Retail Opportunity Investments (NASDAQ:ROIC) released first-quarter 2019 results on Wednesday after the market closed. The shopping-center REIT essentially delivered as promised, bolstering base rents and maintaining healthy portfolio occupancy. But it also highlighted a shift to strategic divestments amid continued uncertainty in the acquisitions market. 

With shares up modestly in after-hours trading as of this writing, let's peruse the aisles of Retail Opportunity Investments' results to better understand how it started the new year.

Outdoor shopping center

Image source: Retail Opportunity Investments.

Retail Opportunity Investments results: The raw numbers


Q1 2019

Q1 2018

Year-Over-Year Growth (Decline)


$76.1 million

$74.4 million


GAAP net income attributable to retail opportunity investments

$13.3 million

$10.7 million


GAAP net income per diluted share




Diluted funds from operations (FFO)

$36.7 million

$37.0 million


Diluted FFO per share


$0.30 (3.3%)

Data source: Retail Opportunity Investments. 

What happened with Retail Opportunity Investments this quarter?

  • Base rents grew 3.9% year over year to $50.5 million, and recoveries from tenants rose 6.9% to $16.9 million.
  • Same-space comparative base rent increased 30.7% on 27 new leases totaling 72,903 square feet, and jumped 12.4% on 81 renewed leases totaling 238,754 square feet.
  • ROIC ended the quarter with a portfolio lease rate of 97.8%, for its 19th straight quarter above 97%.
  • Same-center net operating income rose grew 2.9% to $47.1 million.
  • In February, ROIC sold Vancouver Market Center for $17 million, recognizing a gain to GAAP net income of $2.6 million in the process.
  • ROIC also has pending agreements to sell three other properties in separate transactions totaling roughly $57 million. 

What management had to say

CEO Stuart Tanz stated:

Property operations and leasing continue to propel our business forward. [...] In terms of strategic initiatives, we are making good progress with disposing of non-core properties. We sold one property during the first quarter and have three more currently lined up for sale, which all together total approximately $74 million. Additionally, with respect to our initial property densification efforts, the entitlement process is moving forward steadily. With our accomplishments to date, we are off to a solid start in 2019 and firmly on track to achieve our stated objectives for the year.

Looking forward

As such, Retail Opportunity Investments reaffirmed its outlook for 2019 GAAP net income per share of $0.40 to $0.44, and for FFO per share ranging from $1.11 to $1.15.

In the end, while some investors would like to see the company resume the acquisitive streak that helped it build its enviable property portfolio in the first place, it's hard to fault the company for patiently adjusting its base as it waits for the right deals to surface.

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