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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
 
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2019

or
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from           to         

RETAIL OPPORTUNITY INVESTMENTS CORP.
(Exact name of registrant as specified in its charter)
Commission file number:  001-33749
 
RETAIL OPPORTUNITY INVESTMENTS PARTNERSHIP, LP
(Exact name of registrant as specified in its charter)
Commission file number:  333-189057-01


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
San Diego,California92130
(Address of Principal Executive Offices)(Zip Code)
(858) 677-0900
(Registrant’s telephone number, including area code)
 
Securities Registered Pursuant to Section 12(g) of the Act:
 
Retail Opportunity Investments Corp.                                    None
Retail Opportunity Investments Partnership, LP                    None
 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.   
Retail Opportunity Investments Corp.YesNo
Retail Opportunity Investments Partnership, LPYesNo
 
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.   
Retail Opportunity Investments Corp.YesNo
Retail Opportunity Investments Partnership, LPYesNo
 
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.YesNo
Retail Opportunity Investments Partnership, LPYesNo

Indicate by check mark whether the registrant has submitted electronically, if any, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   
Retail Opportunity Investments Corp.YesNo
Retail Opportunity Investments Partnership, LPYesNo
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or 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.  (Check one):
 
Retail Opportunity Investments Corp. 
Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting company
Emerging growth companyIf 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 filerAccelerated filerNon-accelerated filerSmaller reporting company
Emerging growth companyIf 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.

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.YesNo
Retail Opportunity Investments Partnership, LPYesNo
 
Securities registered pursuant to Section 12(b) of the Act:
Name of RegistrantTitle of each classTrading SymbolName of each exchange on which registered
Retail Opportunity Investments Corp.Common Stock, par value $0.0001 per shareROICNASDAQ
Retail Opportunity Investments Partnership, LPNoneNoneNone

The aggregate market value of the common equity held by non-affiliates of Retail Opportunity Investments Corp. as of June 30, 2019, the last business day of its most recently completed second fiscal quarter, was $1.9 billion (based on the closing sale price of $17.13 per share of Retail Opportunity Investments Corp. common stock on that date as reported on the NASDAQ Global Select Market).
 
There is no public trading market for the operating partnership units of Retail Opportunity Investments Partnership, LP. As a result the aggregate market value of common equity securities held by non-affiliates of this registrant cannot be determined.
 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date: 116,455,432 shares of common stock, par value $0.0001 per share, of Retail Opportunity Investments Corp. outstanding as of February 14, 2020.
 
DOCUMENTS INCORPORATED BY REFERENCE
 
Portions of Retail Opportunity Investments Corp.’s definitive proxy statement for its 2020 Annual Meeting, to be filed within 120 days after its fiscal year, are incorporated by reference into Part III of this Annual Report on Form 10-K.
1


EXPLANATORY PARAGRAPH
 
This report combines the annual reports on Form 10-K for the year ended December 31, 2019 of Retail Opportunity Investments Corp., a Maryland corporation (“ROIC”), and Retail Opportunity Investments Partnership, LP, a Delaware limited partnership (the “Operating Partnership”) of which Retail Opportunity Investments Corp. is the parent company and through its wholly owned subsidiary, acts as 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 Retail Opportunity Investments Partnership, LP. 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 December 31, 2019, ROIC owned an approximate 91.3% 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. Through this subsidiary, ROIC has full and complete authority and control over the Operating Partnership’s business.
 
The Company believes that combining the annual reports on Form 10-K 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 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 assets are its 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 and through Retail Opportunity Investments Partnership GP, LLC as the sole general partner of the Operating Partnership. 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 Company conducts its business through the Operating Partnership, which 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”) of the Operating Partnership.
 
Non-controlling interests is the primary 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 Partnership.
 
This report also includes separate Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources, Item 9A. 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.


3


RETAIL OPPORTUNITY INVESTMENTS CORP.
   
