ROIC - Earnings call transcript Q3 2024 | Retail Opportunity Investments Corp.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

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

Lauren Silveira

Thank you. 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. other the annual with to report about risks to our SEC, learn refer these recent most on and should company's the filings including more Participants factors. Form XX-K

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

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

Stuart A. Tanz

Lauren, and good you, everyone. Thank morning,

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

months, Before speculation received we begin, over the market. the number past regarding several questions we've of a in

As or will carefully company all is we firmly policy, speculation actions that opportunities say market evaluates value in with to company all this and taking a believes will stakeholders. so best of of are rumors we the the on not company of that What objective do the not matter enhance do comment interest today.

Turning to the company's performance.

our to is the the which business. drivers evidence pleased of years best and fundamentals this XX continue past our as core been shopping above and fundamentals report the are be long-standing markets a at and remain We to our grocery-anchored XX.X%. rock of strong of sector rate, lease for portfolio Perhaps has XX% as the today stands all solid, the well protected of centers supply-constrained grocery-anchored our our that

XXXX, third of tenants. X.X leased maintain the already long-standing over over growing to through million consistently a Capitalizing portfolio to square come underscored feet alone. including strong continues diverse XXX,XXX months well square first demand quarter the range X demand ability Our which in the rate on of feet of the wide a space, space, we've high lease is for by from

well opportunity we continue at enhance on drive as to the capitalize higher. to to as every demand tenancies Additionally, rents

rent solid XXth post are achieving year and renewed leases. new on consecutive track of growth we currently on to fact, our both In

to with disposing investment long-term Along that through exceptional aimed portfolio continue properties is certain implement our of through initiatives, we our centers. the valued shopping fully value the acquiring program while portfolio enhancing enhancing grocery-anchored our value of our leasing at

quarter, X located the in in Seattle. San the During sold one and properties, we Diego located up third other

While time were felt both to assets, and properties were we value growth and the the going stable property capitalize each the is we prospects on created. appropriate sell that forward now limited

is acquired we as the the affluent most terrific acquisitions, of Diego back previously estate. situated in market, we the quarter, in dual second of terms center sought-after communities shopping In a irreplaceable in one that reported grocery-anchored real truly San

terms properties the X to the X% acquisition, at going-in was purchase already price leasing we've separate to $XX we center. relationship, of properties in total started million, sold which high equating of the blended With which the range. transactions. range, a quickly Both a for we sourced through the were $XX exit to economics, rate the in a cap sold increase buyers low to million, the X% space long-standing In available equating cap a respect through XXXX private in rate to off-market

tenant Going below-market re-leasing forward, as space through as we grow over yield next the enhancing several the to expect notably the in-line well years mix.

given before also In that the identified acquisition in exploring would we with, addition quarter couple look to decide possibly transactions, forward properties both know move property to fourth these we off-market here year-end, quickly potential currently additional very are we opportunities close an if of that well. selling we to a have and

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

Michael B. Haines

$XX.X basis, million average. Included On about by same-center and by during operating shareholders income to share. driven $X.XX X down cash in lease remaining third quarter third last had income all the on the the quarter. gain sold from a XXXX, of which the net the to GAAP since same-center Thanks, as Stuart. rents released from spaces have term which per we a higher higher we recapturing of to was of is third $XX.X third of sales net of at for we diluted quarter quarter X% last compared as totaled NOI recapture for notably common properties of equating was third anticipated, income attributable result slightly, GAAP year the considerable million that net the quarter as on year, significantly in leases, on income, that

months to million, particularly per FFO year X the the along The $XX.X operations, equating terms with early to larger share. from which for $X.XX higher property respect the of diluted expense sale, FFO sales, third the in quarter, impacted quarter, compared a as increased compared to last ago. occurred X third months first same-center of by With NOI XXXX, funds the to In totaled first X of X.X% as year. interest

In given totaled the terms of that the FFO with We expect year $X.XX to $X.XX finish the range. per share. first to months, the X FFO FFO year, through currently XXXX diluted per in for diluted for full $X.XX share

