Maryland (Retail Opportunity Investments Corp.)
Delaware (Retail Opportunity Investments Partnership, LP)
(State or other jurisdiction of
incorporation or organization)
|
26-0500600 (Retail Opportunity Investments Corp.)
27-1532741 (Retail Opportunity Investments Partnership, LP)
(I.R.S. Employer
Identification No.)
|
8905 Towne Centre Drive, Suite 108
San Diego, California
(Address of principal executive
offices)
|
92122
(Zip code)
|
|
Retail Opportunity Investments Corp.
|
Yes [X] No [ ]
|
|
Retail Opportunity Investments Partnership, LP
|
Yes [X] No [ ]
|
|
Retail Opportunity Investments Corp.
|
Yes [X] No [ ]
|
|
Retail Opportunity Investments Partnership, LP
|
Yes [X] No [ ]
|
Large accelerated filer [ ]
|
Accelerated filer [X]
|
Non-accelerated filer [ ]
(Do not check if a smaller reporting company)
|
Smaller reporting company [ ]
|
Large accelerated filer [ ]
|
Accelerated filer [ ]
|
Non-accelerated filer [X]
(Do not check if a smaller reporting company)
|
Smaller reporting company [ ]
|
|
Retail Opportunity Investments Corp.
|
Yes [ ] No [X]
|
|
Retail Opportunity Investments Partnership, LP
|
Yes [ ] No [X]
|
·
|
facilitate a better understanding by the investors of ROIC and the Operating Partnership by enabling them to view the business as a whole in the same manner as management views and operates the business
|
·
|
remove duplicative disclosures and provide a more straightforward presentation in light of the fact that a substantial portion of the disclosure applies to both ROIC and the Operating Partnership; and
|
·
|
create time and cost efficiencies through the preparation of one combined report instead of two separate reports.
|
Consolidated Financial Statements of Retail Opportunity Investments Corp.:
|
|
Consolidated Financial Statements of Retail Opportunity Investments Partnership, LP:
|
|
June 30, 2013
(unaudited)
|
December 31,
2012
|
|||||||
ASSETS
|
||||||||
Real Estate Investments:
|
||||||||
Land
|
$ | 328,053,350 | $ | 283,445,257 | ||||
Building and improvements
|
721,898,820 | 588,248,338 | ||||||
1,049,952,170 | 871,693,595 | |||||||
Less: accumulated depreciation
|
43,370,524 | 32,364,772 | ||||||
1,006,581,646 | 839,328,823 | |||||||
Mortgage note receivable
|
10,294,000 | 10,000,000 | ||||||
Investment in and advances to unconsolidated joint venture
|
15,566,659 | 15,295,223 | ||||||
Real Estate Investments, net
|
1,032,442,305 | 864,624,046 | ||||||
Cash and cash equivalents
|
6,393,868 | 4,692,230 | ||||||
Restricted cash
|
2,059,741 | 1,700,692 | ||||||
Tenant and other receivables
|
15,008,749 | 12,455,190 | ||||||
Deposits
|
2,250,000 | 2,000,000 | ||||||
Acquired lease intangible asset, net of accumulated amortization
|
42,299,617 | 41,230,616 | ||||||
Prepaid expenses
|
685,801 | 1,245,778 | ||||||
Deferred charges, net of accumulated amortization
|
23,432,476 | 21,623,474 | ||||||
Other
|
2,308,375 | 1,339,501 | ||||||
Total assets
|
$ | 1,126,880,932 | $ | 950,911,527 | ||||
LIABILITIES AND EQUITY
|
||||||||
Liabilities:
|
||||||||
Term loan
|
$ | 200,000,000 | $ | 200,000,000 | ||||
Credit facility
|
105,150,000 | 119,000,000 | ||||||
Mortgage notes payable
|
81,143,101 | 72,689,842 | ||||||
Acquired lease intangibles liability, net of accumulated amortization
|
57,485,197 | 57,371,803 | ||||||
Accounts payable and accrued expenses
|
5,964,544 | 6,468,580 | ||||||
Tenants' security deposits
|
3,062,637 | 2,336,680 | ||||||
Other liabilities
|
16,004,904 | 26,502,551 | ||||||
Total liabilities
|
468,810,383 | 484,369,456 | ||||||
Commitments and contingencies
|
— | — | ||||||
Equity:
|
||||||||
Preferred stock, $.0001 par value 50,000,000 shares authorized; none issued and outstanding
|
— | — | ||||||
Common stock, $.0001 par value 500,000,000 shares authorized; and 71,843,084 and 52,596,754 shares issued and outstanding at June 30, 2013 and December 31, 2012
|
7,178 | 5,260 | ||||||
Additional paid-in-capital
|
722,675,337 | 523,540,268 | ||||||
Cumulative distributions in excess of net income
|
(54,892,307 | ) | (38,851,234 | ) | ||||
Accumulated other comprehensive loss
|
(9,722,048 | ) | (18,154,612 | ) | ||||
Total Retail Opportunity Investments Corp. stockholders' equity
|
658,068,160 | 466,539,682 | ||||||
Non-controlling interests
|
2,389 | 2,389 | ||||||
Total equity
|
658,070,549 | 466,542,071 | ||||||
Total liabilities and equity
|
$ | 1,126,880,932 | $ | 950,911,527 |
For the Three Months Ended
|
For the Six Months Ended
|
|||||||||||||||
June 30,
2013
|
June 30,
2012
|
June 30,
2013
|
June 30,
2012
|
|||||||||||||
Revenues
|
||||||||||||||||
Base rents
|
$ | 20,161,341 | $ | 14,196,622 | $ | 39,510,902 | $ | 27,538,042 | ||||||||
Recoveries from tenants
|
5,692,669 | 3,412,322 | 10,523,498 | 6,516,364 | ||||||||||||
Mortgage interest
|
208,197 | 509,428 | 412,256 | 711,650 | ||||||||||||
Total revenues
|
26,062,207 | 18,118,372 | 50,446,656 | 34,766,056 | ||||||||||||
Operating expenses
|
||||||||||||||||
Property operating
|
4,081,626 | 3,282,120 | 8,240,507 | 6,251,468 | ||||||||||||
Property taxes
|
2,782,806 | 1,734,562 | 5,097,984 | 3,333,721 | ||||||||||||
Depreciation and amortization
|
9,176,706 | 7,017,542 | 18,057,836 | 13,667,360 | ||||||||||||
General and administrative expenses
|
2,913,101 | 2,596,688 | 5,649,682 | 5,016,526 | ||||||||||||
Acquisition transaction costs
|
519,532 | 630,371 | 928,368 | 753,214 | ||||||||||||
Total operating expenses
|
19,473,771 | 15,261,283 | 37,974,377 | 29,022,289 | ||||||||||||
Operating income
|
6,588,436 | 2,857,089 | 12,472,279 | 5,743,767 | ||||||||||||
Non-operating income (expenses)
|
||||||||||||||||
Interest expense and other finance expenses
|
(3,445,396 | ) | (2,757,108 | ) | (7,270,547 | ) | (5,050,856 | ) | ||||||||
Gain on bargain purchase
|
— | 3,864,145 | — | 3,864,145 | ||||||||||||
Equity in earnings from unconsolidated joint ventures
|
40,242 | 459,491 | 271,436 | 983,820 | ||||||||||||
Interest income
|
1,259 | 1,135 | 1,259 | 11,280 | ||||||||||||
Income from continuing operations
|
3,184,541 | 4,424,752 | 5,474,427 | 5,552,156 | ||||||||||||
Loss from discontinued operations
|
(713,529 | ) | — | (713,529 | ) | — | ||||||||||
Net Income Attributable to Retail Opportunity Investments Corp.
|
$ | 2,471,012 | $ | 4,424,752 | $ | 4,760,898 | $ | 5,552,156 | ||||||||
Net income per share - basic: | ||||||||||||||||
Income from continuing operations
|
$ | 0.05 | $ | 0.09 | $ | 0.09 | $ | 0.11 | ||||||||
Loss from discontinued operations
|
(0.01 | ) | — | (0.01 | ) | — | ||||||||||
Net income per share (1)
|
$ | 0.04 | $ | 0.09 | $ | 0.07 | $ | 0.11 | ||||||||
Net income per share - diluted: | ||||||||||||||||
Income from continuing operations
|
$ | 0.04 | $ | 0.09 | $ | 0.08 | $ | 0.11 | ||||||||
Loss from discontinued operations
|
(0.01 | ) | — | (0.01 | ) | — | ||||||||||
Net income per share
|
$ | 0.03 | $ | 0.09 | $ | 0.07 | $ | 0.11 | ||||||||
Dividends per common share
|
$ | 0.15 | $ | 0.13 | $ | 0.30 | $ | 0.25 | ||||||||
Comprehensive income (loss):
|
||||||||||||||||
Net income attributable to Retail Opportunity Investments Corp.
|
$ | 2,471,012 | $ | 4,424,752 | $ | 4,760,898 | $ | 5,552,156 | ||||||||
Other comprehensive income (loss)
|
||||||||||||||||
Unrealized gain (loss) on swap derivative
|
||||||||||||||||
Unrealized swap derivative gain (loss) arising during the period
|
5,739,808 | (5,441,029 | ) | 6,062,062 | (5,046,565 | ) | ||||||||||
Reclassification adjustment for amortization of interest expense included in net income
|
1,172,818 | 960,075 | 2,370,502 | 1,532,151 | ||||||||||||
Unrealized gain (loss) on swap derivative, net
|
6,912,626 | (4,480,954 | ) | 8,432,564 | (3,514,414 | ) | ||||||||||
Total other comprehensive income (loss)
|
$ | 9,383,638 | $ | (56,202 | ) | $ | 13,193,462 | $ | 2,037,742 |
Common Stock
|
||||||||||||||||||||||||||||
Shares
|
Amount
|
Additional
paid-in capital
|
Cumulative
distributions
in excess of
net income
|
Accumulated
other
comprehensive
loss
|
Non-controlling
interests
|
Equity
|
||||||||||||||||||||||
Balance at December 31, 2012
|
52,596,754 | $ | 5,260 | $ | 523,540,268 | $ | (38,851,234 | ) | $ | (18,154,612 | ) | $ | 2,389 | $ | 466,542,071 | |||||||||||||
Shares issued under the 2009 Plan
|
215,414 | 21 | (21 | ) | — | — | — | — | ||||||||||||||||||||
Repurchase of common stock
|
(21,865 | ) | (2 | ) | (280,972 | ) | — | — | — | (280,974 | ) | |||||||||||||||||
Retirement of options
|
— | — | (274,830 | ) | — | — | — | (274,830 | ) | |||||||||||||||||||
Stock based compensation expense
|
— | — | 1,346,155 | — | — | — | 1,346,155 | |||||||||||||||||||||
Proceeds from the exercise of warrants
|
18,364,281 | 1,831 | 220,369,535 | — | — | — | 220,371,366 | |||||||||||||||||||||
Exercise of Sponsor warrants
|
688,500 | 68 | (68 | ) | — | — | — | — | ||||||||||||||||||||
Buyback of warrants
|
— | — | (21,989,860 | ) | — | — | — | (21,989,860 | ) | |||||||||||||||||||
Registration expenditures
|
— | — | (34,870 | ) | — | — | — | (34,870 | ) | |||||||||||||||||||
Dividends ($.30 per share)
|
— | — | — | (20,746,971 | ) | — | — | (20,746,971 | ) | |||||||||||||||||||
Dividends payable on performance-based shares
|
— | — | — | (55,000 | ) | — | — | (55,000 | ) | |||||||||||||||||||
Net income attributable to Retail Opportunity Investments Corp.
|
— | — | — | 4,760,898 | — | — | 4,760,898 | |||||||||||||||||||||
Other comprehensive gain
|
— | — | — | — | 8,432,564 | — | 8,432,564 | |||||||||||||||||||||
Balance at June 30, 2013
|
71,843,084 | $ | 7,178 | $ | 722,675,337 | $ | (54,892,307 | ) | $ | (9,722,048 | ) | $ | 2,389 | $ | 658,070,549 |
Six Months Ended June 30,
|
||||||||
2013
|
2012
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net income attributable to Retail Opportunity Investments Corp.
