Retail Opportunity Investments Corp. (ROIC -1.15%) announced in-line first-quarter results late Wednesday, underpinned by strong portfolio lease rates, steady growth in base rents, and the reiteration of the real estate investment trust's full-year guidance.

Let's have a look around, then, to get a better idea of what Retail Opportunity Investments had to say about its start to 2018.

A shopping center named Old Town Square owned by Retail Opportunity Investments.

Image source: Retail Opportunity Investments.

Retail Opportunity Investments results: The raw numbers


Q1 2018

Q1 2017

Year-Over-Year Growth


$74.4 million

$65.9 million


GAAP net income attributable to Retail Opportunity Investments

$10.7 million

$10.2 million


GAAP net income per share (diluted)




Funds from operations (FFO)

$37.0 million

$34.3 million


FFO per share (diluted)


$0.28 7.1%

Data source: Retail Opportunity Investments. 

What happened with Retail Opportunity Investments this quarter?

  • Base rents grew 7.6% year over year to $55.4 million, while recoveries from tenants increased 18.2% to $16.2 million.
  • GAAP net income and FFO this quarter included $2.2 million of lease settlement income received for a property currently lined up to be sold for new, multi-family development.
  • ROIC's portfolio lease rate stood at 97.4% as of March 31, 2018, marking its 15th straight quarter at or above 97%.
  • Same-center net operating income increased 2.4% to $42.9 million.
  • Same-space comparative base rents grew 21.6% on 26 new leases totaling 85,346 square feet, and increased 8.3% on 68 renewed leases totaling 338,996 square feet.
  • As announced along with last quarter's results, acquired Stadium Center, a 100%-leased, 49,000-square-foot property in Tacoma, Washington, for $19.0 million.
  • ROIC also still has a binding contract to acquire King City Plaza, a 100%-leased, 63,000-square-foot property in King City, Oregon, for $15.6 million.
  • Retired a $10.1 million mortgage during the quarter. 

What management had to say

Retail Opportunity Investments CEO Stuart Tanz said:

As 2018 gets fully under way, we are off to another solid start. Demand for space from a broad and growing number of retailers continues to accelerate across our portfolio, as evidenced by our record first-quarter leasing activity. Additionally, we again achieved a portfolio lease rate above 97%, as well as strong same-space rent increases[...]. Along with the strong demand from new retailers seeking space at our shopping centers, an increasing number of our existing, necessity-based tenants are proactively seeking to renew their leases well ahead of schedule, which is indicative of the long-term appeal of our properties and fundamental strength of our core West Coast markets.

Looking forward

As such, Tanz says Retail Opportunity investments is on track to meet its previously provided guidance for full-year FFO of between $1.16 and $1.20 per diluted share. 

In the end, this was a particularly quiet quarter on the acquisitions front -- especially considering Retail Opportunity Investments acquired nearly $360 million in new shopping centers in 2017, adding more than one million square feet to its portfolio in the process.

But it's hard to complain about what's sure to be a temporarily lull in Retail Opportunity Investments' long-term plans to continue building its attractive portfolio of grocery-anchored retail properties. In the meantime, the company is enjoying validation for its model, both as new retailers find their way into that portfolio, and as existing anchor tenants move aggressively to renew their respective leases.