X% With on basis. that respect we to expect continue same-center X% growth, it a will NOI in to be range the to year-over-year

same-center our the has year. muted last anchor associated NOI commented this re-leasing call, ongoing and on downtime we between As growth leases activity our

anchors anchor NOI line our XXXX, historical in releasing, As the in occupancy opportunities looking be targeted potentially ahead with we growth average at we expect re-leasing stronger. next with year, complete take together will same-center as new

Lastly, turning sheet. to our balance

are in a senior forward expeditiously and to are move notes it in million mature December, as bonds. with market refinancing the Specifically, relates position to $XXX the the we closely monitoring of that

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

Richard K. Schoebel

being the just actually trend willing tenants gain strong prospective that standing Thanks, continues leases momentum is tenant to it years Mike. offers whenever across come available lease prospective sign available regarding to our of started to To ago before tenants a comments expand markets on Stuart's portfolio demand and today. a is, in it may space and few how submitting space

such needs destination Additionally, portfolio are proactively continues increasingly and strong and to jumping to seeking from are in lease continues grocery-anchored be their tenants to of fits range demand necessity, service space the a opportunities. and our out infrastructure come all, like-for-like All across chance tenants. broad at that

to our leasing results. Turning

During The with year-to-date, of around scheduled the square which that of over third renewing million quarter, far our we leased involve leased ahead activity. bulk activity maturities. renewal of over feet have renew tenants, XXX,XXX to center continues being their the many over anchor square well bulk X/X of to And of renewal space, thus continue X.X valued feet which tenants. of long-standing we

X during renewed scheduled quarter, third X the of anchor leases next fact, to all until we that In mature year. the not were

scheduled to now leases anchor XXX,XXX Furthermore, at XXXX, of initiatives, have renew. only XXXX, based all XXX,XXX square beginning on expect our Based date next totaling year, tenants, feet. XX just re-leasing totaling we our to leases mature had on in year XX currently we to and discussions next the anchor square we mature that early will feet. And XX scheduled with renewal these

rent success rents have With growth, good Stuart to we indicated, continue as at higher. driving respect to re-leasing

comparative quarter, third basis new activity. on a during Specifically, same-space activity we increase a renewal on leasing the our increase XX% on and cash a X% achieved

stores leadership. base as all have now with XX the for reported, of With Rite on as to leases Aid our years they another Rite been XX the in previous private recently In Aid, respect forward X are average, moving terms in-place portfolio, new maintaining extended a company rents.

which repositioning to part initiatives, leasing our put on of extending the part TIs some be towards additional As our in leases, is table. the third quarter were provided reflected statistics

stores Aid rent average to we is with tenants the underway and of over recaptured, higher replace Aid we what terms Rite tenants these X the the that XX% are based new that plans, before. paying build-out In had Rite respective been new Aid on from Rite already signed

activity, the rent $X.X new success tenants signed incremental $X.X has incremental had including their during haven't XXXX, year-to-date continue commenced as beginning while that rent, million account, we At and representing of and leases the added we leases basis that quarter. $X.X of year-to-date, rent signed rent. open of from of not new Taking $X.X total And paying $X.X quarter. third cash during base the additional to at this stood that into have have million that from approximately and million newly rent on have million of a Lastly, $X are strong opened activity that million. $X Of operating. new good September commenced signed XX, yet incremental million, all yet that have about getting leases opened, open we leasing businesses of our tenants rent, paying given new including of opened now incremental $X.X approximately third million million with