|
$ | 4,760,898 | $ | 5,552,156 | ||||
Adjustments to reconcile net income to cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
18,057,836 | 13,667,360 | ||||||
Amortization of deferred financing costs and mortgage premiums, net
|
176,579 | 202,405 | ||||||
Gain on bargain purchase
|
— | (3,864,145 | ) | |||||
Straight-line rent adjustment
|
(1,737,266 | ) | (1,721,006 | ) | ||||
Amortization of above and below market rent
|
(2,045,464 | ) | (1,602,395 | ) | ||||
Amortization relating to stock based compensation
|
1,346,155 | 1,325,131 | ||||||
Provisions for tenant credit losses
|
451,475 | 523,248 | ||||||
Equity in earnings from unconsolidated joint ventures
|
(271,436 | ) | (983,820 | ) | ||||
Loss on sale of discontinued operations
|
713,529 | — | ||||||
Distribution of cumulative earnings from unconsolidated joint ventures
|
— | 468,000 | ||||||
Other
|
308,652 | — | ||||||
Change in operating assets and liabilities
|
||||||||
Restricted cash
|
(214,037 | ) | (315,324 | ) | ||||
Tenant and other receivables
|
(1,360,807 | ) | (1,320,640 | ) | ||||
Prepaid expenses
|
549,838 | (198,363 | ) | |||||
Accounts payable and accrued expenses
|
(1,940,459 | ) | (3,036,167 | ) | ||||
Other assets and liabilities, net
|
(1,052,625 | ) | 1,183,997 | |||||
Net cash provided by operating activities
|
17,742,868 | 9,880,437 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||
Investments in real estate
|
(170,955,340 | ) | (85,579,794 | ) | ||||
Proceeds from sale of real estate
|
5,607,612 | — | ||||||
Investments in mortgage notes receivables
|
(294,000 | ) | — | |||||
Investments in unconsolidated joint ventures
|
— | (735,000 | ) | |||||
Return of capital from unconsolidated joint ventures
|
— | 783,211 | ||||||
Improvements to properties
|
(8,499,196 | ) | (3,391,381 | ) | ||||
Deposits on real estate acquisitions
|
(2,250,000 | ) | (1,850,000 | ) | ||||
Construction escrows and other
|
(145,012 | ) | (174,234 | ) | ||||
Net cash used in investing activities
|
(176,535,936 | ) | (90,947,198 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Principal repayment on mortgages
|
(712,467 | ) | (7,328,146 | ) | ||||
Proceeds from draws on term loan/credit facility
|
182,150,000 | 64,000,000 | ||||||
Payments on credit facility
|
(196,000,000 | ) | — | |||||
Payment of contingent consideration
|
(1,864,370 | ) | — | |||||
Proceeds from exercise of warrants
|
220,371,366 | — | ||||||
Payments to acquire warrants
|
(21,989,860 | ) | — | |||||
Proceeds from the sale of stock
|
— | 13,378,487 | ||||||
Deferred financing and other costs
|
(122,318 | ) | (205,639 | ) | ||||
Registration expenditures
|
(34,870 | ) | (425,383 | ) | ||||
Dividends paid to common shareholders
|
(20,746,971 | ) | (12,516,146 | ) | ||||
Repurchase of common stock
|
(280,974 | ) | — | |||||
Retirement of options
|
(274,830 | ) | — | |||||
Net cash provided by financing activities
|
160,494,706 | 56,903,173 | ||||||
Net increase (decrease) in cash and cash equivalents
|
1,701,638 | (24,163,588 | ) | |||||
Cash and cash equivalents at beginning of period
|
4,692,230 | 34,317,588 | ||||||
Cash and cash equivalents at end of period
|
$ | 6,393,868 | $ | 10,154,000 | ||||
Other non-cash investing and financing activities:
|
||||||||
Assumed mortgage at fair value
|
$ | 9,670,900 | $ | 8,428,062 | ||||
Intangible lease liabilities
|
$ | 3,670,775 | $ | 7,688,491 | ||||
Accrued real estate improvement costs
|
$ | 708,235 | $ | 164,857 |
June 30,
2013
|
December 31,
2012
|
|||||||
ASSETS
|
||||||||
Real Estate Investments:
|
||||||||
Land
|
$ | 328,053,350 | $ | 283,445,257 | ||||
Building and improvements
|
721,898,820 | 588,248,338 | ||||||
1,049,952,170 | 871,693,595 | |||||||
Less: accumulated depreciation
|
43,370,524 | 32,364,772 | ||||||
1,006,581,646 | 839,328,823 | |||||||
Mortgage note receivable
|
10,294,000 | 10,000,000 | ||||||
Investment in and advances to unconsolidated joint venture
|
15,566,659 | 15,295,223 | ||||||
Real Estate Investments, net
|
1,032,442,305 | 864,624,046 | ||||||
Cash and cash equivalents
|
6,393,868 | 4,692,230 | ||||||
Restricted cash
|
2,059,741 | 1,700,692 | ||||||
Tenant and other receivables
|
15,008,749 | 12,455,190 | ||||||
Deposits
|
2,250,000 | 2,000,000 | ||||||
Acquired lease intangible asset, net of accumulated amortization
|
42,299,617 | 41,230,616 | ||||||
Prepaid expenses
|
685,801 | 1,245,778 | ||||||
Deferred charges, net of accumulated amortization
|
23,432,476 | 21,623,474 | ||||||
Other
|
2,308,375 | 1,339,501 | ||||||
Total assets
|
$ | 1,126,880,932 | $ | 950,911,527 | ||||
LIABILITIES AND CAPITAL
|
||||||||
Liabilities:
|
||||||||
Term loan
|
$ | 200,000,000 | $ | 200,000,000 | ||||
Credit facility
|
105,150,000 | 119,000,000 | ||||||
Mortgage notes payable
|
81,143,101 | 72,689,842 | ||||||
Acquired lease intangibles liability, net of accumulated amortization
|
57,485,197 | 57,371,803 | ||||||
Accounts payable and accrued expenses
|
5,964,544 | 6,468,580 | ||||||
Tenants' security deposits
|
3,062,637 | 2,336,680 | ||||||
Other liabilities
|
16,004,904 | 26,502,551 | ||||||
Total liabilities
|
468,810,383 | 484,369,456 | ||||||
Commitments and contingencies
|
— | — | ||||||
Capital:
|
||||||||
General partner’s capital
|
667,790,208 | 484,694,294 | ||||||
Accumulated other comprehensive loss
|
(9,722,048 | ) | (18,154,612 | ) | ||||
Total partners’ capital
|
658,068,160 | 466,539,682 | ||||||
Non-controlling interests
|
2,389 | 2,389 | ||||||
Total capital
|
658,070,549 | 466,542,071 | ||||||
Total liabilities and capital
|
$ | 1,126,880,932 | $ | 950,911,527 |
For the Three Months Ended
|
For the Six Months Ended
|
|||||||||||||||
June 30,
2013
|
June 30,
2012
|
June 30,
2013
|
June 30,
2012
|
|||||||||||||
Revenues
|
||||||||||||||||
Base rents
|
$ | 20,161,341 | $ | 14,196,622 | $ | 39,510,902 | $ | 27,538,042 | ||||||||
Recoveries from tenants
|
5,692,669 | 3,412,322 | 10,523,498 | 6,516,364 | ||||||||||||
Mortgage interest
|
208,197 | 509,428 | 412,256 | 711,650 | ||||||||||||
Total revenues
|
26,062,207 | 18,118,372 | 50,446,656 | 34,766,056 | ||||||||||||
Operating expenses
|
||||||||||||||||
Property operating
|
4,081,626 | 3,282,120 | 8,240,507 | 6,251,468 | ||||||||||||
Property taxes
|
2,782,806 | 1,734,562 | 5,097,984 | 3,333,721 | ||||||||||||
Depreciation and amortization
|
9,176,706 | 7,017,542 | 18,057,836 | 13,667,360 | ||||||||||||
General and administrative expenses
|
2,913,101 | 2,596,688 | 5,649,682 | 5,016,526 | ||||||||||||
Acquisition transaction costs
|
519,532 | 630,371 | 928,368 | 753,214 | ||||||||||||
Total operating expenses
|
19,473,771 | 15,261,283 | 37,974,377 | 29,022,289 | ||||||||||||
Operating income
|
6,588,436 | 2,857,089 | 12,472,279 | 5,743,767 | ||||||||||||
Non-operating income (expenses)
|
||||||||||||||||
Interest expense and other finance expenses
|
(3,445,396 | ) | (2,757,108 | ) | (7,270,547 | ) | (5,050,856 | ) | ||||||||
Gain on bargain purchase
|
— | 3,864,145 | — | 3,864,145 | ||||||||||||
Equity in earnings from unconsolidated joint ventures
|
40,242 | 459,491 | 271,436 | 983,820 | ||||||||||||
Interest income
|
1,259 | 1,135 | 1,259 | 11,280 | ||||||||||||
Income from continuing operations
|
3,184,541 | 4,424,752 | 5,474,427 | 5,552,156 | ||||||||||||
Loss from discontinued operations
|
(713,529 | ) | — | (713,529 | ) | — | ||||||||||
Net Income Attributable to Retail Opportunity Investments Partnership, LP
|
$ | 2,471,012 | $ | 4,424,752 | $ | 4,760,898 | $ | 5,552,156 | ||||||||
Comprehensive income (loss):
|
||||||||||||||||
Net income attributable to Retail Opportunity Investments Partnership, LP.
|
$ | 2,471,012 | $ | 4,424,752 | $ | 4,760,898 | $ | 5,552,156 | ||||||||
Other comprehensive income (loss)
|
||||||||||||||||
Unrealized gain (loss) on swap derivative
|
||||||||||||||||
Unrealized swap derivative gain (loss) arising during the period
|
5,739,808 | (5,441,029 | ) | 6,062,062 | (5,046,565 | ) | ||||||||||
Reclassification adjustment for amortization of interest expense included in net income
|
1,172,818 | 960,075 | 2,370,502 | 1,532,151 | ||||||||||||
Unrealized gain (loss) on swap derivative, net
|
6,912,626 | (4,480,954 | ) | 8,432,564 | (3,514,414 | ) | ||||||||||
Total other comprehensive income (loss)
|
$ | 9,383,638 | $ | (56,202 | ) | $ | 13,193,462 | $ | 2,037,742 |
General
Partner’s
Capital
|
Accumulated
other
comprehensive
loss
|
Non-controlling
interests
|
Capital
|
|||||||||||||
Balance at December 31, 2012
|
$ | 484,694,294 | $ | (18,154,612 | ) | $ | 2,389 | $ | 466,542,071 | |||||||
Distributions to ROIC
|
(43,382,505 | ) | — | — | (43,382,505 | ) | ||||||||||
Contributions from ROIC
|
220,371,366 | — | — | 220,371,366 | ||||||||||||
Stock based compensation expense
|
1,346,155 | — | — | 1,346,155 | ||||||||||||
Net income attributable to Retail Opportunity Investments Partnership, LP
|
4,760,898 | — | — | 4,760,898 | ||||||||||||
Other comprehensive gain
|
— | 8,432,564 | — | 8,432,564 | ||||||||||||
Balance at June 30, 2013
|
$ | 667,790,208 | $ | (9,722,048 | ) | $ | 2,389 | $ | 658,070,549 |
Six Months Ended June 30,
|
||||||||
2013
|
2012
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net income attributable to Retail Opportunity Investments Partnership, LP
|
$ | 4,760,898 | $ | 5,552,156 | ||||
Adjustments to reconcile net income to cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
18,057,836 | 13,667,360 | ||||||
Amortization of deferred financing costs and mortgage premiums, net
|
176,579 | 202,405 | ||||||
Gain on bargain purchase
|
— | (3,864,145 | ) | |||||
Straight-line rent adjustment
|
(1,737,266 | ) | (1,721,006 | ) | ||||
Amortization of above and below market rent
|
(2,045,464 | ) | (1,602,395 | ) | ||||
Amortization relating to stock based compensation
|
1,346,155 | 1,325,131 | ||||||
Provisions for tenant credit losses
|
451,475 | 523,248 | ||||||
Equity in earnings from unconsolidated joint ventures
|
(271,436 | ) | (983,820 | ) | ||||
Loss on sale of discontinued operations
|
713,529 | — | ||||||
Distribution of cumulative earnings from unconsolidated joint ventures
|
— | 468,000 | ||||||
Other
|
308,652 | — | ||||||
Change in operating assets and liabilities
|
||||||||
Restricted cash
|
(214,037 | ) | (315,324 | ) | ||||
Tenant and other receivables
|
(1,360,807 | ) | (1,320,640 | ) | ||||
Prepaid expenses
|
549,838 | (198,363 | ) | |||||
Accounts payable and accrued expenses
|
(1,940,459 | ) | (3,036,167 | ) | ||||
Other assets and liabilities, net
|
(1,052,625 | ) | 1,183,997 | |||||
Net cash provided by operating activities
|
17,742,868 | 9,880,437 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||
Investments in real estate
|
(170,955,340 | ) | (85,579,794 | ) | ||||
Proceeds from sale of real estate
|
5,607,612 | — | ||||||
Investments in mortgage notes receivables
|
(294,000 | ) | — | |||||
Investments in unconsolidated joint ventures
|
— | (735,000 | ) | |||||
Return of capital from unconsolidated joint ventures
|
— | 783,211 | ||||||
Improvements to properties
|
(8,499,196 | ) | (3,391,381 | ) | ||||
Deposits on real estate acquisitions
|
(2,250,000 | ) | (1,850,000 | ) | ||||
Construction escrows and other
|
(145,012 | ) | (174,234 | ) | ||||
Net cash used in investing activities
|
(176,535,936 | ) | (90,947,198 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Principal repayment on mortgages
|
(712,467 | ) | (7,328,146 | ) | ||||
Proceeds from draws on term loan/credit facility
|
182,150,000 | 64,000,000 | ||||||
Payments on credit facility
|
(196,000,000 | ) | — | |||||
Payment of contingent consideration
|
(1,864,370 | ) | — | |||||
Deferred financing and other costs
|
(122,318 | ) | (205,639 | ) | ||||
Distributions to ROIC
|
(43,327,505 | ) | (12,941,529 | ) | ||||
Contributions from ROIC
|
220,371,366 | 13,378,487 | ||||||
Net cash provided by financing activities
|
160,494,706 | 56,903,173 | ||||||
Net increase (decrease) in cash and cash equivalents
|
1,701,638 | (24,163,588 | ) | |||||
Cash and cash equivalents at beginning of period
|
4,692,230 | 34,317,588 | ||||||
Cash and cash equivalents at end of period
|
$ | 6,393,868 | $ | 10,154,000 | ||||
Other non-cash investing and financing activities:
|
||||||||
Assumed mortgage at fair value
|
$ | 9,670,900 | $ | 8,428,062 | ||||
Intangible lease liabilities
|
$ | 3,670,775 | $ | 7,688,491 | ||||
Accrued real estate improvement costs
|
$ | 708,235 | $ | 164,857 |
1.