TABLE OF CONTENTS
   
  Page

4


Statements Regarding Forward-Looking Information

When used in this discussion and elsewhere in this Annual Report on Form 10-K, the words “believes,” “anticipates,” “projects,” “should,” “estimates,” “expects,” and similar expressions are intended to identify forward-looking statements with the meaning of that term in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and in Section 21F of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  Actual results may differ materially due to uncertainties including:
 
the Company’s ability to identify and acquire retail real estate that meet its investment standards in its markets;

the level of rental revenue the Company achieves from its assets;

the market value of the Company’s assets and the supply of, and demand for, the retail real estate in which it invests;

the state of the U.S. economy generally, or in specific geographic regions;

the impact of economic conditions on the Company’s business;

the conditions in the local markets in which the Company operates and its concentration in those markets, as well as changes in national economic and market conditions; 

consumer spending and confidence trends;

the Company’s ability to enter into new leases or to renew leases with existing tenants at the properties it owns or acquires at favorable rates;

the Company’s ability to anticipate changes in consumer buying practices and the space needs of tenants;

the competitive landscape impacting the properties the Company owns or acquires and their tenants;

the Company’s relationships with its tenants and their financial condition and liquidity;

ROIC’s ability to continue to qualify as a real estate investment trust for U.S. federal income tax (a “REIT”);

the Company’s use of debt as part of its financing strategy and its ability to make payments or to comply with any covenants under its senior unsecured notes, its unsecured credit facilities or other debt facilities it currently has or subsequently obtains;

the Company’s level of operating expenses, including amounts it is required to pay to its management team;

changes in interest rates that could impact the market price of ROIC’s common stock and the cost of the Company’s borrowings; and

legislative and regulatory changes (including changes to laws governing the taxation of REITs).
 
Forward-looking statements are based on estimates as of the date of this Annual Report on Form 10-K.  The Company disclaims any obligation to publicly release the results of any revisions to these forward-looking statements reflecting new estimates, events or circumstances after the date of this Annual Report on Form 10-K.
 
The risks included here are not exhaustive.  Other sections of this Annual Report on Form 10-K may include additional factors that could adversely affect the Company’s business and financial performance.  Moreover, the Company operates in a very competitive and rapidly changing environment.  New risk factors emerge from time to time and it is not possible for management to predict all such risk factors, nor can it assess the impact of all such risk factors on the Company’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.  Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.


5


PART I
 
In this Annual Report on Form 10-K, unless otherwise indicated or the context requires otherwise, all references to “the Company,” “we,” “us,” “our,” or “our company” refer to ROIC together with its consolidated subsidiaries, including the Operating Partnership.
 
Item 1.  Business
 
Overview
 
Retail Opportunity Investments Corp., a Maryland corporation (“ROIC”) commenced operations in October 2009 as a fully integrated, self-managed REIT, and as of December 31, 2019, ROIC owned an approximate 91.3% partnership interest and other limited partners owned the remaining 8.7% partnership interest in the Operating Partnership.  The Company specializes in the acquisition, ownership and management of necessity-based community and neighborhood shopping centers on the west coast of the United States, anchored by supermarkets and drugstores.  The Company 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 sole general partner of, and ROIC conducts substantially all of its business through, its operating partnership, Retail Opportunity Investments Partnership, LP, a Delaware limited partnership (the “Operating Partnership”), together with its subsidiaries. As of December 31, 2019, the Company’s portfolio consisted of 89 properties (88 retail and one office) totaling approximately 10.1 million square feet of gross leasable area (“GLA”).
 
ROIC’s only material assets are its 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 and through this subsidiary, acts as the sole general partner of the Operating Partnership. 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”) of the Operating Partnership.
 
Investment Strategy
 
The Company seeks to acquire shopping centers located in densely populated, supply-constrained metropolitan markets on the west coast of the United States, which exhibit income and population growth and high barriers to entry.  The Company’s senior management team has operated in the Company’s markets for over 30 years and has established an extensive network of relationships in these markets with key institutional and private property owners, brokers and financial institutions and other real estate operators.  The Company’s in-depth local and regional market knowledge and expertise provides a distinct competitive advantage in identifying and accessing attractive acquisition opportunities, including properties that are not widely marketed.
 
The Company seeks to acquire high quality necessity-based community and neighborhood shopping centers anchored by national and regional supermarkets and drugstores that are well-leased, with stable cash flows.  Additionally, the Company acquires shopping centers which it believes are candidates for attractive near-term re-tenanting or present other value-enhancement opportunities.
 
Upon acquiring a shopping center, the Company normally commences leasing initiatives aimed at enhancing long-term value through re-leasing below market space and improving the tenant mix.  The Company focuses on leasing to retailers that provide necessity-based, non-discretionary goods and services, catering to the basic and daily needs of the surrounding community, a majority of which are destination-based and therefore more resistant to competition from e-commerce than other types of retailers. The Company believes necessity-based retailers draw consistent, regular traffic to its shopping centers, which results in stronger sales for its tenants and a more consistent revenue base.  Additionally, the Company seeks to maintain a strong and diverse tenant base with a balance of large, long-term leases to major national and regional retailers, including supermarkets, drugstores and discount stores, with small, shorter-term leases to a broad mix of national, regional and local retailers.  The Company believes the long-term anchor tenants provide a reliable, stable base of rental revenue, while the shorter-term leases afford the Company the opportunity to drive rental growth, as well as the ongoing flexibility to adapt to evolving consumer trends.

