RETAIL OPPORTUNITY INVESTMENTS CORP [ROIC] Filings

10-Q 1 roic-20230630.htm 10-Q roic-20230630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ____

Commission file number 001-33749

RETAIL OPPORTUNITY INVESTMENTS CORP.

RETAIL OPPORTUNITY INVESTMENTS PARTNERSHIP, LP

(Exact name of registrant as specified in its charter)

Maryland

(Retail Opportunity Investments Corp.)

26-0500600

(Retail Opportunity Investments Corp.)

Delaware

(Retail Opportunity Investments Partnership, LP)

94-2969738

(Retail Opportunity Investments Partnership, LP)

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

11250 El Camino Real

Suite 200

San Diego,

California

92130

(Address of Principal Executive Offices)

(Zip Code)

(858) 677-0900

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Retail Opportunity Investments Corp.

Yes

☒

☐

Retail Opportunity Investments Partnership, LP

Yes

☒

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Retail Opportunity Investments Corp.

Yes

☒

☐

Retail Opportunity Investments Partnership, LP

Yes

☒

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Retail Opportunity Investments Corp.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Retail Opportunity Investments Partnership, LP

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☐

Emerging growth company

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Retail Opportunity Investments Corp.

Yes

☐

☒

Retail Opportunity Investments Partnership, LP

Yes

☐

☒

Securities registered pursuant to Section 12(b) of the Act:


Name of Registrant	Title of each class	Trading Symbol	Name of each exchange on which registered
Retail Opportunity Investments Corp.	Common Stock, par value $0.0001 per share	ROIC	NASDAQ
Retail Opportunity Investments Partnership, LP	None	None	None

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date: 126,003,795 shares of common stock, par value $0.0001 per share, of Retail Opportunity Investments Corp. outstanding as of July 20, 2023.

EXPLANATORY PARAGRAPH

This report combines the quarterly reports on Form 10-Q for the quarter ended June 30, 2023 of Retail Opportunity Investments Corp., a Maryland corporation (“ROIC”), and Retail Opportunity Investments Partnership, LP, a Delaware limited partnership (the “Operating Partnership”), of which ROIC is the parent company and general partner. Unless otherwise indicated or unless the context requires otherwise, all references in this report to “the Company,” “we,” “us,” “our,” or “our company” refer to ROIC together with its consolidated subsidiaries, including the Operating Partnership. Unless otherwise indicated or unless the context requires otherwise, all references in this report to “the Operating Partnership” refer to Retail Opportunity Investments Partnership, LP together with its consolidated subsidiaries.

ROIC operates as a real estate investment trust and as of June 30, 2023, ROIC owned an approximate 94.4% partnership interest in the Operating Partnership. Retail Opportunity Investments GP, LLC, ROIC’s wholly-owned subsidiary, is the sole general partner of the Operating Partnership, and as the parent company, ROIC has the full and complete authority over the Operating Partnership’s day-to-day management and control.

The Company believes that combining the quarterly reports on Form 10-Q of ROIC and the Operating Partnership into a single report will result in the following benefits:

•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.

Management operates ROIC and the Operating Partnership as one enterprise. The management of ROIC and the Operating Partnership are the same.

There are a few differences between ROIC and the Operating Partnership, which are reflected in the disclosures in this report. The Company believes it is important to understand the differences between ROIC and the Operating Partnership in the context of how these entities operate as an interrelated consolidated company. ROIC is a real estate investment trust, whose only material asset is its ownership of direct or indirect partnership interests in the Operating Partnership and membership interest 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 of the Operating Partnership 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 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) or through the issuance of operating partnership units (“OP Units”).

Non-controlling interests is the primary area of difference between the Consolidated Financial Statements for ROIC and the Operating Partnership. The OP Units in the Operating Partnership that are not owned by ROIC are accounted for as partners’ capital in the Operating Partnership’s financial statements and as non-controlling interests in ROIC’s financial statements. Accordingly, this report presents the Consolidated Financial Statements for ROIC and the Operating Partnership separately, as required, as well as Earnings Per Share / Earnings Per Unit and Capital of the Operating Partnership.

