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.
Continue Reading Below
Retail Opportunity Investments results: The raw numbers
| Metric |
Q1 2019 |
Q1 2018 |
Year-Over-Year Growth (Decline) |
|---|---|---|---|
|
Revenue |
$76.1 million |
$74.4 million |
2.3% |
|
GAAP net income attributable to retail opportunity investments |
$13.3 million |
$10.7 million |
24.3% |
|
GAAP net income per diluted share |
$0.12 |
$0.09 |
33.3% |
|
Diluted funds from operations (FFO) |
$36.7 million |
$37.0 million |
(0.8%) |
|
Diluted FFO per share |
$0.29 |
$0.30 | (3.3%) |
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
Advertisement
CEO Stuart Tanz stated:
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.
10 stocks we like better than Retail Opportunity InvestmentsWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now… and Retail Opportunity Investments wasn’t one of them! That’s right — they think these 10 stocks are even better buys.
*Stock Advisor returns as of March 1, 2019
Steve Symington owns shares of Retail Opportunity Investments. The Motley Fool owns shares of and recommends Retail Opportunity Investments. The Motley Fool has a disclosure policy.
