tanz

I'm that. sorry. get didn't I

Michael B. Haines

of Can the first you repeat part the question?

Linda Yu Tsai

sure. Oh

Just like Big term Lots guidance? then lease do and backfill a good potential in you that for fee a your have

Michael B. Haines

fee No, in our the No. no. we termination guidance, don't have

Stuart A. Tanz

Rich termination lease No said, haven't either. had the a formal fee. of again, And No. we as rejection

So...

Richard K. Schoebel

But yes, the that our hit news, went to minute the team leasing work.

the they when hear back, to about the to excited long that good us anyone get of space, received already ahead as talking So potential they've were on interest back it space right. getting

Michael B. Haines

And guidance think I that our bad would debt downtime anyway. kind a cover of range truly

Linda Yu Tsai

closures And update portfolio? us Could be just then it. you more an Got Rite Aid give that on announced month. anything might last impacting your

Stuart A. Tanz

Sure. Yes, no impact in terms of the closings.

we're and the has in more expanding continued downtime terms relates given to location. their coming to -- and to other thing will The downtime store. the close hear next very of to our in we is right space, is fact talk any got out should the we Rite done. small traction Aid to only where now, about Kroger update no it were last of just signing as fact hopeful that that back. on we're quarter. continue again, getting Our Rite who's be Rite no And Aid about things and we importantly, very we're Kroger the that taking Kroger -- day build the gain in current TIs And bankruptcy. stepped Sales very are continue to excited this operate. that some But Aids one the up rent Kroger that to has rent to, short, But is

Linda Yu Tsai

store closures, on last your to Walgreens potential announcing portfolio? just impact X then And X news any or

Stuart A. Tanz

very Yes. I we exposure to little have mean, Walgreens.

Walgreens fact, center sold of the just had one In in we our it.

out our come the that's over of Rich? quarter. But So portfolio last

Richard K. Schoebel

Yes.

in as of Stuart, Stuart touched quarter, end the we on, those Walgreens at X sold the one of portfolio, have We the locations.

in had the with leave location that on Tree. which direct Pacific Tree to lease anticipating one Northwest. Dollar Another been previously Dollar doing by us up X location, with sublet will We're Walgreens a Walgreens

Operator

Street. our Paulina And coming Rojas-Schmidt Green question is of from next

Paulina Rojas Schmidt

Same as for you.

I'm here. $XX. not your you we're few in foot leases at ] the per leases, really [ all by around the space. is square representative of But for signed And same low a on boat it's still only disclosure intrigued my question I know AVR new So looking your portfolio. I'm anchor

So better average on the some place lower certainly location market, tenant type of in you can here. provide the or than to rent -- space -- lower color understand

Richard K. Schoebel

quarter? to the Paulina, are you renewals referring the during anchor

Paulina Rojas Schmidt

have well, the I yes, I Both really for per see of an foot. square space let $XX, per has also around both, one because If it's them front new lease initial remember if $XX me square foot. And in rent anchor renewals, $XX of me.

what type such paying tenants of are So rent today? low

Richard K. Schoebel

relates bought renewals, underwrote it rent as as some many ground leases space, tenants anchor the those property. in structured we And which cases, flat. the the anchor the cases, the gave leases cases, are options. when And anchor options And rent. are where actually the tenant were in Well, in exercising we built that's some them those the low very initially to

depends And much deal able I how the the then much space, really for And TI place whole already could putting be as pay. are actually there is package what get whether back. to into it, new what relates it is leasing, and just that some get of mean, how we're so renewals to it below in options tenant in terms market it the the drag to we the could on may we on of that structures,

anchor the were than we're is, on market for getting at to spaces. we The portfolio total below more if them on But throughout previously average. were in what look are you space average, the

Paulina Rojas Schmidt

you market and big the few in that the has rent rent growth that Okay. observed strongest been you space. you years observed market for have for of compare shop to Is it picture, that in have -- last or market more fair space? And strength growth demand the rent would then how shop anchor say

Stuart A. Tanz

increased Rich? rent can space of that because to space I anything capture that leases lot And expiring is you're Well, that quickly. yes, higher leases. going be capture typically if quite are any going without more to shop know have that, just to you lot want don't a options, and add a that to you rent -- you if more

Richard K. Schoebel

No, I think so. don't

Paulina Rojas Schmidt

does the rights to, some leases. the it So example, have, work? divestiture the some in reject further subleasing also how to leases, the subleases or a for for you you mentioned those And right cases, follow-up apply how consent about anchor that And that space? does of

Stuart A. Tanz

Yes. old think leases. very I articulated these I are of mean a as I leases number

there's worth the it an the tenant done... a when of anchor recapture -- The doesn't a into So the a we net transaction big of or done, the one of space. landlord space that to lease, the if the course, right threshold on ability is If tenant a the -- have certain meet transaction. recapture merger gives depending the if goes to

Michael B. Haines

identified There's different actually are actually correct by Kroger, think don't I X of any variables. sublet. But Albertsons and They're the me wrong, being operated right?

Stuart A. Tanz

Correct. Correct.

Michael B. Haines

[indiscernible] have been sublet.

Stuart A. Tanz

either No, so... by no, are sublet. X Kroger. been no. They're Kroger the are has Nothing and balance Albertsons operated

Michael B. Haines

Direct leases.

Stuart A. Tanz

Right.

we're having that. maybe And different. going a lease around is every again, just conversation the be circumstance, every either to midst lease of to So now amend more than do the the or ability in and

very the situation again, fluid. is still So

could voted this the moot XX a appellate be conversation by if gets So court. August on transaction the down

quarter more relates think total as of on I going the have the when it we'll not a from perspective next these amount our good on, at to But clarity exposure. of you look leases. news is, So lot what's leases

Paulina Rojas Schmidt

a then still one, today? to California that's premium used case And cap last in you general, think command Do market. so lower rates, the

Stuart A. Tanz

be and circumstances capital Coast the grocery cases, whole on dominant Demand dense wants in and at where depending stronger country. own affluent else drug-anchored the is even terms is the very of we attributes estate. look California capital some markets. it product and to that in And estate West in anywhere I again, in operate, the from the capital that as assets or When Yes. as of real the the and strong real of

So lot yes, California is a people's still of on screen. radar

Paulina Rojas Schmidt

are that today. rate very perhaps think you And How do or Florida hot with compares your markets if you for compare Austin similar products? there cap the markets some

Stuart A. Tanz

Austin I on are I've am Coast cap transactions certainly would rates as the lower cap in see we the or not as And in But with historically West the much rates have believe I'm certainly to markets. demand Coast. Florida else. continue are seen West tell been you Well, the anywhere tracked familiar they as as as that as as West we're I Coast. I market, some that low those on

Operator

Q&A This go closing Please for does session. Stuart today's turn to the conclude like ahead. you. Thank And would I now back to call remarks. over

Stuart A. Tanz

us thanks today. closing, all for to In joining you of

ROIC. we your appreciate in interest As always,

contact our have the as Also, as information please and Lauren, is find can our have great again, XX-Q. in which If any quarterly Rich me website additional additional Mike, directly. everyone. Thanks on well day, you posted you supplemental package, or company's a questions,

Operator

Thank you, everyone, joining. for

may disconnect. You now

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