This report also includes separate Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources, Item 4. Controls and Procedures sections and separate Chief Executive Officer and Chief Financial Officer certifications for each of ROIC and the Operating Partnership as reflected in Exhibits 31 and 32.

TABLE OF CONTENTS


Part I. Financial Information			1
Item 1. Financial Statements			1
Consolidated Financial Statements of Retail Opportunity Investments Corp.:
Consolidated Balance Sheets (Unaudited)			1
Consolidated Statements of Operations and Comprehensive Income (Unaudited)			2
Consolidated Statements of Equity (Unaudited)			3
Consolidated Statements of Cash Flow s (Unaudited)			5
Consolidated Financial Statements of Retail Opportunity Investments Partnership, LP:
Consolidated Balance Sheets (Unaudited)			6
Consolidated Statements of Operations and Comprehensive Income (Unaudited)			7
Consolidated Statements of Partners’ Capital (Unaudited)			8
Consolidated Statements of Cash Flow s (Unaudited)			10
Notes to Consolidated Financial Statements (Unaudited)			11
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			25
Item 3. Quantitative and Qualitative Disclosures About Market Risk			40
Item 4. Controls and Procedures			40
Part II. Other Information			41
Item 1. Legal Proceedings			41
Item 1A. Risk Factors			41
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			41
Item 3. Defaults Upon Senior Securities			41
Item 4. Mine Safety Disclosures			41
Item 5. Other Information			41
Item 6. Exhibits			42
Signatures			43

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

RETAIL OPPORTUNITY INVESTMENTS CORP.

Consolidated Balance Sheets

(In thousands, except share data)


	June 30, 2023 (unaudited)		December 31, 2022
ASSETS
Real Estate Investments:
Land	$	958,397	$	958,236
Building and improvements	2,467,962		2,452,857
	3,426,359		3,411,093
Less: accumulated depreciation	615,501		578,593
	2,810,858		2,832,500
Mortgage note receivable	4,741		4,786
Real Estate Investments, net	2,815,599		2,837,286
Cash and cash equivalents	5,296		5,598
Restricted cash	2,069		1,861
Tenant and other receivables, net	57,336		57,546
Deposits	—		500
Acquired lease intangible assets, net	48,564		52,428
Prepaid expenses	2,251		5,957
Deferred charges, net	30,011		26,683
Other assets	17,433		16,420
Total assets	$	2,978,559	$	3,004,279

LIABILITIES AND EQUITY
Liabilities:
Term loan	$	299,435	$	299,253
Credit facility	63,000		88,000
Senior Notes	947,673		946,849
Mortgage notes payable	60,486		60,917
Acquired lease intangible liabilities, net	145,685		152,117
Accounts payable and accrued expenses	43,733		22,885
Tenants’ security deposits	7,894		7,701
Other liabilities	42,722		41,959
Total liabilities	1,610,628		1,619,681

Commitments and contingencies



Equity:
Preferred stock, $0.0001 par value 50,000,000 shares authorized; none issued and outstanding	—		—
Common stock, $0.0001 par value, 500,000,000 shares authorized; 126,003,795 and 124,538,811 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively	13		12
Additional paid-in capital	1,625,667		1,612,126
Accumulated dividends in excess of earnings	(335,755)		(315,984)
Accumulated other comprehensive income	1,337		14
Total Retail Opportunity Investments Corp. stockholders’ equity	1,291,262		1,296,168
Non-controlling interests	76,669		88,430
Total equity	1,367,931		1,384,598
Total liabilities and equity	$	2,978,559	$	3,004,279

See accompanying notes to consolidated financial statements.

- 1 -

RETAIL OPPORTUNITY INVESTMENTS CORP.