|
Organization, Basis of Presentation and Summary of Significant Accounting Policies
|
For the Three Months Ended
|
For the Six Months Ended
|
|||||||||||||||
June 30,
2013
|
June 30,
2012
|
June 30,
2013
|
June 30,
2012
|
|||||||||||||
Numerator:
|
||||||||||||||||
Net income attributable to ROIC
|
$ | 2,471,012 | $ | 4,424,752 | $ | 4,760,898 | $ | 5,552,156 | ||||||||
Less, earnings allocated to unvested shares
|
(51,572 | ) | (65,915 | ) | (101,660 | ) | (95,669 | ) | ||||||||
Net income available for common shareholders, basic and diluted
|
$ | 2,419,440 | $ | 4,358,837 | $ | 4,659,238 | $ | 5,456,487 | ||||||||
Denominator:
|
||||||||||||||||
Denominator for basic EPS – weighted average common shares
|
67,915,106 | 50,394,722 | 62,651,921 | 49,999,241 | ||||||||||||
Warrants
|
2,987,628 | 448,720 | 3,667,635 | — | ||||||||||||
Restricted stock awards – performance-based
|
120,268 | 52,073 | 104,278 | 51,870 | ||||||||||||
Stock Options
|
72,090 | 46,525 | 62,367 | 43,791 | ||||||||||||
Denominator for diluted EPS – weighted average common equivalent shares
|
71,095,092 | 50,942,040 | 66,486,201 | 50,094,902 |
2.
|
Real Estate Investments
|
June 30,
2013
|
||||
ASSETS
|
||||
Land
|
$ | 46,679,765 | ||
Building and improvements
|
128,454,743 | |||
Acquired lease intangible asset
|
7,642,268 | |||
Deferred charges
|
3,520,239 | |||
Assets acquired
|
$ | 186,297,015 | ||
LIABILITIES
|
||||
Acquired lease intangible liability
|
3,670,775 | |||
Mortgage notes assumed
|
9,670,900 | |||
Liabilities assumed
|
$ | 13,341,675 |
For the Three Months Ended
|
For the Six Months Ended
|
|||||||||||||||
June 30,
2013
|
June 30,
2012
|
June 30,
2013
|
June 30,
2012
|
|||||||||||||
Statement of operations:
|
||||||||||||||||
Revenues
|
$ | 26,331,595 | $ | 25,180,449 | $ | 51,065,929 | $ | 47,497,162 | ||||||||
Property operating and other expenses
|
15,229,803 | 9,599,694 | 29,333,089 | 21,847,747 | ||||||||||||
Depreciation and amortization
|
9,210,852 | 9,434,100 | 18,249,685 | 17,741,075 | ||||||||||||
Net income attributable to Retail Opportunity Investments Corp.
|
$ | 1,890,940 | $ | 6,146,655 | $ | 3,483,155 | $ | 7,908,340 |
For the Three
Months Ended
|
For the Six
Months Ended
|
|||||||
June 30,
2013
|
June 30,
2013
|
|||||||
Statement of operations:
|
||||||||
Revenues
|
$ | 2,008,856 | $ | 2,563,517 | ||||
Property operating and other expenses
|
970,464 | 1,235,863 | ||||||
Depreciation and amortization
|
991,266 | 1,260,183 | ||||||
Net income attributable to Retail Opportunity Investments Corp.
|
$ | 47,126 | $ | 67,471 |
3.
|
Discontinued Operations
|
4.
|
Mortgage Notes Payable and Credit Facilities
|
Property
|
Maturity Date
|
Interest Rate
|
June 30, 2013
|
December 31, 2012
|
||||||||||
Gateway Village I
|
February 2014
|
5.58 | % | 6,638,629 | 6,718,119 | |||||||||
Gateway Village II
|
May 2014
|
5.73 | % | 6,794,397 | 6,872,265 | |||||||||
Euclid Plaza
|
November 2014
|
5.23 | % | 8,238,053 | 8,329,824 | |||||||||
Country Club Gate
|
January 2015
|
5.04 | % | 12,357,860 | 12,477,997 | |||||||||
Renaissance Towne Centre
|
June 2015
|
5.13 | % | 16,625,667 | 16,760,383 | |||||||||
Gateway Village III
|
July 2016
|
6.10 | % | 7,414,797 | 7,460,907 | |||||||||
Bernardo Heights
|
July 2017
|
5.70 | % | 8,826,429 | — | |||||||||
Santa Teresa Village
|
February 2018
|
6.20 | % | 11,129,744 | 11,223,888 | |||||||||
$ | 78,025,576 | $ | 69,843,383 | |||||||||||
Mortgage Premium
|
3,117,525 | 2,846,459 | ||||||||||||
Total mortgage notes payable
|
$ | 81,143,101 | $ | 72,689,842 |
5.
|
Preferred Stock of ROIC
|
6.
|
Common Stock and Warrants of ROIC
|
·
|
The exercise price of the warrants is $12.00.
|
·
|
The expiration date of the warrants is October 23, 2014.
|
·
|
The price at which ROIC’s common stock must trade before ROIC is able to redeem the warrants it issued in the IPO is $18.75.
|
·
|
To provide that a warrantholder's ability to exercise warrants is limited to ensure that such holder's "Beneficial Ownership" or "Constructive Ownership," each as defined in ROIC’s charter, does not exceed the restrictions contained in the charter limiting the ownership of shares of ROIC’s common stock.
|
7.
|
Stock Compensation for ROIC
|
Shares
|
Weighted
Average
Grant Date
Fair Value
|
|||||||
Non-vested at December 31, 2012
|
391,264 | $ | 10.48 | |||||
Granted
|
218,500 | $ | 11.76 | |||||
Vested
|
(83,164 | ) | $ | 10.62 | ||||
Non-vested at June 30, 2013
|
526,600 | $ | 11.27 |
8.
|
Fair Value of Financial Instruments
|
Swap Counterparty
|
Notional
Amount
|
Effective
Date
|
Maturity
Date
|
Cash
Settlement
Date
|
|||||
Wells Fargo Bank, N.A.
|
$ | 25,000,000 |
4/15/2011
|
4/15/2021
|
9/22/2014
|
||||
PNC Bank, N.A.
|
$ | 50,000,000 |
7/1/2011
|
7/1/2018
|
12/1/2013
|
||||
Bank of Montreal
|
$ | 50,000,000 |
4/2/2012
|
4/1/2019
|
12/1/2013
|
||||
Wells Fargo Bank, N.A.
|
$ | 25,000,000 |
4/2/2012
|
4/2/2019
|
9/22/2014
|
||||
Royal Bank of Canada
|
$ | 25,000,000 |
4/1/2013
|
4/3/2023
|
10/31/2014
|
Quoted Prices in
Active Markets for
Identical Assets and
Liabilities (Level 1)
|
Significant Other
Observable Inputs
(Level 2)
|
Significant
Unobservable
Inputs (Level 3)
|
Total
|
|||||||||||||
June 30, 2013:
|
||||||||||||||||
Assets
|
||||||||||||||||
Derivative financial instruments
|
$ | — | $ | 1,379,186 | $ | — | $ | 1,379,186 | ||||||||
Liabilities
|
||||||||||||||||
Derivative financial instruments
|
$ | — | $ | (11,101,428 | ) | $ | — | $ | (11,101,428 | ) | ||||||
December 31, 2012:
|
||||||||||||||||
Liabilities
|
||||||||||||||||
Derivative financial instruments
|
$ | — | $ | (18,012,516 | ) | $ | — | $ | (18,012,516 | ) |
Derivatives designed as hedging instruments
|
Balance
sheet location
|
June 30, 2013
Fair Value
|
December 31, 2012
Fair Value
|
|||||||
Interest rate products
|
Other assets
|
$ | 1,379,186 | $ | — | |||||
Interest rate products
|
Other liabilities
|
$ | (11,101,428 | ) | $ | (18,012,516 | ) |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
2013
|
June 30,
2012
|
June 30,
2013
|
June 30,
2012
|
|||||||||||||
Amount of gain (loss) recognized in OCI on derivative
|
$ | 5,739,808 | $ | (5,441,029 | ) | $ | 6,062,062 | $ | (5,046,565 | ) | ||||||
Amount of loss reclassified from accumulated OCI into interest
|
$ | 1,172,818 | $ | 960,075 | $ | 2,370,502 | $ | 1,532,151 | ||||||||
Amount of gain recognized in income on derivative (ineffective portion and amount excluded from effectiveness testing)
|
$ | 41,927 | $ | 37,947 | $ | 4,567 | 12,296 |
9.
|
Commitments and Contingencies
|
Operating Leases
|
||||
2013
|
$ | 345,444 | ||
2014
|
690,888 | |||
2015
|
690,888 | |||
2016
|
754,910 | |||
2017
|
818,932 | |||
Thereafter
|
23,981,684 | |||
Total minimum lease payments
|
$ | 27,282,746 |
10.
|
Related Party Transactions
|
11.
