Retail Opportunity Investments (ROIC) Q2 2024 earnings summary

Executive summary

• Operates as a REIT focused on necessity-based, grocery-anchored shopping centers on the U.S. West Coast, with 95–96 properties totaling up to 10.8 million sq. ft. and a 97% lease rate as of June 30, 2024.

• Leased or renewed 776,000 sq. ft. year-to-date, with strong tenant diversification and high occupancy across major metro areas.

• Acquired Bressi Ranch Village Center for $70–$71 million and sold a property for $56.6–$57 million, enhancing portfolio quality.

• Achieved a 12.4% increase in same-space cash base rents on new leases in Q2 2024 and a 5.8% increase on renewals.

• Management anticipates another strong year of leasing activity and operational results.

Financial highlights

• Q2 2024 total revenues were $83.3 million, up from $82.0 million in Q2 2023; net income attributable to common shareholders was $7.4 million ($0.06 per diluted share), down from $9.9 million ($0.08 per diluted share) in Q2 2023.

• Six-month 2024 revenues reached $168.7 million, with net income at $18.4 million ($0.14 per diluted share), nearly flat year-over-year.

• Funds from operations (FFO) for Q2 2024 was $34.1 million ($0.25–$0.27 per diluted share); first half FFO was $72.1 million ($0.54 per diluted share).

• Same-center cash NOI for Q2 2024 increased 1.7% year-over-year; six-month same-center NOI rose 3.7%.

• FFO payout ratio was 60.0% for the quarter; dividends per share were $0.15 for Q2 2024.

Outlook and guidance

• 2024 GAAP net income guidance is $0.25–$0.28 per diluted share; FFO guidance is $1.04–$1.07 per diluted share.

• Raised the lower end and lowered the high end of initial FFO guidance, assuming no additional acquisitions in the second half due to muted market activity.

• Same-center NOI growth expected between 1.0% and 2.0% for 2024, with stronger growth anticipated in 2025 as new leases commence.

• Management expects to meet all liquidity needs through operating cash flows, debt refinancing, asset sales, and credit facility borrowings.

• Declared a Q3 2024 dividend of $0.15 per share, payable October 4, 2024.