Consolidated Statements of Operations and Comprehensive Income

(Unaudited)

(In thousands, except share data)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenues
Rental revenue	$	79,630	$	77,218	$	158,629	$	152,255

Other income	2,410		1,007		2,707		2,443
Total revenues	82,040		78,225		161,336		154,698

Operating expenses
Property operating	13,581		12,672		27,783		24,763
Property taxes	8,924		8,416		17,768		16,936
Depreciation and amortization	25,126		24,350		50,230		48,112
General and administrative expenses	5,776		5,702		11,096		10,942

Other expense	482		488		654		667
Total operating expenses	53,889		51,628		107,531		101,420



Operating income	28,151		26,597		53,805		53,278

Non-operating expenses
Interest expense and other finance expenses	(17,633)		(14,283)		(34,591)		(28,498)
Net income	10,518		12,314		19,214		24,780
Net income attributable to non-controlling interests	(589)		(807)		(1,143)		(1,632)
Net Income Attributable to Retail Opportunity Investments Corp.	$	9,929	$	11,507	$	18,071	$	23,148

Earnings per share – basic and diluted	$	0.08	$	0.09	$	0.14	$	0.19



Dividends per common share	$	0.15	$	0.13	$	0.30	$	0.26

Comprehensive income:
Net income	$	10,518	$	12,314	$	19,214	$	24,780
Other comprehensive income:
Unrealized swap derivative gain arising during the period	1,657		235		1,668		1,043
Reclassification adjustment for amortization of interest expense included in net income	(251)		932		(267)		2,327
Other comprehensive income:	1,406		1,167		1,401		3,370
Comprehensive income	11,924		13,481		20,615		28,150
Comprehensive income attributable to non-controlling interests	(667)		(884)		(1,221)		(1,853)
Comprehensive income attributable to Retail Opportunity Investments Corp.	$	11,257	$	12,597	$	19,394	$	26,297

See accompanying notes to consolidated financial statements.

- 2 -

RETAIL OPPORTUNITY INVESTMENTS CORP.

Consolidated Statements of Equity

(Unaudited)

(In thousands, except share data)


	Common Stock			Additional paid-in capital		Accumulated dividends in excess of earnings		Accumulated other comprehensive income (loss)		Non- controlling interests		Equity
	Shares	Amount
Balance at December 31, 2022	124,538,811	$	12	$	1,612,126	$	(315,984)	$	14	$	88,430	$	1,384,598
Shares issued under the Equity Incentive Plan	697,691	—		32		—		—		—		32
Shares withheld for employee taxes	(211,615)	—		(3,181)		—		—		—		(3,181)

Stock based compensation expense	—	—		2,840		—		—		87		2,927



Adjustment to non-controlling interests ownership in Operating Partnership	—	—		343		—		—		(343)		—


Registration expenditures	—	—		(10)		—		—		—		(10)
Cash dividends ($0.15 per share)	—	—		—		(18,753)		—		(1,267)		(20,020)
Dividends payable to officers	—	—		—		(91)		—		(52)		(143)
Net income attributable to Retail Opportunity Investments Corp.	—	—		—		8,142		—		—		8,142
Net income attributable to non-controlling interests	—	—		—		—		—		554		554
Other comprehensive loss	—	—		—		—		(5)		—		(5)
Balance at March 31, 2023	125,024,887	$	12	$	1,612,150	$	(326,686)	$	9	$	87,409	$	1,372,894
Shares issued under the Equity Incentive Plan	1,000	—		—		—		—		—		—
Shares withheld for employee taxes	(8,667)	—		(110)		—		—		—		(110)
Cancellation of restricted stock	(23,425)	—		—		—		—		—		—
Stock based compensation expense	—	—		2,761		—		—		669		3,430

Redemption of OP Units	1,010,000	1		13,388		—		—		(13,389)		—

Adjustment to non-controlling interests ownership in Operating Partnership	—	—		(2,486)		—		—		2,486		—


Registration expenditures	—	—		(36)		—		—		—		(36)
Cash dividends ($0.15 per share)	—	—		—		(18,899)		—		(1,116)		(20,015)
Dividends payable to officers	—	—		—		(99)		—		(57)		(156)
Net income attributable to Retail Opportunity Investments Corp.	—	—		—		9,929		—		—		9,929
Net income attributable to non-controlling interests	—	—		—		—		—		589		589
Other comprehensive income	—	—		—		—		1,328		78		1,406
Balance at June 30, 2023	126,003,795	$	13	$	1,625,667	$	(335,755)	$	1,337	$	76,669	$	1,367,931

- 3 -

RETAIL OPPORTUNITY INVESTMENTS CORP.