|
Subsequent Events
|
·
|
our ability to identify and acquire retail real estate investments that meet our investment standards in our target markets;
|
·
|
the level of rental revenue and net interest income we achieve from our target assets;
|
·
|
the market value of our assets and the supply of, and demand for, retail real estate investments in which we invest;
|
·
|
the state of the U.S. economy generally, or in specific geographic regions;
|
·
|
the impact of economic conditions on our business;
|
·
|
the conditions in the local markets in which we operate and our concentration in those markets, as well as changes in national economic and market conditions;
|
·
|
consumer spending and confidence trends;
|
·
|
our ability to enter into new leases or to renew leases with existing tenants at the properties we own or acquire at favorable rates;
|
·
|
our ability to anticipate changes in consumer buying practices and the space needs of tenants;
|
·
|
the competitive landscape impacting the properties we own or acquire and their tenants;
|
·
|
our relationships with our tenants and their financial condition and liquidity;
|
·
|
our ability to continue to qualify as a REIT for U.S. federal income tax;
|
·
|
our use of debt as part of our financing strategy and our ability to make payments or to comply with any covenants under any borrowings or other debt facilities we currently have or subsequently obtain;
|
·
|
the level of our operating expenses, including amounts we are required to pay to our management team and to engage third party property managers;
|
·
|
changes in interest rates that could impact the market price of our common stock and the cost of our borrowings; and
|
·
|
legislative and regulatory changes (including changes to laws governing the taxation of REITs).
|
|
·
|
does not represent cash flows from operating activities in accordance with GAAP (which, unlike FFO, generally reflects all cash effects of transactions and other events in the determination of net income); and
|
|
·
|
should not be considered an alternative to net income as an indication of our performance.
|
For the Three Months Ended
|
For the Six Months Ended
|
|||||||||||||||
June 30, 2013
|
June 30, 2012
|
June 30, 2013
|
June 30, 2012
|
|||||||||||||
Net income for period
|
$ | 2,471,012 | $ | 4,424,752 | $ | 4,760,898 | $ | 5,552,156 | ||||||||
Plus: Real property depreciation
|
4,668,517 | 3,324,573 | 8,917,306 | 6,279,053 | ||||||||||||
Amortization of tenant improvements and allowances
|
1,207,475 | 913,792 | 2,387,851 | 1,860,134 | ||||||||||||
Amortization of deferred leasing costs
|
3,300,714 | 2,779,177 | 6,752,679 | 5,528,173 | ||||||||||||
Depreciation and amortization attributable to unconsolidated joint ventures
|
353,254 | 605,972 | 705,330 | 1,212,237 | ||||||||||||
Loss from discontinued operations
|
713,529 | — | 713,529 | — | ||||||||||||
Funds from operations
|
$ | 12,714,501 | $ | 12,048,266 | $ | 24,237,593 | $ | 20,431,753 |
For the Three Months Ended
|
|||||||||
June 30, 2013
|
June 30, 2012
|
||||||||
Operating income per GAAP
|
$ | 6,588,436 | $ | 2,857,089 | |||||
Plus:
|
Depreciation and amortization
|
9,176,706 | 7,017,542 | ||||||
General and administrative expenses
|
2,913,101 | 2,596,688 | |||||||
Acquisition transaction costs
|
519,532 | 630,371 | |||||||
Less:
|
Mortgage interest
|
(208,197 | ) | (509,428 | ) | ||||
Property operating income
|
$ | 18,989,578 | $ | 12,592,262 |
For the Three Months Ended
|
|||||||||
June 30, 2013
|
June 30, 2012
|
||||||||
Same-store operating income per GAAP
|
$ | 7,400,975 | $ | 5,642,619 | |||||
Plus:
|
Depreciation and amortization
|
5,711,959 | 6,548,024 | ||||||
Acquisition transaction costs
|
9,819 | 21,812 | |||||||
Same-store property operating income
|
$ | 13,122,753 | $ | 12,212,455 |
For the Six Months Ended
|
|||||||||
June 30, 2013
|
June 30, 2012
|
||||||||
Operating income per GAAP
|
$ | 12,472,279 | $ | 5,743,767 | |||||
Plus:
|
Depreciation and amortization
|
18,057,836 | 13,667,360 | ||||||
General and administrative expenses
|
5,649,682 | 5,016,526 | |||||||
Acquisition transaction costs
|
928,368 | 753,214 | |||||||
Less:
|
Mortgage interest
|
(412,256 | ) | (711,650 | ) | ||||
Property operating income
|
$ | 36,695,909 | $ | 24,469,217 |
For the Six Months Ended
|
|||||||||
June 30, 2013
|
June 30, 2012
|
||||||||
Same-store operating income per GAAP
|
$ | 13,035,272 | $ | 10,132,964 | |||||
Plus:
|
Depreciation and amortization
|
10,918,609 | 12,655,062 | ||||||
Acquisition transaction costs
|
1,319 | 201,278 | |||||||
Same-store property operating income
|
$ | 23,955,200 | $ | 22,989,304 |
Buildings
|
39-40 years
|
Property Improvements
|
10-20 years
|
Furniture/Fixtures
|
3-10 years
|
Tenant Improvements
|
Shorter of lease term or their useful life
|
For the Six Months Ended
|
||||||||
June 30, 2013
|
June 30, 2012
|
|||||||
Net Cash Provided by (Used in):
|
||||||||
Operating Activities
|
$ | 17,742,868 | $ | 9,880,437 | ||||
Investing Activities
|
$ | (176,535,936 | ) | $ | (90,947,198 | ) | ||
Financing Activities
|
$ | 160,494,706 | $ | 56,903,173 |
2013
|
2014
|
2015
|
2016
|
2017
|
Thereafter
|
Total
|
||||||||||||||||||||||
Contractual obligations:
|
||||||||||||||||||||||||||||
Mortgage Notes Payable Principal (1)
|
$ | 719,490 | $ | 22,440,636 | $ | 28,685,585 | $ | 7,582,838 | $ | 8,460,412 | $ | 10,136,577 | $ | 78,025,538 | ||||||||||||||
Mortgage Notes Payable Interest
|
2,177,771 | 3,719,998 | 2,073,806 | 1,317,579 | 910,889 | 104,635 | 10,304,678 | |||||||||||||||||||||
Term loan (2)
|
— | — | — | — | 200,000,000 | — | 200,000,000 | |||||||||||||||||||||
Credit facility (2)
|
— | — | — | 105,150,000 | — | — | 105,150,000 | |||||||||||||||||||||
Operating lease obligations
|
345,444 | 690,888 | 690,888 | 754,910 | 818,932 | 23,981,684 | 27,282,746 | |||||||||||||||||||||
Total
|
$ | 3,242,705 | $ | 26,851,522 | $ | 31,450,279 | $ | 114,805,327 | $ | 210,190,233 | $ | 34,222,896 | $ | 420,762,962 |
(1) |
Does not include unamortized mortgage premium of $3.1 million as of June 30, 2013.
|
(2) |
For the purpose of the above table, the Company has assumed that borrowings under the loan agreements bear interest at the average interest rate on the term loan and credit facility during the three and six months ended June 30, 2013 which was 1.8%. Borrowings under the term loan and credit facility bear interest at a rate equal to an applicable rate based on the credit rating level of the Company, plus, as applicable (i) a LIBOR rate determined by reference to the cost of funds for dollar deposits for the relevant period, or (ii) a base rate determined by reference to the highest of (a) the federal funds rate plus 0.50%, (b) the rate of interest announced by KeyBank, National Association at its “prime rate,” and (c) the Eurodollar Rate plus 1.00%.
|
Swap Notional
|
Less 100 basis points
|
Less 50 basis points
|
June 30, 2013 Value
|
Increase 50 basis points
|
Increase 100 basis points
|
$ 25M
|
(6,424,579)
|
(3,607,414)
|
(2,621,997)
|
(1,671,070)
|
(757,729)
|
$ 50M
|
(6,460,601)
|
(5,229,023)
|
(4,058,946)
|
(2,826,375)
|
(1,627,194)
|
$ 50M
|
(6,813,976)
|
(5,392,476)
|
(4,039,684)
|
(2,634,419)
|
(1,272,142)
|
$ 25M
|
(2,010,388)
|
(1,314,006)
|
(656,738)
|
26,658
|
688,936
|
$ 25M
|
(812,174)
|
321,310
|
1,372,144
|
2,415,521
|
3,406,898
|
Total Number
of Shares Purchased
|
Average Price
Paid per Share
|
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans
or Programs
|
Maximum Number
of Shares That
May Yet be
Purchased Under
the Plans or
Programs
|
|||||||||||||
April 1, 2013 to April 30, 2013
|
— | $ | — | — | — | |||||||||||
May 1, 2013 to May 31, 2013
|
1,734,000 | $ | 3.38 | — | — | |||||||||||
June 1, 2013 to June 30, 2013
|
2,000,000 | $ | 2.73 | — | — | |||||||||||
Total
|
3,734,000 | — | — |
3.1
|
Articles of Merger between Retail Opportunity Investments Corp., a Delaware corporation, and Retail Opportunity Investments Corp., a Maryland corporation, as survivor .(1)
|
3.2
|
Articles of Amendment and Restatement of Retail Opportunity Investment Corp.(1)
|
3.3
|
Bylaws of Retail Opportunity Investments Corp.(2)
|
3.3
|
Amended and Restated Agreement of Limited Partnership of Retail Opportunity Investments Partnership, LP dated as of December 1, 2012 between Retail Opportunity Investments GP, LLC and Retail Opportunity Investments Corp.(3)
|
4.1
|
Specimen Unit Certificate.(2)
|
4.2
|
Specimen Common Stock Certificate.(2)
|
4.3
|
Specimen Warrant Certificate.(2)
|
4.4
|
Form of Warrant Agreement between Continental Stock Transfer & Trust Company NRDC Acquisition Corp.(4)
|
4.5
|
Supplement and Amendment to Warrant Agreement by and between NRDC Acquisition Corp. and Continental Stock Transfer & Trust Company, dated as of October 20, 2009.(2)
|
4.6
|
Letter Agreement, dated December 11, 2012, between Retail Opportunity Investments Corp. and Computershare Trust Company, NA.(5)
|
31.1
|
Certification of Chief Executive Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
|
31.2
|
Certification of Chief Financial Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
|
32.1
|
Certification of Chief Executive and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
101.INS XBRL Instance Document
|
|
101.SCH XBRL Taxonomy Extension Schema
|
|
101.CAL XBRL Taxonomy Extension Calculation Linkbase
|
|
101.DEF XBRL Taxonomy Extension Definition Linkbase
|
|
101.LAB XBRL Taxonomy Extension Label Linkbase
|
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101.PRE XBRL Taxonomy Extension Presentation Linkbase
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(1)
|
Incorporated by reference to the Company's current report on Form 8-K filed on June 2, 2011.
|
(2)
|
Incorporated by reference to the Company's current report on Form 8-K filed on February 9, 2009.
|
(3)
|
Incorporated by reference to the Company's and the Operating Partnership's Registration Statement on Form S-3 filed on June 3, 2013.
|
(4)
|
Incorporated by reference to the Company’s registration statement on Form S-1/A filed on September 7, 2007 (File No. 333-144871).
|
(5)
|
Incorporated by reference to the Company's current report on Form 8 K filed on December 14, 2012.
|
RETAIL OPPORTUNITY INVESTMENTS CORP.
Registrant
|
RETAIL OPPORTUNITY INVESTMENTS PARTNERSHIP, LP, by Retail Opportunity Investments GP, LLC, its sole general partner
Registrant
|
/s/ Stuart A. Tanz
Name: Stuart A. Tanz
Title: Chief Executive Officer
Date: August 2, 2013
|
/s/ Stuart A. Tanz
Name: Stuart A. Tanz
Title: Chief Executive Officer
Date: August 2, 2013
|
/s/ Michael B. Haines
Name: Michael B. Haines
Title: Chief Financial Officer
Date: August 2, 2013
|
/s/ Michael B. Haines
Name: Michael B. Haines
Title: Chief Financial Officer
Date: August 2, 2013
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Retail Opportunity Investments Corp.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: August 2, 2013
|
By: /s/ Stuart A. Tanz
Name: Stuart A. Tanz
Title: Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Retail Opportunity Investments Partnership, LP;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: August 2, 2013
|
By: /s/ Stuart A. Tanz
Name: Stuart A. Tanz
Title: Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Retail Opportunity Investments Corp.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: August 2, 2013
|
By: /s/ Michael B. Haines
Name: Michael B. Haines
Title: Chief Financial Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Retail Opportunity Investments Partnership, LP;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: August 2, 2013
|
By: /s/ Michael B. Haines
Name: Michael B. Haines
Title: Chief Financial Officer
|
Date: August 2, 2013
|
By: /s/ Stuart A. Tanz
Name: Stuart A. Tanz
Title: Chief Executive Officer
|
Date: August 2, 2013
|
By: /s/ Michael B. Haines
Name: Michael B. Haines
Title: Chief Financial Officer
|
Date: August 2, 2013
|
By: /s/ Stuart A. Tanz
Name: Stuart A. Tanz
Title: Chief Executive Officer
|
Date: August 2, 2013
|
By: /s/ Michael B. Haines
Name: Michael B. Haines
Title: Chief Financial Officer
|
Note 9 - Commitments and Contingencies
|
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
|||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Text Block] | |||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Text Block] |
In
the normal course of business, the Company is involved in
legal actions relating to the ownership and operations of its
properties. In management's opinion, the
liabilities, if any, that ultimately may result from such
legal actions are not expected to have a material adverse
effect on the consolidated financial position, results of
operations or liquidity of the Company.