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

Stuart A. Tanz

Rich. Thanks,

As quarter. XXXX, have we productive active and move forward, wrapping expect to we up fourth an

track quarter. on another On far the are leasing thus to front, have we successful

that re-leasing Once -- re-leasing XX% are We in anchor re-leasing XXX% that at Kohl's years steadily initiative we space overall lease around be is again up expect the to year, again. Fallbrook. row, will we the the anchor the the we leased portfolio largest has it in to towards complete, of being rate at that a the our as space for commenced moving X completing expect been the lease previous our will and bring earlier

incremental that over initiative will revenue. additional expect of long-term we anchor our add Additionally, million re-leasing $X annual

that are commented, we of options market. scheduled all Several are mature will next currently below in notably leases ahead renew. Looking and Rich to no as those anchor expect of our XXXX, further renewal have year

which noted, the In addition of to maturing bonds coming to expect leasing, the as will refinancing in $XXX do be weeks. we Mike million we

off-market going with earlier, at at valued recycling the portfolio, on building our capital advancing well and to growing overall looking as time, investment touched are I no our growth continue acquiring our properties interesting selling as continue cash and same while like ability fully flow as doubt From well limited irreplaceable into perspective, certain sources, Lastly, our future. assets appeal opportunities the enhances recent long-term we to value the acquisition, of our currently initiatives. through strength forward, several

company questions, beginning not speculation. market along from matter rumors comment the at questions or lines. I stated as on the we please Before do ask as refrain of We that a taking call, of you policy, those

that, With your for please questions. up operator, open call the

Operator

our Dori Fargo from And of will Securities. today question be for coming first Instructions] Kesten [Operator Wells

Dori Kesten

the include loan still to next then is think the You few Xs, mentioned just still pricing, And refinancing the your you high expect that? appropriate? in on like with mentioned you term previously Do that weeks. in expect I bonds

Michael B. Haines

do term but probably -- we in it's little we That's expect is the bouncing Dori, of initiative bonds. the part a the bit, around tenure our refinancing to on Yes, mid the include somewhere the X.X% goal. price Yes. And we Mike. expect as to whole loan range.

Dori Kesten

you Would don't expectation Okay. And about store X%, that NOI returning into talked same-store a mid-'XX, put the, your taking your would a rate. 'XX X% you in closer know, account to X.X% 'XX would to range? openings which growth call to I I then assume X% growth just

Michael B. Haines

if know notably don't don't than year, I expect. going Stuart, as are I just some expect it's in if necessarily But I to would of of -- higher simply know that. off in earlier be event. higher the comment I to expect high be last can anchors year. That's year than the coming on this 'XX. be measured to 'XX from paying We're a obviously I you 'XX be those because 'XX would

should normal. 'XX versus 'XX So to returning be

Operator

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

Juan Sanabria

higher the the as drove just for first outlays just expected curious a Maybe G&A what year? question, on

Michael B. Haines

up basically measurements bit. based -- had you're this adjust think the quarter, when going have we comp to shares you It's performance-based to expectations. achieve, on a the that quarter you to on And that it's based well, little adjust every related,

Juan Sanabria

then And on just transactions Okay. the market.

assets perspective recent talked buy could fourth Or a early your... on a you or sell into see the you about being quarter may cap general sense 'XX and comment for some valued? most if in in us hoping that the asset are a rate of where where could in from bit of you the the give values transactions. little But You you rates cap

Stuart A. Tanz

XX as think tenure. the saw to market we basis and over it Sure. last points. know, relates has the rates cap Yes. acquisition flowed the quarter, as I pickup in all I mean, XX, look, ebbed dropping activity some We

for high Coast more What continue tenure activity. touch, down over looking the you're rate up last training high-quality recently moved the West a bit, terms slow that of but quarter I'm cap saw momentum From in that the the Xs. the perspective, market we more -- to a Now has what's assets. Xs, be a low grocery-anchored on we potentially with in would see the expecting

we that low towards continue the quarters. high X say, at several X, range so capital over in transactions X hope that buy to or you sell So again, as as last we continue can range, to off-market and the assets that churning we've that done mid-X And accretively. would we're higher

Operator

next from of Mailman coming our And will Citi. be Craig question

Craig Mailman

Just I recycling? think all? mentioned guys had recently, potentially you on kind guys, to just Is we we on at consider inside points basis the unit on the Or XX acquisition more sell deals you you continue coming still back XX, with market, of should into need table buy some when capital the were mix. the to OP to that