Consolidated Statements of Equity (continued)

(Unaudited)

(In thousands, except share data)


	Common Stock			Additional paid-in capital		Accumulated dividends in excess of earnings		Accumulated other comprehensive (loss) income		Non- controlling interests		Equity
	Shares	Amount
Balance at December 31, 2021	122,685,266	$	12	$	1,577,837	$	(297,801)	$	(3,154)	$	89,459	$	1,366,353
Shares issued under the Equity Incentive Plan	406,106	—		302		—		—		—		302
Shares withheld for employee taxes	(122,658)	—		(2,405)		—		—		—		(2,405)
Cancellation of restricted stock	(10,649)	—		—		—		—		—		—
Stock based compensation expense	—	—		2,572		—		—		—		2,572

Redemption of OP Units	50,000	—		978		—		—		(978)		—

Adjustment to non-controlling interests ownership in Operating Partnership	—	—		(2,668)		—		—		2,668		—
Proceeds from the issuance of common stock	724,279	—		14,211		—		—		—		14,211

Registration expenditures	—	—		(172)		—		—		—		(172)
Cash dividends ($0.13 per share)	—	—		—		(16,009)		—		(1,130)		(17,139)
Dividends payable to officers	—	—		—		(110)		—		—		(110)
Net income attributable to Retail Opportunity Investments Corp.	—	—		—		11,641		—		—		11,641
Net income attributable to non-controlling interests	—	—		—		—		—		825		825
Other comprehensive income	—	—		—		—		2,059		144		2,203
Balance at March 31, 2022	123,732,344	$	12	$	1,590,655	$	(302,279)	$	(1,095)	$	90,988	$	1,378,281


Cancellation of restricted stock	(1,500)	—		—		—		—		—		—
Stock based compensation expense	—	—		3,028		—		—		—		3,028

Redemption of OP Units	46,840	—		917		—		—		(917)		—

Adjustment to non-controlling interests ownership in Operating Partnership	—	—		(932)		—		—		932		—
Proceeds from the issuance of common stock	563,934	—		10,988		—		—		—		10,988

Registration expenditures	—	—		(161)		—		—		—		(161)
Cash dividends ($0.13 per share)	—	—		—		(16,164)		—		(1,126)		(17,290)
Dividends payable to officers	—	—		—		(103)		—		—		(103)
Net income attributable to Retail Opportunity Investments Corp.	—	—		—		11,507		—		—		11,507
Net income attributable to non-controlling interests	—	—		—		—		—		807		807
Other comprehensive income	—	—		—		—		1,090		77		1,167
Balance at June 30, 2022	124,341,618	$	12	$	1,604,495	$	(307,039)	$	(5)	$	90,761	$	1,388,224

See accompanying notes to consolidated financial statements.

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RETAIL OPPORTUNITY INVESTMENTS CORP.

Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)


	Six Months Ended June 30,
	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	19,214	$	24,780
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	50,230		48,112
Amortization of deferred financing costs and mortgage discounts and premiums, net	1,836		1,213
Straight-line rent adjustment	(1,326)		(1,366)
Amortization of above and below market rent	(5,473)		(6,311)
Amortization relating to stock based compensation	6,357		5,600
Provisions for tenant credit losses	2,009		849
Other noncash interest income	(15)		(28)


Change in operating assets and liabilities:

Tenant and other receivables	(618)		3,486
Prepaid expenses	3,707		3,387
Accounts payable and accrued expenses	(3,124)		(4,574)
Other assets and liabilities, net	375		2,332
Net cash provided by operating activities	73,172		77,480
CASH FLOWS FROM INVESTING ACTIVITIES
Investments in real estate	—		(60,205)



Improvements to properties	(19,132)		(29,074)
Deposits on real estate acquisitions, net	500		—
Proceeds on repayment of mortgage note receivable	45		44

Net cash used in investing activities	(18,587)		(89,235)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal repayments on mortgages	(342)		(23,801)



Proceeds from draws on credit facility	48,000		94,000
Payments on credit facility	(73,000)		(48,000)




Distributions to OP Unitholders	(1,267)		(2,970)
Deferred financing and other costs	(5,716)		—
Proceeds from the sale of common stock	—		25,199

