Q3 2024 Retail Opportunity Investments Corp Earnings Call Transcript
Key Points
- Retail Opportunity Investments Corp (ROIC) maintained a high portfolio lease rate of 97.1%, showcasing strong demand for their grocery-anchored shopping centers.
- The company achieved significant leasing activity, with over 1.2 million square feet leased in the first nine months of 2024, including 450,000 square feet in the third quarter.
- ROIC is on track to achieve its 12th consecutive year of solid rent growth on both new and renewed leases.
- The company successfully sold two properties for $69 million, achieving a blended exit cap rate in the low 6% range, and acquired a dual grocery-anchored shopping center at a high 6% cap rate.
- ROIC's anchor re-leasing initiative is expected to add over $2 million of additional incremental long-term annual revenue, with a goal to bring the overall portfolio lease rate to around 98%.
- Same-center net operating income (NOI) for the third quarter was down by about 2% compared to the same period last year, due to higher lease recapture income in the previous year.
- Funds from operations (FFO) were impacted by higher interest expenses and property sales, with a full-year FFO per diluted share expected to be in the $1.03 to $1.05 range.
- The company faces challenges with refinancing $250 million of senior notes maturing in December, amidst fluctuating market conditions.
- ROIC's ongoing anchor re-leasing activity has muted same-center NOI growth for the year, with expectations for improvement in 2025.
- The company anticipates a considerable pickup in bad debt for the fourth quarter, despite a healthy tenant base, reflecting cautious financial guidance.
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.
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. 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.
In addition, we will be discussing certain non-GAAP financial results on today's call. Reconciliation of these non-GAAP financial results to GAAP results can be found in the company's quarterly supplemental, which is posted on our website.
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