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The Company believes that the current market environment continues to present opportunities for it to further build its portfolio and add additional necessity-based community and neighborhood shopping centers that meet its investment profile.  The Company’s long-term objective is to prudently build and maintain a diverse portfolio of necessity-based community and neighborhood shopping centers aimed at providing stockholders with sustainable, long-term growth and value through all economic cycles.
 
In implementing its investment strategy and selecting an asset for acquisition, the Company analyzes the fundamental qualities of the asset, the inherent strengths and weaknesses of its market, sub-market drivers and trends, and potential risks and risk mitigants facing the property.  The Company believes that its acquisition process and operational expertise provide it with the capability to identify and properly underwrite investment opportunities.
 
The Company’s aim is to seek to provide diversification of assets, tenant exposures, lease terms and locations in its portfolio.  In order to capitalize on the changing sets of investment opportunities that may be present in the various points of an economic cycle, the Company may expand or refocus its investment strategy.  The Company’s investment strategy may be amended from time to time, if approved by its board of directors.  The Company is not required to seek stockholder approval when amending its investment strategy.
 
Transactions During 2019
 
Investing Activity
 
Property Asset Acquisitions
 
On December 13, 2019, the Company acquired the property known as Summerwalk Village located in Lacey, Washington, within the Seattle metropolitan area, for an adjusted purchase price of approximately $11.6 million. Summerwalk Village is approximately 58,000 square feet and is anchored by Walmart Neighborhood Market. The property was acquired with borrowings under the credit facility.

Property Asset Dispositions

On February 15, 2019, the Company sold Vancouver Market Center, a non-core shopping center located in Vancouver, Washington. The sales price of $17.0 million, less costs to sell, resulted in net proceeds of approximately $16.0 million. The Company recorded a gain on sale of real estate of approximately $2.6 million during the year ended December 31, 2019 related to this property disposition.

On May 1, 2019, the Company sold Norwood Shopping Center, a non-core shopping center located in Sacramento, California for a sales price of $13.5 million. In connection with the sale of this property, the Company entered into a $13.3 million mortgage note with the buyer. The mortgage note is a four year interest only note whereby the interest rate increases 1% annually from 3% to 6%. The Company recorded a gain on sale of real estate of approximately $180,000 during the year ended December 31, 2019 related to this property disposition.

On August 1, 2019, the Company sold Morada Ranch, a non-core shopping center located in Stockton, California. The sales price of $30.0 million, less costs to sell, resulted in net proceeds of approximately $29.1 million. The Company recorded a gain on sale of real estate of approximately $10.4 million during year ended December 31, 2019 related to this property disposition.

On December 12, 2019, the Company sold Mission Foothill Marketplace, located in Mission Viejo, California, as a redevelopment property. The Company retained ownership of two retail pads that will be the gateway to the buyer's planned single-family and townhome community. The sales price of approximately $13.6 million, less costs to sell, resulted in net proceeds of approximately $13.5 million.

The Company used the proceeds from the above property asset dispositions to pay down its credit facility.
 
Financing Activities
 
The Company employs prudent amounts of leverage and uses debt as a means of providing funds for the acquisition of its properties and the diversification of its portfolio.  The Company seeks to primarily utilize unsecured debt in order to maintain liquidity and flexibility in its capital structure.
 

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Term Loan and Credit Facility
 
The Company has an unsecured term loan agreement with several banks under which the lenders agreed to provide a $300.0 million unsecured term loan facility. Effective December 20, 2019, the Company entered into the First Amendment to First Amended and Restated Term Loan Agreement (as amended, the “Term Loan Agreement”) pursuant to which the maturity date of the term loan was extended from September 8, 2022 to January 20, 2025, without further options for extension. The Term Loan Agreement also provides that the Company may from time to time request increased aggregate commitments of $200.0 million under certain conditions set forth in the Term Loan Agreement, including the consent of the lenders for the additional commitments. Borrowings under the Term Loan Agreement accrue interest on the outstanding principal amount 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 U.S. dollar deposits for the relevant period (the “Eurodollar Rate”), 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 the Administrative Agent as its “prime rate,” and (c) the Eurodollar Rate plus 1.00%.
 