The
following table represents the Company’s future minimum
annual lease payments under operating leases as of June 30,
2013:
|
Note 2 - Real Estate Investments
|
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Table Text Block [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate Investment Financial Statements, Disclosure [Table Text Block] |
The
following real estate investment transactions have occurred
during the six months ended June 30, 2013.
Property
Acquisitions
On
February 1, 2013, the Company acquired the property
known as Diamond Bar Town Center located in Diamond Bar,
California, within the Los Angeles metropolitan area, for a
purchase price of approximately
$27.4 million. Diamond Bar Town Center is
approximately 100,000 square feet and is anchored by a
national grocer. The property was acquired with borrowings
under the Company’s credit facility.
On
February 6, 2013, the Company acquired the property
known as Bernardo Heights Plaza in Rancho Bernardo,
California, within the San Diego metropolitan area, for a
purchase price of approximately $12.4 million. Bernardo
Heights Plaza is approximately 38,000 square feet and is
anchored by Sprouts Farmers Market and Tuesday Morning. The
property was acquired with cash of approximately $3.6 million
and the assumption of an existing mortgage with a principal
amount of approximately $8.9 million, and a fair value of
approximately $9.7 million.
On
April 15, 2013, the Company acquired the property known
as Canyon Crossing Shopping Center located in Puyallup,
Washington, within the Seattle metropolitan area, for a
purchase price of approximately
$35.0 million. Canyon Crossing Shopping
Center is approximately 121,000 square feet and is anchored
by Safeway Supermarket. The property was acquired using
borrowings under the Company’s credit facility.
On
April 22, 2013, the Company acquired the property known
as Diamond Hills Plaza located in Diamond Bar, California,
within the Los Angeles metropolitan area, for a purchase
price of approximately $48.0 million. Diamond
Hills Plaza is approximately 140,000 square feet and is
anchored by an H Mart Supermarket and a Rite Aid. The
property was acquired using borrowings under the
Company’s credit facility.
On
June 27, 2013, the Company acquired the property known as
Hawthorne Crossings located in San Diego, California, for a
purchase price of approximately $41.5
million. Hawthorne Crossings is approximately
141,000 square feet and is anchored by Mitsuwa Marketplace,
Ross Dress For Less and Staples. The property was
acquired using borrowings under the Company’s credit
facility.
On
June 27, 2013, the Company acquired the property known as
Granada Shopping Center located in Livermore, California, for
a purchase price of approximately $17.5
million. Granada Shopping Center is approximately
69,000 square feet and is anchored by Lucky
Supermarket. The property was acquired using
borrowings under the Company’s credit facility.
The
financial information set forth below summarizes the
Company's preliminary purchase price allocation for the
properties acquired during the six months ended June 30,
2013.
The
Company assessed the fair value of the lease intangibles
based on estimated cash flow projections that utilize
appropriate discount rates and available market information.
Such inputs are Level 3 in the fair value
hierarchy. See Note 8, “Fair Value of
Financial Instruments,” for a discussion of the
framework for measuring fair value.
Pro
Forma Financial Information
The
pro forma financial information set forth below is based upon
the Company's historical consolidated statements of
operations for the three and six months ended June 30, 2013
and 2012, adjusted to give effect of these transactions as if
they had been completed at the beginning of 2012.
The
pro forma financial information is presented for
informational purposes only and may not be indicative of what
actual results of operations would have been had the
transactions occurred at the beginning of each year, nor does
it purport to represent the results of future
operations.
The
following table summarizes the operating results included in
the Company's historical consolidated statement of operations
for the three and six months ended June 30, 2013, for the
properties acquired during the six months ended June 30,
2013.
Mortgage
Notes Receivable
The
Company holds a $10.0 million second mortgage loan to
the joint venture that owns the Crossroads Shopping
Center. The Company owns a 49% equity interest in
the joint venture. The interest rate on the loan
is 8% per annum and the loan matures on September 1,
2015, which is coterminous with the existing first mortgage.
Additionally, during the six months ended June 30, 2013, the
Company funded a $294,000 partner loan to the joint
venture.
Unconsolidated
Joint Ventures
At
June 30, 2013 and December 31, 2012, investment in and
advances to unconsolidated joint venture consisted of a 49%
ownership of Crossroads Shopping Center of $15.6 million and
$15.3 million, respectively.
The
Company has no material contractual capital contribution
commitments to its joint venture.
The
Company has evaluated its investment in the joint venture and
has concluded that the joint venture is not a
VIE. The Company accounts for its investment in
its unconsolidated joint ventures under the equity method of
accounting since it exercises significant influence over, but
does not control the unconsolidated joint
venture. The other members in the unconsolidated
joint venture have substantial participation rights in the
financial decisions and operations of the unconsolidated
joint venture.
|
Note 7 - Stock Compensation for ROIC (Tables)
|
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | ||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Nonvested Restricted Stock Units Activity [Table Text Block] |
|
Note 10 - Related Party Transactions
|
3 Months Ended | ||
---|---|---|---|
Jun. 30, 2013
|
|||
Related Party Transactions Disclosure [Text Block] | |||
Related Party Transactions Disclosure [Text Block] |
In
August 2011, the Company entered into two lease agreements
effective July 1, 2011, with an officer of the
Company. Pursuant to the lease agreements, the
Company is provided the use of storage space. For
the three months ended June 30, 2013 and 2012, the Company
incurred approximately $6,300 and $2,400, respectively, of
expenses relating to the agreements. For the six months ended
June 30, 2013 and 2012, the Company incurred approximately
$11,300 and $4,800, respectively, of expenses relating to the
agreements. These expenses were included in
general and administrative expenses in the accompanying
consolidated statements of operations.
|
Note 7 - Stock Compensation for ROIC (Details) (USD $)
|
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2013
|
Mar. 31, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Note 7 - Stock Compensation for ROIC (Details) [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Percentage of Outstanding Stock Maximum | 7.50% | ||||
Share Based Compensation, Arrangement by Share Based Payment Award, Maximum Number of Shares (in Shares) | 4,000,000 | 4,000,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in Shares) | 218,500 | ||||
Allocated Share-based Compensation Expense | $ 750,000 | $ 858,000 | $ 1,300,000 | $ 1,300,000 | |
Restricted Stock [Member]
|
|||||
Note 7 - Stock Compensation for ROIC (Details) [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in Shares) | 218,500 | ||||
Performance Shares [Member]
|
|||||
Note 7 - Stock Compensation for ROIC (Details) [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in Shares) | 86,250 |
Note 1 - Organization, Basis of Presentation and Summary of Significant Accounting Policies (Details) (USD $)
|
0 Months Ended | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|---|---|
Jun. 05, 2013
|
Jun. 30, 2013
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Dec. 31, 2012
|
|
Note 1 - Organization, Basis of Presentation and Summary of Significant Accounting Policies (Details) [Line Items] | |||||||
Taxable Income, Percentage | 90.00% | 90.00% | 90.00% | ||||
Tax Adjustments, Settlements, and Unusual Provisions (in Dollars) | $ 122,000 | ||||||
SEC Schedule III, Real Estate, Improvements (in Dollars) | 8,500,000 | 3,400,000 | |||||
Number of Years from Aquisition Date | 1 year | 1 year | |||||
Acquisition Costs, Period Cost (in Dollars) | 519,532 | 630,371 | 928,368 | 753,214 | |||
SalesPriceOfPropertySold (in Dollars) | 6,300,000 | 6,300,000 | |||||
Proceeds from Sale of Real Estate (in Dollars) | 5,600,000 | 5,600,000 | |||||
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax (in Dollars) | (714,000) | (713,529) | |||||
Allowance for Doubtful Accounts Receivable (in Dollars) | 2,700,000 | 2,700,000 | 2,700,000 | 3,200,000 | |||
Deferred Costs, Leasing, Accumulated Amortization (in Dollars) | $ 11,800,000 | $ 11,800,000 | $ 11,800,000 | $ 9,100,000 | |||
Number of Operating Segments | 1 | ||||||
Number of Reportable Segments | 1 | ||||||
Public Warrants [Member]
|
|||||||
Note 1 - Organization, Basis of Presentation and Summary of Significant Accounting Policies (Details) [Line Items] | |||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in Shares) | 41,400,000 | ||||||
Private Placement Warrants [Member]
|
|||||||
Note 1 - Organization, Basis of Presentation and Summary of Significant Accounting Policies (Details) [Line Items] | |||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in Shares) | 8,000,000 | ||||||
Building [Member] | Minimum [Member]
|
|||||||
Note 1 - Organization, Basis of Presentation and Summary of Significant Accounting Policies (Details) [Line Items] | |||||||
Property, Plant and Equipment, Useful Life | 39 years | ||||||
Building [Member] | Maximum [Member]
|
|||||||
Note 1 - Organization, Basis of Presentation and Summary of Significant Accounting Policies (Details) [Line Items] | |||||||
Property, Plant and Equipment, Useful Life | 40 years | ||||||
Building Improvements [Member] | Minimum [Member]
|
|||||||
Note 1 - Organization, Basis of Presentation and Summary of Significant Accounting Policies (Details) [Line Items] | |||||||
Property, Plant and Equipment, Useful Life | 10 years | ||||||
Building Improvements [Member] | Maximum [Member]
|
|||||||
Note 1 - Organization, Basis of Presentation and Summary of Significant Accounting Policies (Details) [Line Items] | |||||||
Property, Plant and Equipment, Useful Life | 20 years | ||||||
Furniture and Fixtures [Member] | Minimum [Member]
|
|||||||
Note 1 - Organization, Basis of Presentation and Summary of Significant Accounting Policies (Details) [Line Items] | |||||||
Property, Plant and Equipment, Useful Life | 3 years | ||||||
Furniture and Fixtures [Member] | Maximum [Member]
|
|||||||
Note 1 - Organization, Basis of Presentation and Summary of Significant Accounting Policies (Details) [Line Items] | |||||||
Property, Plant and Equipment, Useful Life | 10 years |
Note 9 - Commitments and Contingencies (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
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Commitments and Contingencies Disclosure [Text Block] | |||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Lease Payments for Capital Leases [Table Text Block] |
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Note 10 - Related Party Transactions (Details) (USD $)
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1 Months Ended | 3 Months Ended | 6 Months Ended | ||
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Aug. 31, 2011
|
Jun. 30, 2013
Related Party Lease Agreements [Member]
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Jun. 30, 2012
Related Party Lease Agreements [Member]
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Jun. 30, 2013
Related Party Lease Agreements [Member]
|
Jun. 30, 2012
Related Party Lease Agreements [Member]
|
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Note 10 - Related Party Transactions (Details) [Line Items] | |||||
Number of Lease Agreements Entered, Related Party | 2 | ||||
Related Party Transaction, Selling, General and Administrative Expenses from Transactions with Related Party | $ 6,300 | $ 2,400 | $ 11,300 | $ 4,800 |
Note 4 - Mortgage Notes Payable and Credit Facilities (Details) (USD $)
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3 Months Ended | ||||||||||
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Jun. 30, 2013
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Dec. 31, 2012
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Jun. 30, 2013
Subsequent to June 26,2013 [Member]
|
Jun. 30, 2013
Accordion Feature [Member]
Line of Credit [Member]
|
Jun. 30, 2013
Accordion Feature [Member]
Term Loan [Member]
|
Jun. 30, 2013
If Oustanding Principal Is Less Than Fifty Percent Of The Aggregate Commitments [Member]
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Jun. 30, 2013
If Outstanding Principal Is Greater Than Or Equal To Fifty Percent Of Aggregate Commitments [Member]
|
Jun. 30, 2013
Spread On Federal Funds Rate [Member]
Loan Agreements [Member]
|
Jun. 30, 2013
Spread On Eurodollar Rate [Member]
Loan Agreements [Member]
|
Jun. 30, 2013