Registration expenditures	(46)		(512)
Dividends paid to common stockholders	(19,049)		(38,059)
Common shares issued under the Equity Incentive Plan	32		302
Shares withheld for employee taxes	(3,291)		(2,405)
Net cash (used in) provided by financing activities	(54,679)		3,754
Net decrease in cash, cash equivalents and restricted cash	(94)		(8,001)
Cash, cash equivalents and restricted cash at beginning of period	7,459		15,363
Cash, cash equivalents and restricted cash at end of period	$	7,365	$	7,362

Other non-cash investing and financing activities:


Increase in intangible lease liabilities	$	—	$	12,959
Increase in interest rate swap asset	$	1,417	$	63
Decrease in interest rate swap liability	$	—	$	(3,336)
Accrued real estate improvement costs	$	7,426	$	8,117
Equity redemption of OP Units	$	13,389	$	1,895

Dividends and distributions payable	$	20,868	$	17,830

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statements of cash flows:


	Six Months Ended June 30,
	2023		2022
Cash and cash equivalents	$	5,296	$	5,632
Restricted cash	2,069		1,730
Total cash, cash equivalents and restricted cash shown in Statements of Cash Flows	$	7,365	$	7,362

See accompanying notes to consolidated financial statements.

- 5 -

RETAIL OPPORTUNITY INVESTMENTS PARTNERSHIP, LP

Consolidated Balance Sheets

(In thousands)


	June 30, 2023 (unaudited)		December 31, 2022
ASSETS
Real Estate Investments:
Land	$	958,397	$	958,236
Building and improvements	2,467,962		2,452,857
	3,426,359		3,411,093
Less: accumulated depreciation	615,501		578,593
	2,810,858		2,832,500
Mortgage note receivable	4,741		4,786
Real Estate Investments, net	2,815,599		2,837,286
Cash and cash equivalents	5,296		5,598
Restricted cash	2,069		1,861
Tenant and other receivables, net	57,336		57,546
Deposits	—		500
Acquired lease intangible assets, net	48,564		52,428
Prepaid expenses	2,251		5,957
Deferred charges, net	30,011		26,683
Other assets	17,433		16,420
Total assets	$	2,978,559	$	3,004,279

LIABILITIES AND CAPITAL
Liabilities:
Term loan	$	299,435	$	299,253
Credit facility	63,000		88,000
Senior Notes	947,673		946,849
Mortgage notes payable	60,486		60,917
Acquired lease intangible liabilities, net	145,685		152,117
Accounts payable and accrued expenses	43,733		22,885
Tenants’ security deposits	7,894		7,701
Other liabilities	42,722		41,959
Total liabilities	1,610,628		1,619,681

Commitments and contingencies



Capital:
Partners’ capital, unlimited partnership units authorized:
ROIC capital	1,289,925		1,296,154
Limited partners’ capital	76,590		88,429
Accumulated other comprehensive income	1,416		15
Total capital	1,367,931		1,384,598
Total liabilities and capital	$	2,978,559	$	3,004,279

See accompanying notes to consolidated financial statements.

- 6 -

RETAIL OPPORTUNITY INVESTMENTS PARTNERSHIP, LP

Consolidated Statements of Operations and Comprehensive Income

(Unaudited)

(In thousands, except unit data)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenues
Rental revenue	$	79,630	$	77,218	$	158,629	$	152,255

Other income	2,410		1,007		2,707		2,443
Total revenues	82,040		78,225		161,336		154,698

Operating expenses
Property operating	13,581		12,672		27,783		24,763
Property taxes	8,924		8,416		17,768		16,936
Depreciation and amortization	25,126		24,350		50,230		48,112
General and administrative expenses	5,776		5,702		11,096		10,942

Other expense	482		488		654		667
Total operating expenses	53,889		51,628		107,531		101,420



Operating income	28,151		26,597		53,805		53,278

Non-operating expenses
Interest expense and other finance expenses	(17,633)		(14,283)		(34,591)		(28,498)
Net Income Attributable to Retail Opportunity Investments Partnership, LP	$	10,518	$	12,314	$	19,214	$	24,780

Earnings per unit - basic and diluted	$	0.08	$	0.09	$	0.14	$	0.19



Distributions per unit	$	0.15	$	0.13	$	0.30	$	0.26

Comprehensive income:
Net income attributable to Retail Opportunity Investments Partnership, LP	$	10,518	$	12,314	$	19,214	$	24,780
Other comprehensive income:
Unrealized swap derivative gain arising during the period	1,657		235		1,668		1,043
Reclassification adjustment for amortization of interest expense included in net income	(251)		932		(267)		2,327
Other comprehensive income:	1,406		1,167		1,401		3,370
Comprehensive income attributable to Retail Opportunity Investments Partnership, LP	$	11,924	$	13,481	$	20,615	$	28,150

See accompanying notes to consolidated financial statements.