The Operating Partnership has an unsecured revolving credit facility with several banks. Effective December 20, 2019, the Company entered into the First Amendment to Second Amended and Restated Credit Agreement (as amended, the “Credit Facility Agreement”) pursuant to which the borrowing capacity under the credit facility is $600.0 million. The maturity date of the credit facility was extended from September 8, 2021 to February 20, 2024, with two six-month extension options, which may be exercised by the Operating Partnership upon satisfaction of certain conditions including the payment of extension fees. Additionally, the credit facility contains an accordion feature, which allows the Operating Partnership to increase the borrowing capacity up to an aggregate of $1.2 billion, subject to lender consents and other conditions. Borrowings under the credit facility accrue interest on the outstanding principal amount at a rate equal to an applicable rate based on the credit rating level of the Company, plus, as applicable, (i) the Eurodollar Rate, 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 as its “prime rate,” and (c) the Eurodollar Rate plus 0.90%. Additionally, the Operating Partnership is obligated to pay a facility fee at a rate based on the credit rating level of the Company, currently 0.20%, and a fronting fee at a rate of 0.125% per year with respect to each letter of credit issued under the credit facility. The Company has investment grade credit ratings from Moody’s Investors Service (Baa2) and Standard & Poor’s Ratings Services (BBB-).
 
Both the term loan and credit facility contain customary representations, financial and other covenants. The Operating Partnership’s ability to borrow under the term loan and credit facility are subject to its compliance with financial covenants and other restrictions on an ongoing basis. The Operating Partnership was in compliance with such covenants at December 31, 2019.
 
As of December 31, 2019, $300.0 million and $84.0 million were outstanding under the term loan and credit facility, respectively. The weighted average interest rates on the term loan and the credit facility during the year ended December 31, 2019 were 3.4% and 3.3%, respectively. As discussed in Note 11 of the accompanying financial statements, the Company uses interest rate swaps to manage its interest rate risk and accordingly, the swapped interest rate on the term loan is 3.0%. The Company had no available borrowings under the term loan at December 31, 2019. The Company had $516.0 million available to borrow under the credit facility at December 31, 2019.

ATM Equity Offering
 
On May 1, 2018, ROIC entered into five separate Sales Agreements (the “Sales Agreements”) with each of Capital One Securities, Inc., Jefferies LLC, KeyBanc Capital Markets Inc., Raymond James & Associates, Inc., and Robert W. Baird & Co. Incorporated (each individually, an “Agent” and collectively, the “Agents”) pursuant to which ROIC may sell, from time to time, shares of ROIC’s common stock, par value $0.0001 per share, having an aggregate offering price of up to $250.0 million through the Agents either as agents or principals.

During the year ended December 31, 2019, ROIC sold a total of 1,861,036 shares under the Sales Agreements, which resulted in gross proceeds of approximately $34.2 million and commissions of approximately $342,000 paid to the Agents.
 
The Company plans to finance future acquisitions through a combination of operating cashflow, borrowings under the credit facility, the assumption of existing mortgage debt, the issuance of equity securities including OP Units, equity and debt offerings, and the potential sale of existing assets.
 

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Business Segments
 
The Company’s primary business is the ownership, management, and redevelopment of retail real estate properties. The Company reviews operating and financial information for each property on an individual basis and therefore, each property represents an individual operating segment. The Company evaluates financial performance using property operating income, defined as operating revenues (base rent and recoveries from tenants), less property and related expenses (property operating expenses and property taxes). The Company has aggregated the properties into one reportable segment as the properties share similar long-term economic characteristics and have other similarities including the fact that they are operated using consistent business strategies, are typically located in major metropolitan areas, and have similar tenant mixes.
 
Regulation
 
The following discussion describes certain material U.S. federal laws and regulations that may affect the Company’s operations and those of its tenants.  However, the discussion does not address state laws and regulations, except as otherwise indicated.  These state laws and regulations, like the U.S. federal laws and regulations, could affect the Company’s operations and those of its tenants.
 
Generally, real estate properties are subject to various laws, ordinances and regulations.  Changes in any of these laws or regulations, such as the Comprehensive Environmental Response and Compensation, and Liability Act of 1980, as amended, increase the potential liability for environmental conditions or circumstances existing or created by tenants or others on the properties.  In addition, laws affecting development, construction, operation, upkeep, safety and taxation requirements may result in significant unanticipated expenditures, loss of real estate property sites or other impairments, which would adversely affect its cash flows from operating activities.
 