Line of Credit [Member]
|
Jun. 30, 2013
Term Loan [Member]
|
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Note 4 - Mortgage Notes Payable and Credit Facilities (Details) [Line Items] | |||||||||||
Line of Credit Facility, Maximum Borrowing Capacity (in Dollars) | $ 300,000,000 | $ 300,000,000 | $ 200,000,000 | $ 200,000,000 | |||||||
Line of Credit Facility, Extension Option, Term | 1 year | ||||||||||
Debt Instrument, Basis Spread on Variable Rate | 0.50% | 1.00% | |||||||||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.35% | 0.25% | |||||||||
Line of Credit, Fronting Fee | 0.125% | 0.125% | |||||||||
Line of Credit Facility, Amount Outstanding (in Dollars) | 105,150,000 | 119,000,000 | 105,100,000 | 200,000,000 | |||||||
Line of Credit Facility, Interest Rate at Period End | 1.80% | ||||||||||
Line of Credit Facility, Remaining Borrowing Capacity (in Dollars) | $ 94,900,000 |
Note 8 - Fair Value of Financial Instruments (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended |
---|---|
Jun. 30, 2013
|
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Note 8 - Fair Value of Financial Instruments (Details) [Line Items] | |
Mortgage Loans on Real Estate, Minimum Interest Rate in Range | 2.90% |
Mortgage Loans on Real Estate, Maximum Interest Rate in Range | 4.10% |
Mortgage Loans on Real Estate, Interest Rate | 3.30% |
Interest Rate Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months, Net (in Dollars) | $ 4.6 |
Mortgages [Member] | Fair Value, Inputs, Level 3 [Member]
|
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Note 8 - Fair Value of Financial Instruments (Details) [Line Items] | |
Notes Payable, Fair Value Disclosure (in Dollars) | $ 82.2 |
Note 2 - Real Estate Investments (Details) - Pro Forma Financial Information - Results of Operations Had the Acquisitions Occured at the Beginning of the Year (USD $)
|
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Statement of operations: | ||||
Revenues | $ 26,331,595 | $ 25,180,449 | $ 51,065,929 | $ 47,497,162 |
Property operating and other expenses | 15,229,803 | 9,599,694 | 29,333,089 | 21,847,747 |
Depreciation and amortization | 9,210,852 | 9,434,100 | 18,249,685 | 17,741,075 |
Net income attributable to Retail Opportunity Investments Corp. | $ 1,890,940 | $ 6,146,655 | $ 3,483,155 | $ 7,908,340 |
Note 8 - Fair Value of Financial Instruments (Details) - Fair Value of Derivative Financial Instruments (USD $)
|
Jun. 30, 2013
|
Dec. 31, 2012
|
---|---|---|
Fair Value of Derivative Financial Instruments [Abstract] | ||
Interest rate products | $ 1,379,186 | |
Interest rate products | $ (11,101,428) | $ (18,012,516) |
Note 8 - Fair Value of Financial Instruments (Tables)
|
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Note 8 - Fair Value of Financial Instruments (Tables) [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Interest Rate Derivatives [Table Text Block] |
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Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] |
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Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] |
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Cash Flow Hedges [Member]
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Note 8 - Fair Value of Financial Instruments (Tables) [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments, Gain (Loss) [Table Text Block] |
|
Consolidated Statements of Equity (Unaudited) (Parentheticals) (USD $)
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Dividends per share | $ 0.30 |
Retained Earnings [Member]
|
|
Dividends per share | $ 0.30 |
Consolidated Statements of Capital (Unaudited) (USD $)
|
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2013
|
Dec. 31, 2012
|
|
Stock based compensation expense | $ 1,346,155 | ||
Net income attributable to Retail Opportunity Investments Partnership, LP | 2,471,012 | 4,760,898 | |
Other comprehensive gain | 8,432,564 | ||
General Partner's Capital [Member] | Retail Opportunity Investments Partnership L.P. [Member]
|
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Balance | 667,790,208 | 667,790,208 | 484,694,294 |
Distributions to ROIC | (43,382,505) | ||
Contributions from ROIC | 220,371,366 | ||
Stock based compensation expense | 1,346,155 | ||
Net income attributable to Retail Opportunity Investments Partnership, LP | 4,760,898 | ||
Accumulated Other Comprehensive Income (Loss) [Member] | Retail Opportunity Investments Partnership L.P. [Member]
|
|||
Balance | (9,722,048) | (9,722,048) | (18,154,612) |
Other comprehensive gain | 8,432,564 | ||
Accumulated Other Comprehensive Income (Loss) [Member]
|
|||
Other comprehensive gain | 8,432,564 | ||
Noncontrolling Interest [Member] | Retail Opportunity Investments Partnership L.P. [Member]
|
|||
Balance | 2,389 | 2,389 | 2,389 |
Additional Paid-in Capital [Member] | Retail Opportunity Investments Partnership L.P. [Member]
|
|||
Balance | 658,070,549 | 658,070,549 | 466,542,071 |
Distributions to ROIC | (43,382,505) | ||
Contributions from ROIC | 220,371,366 | ||
Stock based compensation expense | 1,346,155 | ||
Net income attributable to Retail Opportunity Investments Partnership, LP | 4,760,898 | ||
Other comprehensive gain | 8,432,564 | ||
Additional Paid-in Capital [Member]
|
|||
Stock based compensation expense | 1,346,155 | ||
Retail Opportunity Investments Partnership L.P. [Member]
|
|||
Balance | 667,790,208 | 667,790,208 | 484,694,294 |
Distributions to ROIC | (43,327,505) | ||
Contributions from ROIC | (220,371,366) | ||
Net income attributable to Retail Opportunity Investments Partnership, LP | $ 2,471,012 | $ 4,760,898 |
Note 3 - Discontinued Operations
|
3 Months Ended | ||
---|---|---|---|
Jun. 30, 2013
|
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Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | |||
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] |
On
June 5, 2013, the Company sold the Nimbus Winery Shopping
Center, a non-grocery anchored, non-core shopping center
located in Rancho Cordova, California. The sales price of
this property of approximately $6.3 million, less costs to
sell, resulted in proceeds to the Company of approximately
$5.6 million. Accordingly, the Company recorded a
loss on sale of property of approximately $714,000 for the
three and six months ended June 30, 2013, which has been
included in discontinued operations. The carrying
value of the property as of December 31, 2012 was
approximately $6.3 million.
|
Note 1 - Organization, Basis of Presentation and Summary of Significant Accounting Policies
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3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Significant Accounting Policies [Text Block] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies [Text Block] |
Business
Retail
Opportunity Investments Corp., a Maryland corporation
("ROIC"), is a fully integrated and self-managed real estate
investment trust ("REIT"). ROIC specializes in the
acquisition, ownership and management of necessity-based
community and neighborhood shopping centers in the western
regions of the United States anchored by national and
regional supermarkets and drugstores. ROIC refers
to the properties it targets for investments as its target
assets.
ROIC
is organized in a traditional umbrella partnership real
estate investment trust ("UpREIT") format pursuant to which
Retail Opportunity Investments GP, LLC, its wholly-owned
subsidiary, serves as the general partner of, and ROIC
conducts substantially all of its business through, its
wholly-owned operating partnership subsidiary, Retail
Opportunity Investments Partnership, LP, a Delaware limited
partnership (the "Operating Partnership") and its
subsidiaries. Unless otherwise indicated or unless
the context requires otherwise, all references to the
“Company”, “we,” “us,”
“our,” or “our company” refer to ROIC
together with its consolidated subsidiaries, including Retail
Opportunity Investments Partnership, LP.
With
the approval of its stockholders, ROIC reincorporated as a
Maryland corporation on June 2, 2011. ROIC
began operations as a Delaware corporation, known as NRDC
Acquisition Corp., which was incorporated on July 10,
2007, for the purpose of acquiring assets or operating
business through a merger, capital stock exchange, stock
purchase, asset acquisition or other similar business
combination with one or more assets or control of one or more
operating businesses. On October 20, 2009,
ROIC’s stockholders and warrantholders approved each of
the proposals presented at the special meetings of
stockholders and warrantholders, respectively, in connection
with the transactions contemplated by the Framework Agreement
(the "Framework Agreement") ROIC entered into on
August 7, 2009 with NRDC Capital Management, LLC, which,
among other things, set forth the steps to be taken by ROIC
to continue its business as a corporation that has elected to
qualify as a REIT for U.S. federal income tax purposes,
commencing with its taxable year ended December 31,
2010.
ROIC’s
only material asset is its ownership of partnership interests
of the Operating Partnership and membership interests in
Retail Opportunity Investments GP, LLC, which is the sole
general partner of the Operating Partnership. As a result,
ROIC does not conduct business itself, other than acting as
the parent company and issuing equity from time to
time. The Operating Partnership holds
substantially all the assets of the Company and directly or
indirectly holds the ownership interests in the
Company’s real estate ventures. The Operating
Partnership conducts the operations of the Company’s
business and is structured as a partnership with no publicly
traded equity. Except for net proceeds from warrant exercises
and equity issuances by ROIC, which are contributed to the
Operating Partnership, the Operating Partnership generates
the capital required by the Company’s business through
the Operating Partnership’s operations, by the
Operating Partnership’s incurrence of indebtedness
(directly and through subsidiaries. In the future
the Operating Partnership may generate capital through the
issuance of partnership units of the Operating Partnership or
equity interests in subsidiaries of the Operating
Partnership.
Recent
Accounting Pronouncements
In
February 2013, the Financial Accounting Standards Board
(“FASB”) issued an Accounting Standards Update to
improve the reporting of reclassifications out of accumulated
other comprehensive income (“AOCI”), requiring
companies to present information about reclassifications out
of AOCI in one place and by component. This
guidance is effective for interim and annual periods
beginning on or after December 15, 2012. Adoption of
this guidance did not have a material impact on the
Company’s consolidated financial statements.
Principles
of Consolidation
The
accompanying consolidated financial statements are prepared
on the accrual basis in accordance with accounting principles
generally accepted in the United States (“GAAP”)
for interim financial information and with the instructions
to Form 10-Q and Article 10 of Regulation S-X. Accordingly,
they do not include all of the disclosures required by GAAP
for complete financial statement disclosures. In the opinion
of management, all adjustments considered necessary for a
fair presentation have been included. Results of operations
for the three and six month periods ended June 30, 2013 are
not necessarily indicative of the results that may be
expected for the year ending December 31, 2013. It is
suggested that these financial statements be read in
conjunction with the financial statements and notes thereto
included in the Company’s annual report on Form 10-K
for the fiscal year ended December 31, 2012.
The
consolidated financial statements include the accounts of the
Company and those of its subsidiaries, which are wholly-owned
or controlled by the Company. Entities which the
Company does not control through its voting interest and
entities which are variable interest entities ("VIEs"), but
where it is not the primary beneficiary, are accounted for
under the equity method. All significant
intercompany balances and transactions have been
eliminated.
The
Company follows the FASB guidance for determining whether an
entity is a VIE and requires the performance of a qualitative
rather than a quantitative analysis to determine the primary
beneficiary of a VIE. Under this guidance, an
entity would be required to consolidate a VIE if it has (i)
the power to direct the activities that most significantly
impact the entity's economic performance and (ii) the
obligation to absorb losses of the VIE or the right to
receive benefits from the VIE that could be significant to
the VIE.
A
non-controlling interest in a consolidated subsidiary is
defined as the portion of the equity (net assets) in a
subsidiary not attributable, directly or indirectly, to a
parent. Non-controlling interests are required to
be presented as a separate component of equity in the
consolidated balance sheet and modifies the presentation of
net income by requiring earnings and other comprehensive
income to be attributed to controlling and non-controlling
interests.