- 7 -

RETAIL OPPORTUNITY INVESTMENTS PARTNERSHIP, LP

Consolidated Statements of Partners’ Capital

(Unaudited)

(In thousands, except unit data)


	Limited Partner’s Capital (1)			ROIC Capital (2)			Accumulated other comprehensive income (loss)
	Units	Amount		Units	Amount				Capital
Balance at December 31, 2022	8,447,117	$	88,429	124,538,811	$	1,296,154	$	15	$	1,384,598
OP Units issued under the Equity Incentive Plan	—	—		697,691	32		—		32
OP Units withheld for employee taxes	—	—		(211,615)	(3,181)		—		(3,181)

Stock based compensation expense	—	87		—	2,840		—		2,927



Adjustment to non-controlling interests ownership in Operating Partnership	—	(343)		—	343		—		—


Registration expenditures	—	—		—	(10)		—		(10)
Cash distributions ($0.15 per unit)	—	(1,267)		—	(18,753)		—		(20,020)
Distributions payable to officers	—	(52)		—	(91)		—		(143)
Net income attributable to Retail Opportunity Investments Partnership, LP	—	554		—	8,142		—		8,696
Other comprehensive loss	—	—		—	—		(5)		(5)
Balance at March 31, 2023	8,447,117	$	87,408	125,024,887	$	1,285,476	$	10	$	1,372,894
OP Units issued under the Equity Incentive Plan	—	—		1,000	—		—		—
OP Units withheld for employee taxes	—	—		(8,667)	(110)		—		(110)
Cancellation of OP Units	—	—		(23,425)	—		—		—
Stock based compensation expense	—	669		—	2,761		—		3,430

Equity redemption of OP Units	(1,010,000)	(13,389)		1,010,000	13,389		—		—

Adjustment to non-controlling interests ownership in Operating Partnership	—	2,486		—	(2,486)		—		—

Registration expenditures	—	—		—	(36)		—		(36)
Cash distributions ($0.15 per unit)	—	(1,116)		—	(18,899)		—		(20,015)
Distributions payable to officers	—	(57)		—	(99)		—		(156)
Net income attributable to Retail Opportunity Investments Partnership, LP	—	589		—	9,929		—		10,518
Other comprehensive income	—	—		—	—		1,406		1,406
Balance at June 30, 2023	7,437,117	$	76,590	126,003,795	$	1,289,925	$	1,416	$	1,367,931

- 8 -

RETAIL OPPORTUNITY INVESTMENTS PARTNERSHIP, LP

Consolidated Statements of Partners’ Capital (continued)

(Unaudited)

(In thousands, except unit data)


	Limited Partner’s Capital (1)			ROIC Capital (2)			Accumulated other comprehensive (loss) income
	Units	Amount		Units	Amount				Capital
Balance at December 31, 2021	8,542,097	$	89,680	122,685,266	$	1,280,048	$	(3,375)	$	1,366,353
OP Units issued under the Equity Incentive Plan	201,860	—		406,106	302		—		302
OP Units withheld for employee taxes	—	—		(122,658)	(2,405)		—		(2,405)
Cancellation of OP Units	—	—		(10,649)	—		—		—
Stock based compensation expense	—	—		—	2,572		—		2,572

Equity redemption of OP Units	(50,000)	(978)		50,000	978		—		—

Adjustment to non-controlling interests ownership in Operating Partnership	—	2,668		—	(2,668)		—		—
Issuance of OP Units in connection with sale of common stock	—	—		724,279	14,211		—		14,211