Michael B. Haines

we've into fourth we continue we well to we with assets, that on pursue the equity trade the to the West But continue have acquisition to OP and forward we on not the as is as relationships that balance or things. build so front, we identified transactions, opportunities Coast, in our the pipeline, into any X Well, quarter to impact Obviously, purchases. terms we look to of think as do continue And we continue more buy sell sheet. any having as raising assets. will 'XX, pursue

Craig Mailman

Any on be And on that could signed? Fallbrook. when update Okay. just then lease

Stuart A. Tanz

Yes. Sure.

work ours. prospective the the tenant, which national a longtime is to with lease on tenant of continue We finalizing

year. We have have -- executed of before lease end this our completed process the the goal is the to and

Operator

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

Todd Thomas

on the reacted at and Stuart, almost the I'm that not to the speculation held levels. year. but about It's asking up itself, XX% higher has stock

cost yield or cap rate, of a And capital has improved quite implied your your AFFO bit. so whether

You advantage capital improved market cost talked I'm take in put that right is time the acquisitions. work? capital to some capital, when some perhaps of to equity the of seeing potential curious maybe use about raise be of ATM just and to your to the

Stuart A. Tanz

look, through due the that sheet mean, to been sure balance the terms debt of of on we year the move as coming in I Todd. into balance continue those metrics the focus has early year, next Yes. focus and making with we

due. of to So I focus around importantly, refinance to our debt the on work raising the our back capital. don't time that's equity think in capital more looking we're is coming right on the focusing continuing terms balance and in market metrics and on check going be when keeping going sheet to The is really to markets the turning now to the

Todd Thomas

$XXX swap there entering quite over consideration weeks, And maturities Okay. or last December million and Michael, bounce agreements off combined any of bottom. to several the January was the new into curves the refinancing the yield a bit

timing Just curious the on around the off decision all of that. to hold and

Michael B. Haines

term. the bit swap swaps the with XXXX to new both now, timing and kind expecting allowed we Obviously, Well, refinancing. term near mature a in to that into goal loan. loan August enter of the the because to the do is goal expectation we're the -- a just of of little back of the kind is coincident go to And the muddy market up in bond

didn't sense currently. to it make swap So do a

Todd Thomas

one I could. just if And more, Okay.

the the hit today. eyeing general the specifically that base that through the just if in the you health we're in a in the Is that year quarter. million you're $X implies guidance the quarter considerable the can I'm revised you're $X.X full year, anything last might So for almost tenant pickup the for fourth bad debt, curious million year, comment at October. in there on of of

Michael B. Haines

is continuing the I to on just healthy. be guidance. tenant Nothing in -- bad think We're base conservative pretty debt cautiously particular. the being

Operator

will And coming next from of our be Thillman Baird. Nicholas question

Wesley Golladay

up whole Wes. auto actually I Fallbrook. has guess for you. on this question picked for you Nick is Quick dial-in this Well,

are opened? to there. you can a pretty have have a at said when tenant And split still looking And lease box that big you're looking there? you sign You

Richard K. Schoebel

needs well, box -- the done to still need but There's be of split, work Yes. to the the the box be significant tenant. to to needs accommodate

of the we 'XX. year first so expect or the be next completed next part very would And either would year that late opening that, and tenant

Wesley Golladay

Okay. recaptures? mainly about look eyeing to that And actually a tenant out. moves And your before anchor that Would tenants then comment? comment have are was an you space increase you

Richard K. Schoebel

we out rents end we've year. there's at -- year, some have of this at last opportunities we other a released mean, which I couple higher the there, No. of pads -- recaptured significantly

there's portfolio embedded But you can of access when so the depends. them, sort anchor. opportunities and in the opportunities shop And timing throughout that we're The throughout portfolio. of eyeing space

Wesley Golladay

Okay. then sheet. And one final on balance the one

the pivot With rise, you'll long loan? term a term, to start maybe would you to

Michael B. Haines

the have group that the side I'd given some banking bank We've about my on to for loans. consideration us talk term appetite to

That's considerations I the little think of a sure. one back that's for lately. bit come always

Operator

of from line question next Mueller Michael coming of be the our And JPMorgan. will

Michael Mueller

curious, guidance in wasn't and that to a Just the what expectation same-store out? there wash considering of kind each change seem NOI the the adjustments FFO drove other exactly reduction other

Richard K. Schoebel

Acquisitions.

