Yahoo Finance Retail Opportunity Investments Corp (ROIC) (Q1 2024) Earnings Call Transcript Highlights: ...
Total Revenues: Increased to $85.3 million.
GAAP Net Income: $11 million for Q1 2024.
Earnings Per Share (EPS): $0.09 per diluted share.
FFO (Funds from Operations): $37.9 million, or $0.28 per diluted share.
Same-Center Net Operating Income: Increased by 5.7%.
Acquisition: Purchased a shopping center for $70 million with a 6.75% cash yield.
Dispositions: Two properties under contract totaling $68 million.
Debt-to-EBITDA Ratio: Net debt-to-annualized EBITDA at 6.4x.
Leasing Activity: Signed 87 leases totaling over 383,000 square feet.
Releasing Rent Growth: 12% increase on new leases, 7% on renewals.
Incremental Annual Base Rent: $1.4 million from new tenants already opened.
Release Date: April 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Stuart, did you comment on your expectations for net acquisitions this year? Are you still in the range of $100 million to $300 million? A: Yes, we are. Although the acquisition market is currently paused, things can change very quickly. But yes, were still on tap to look at external growth in that range.
Q: Can you elaborate a bit more on the comments on 2Q? And I think Mike commented on expectations on 2Q leasing to be stronger. A: This is Rich. As we mentioned, weve got these tenants lined up for the anchor spaces and the demand for the shop space continues to be very strong. Were receiving multiple LOIs on the shop space and on the anchor space. The leasing team, while it is still taking a touch longer to get to the signature, still has a lot of demand for all the available space.
Q: Can you comment a little bit more around the senior notes coming due in December? A: Its just basically market conditions. Obviously, the tenure has ticked up quite a bit recently and thats obviously not favorable for us, but it seems to move around quite a bit. So the good news is weve got a little bit of time before the end of the year and well look to transact obviously the back half, probably in the third quarter like we did last year.
Q: I just wanted to follow-up first on the net investment guidance. So $100 million to $300 million, youre roughly net neutral year to date assuming that dispositions close in the next 60 to 90 days. How should we think about funding future investments? A: Were certainly not issuing equity where our stock is currently trading. So we will accelerate, continue to look at accelerating the disposition side to help pay for more acquisitions or for more growth as we move through the year. And subject to market conditions, if the stock does move up accordingly and we can continue to buy accretively, then well look to the equity market as well, but primarily being funded through dispositions more than anything else.
Q: Stuart, you mentioned roughly doubling the rent on the vacant anchor GLA. How much CapEx is estimated as it pertains to those leases? A: From a CapEx perspective, on all the anchor leases, you're looking at $75 to $100. Our comment is around on a net basis in terms of doubling the rent. So as an example, the one big lease we're on is actually with an increase, it's over 300%. But after CapEx, as you heard in the comments, to double the rent. So we're expecting again, as Rich touched on, all -- actually, one of the leases has already been executed, but the balance to be executed during the quarter delivery should take place within probably depending on how much work.
Q: Just hoping you could talk a little bit about the latest thoughts on Rite Aid. I think they've increased their store closure count, and maybe there's some, maybe delays or hesitation there and some back and forth in the market that they may pursue. Chapter 7. So just curious on what the plan would be if that were to eventuate with Rite Aid? A: Well, yes, obviously, as you're touching on there, there's a bit of uncertainty about, the final outcome of the Rite Aid situation. We have reached agreements with Rite Aid on all the remaining locations, extending the terms on most of those, and we are hopeful that that plan will get approved. But in the event that it doesn't, the demand for our spaces continues to be very strong. And as we touched on with the spaces we did get back, they were spoken for very quickly. So while we're hoping that the plan gets approved, we're also prepared to capitalize on the opportunity if it doesn't.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