Registration expenditures	—	—		—	(172)		—		(172)
Cash distributions ($0.13 per unit)	—	(1,130)		—	(16,009)		—		(17,139)
Distributions payable to officers	—	—		—	(110)		—		(110)
Net income attributable to Retail Opportunity Investments Partnership, LP	—	825		—	11,641		—		12,466
Other comprehensive income	—	—		—	—		2,203		2,203
Balance at March 31, 2022	8,693,957	$	91,065	123,732,344	$	1,288,388	$	(1,172)	$	1,378,281


Cancellation of OP Units	—	—		(1,500)	—		—		—
Stock based compensation expense	—	—		—	3,028		—		3,028

Equity redemption of OP Units	(46,840)	(917)		46,840	917		—		—

Adjustment to non-controlling interests ownership in Operating Partnership	—	932		—	(932)		—		—
Issuance of OP Units in connection with sale of common stock	—	—		563,934	10,988		—		10,988

Registration expenditures	—	—		—	(161)		—		(161)
Cash distributions ($0.13 per unit)	—	(1,126)		—	(16,164)		—		(17,290)
Distributions payable to officers	—	—		—	(103)		—		(103)
Net income attributable to Retail Opportunity Investments Partnership, LP	—	807		—	11,507		—		12,314
Other comprehensive income	—	—		—	—		1,167		1,167
Balance at June 30, 2022	8,647,117	$	90,761	124,341,618	$	1,297,468	$	(5)	$	1,388,224

_________________________________

1.Consists of limited partnership interests held by third parties.

2.Consists of general and limited partnership interests held by ROIC.

See accompanying notes to consolidated financial statements.

- 9 -

RETAIL OPPORTUNITY INVESTMENTS PARTNERSHIP, LP

Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)


	Six Months Ended June 30,
	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	19,214	$	24,780
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	50,230		48,112
Amortization of deferred financing costs and mortgage discounts and premiums, net	1,836		1,213
Straight-line rent adjustment	(1,326)		(1,366)
Amortization of above and below market rent	(5,473)		(6,311)
Amortization relating to stock based compensation	6,357		5,600
Provisions for tenant credit losses	2,009		849
Other noncash interest income	(15)		(28)


Change in operating assets and liabilities:

Tenant and other receivables	(618)		3,486
Prepaid expenses	3,707		3,387
Accounts payable and accrued expenses	(3,124)		(4,574)
Other assets and liabilities, net	375		2,332
Net cash provided by operating activities	73,172		77,480
CASH FLOWS FROM INVESTING ACTIVITIES
Investments in real estate	—		(60,205)



Improvements to properties

RETAIL OPPORTUNITY INVESTMENTS CORP [ROIC] Filings
10-Q	[2023-07-26]
10-Q	[2023-04-26]
10-K	[2023-02-16]
10-Q	[2022-10-26]
10-Q	[2022-07-27]
10-Q	[2022-04-26]
10-K	[2022-02-17]
10-Q	[2021-10-27]
10-Q	[2021-07-29]
10-Q	[2021-04-28]
10-K	[2021-02-24]
10-Q	[2020-10-27]
10-Q	[2020-07-30]
10-Q	[2020-04-23]
10-K	[2020-02-19]
10-Q	[2019-10-29]
10-Q	[2019-07-25]
10-Q	[2019-04-25]
10-K	[2019-02-20]
10-Q	[2018-10-24]
10-Q	[2018-07-26]
10-Q	[2018-04-26]
10-K	[2018-02-22]
10-Q	[2017-10-25]
10-Q	[2017-07-27]
10-Q	[2017-04-27]
10-K	[2017-02-23]
10-Q	[2016-10-26]
10-Q	[2016-07-28]
10-Q	[2016-04-28]
10-K	[2016-02-24]
10-Q	[2015-10-29]
10-Q	[2015-07-30]
10-Q	[2015-04-30]
10-K	[2015-02-25]
10-Q	[2014-10-30]
10-Q	[2014-07-31]
10-Q	[2014-05-01]
10-K	[2014-02-25]
10-Q	[2013-10-31]
10-Q	[2013-08-02]
10-Q	[2013-05-03]
10-K	[2013-02-27]
10-Q	[2012-11-05]
10-Q	[2012-08-03]
10-Q	[2012-05-04]
10-K	[2012-02-28]