Retail Opportunity Investments Corp. (NASDAQ: ROIC) 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.
Image source: Retail Opportunity Investments.
Retail Opportunity Investments results: The raw numbers
| Metric | Q1 2018 | Q1 2017 | Year-Over-Year Growth |
|---|---|---|---|
| Revenue | $74.4 million | $65.9 million | 12.9% |
| GAAP net income attributable to Retail Opportunity Investments | $10.7 million | $10.2 million | 5.2% |
| GAAP net income per share (diluted) | $0.09 | $0.09 | 0% |
| Funds from operations (FFO) | $37.0 million | $34.3 million | 7.9% |
| FFO per share (diluted) | $0.30 | $0.28 | 7.1% |
Data source: Retail Opportunity Investments.
What happened with Retail Opportunity Investments this quarter?
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Base rents grew 7.6% year over year to $55.4 million, while recoveries from tenants increased 18.2% to $16.2 million.
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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.
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ROIC's portfolio lease rate stood at 97.4% as of March 31, 2018, marking its 15th straight quarter at or above 97%.
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Same-center net operating income increased 2.4% to $42.9 million.
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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.
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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.
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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.
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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.