The
Company assesses the accounting treatment for each joint
venture. This assessment includes a review of each
joint venture or limited liability company agreement to
determine which party has what rights and whether those
rights are protective or participating. For all
VIEs, the Company reviews such agreements in order to
determine which party has the power to direct the activities
that most significantly impact the entity's economic
performance. In situations where the Company or
its partner approves, among other things, the annual budget,
receives a detailed monthly reporting package from the
Company, meets on a quarterly basis to review the results of
the joint venture, reviews and approves the joint venture's
tax return before filing, and approves all leases that cover
more than a nominal amount of space relative to the total
rentable space at each property, the Company does not
consolidate the joint venture as it considers these to be
substantive participation rights that result in shared power
of the activities that most significantly impact the
performance of the joint venture. The Company's
joint venture agreements also contain certain protective
rights such as the requirement of partner approval to sell,
finance or refinance the property and the payment of capital
expenditures and operating expenditures outside of the
approved budget or operating plan.
Use
of Estimates
The
preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that
affect the disclosure of contingent assets and liabilities,
the reported amounts of assets and liabilities at the date of
the financial statements, and the reported amounts of revenue
and expenses during the periods covered by the financial
statements. The most significant assumptions and
estimates relate to the purchase price allocations,
depreciable lives, revenue recognition and the collectability
of tenant receivables, other receivables, notes receivables,
the valuation of performance based restricted stock, stock
options, and derivatives. Actual results could
differ from these estimates.
Federal
Income Taxes
Commencing
with ROIC’s taxable year ended December 31, 2010,
ROIC has elected to qualify as a REIT under
Sections 856-860 of the Internal Revenue Code (the
"Code"). Under those sections, a REIT that, among
other things, distributes at least 90% of REIT taxable income
and meets certain other qualifications prescribed by the Code
will not be taxed on that portion of its taxable income that
is distributed.
Although
it may qualify as a REIT for U.S. federal income tax
purposes, ROIC is subject to state income or franchise taxes
in certain states in which some of its properties are
located. In addition, taxable income from non-REIT
activities managed through the Company's taxable REIT
subsidiary ("TRS") is fully subject to U.S. federal, state
and local income taxes. As of June 30, 2013 and
for all prior periods since inception, Retail Opportunity
Investments Partnership, LP has been an entity disregarded
from its sole owner, ROIC, for U.S. federal income tax
purposes and as such is not subject to federal income taxes.
The
Company follows the FASB guidance that defines a recognition
threshold and measurement attribute for the financial
statement recognition and measurement of a tax position taken
or expected to be taken in a tax return. The FASB
also provides guidance on de-recognition, classification,
interest and penalties, accounting in interim periods,
disclosure, and transition. The Company records
interest and penalties relating to unrecognized tax benefits,
if any, as interest expense. As of June 30, 2013,
the tax years 2009 through and including 2012 remain open to
examination by the Internal Revenue Service ("IRS") and state
taxing authorities. During the year ended
December 31, 2011, the IRS conducted an examination of
the Company's 2009 federal tax return. During the
six months ended June 30, 2012 the Company reached a
settlement with the IRS in which the Company paid to the IRS
approximately $122,000.
Real
Estate Investments
All
costs related to the improvement or replacement of real
estate properties are capitalized. Additions,
renovations and improvements that enhance and/or extend the
useful life of a property are also
capitalized. Expenditures for ordinary
maintenance, repairs and improvements that do not materially
prolong the normal useful life of an asset are charged to
operations as incurred. The Company expenses
transaction costs associated with business combinations in
the period incurred. During the six months ended
June 30, 2013 and 2012, capitalized costs related to the
improvements or replacement of real estate properties were
approximately $8.5 million and $3.4 million,
respectively.
Upon
the acquisition of real estate properties, the fair value of
the real estate purchased is allocated to the acquired
tangible assets (consisting of land, buildings and
improvements), and acquired intangible assets and liabilities
(consisting of above-market and below-market leases and
acquired in-place leases). Acquired lease
intangible assets include above-market leases and acquired
in-place leases in the accompanying consolidated balance
sheet. The fair value of the tangible assets of an
acquired property is determined by valuing the property as if
it were vacant, which value is then allocated to land,
buildings and improvements based on management's
determination of the relative fair values of these
assets. In valuing an acquired property's
intangibles, factors considered by management include an
estimate of carrying costs during the expected lease-up
periods, and estimates of lost rental revenue during the
expected lease-up periods based on its evaluation of current
market demand. Management also estimates costs to
execute similar leases, including leasing commissions, tenant
improvements, legal and other related
costs. Leasing commissions, legal and other
related costs ("lease origination costs") are classified as
deferred charges in the accompanying consolidated balance
sheet.
The
value of in-place leases is measured by the excess of
(i) the purchase price paid for a property after
adjusting existing in-place leases to market rental rates,
over (ii) the estimated fair value of the property as if
vacant. Above-market and below-market lease values
are recorded based on the present value (using a discount
rate which reflects the risks associated with the leases
acquired) of the difference between the contractual amounts
to be received and management's estimate of market lease
rates, measured over the terms of the respective leases that
management deemed appropriate at the time of
acquisition. Such valuations include a
consideration of the non-cancellable terms of the respective
leases as well as any applicable renewal
periods. The fair values associated with
below-market rental renewal options are determined based on
the Company's experience and the relevant facts and
circumstances that existed at the time of the
acquisitions. The value of the above-market and
below-market leases associated with the original lease term
is amortized to rental income, over the terms of the
respective leases. The value of in-place leases
are amortized to expense, and the above-market and
below-market lease values are amortized to rental income,
over the remaining non-cancellable terms of the respective
leases. If the value of below-market leases
includes renewal option periods, the Company includes such
renewal periods in the amortization period
utilized. If a lease were to be terminated prior
to its stated expiration, all unamortized amounts relating to
that lease would be recognized in operations at that
time. The Company may record a bargain purchase
gain if it determines that the purchase price for the
acquired assets was less than the fair value. The
Company will record a liability in situations where any part
of the cash consideration is deferred. The amounts
payable in the future are discounted to their present
value. The liability is subsequently re-measured
to fair value with changes in fair value recognized in the
consolidated statements of operations. If, up to
one year from the acquisition date, information regarding
fair value of assets acquired and liabilities assumed is
received and estimates are refined, appropriate property
adjustments are made to the purchase price allocation on a
retrospective basis.
In
conjunction with the Company's pursuit and acquisition of
real estate investments, the Company expensed acquisition
transaction costs during the three months ended June 30, 2013
and 2012 of approximately $520,000 and $630,000,
respectively, and approximately $928,000 and $753,000 during
the six months ended June 30, 2013 and 2012,
respectively.
Regarding
the Company's 2013 property acquisitions (see Note 2),
the fair value of in-place leases and other intangibles have
been allocated to intangible asset and liability
accounts. Such allocations are preliminary and may
be adjusted as final information becomes available.
Asset
Impairment
The
Company reviews long-lived assets for impairment whenever
events or changes in circumstances indicate that the carrying
amount of an asset may not be
recoverable. Recoverability of assets to be held
and used is measured by a comparison of the carrying amount
of the asset to aggregate future net cash flows (undiscounted
and without interest) expected to be generated by the
asset. If such assets are considered impaired, the
impairment to be recognized is measured by the amount by
which the carrying amount of the assets exceed the fair
value. Management does not believe that the value
of any of the Company's real estate investments was impaired
at June 30, 2013.
In
June 2013, the Company sold the Nimbus Winery Shopping
Center, a non-grocery anchored, non-core shopping center
located in Rancho Cordova, California. The sales price of
this property of approximately $6.3 million, less costs to
sell, resulted in proceeds to the Company of approximately
$5.6 million. Accordingly, the Company recorded a
loss on sale of property of approximately $714,000 for the
three and six months ended June 30, 2013, which has been
included in discontinued operations.
The
Company reviews its investment in its unconsolidated joint
venture for impairment periodically and the Company would
record an impairment charge when events or circumstances
change indicating that a decline in the fair values below the
carrying values has occurred and such decline is other-than
temporary. The ultimate realization of the
Company's investment in its unconsolidated joint venture is
dependent on a number of factors, including the performance
of each investment and market
conditions. Management does not believe that the
carrying value of the Company's unconsolidated joint venture
was impaired at June 30, 2013.
Cash
and Cash Equivalents
The
Company considers all highly liquid investments with an
original maturity of three months or less when purchased to
be cash equivalents. Cash and cash equivalents are
maintained at financial institutions and, at times, balances
may exceed the federally insured limit by the Federal Deposit
Insurance Corporation. The Company has not
experienced any losses related to these balances.
Restricted
Cash
The
terms of several of the Company's mortgage loans payable
require the Company to deposit certain replacement and other
reserves with its lenders. Such "restricted cash"
is generally available only for property-level requirements
for which the reserves have been established and is not
available to fund other property-level or Company-level
obligations.
Revenue
Recognition
Management
has determined that all of the Company's leases with its
various tenants are operating leases. Rental
income is generally recognized based on the terms of leases
entered into with tenants. In those instances in
which the Company funds tenant improvements and the
improvements are deemed to be owned by the Company, revenue
recognition will commence when the improvements are
substantially completed and possession or control of the
space is turned over to the tenant. When the
Company determines that the tenant allowances are lease
incentives, the Company commences revenue recognition and
lease incentive amortization when possession or control of
the space is turned over to the tenant for tenant work to
begin. Minimum rental income from leases with
scheduled rent increases is recognized on a straight-line
basis over the lease term. Percentage rent is
recognized when a specific tenant's sales breakpoint is
achieved. Property operating expense recoveries
from tenants of common area maintenance, real estate taxes
and other recoverable costs are recognized in the period the
related expenses are incurred. Lease incentives
are amortized as a reduction of rental revenue over the
respective tenant lease terms.
Termination
fees (included in rental revenue) are fees that the Company
has agreed to accept in consideration for permitting certain
tenants to terminate their lease prior to the contractual
expiration date. The Company recognizes
termination fees in accordance with Securities and Exchange
Commission Staff Accounting Bulletin 104, "Revenue
Recognition," when the following conditions are
met: (a) the termination agreement is
executed; (b) the termination fee is determinable;
(c) all landlord services pursuant to the terminated
lease have been rendered; and (d) collectivity of the
termination fee is assured. Interest income is
recognized as it is earned. Gains or losses on
disposition of properties are recorded when the criteria for
recognizing such gains or losses under generally accepted
accounting principles have been met.
The
Company must make estimates as to the collectability of its
accounts receivable related to base rent, straight-line rent,
expense reimbursements and other
revenues. Management analyzes accounts receivable
and the allowance for bad debts by considering tenant
creditworthiness, current economic trends, and changes in
tenants' payment patterns when evaluating the adequacy of the
allowance for doubtful accounts receivable. The
Company also provides an allowance for future credit losses
of the deferred straight-line rents
receivable. The provision for doubtful accounts at
June 30, 2013 and December 31, 2012 was approximately $2.7
million and $3.2 million, respectively.
Depreciation
and Amortization
The
Company uses the straight-line method for depreciation and
amortization. Buildings are depreciated over the
estimated useful lives which the Company estimates to be
39-40 years. Property improvements are
depreciated over the estimated useful lives that range from
10 to 20 years. Furniture and fixtures are
depreciated over the estimated useful lives that range from 3
to 10 years. Tenant improvements are
amortized over the shorter of the life of the related leases
or their useful life.
Deferred
Charges
Deferred
charges consist principally of leasing commissions and
acquired lease origination costs (which are amortized ratably
over the life of the tenant leases) and financing fees (which
are amortized over the term of the related debt
obligation). Deferred charges in the accompanying
consolidated balance sheets are shown at cost, net of
accumulated amortization of approximately $11.8 million and
$9.1 million, as of June 30, 2013 and December 31, 2012,
respectively.
Concentration
of Credit Risk
Financial
instruments that potentially subject the Company to
concentrations of credit risk consist primarily of cash and
cash equivalents and tenant receivables. The
Company places its cash and cash equivalents in excess of
insured amounts with high quality financial
institutions. The Company performs ongoing credit
evaluations of its tenants and requires tenants to provide
security deposits.
Earnings
Per Share
Basic
earnings per share ("EPS") excludes the impact of dilutive
shares and is computed by dividing net income by the weighted
average number of shares of common stock outstanding for the
period. Diluted EPS reflects the potential
dilution that could occur if securities or other contracts to
issue shares of common stock were exercised or converted into
shares of common stock and then shared in the earnings of the
Company.