Michael B. Haines

bit the gauging Mike, will Yes. in is in head our shake interest aside variable main that's towards where NOI, part one budget of always level results property challenge which driven by activity. of Well, the expense, year-end we from as a a terms leasing is out our versus actual

So leasing up we budget, to is middle our of fourth in line the end would quarter with expect range. in our

Michael Mueller

Got it.

of Okay. When curious, just just your renewal And if looking year-to-date to what quarter your to going question general or leasing, portion kind of fixed either leasing, for third at look here. then we out straight renewals the versus terms is in like market? renewal tied of you're of

Richard K. Schoebel

expiring. any quarter-to-quarter Rich. of anchor here don't have definitely the I that's from There's some coming really based have on leases that leases it don't front me, remaining. It's several number a options but specific in Yes. lease varies up,

because percentage all expect give get market. the a it's to leases But leases those will up to varied. are specific you We to hard

Operator

Street. Paulina be will the from question line next Rojas-Schmidt our Green of coming of And

Paulina Rojas Schmidt

stable that properties would of that to growth of What fit this recycle? would be you limited assets with say ahead your inclined description you percentage

Stuart A. Tanz

tough X, table mean, Well, assets later of it -- that its are to it's perspective, percentage from as relates the about identified get NOI still to move sooner market have right X now couple profile sell assets we've to on a than a I of the would that growth. probably We to that.

have had the enough. we We at and to were lucky top opportunity that the of Those grocery-anchored. list, recently aren't the retenant more are

we're selling. One should the Aid tenant a we focused next Rite the that national on X months. of of a now that with them X That's to leased be online asset coming to was type

So when the look we're probably often, as as XXXX. or we probably is -- X what X as at do we assets come through looking portfolio into we

Paulina Rojas Schmidt

you That's can helpful. the of by Rite retailers Aid? taken And curiosity, formerly out share space what have occupied

Richard K. Schoebel

The Rite Aid spaces, Paulina?

Paulina Rojas Schmidt

Yes. Yes. Correct.

Richard K. Schoebel

Yes.

we So Dollar have one of a taken piece Tree has space.

school. have swim We a

a we grocer and salon tenant, a We suites have have parts. and auto

Paulina Rojas Schmidt

local Okay. Very restaurant on some my mainly And showing weakness. I how restaurants in the versus national is diverse. is service. concentration last would credit? say much And been is recently know your you to have news question quick But

Richard K. Schoebel

I percentage, specific restaurants? number don't is say me local don't credit of a but [ you for Stuart, have in a ] XX% I or here probably would front know,

Stuart A. Tanz

continue be mean, about the it West relates to terms Coast the on XX%, quite our sales Yes, And I of as strong, yes. category to whole portfolio. in

Richard K. Schoebel

But the exposure had haven't on, in as headlines. tenants seeing the that touched you're the we you to

don't of fact, In we exposure have most them, to. any

Operator

would the concludes over Q&A turn for today. to And to Stuart that for closing go like ahead. call Please remarks. session the I

Stuart A. Tanz

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

in ROIC. your appreciate always, we interest As

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

Conference everyone. we few in forward seeing and again, have are Thanks Lastly, for weeks, great attending Las NAREIT a you day, those there. to who a look in you Vegas of

Operator

all concludes conference call. participating. for This Thank you today's

now may disconnect. You

Retail Opportunity Investments (ROIC) 23 Oct 242024 Q3 Earnings call transcript