During
the six months ended June 30, 2012 the effect of the
41,400,000 warrants to purchase ROIC’s common
stock (the "Public Warrants") issued in connection
with ROIC’s initial public offering (the "IPO") and the
8,000,000 warrants (the "Private Placement Warrants")
purchased by NRDC Capital Management, LLC (the "Sponsor")
simultaneously with the consummation of the IPO, were not
included in the calculation of diluted EPS as the weighted
average share price was less than the exercise price during
this period. During the three and six months ended
June 30, 2013 and the three months ended June 30, 2012, the
effect of the outstanding Public Warrants and Private
Placement Warrants, for the time these were outstanding
during these periods, were included in the calculation of
diluted EPS as the weighted average share price was greater
than the exercise price during this period. See
Note 5 to the accompanying consolidated financial
statements.
For
the three and six months ended June 30, 2013 and 2012, basic
EPS was determined by dividing net income allocable to common
stockholders for the applicable period by the weighted
average number of shares of common stock outstanding during
such period. Net income during the applicable period is also
allocated to the time-based unvested restricted stock as
these grants are entitled to receive dividends and are
therefore considered a participating security.
Time-based unvested restricted stock is not allocated
net losses and/or any excess of dividends declared over net
income; such amounts are allocated entirely to the common
stockholders other than the holders of time-based unvested
restricted stock. The performance based restricted
stock awards outstanding under the 2009 Plan described in
Note 6 are excluded from the basic EPS calculation, as these
units are not participating securities until they
vest.
As
of June 30, 2013, the Operating Partnership is wholly-owned
by ROIC, therefore the presentation of earnings per unit is
currently not applicable.
The
following table sets forth the reconciliation between basic
and diluted EPS:
Stock-Based
Compensation
The
Company has a stock-based employee compensation plan, which
is more fully described in Note 6.
The
Company accounts for its stock-based compensation plans based
on the FASB guidance which requires that compensation expense
be recognized based on the fair value of the stock awards
less estimated forfeitures. Restricted stock
grants vest based upon the completion of a service period
("time-based grants") and/or the Company meeting certain
established financial performance criteria
("performance-based grants"). Time-based grants
are valued according to the market price for ROIC’s
common stock at the date of grant. For
performance-based grants, the Company generally engages an
independent appraisal company to determine the value of the
shares at the date of grant, taking into account the
underlying contingency risks associated with the performance
criteria. It is the Company's policy to grant
options with an exercise price equal to the quoted closing
market price of stock on the grant date or the date
immediately prior to the grant date. Awards of
stock options and time-based grants stock are expensed as
compensation ratably over the vesting
period. Awards of performance-based grants are
expensed as compensation under an accelerated method and are
recognized in income regardless of the Company results
against the performance criteria.
Derivatives
The
Company records all derivatives on the balance sheet at fair
value. The accounting for changes in the fair
value of derivatives depends on the intended use of the
derivative, whether the Company has elected to designate a
derivative in a hedging relationship and apply hedge
accounting and whether the hedging relationship has satisfied
the criteria necessary to apply hedge
accounting. Derivatives designated and qualifying
as a hedge of the exposure to changes in the fair value of an
asset, liability, or firm commitment attributable to a
particular risk, such as interest rate risk, are considered
fair value hedges. Derivatives designated and
qualifying as a hedge of the exposure to variability in
expected future cash flows, or other types of forecasted
transactions, are considered cash flow
hedges. Hedge accounting generally provides for
the matching of the timing of gain or loss recognition on the
hedging instrument with the recognition of the changes in the
fair value of the hedged asset or liability that are
attributable to the hedged risk in a fair value hedge or the
earnings effect of the hedged forecasted transactions in a
cash flow hedge.
Segment
Reporting
The
Company operates in one industry segment, ownership of
commercial real estate properties. The Company
does not distinguish in property operations for purposes of
measuring performance. The Company reassesses its
conclusion that it has one reportable operating segment at
least annually.
|
Note 8 - Fair Value of Financial Instruments (Details) - Summary of the terms of the Company’s forward starting interest rate swaps (USD $)
|
3 Months Ended |
---|---|
Jun. 30, 2013
|
|
Wells Fargo Bank 1, N.A.[Member]
|
|
Note 8 - Fair Value of Financial Instruments (Details) - Summary of the terms of the Company’s forward starting interest rate swaps [Line Items] | |
Notional amount | $ 25,000,000 |
Effective date | Apr. 15, 2011 |
Maturity date | Apr. 15, 2021 |
Cash Settlement Date | Sep. 22, 2014 |
PNC Bank, N.A. [Member]
|
|
Note 8 - Fair Value of Financial Instruments (Details) - Summary of the terms of the Company’s forward starting interest rate swaps [Line Items] | |
Notional amount | 50,000,000 |
Effective date | Jul. 01, 2011 |
Maturity date | Jul. 01, 2018 |
Cash Settlement Date | Dec. 01, 2013 |
Bank of Montreal [Member]
|
|
Note 8 - Fair Value of Financial Instruments (Details) - Summary of the terms of the Company’s forward starting interest rate swaps [Line Items] | |
Notional amount | 50,000,000 |
Effective date | Apr. 02, 2012 |
Maturity date | Apr. 01, 2019 |
Cash Settlement Date | Dec. 01, 2013 |
Wells Fargo Bank 2, N.A. [Member]
|
|
Note 8 - Fair Value of Financial Instruments (Details) - Summary of the terms of the Company’s forward starting interest rate swaps [Line Items] | |
Notional amount | 25,000,000 |
Effective date | Apr. 02, 2012 |
Maturity date | Apr. 02, 2019 |
Cash Settlement Date | Sep. 22, 2014 |
Royal Bank of Canada [Member]
|
|
Note 8 - Fair Value of Financial Instruments (Details) - Summary of the terms of the Company’s forward starting interest rate swaps [Line Items] | |
Notional amount | $ 25,000,000 |
Effective date | Apr. 01, 2013 |
Maturity date | Apr. 03, 2023 |
Cash Settlement Date | Oct. 31, 2014 |
Note 1 - Organization, Basis of Presentation and Summary of Significant Accounting Policies (Details) - Reconciliation Between Basic and Diluted EPS (USD $)
|
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Note 1 - Organization, Basis of Presentation and Summary of Significant Accounting Policies (Details) - Reconciliation Between Basic and Diluted EPS [Line Items] | ||||
Net income attributable to ROIC (in Dollars) | $ 2,471,012 | $ 4,424,752 | $ 4,760,898 | $ 5,552,156 |
Less, earnings allocated to unvested shares (in Dollars) | (51,572) | (65,915) | (101,660) | (95,669) |
Net income available for common shareholders, basic and diluted (in Dollars) | $ 2,419,440 | $ 4,358,837 | $ 4,659,238 | $ 5,456,487 |
Denominator for basic EPS – weighted average common shares | 67,915,106 | 50,394,722 | 62,651,921 | 49,999,241 |
Denominator for diluted EPS – weighted average common equivalent shares | 71,095,092 | 50,942,040 | 66,486,201 | 50,094,902 |
Performance Shares [Member]
|
||||
Note 1 - Organization, Basis of Presentation and Summary of Significant Accounting Policies (Details) - Reconciliation Between Basic and Diluted EPS [Line Items] | ||||
Share Based Payment Awards | 120,268 | 52,073 | 104,278 | 51,870 |
Employee Stock Option [Member]
|
||||
Note 1 - Organization, Basis of Presentation and Summary of Significant Accounting Policies (Details) - Reconciliation Between Basic and Diluted EPS [Line Items] | ||||
Share Based Payment Awards | 72,090 | 46,525 | 62,367 | 43,791 |
Warrant [Member]
|
||||
Note 1 - Organization, Basis of Presentation and Summary of Significant Accounting Policies (Details) - Reconciliation Between Basic and Diluted EPS [Line Items] | ||||
Warrants | 2,987,628 | 448,720 | 3,667,635 |
Note 2 - Real Estate Investments (Details) - Operating Results Included in the Company's Historical Consolidated Statement of Operations For Properties Acquired During the Reported Periods (USD $)
|
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Statement of operations: | ||||
Revenues | $ 26,062,207 | $ 18,118,372 | $ 50,446,656 | $ 34,766,056 |
Property operating and other expenses | 4,081,626 | 3,282,120 | 8,240,507 | 6,251,468 |
Depreciation and amortization | 9,176,706 | 7,017,542 | 18,057,836 | 13,667,360 |
Net income attributable to Retail Opportunity Investments Corp. | 2,471,012 | 4,424,752 | 4,760,898 | 5,552,156 |
Attributable to Acquired Properties During the Reporting Periods [Member]
|
||||
Statement of operations: | ||||
Revenues | 2,008,856 | 2,563,517 | ||
Property operating and other expenses | 970,464 | 1,235,863 | ||
Depreciation and amortization | 991,266 | 1,260,183 | ||
Net income attributable to Retail Opportunity Investments Corp. | $ 47,126 | $ 67,471 |
Note 6 - Common Stock and Warrants of ROIC (Details) (USD $)
|
1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
May 31, 2010
|
Jun. 30, 2013
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Dec. 31, 2012
|
Jun. 23, 2011
|
|
Note 6 - Common Stock and Warrants of ROIC (Details) [Line Items] | |||||||
Common Stock, Par or Stated Value Per Share (in Dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
Proceeds from Issuance of Common Stock (in Dollars) | $ 50,000,000 | $ 39,300,000 | $ 13,378,487 | ||||
Stock Issued During Period, Shares, New Issues | 3,183,245 | ||||||
Payments of Stock Issuance Costs (in Dollars) | 34,870 | 425,383 | |||||
Number of Days Notice | 30 days | ||||||
Proceeds from Warrant Exercises (in Dollars) | 64,900,000 | 220,371,366 | |||||
Warrant Repurchase Program, Authorized Amount (in Dollars) | 40,000,000 | ||||||
Warrants Repurchased During Period, Shares | 3,734,000 | 11,484,000 | |||||
Payments for Repurchase of Warrants (in Dollars) | 11,300,000 | 21,989,860 | |||||
Weighted Average Cost Per Warrant (in Dollars per share) | $ 1.91 | ||||||
Minimum Price Company's Common Stock Must Trade Before Warrants Issued in The IPO Can Be Redeemed [Member]
|
|||||||
Note 6 - Common Stock and Warrants of ROIC (Details) [Line Items] | |||||||
Share Price (in Dollars per share) | $ 18.75 | ||||||
Original Number Outstanding [Member] | Public Warrants [Member]
|
|||||||
Note 6 - Common Stock and Warrants of ROIC (Details) [Line Items] | |||||||
Class of Warrant or Right, Outstanding | 41,400,000 | 41,400,000 | |||||
Private Placement Warrants [Member]
|
|||||||
Note 6 - Common Stock and Warrants of ROIC (Details) [Line Items] | |||||||
Warrants Purchased By Sponsor During IPO | 8,000,000 | ||||||
Warrants, Sales Price Per Warrant (in Dollars per share) | $ 1.00 | ||||||
Sponsor Warrants Exercised | 8,000,000 | ||||||
Warrants, Repurchase Price Per Warrant (in Dollars per share) | $ 0.01 | ||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per Item) | 12.00 | ||||||
Sponsor [Member]
|
|||||||
Note 6 - Common Stock and Warrants of ROIC (Details) [Line Items] | |||||||
Stock Issued During Period, Shares, New Issues | 688,500 | ||||||
Public and Private Placement Warrants [Member]
|
|||||||
Note 6 - Common Stock and Warrants of ROIC (Details) [Line Items] | |||||||
Common Stock, Capital Shares Reserved for Future Issuance | 53,400,000 | ||||||
Third-Party Warrant Holders [Member]
|
|||||||
Note 6 - Common Stock and Warrants of ROIC (Details) [Line Items] | |||||||
Stock Issued During Period, Shares, New Issues | 5,408,496 | ||||||
Public Warrants [Member]
|
|||||||
Note 6 - Common Stock and Warrants of ROIC (Details) [Line Items] | |||||||
Stock Issued During Period, Shares, New Issues | 18,364,281 | ||||||
Class of Warrant or Right, Outstanding | 11,550,719 | 11,550,719 | |||||
Commissions Paid to Agent [Member]
|
|||||||
Note 6 - Common Stock and Warrants of ROIC (Details) [Line Items] | |||||||
Payments of Stock Issuance Costs (in Dollars) | $ 687,600 |