Under the Americans with Disabilities Act of 1990 (the “Americans with Disabilities Act”) all places of public accommodation are required to meet certain U.S. federal requirements related to access and use by disabled persons.  A number of additional U.S. federal, state and local laws also exist that may require modifications to properties, or restrict certain further renovations thereof, with respect to access thereto by disabled persons.  Noncompliance with the Americans with Disabilities Act could result in the imposition of fines or an award of damages to private litigants and also could result in an order to correct any non-complying feature and in substantial capital expenditures.  To the extent the Company’s properties are not in compliance, the Company may incur additional costs to comply with the Americans with Disabilities Act.
 
Property management activities are often subject to state real estate brokerage laws and regulations as determined by the particular real estate commission for each state.
 
Environmental Matters
 
Pursuant to U.S. federal, state and local environmental laws and regulations, a current or previous owner or operator of real property may be required to investigate, remove and/or remediate a release of hazardous substances or other regulated materials at or emanating from such property.  Further, under certain circumstances, such owners or operators of real property may be held liable for property damage, personal injury and/or natural resource damage resulting from or arising in connection with such releases.  Certain of these laws have been interpreted to be joint and several unless the harm is divisible and there is a reasonable basis for allocation of responsibility.  The failure to properly remediate the property may also adversely affect the owner’s ability to lease, sell or rent the property or to borrow funds using the property as collateral.
 
In connection with the ownership, operation and management of the Company’s current properties and any properties that it may acquire and/or manage in the future, the Company could be legally responsible for environmental liabilities or costs relating to a release of hazardous substances or other regulated materials at or emanating from such property.  In order to assess the potential for such liability, the Company conducts an environmental assessment of each property prior to acquisition and manages its properties in accordance with environmental laws while it owns or operates them.  All of its leases contain a comprehensive environmental provision that requires tenants to conduct all activities in compliance with environmental laws and to indemnify the owner for any harm caused by the failure to do so.  In addition, the Company has engaged qualified, reputable and adequately insured environmental consulting firms to perform environmental site assessments of its properties and is not aware of any environmental issues that are expected to materially impact the financial condition of the Company.
 
Competition
 
The Company believes that competition for the acquisition, operation and development of retail properties is highly fragmented.  The Company competes with numerous owners, operators and developers for acquisitions and development of
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retail properties, including institutional investors, other REITs and other owner-operators of necessity-based community and neighborhood shopping centers, primarily anchored by supermarkets and drugstores, some of which own or may in the future own properties similar to the Company’s in the same markets in which its properties are located.  The Company also faces competition in leasing available space to prospective tenants at its properties.  The actual competition for tenants varies depending upon the characteristics of each local market (including current economic conditions) in which the Company owns and manages property.  The Company believes that the principal competitive factors in attracting tenants in its market areas are location, demographics, price, the presence of anchor stores and the appearance of properties.
 
Many of the Company’s competitors are substantially larger and have considerably greater financial, marketing and other resources than the Company.  Other entities may raise significant amounts of capital and may have investment objectives that overlap with those of the Company, which may create additional competition for opportunities to acquire assets.  In the future, competition from these entities may reduce the number of suitable investment opportunities offered to the Company or increase the bargaining power of property owners seeking to sell.  Further, as a result of their greater resources, such entities may have more flexibility than the Company does in their ability to offer rental concessions to attract tenants.  If the Company’s competitors offer space at rental rates below current market rates, or below the rental rates the Company currently charges its tenants, the Company may lose potential tenants and it may be pressured to reduce its rental rates below those it currently charges in order to retain tenants when its tenants’ leases expire.
 
Employees
 
As of December 31, 2019, the Company had 73 employees, including 20 maintenance employees at its shopping centers and three executive officers, one of whom is also a member of its board of directors.
 
Available Information
 
The Company files its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports with the Securities and Exchange Commission (the “SEC”).  The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.  The Company’s website is www.roireit.net.  The Company’s reports on Forms 10-K, 10-Q and 8-K, and all amendments to those reports are available free of charge on its Website as soon as reasonably practicable after the reports and amendments are electronically filed with or furnished to the SEC.  The contents of the Company’s website are not incorporated by reference herein.
 
Item 1A.  Risk Factors
 
Risks Related to the Company’s Business and Operations
 
There are risks relating to investments in real estate.
 
Real property investments are subject to varying degrees of risk.  Real estate values are affected by a number of factors, including:  changes in the general economic climate, local conditions (such as an oversupply of space or a reduction in demand for real estate in an area), the quality and philosophy of management, competition from other available space, the ability of the owner to provide adequate maintenance and insurance and to control variable operating costs, adverse weather conditions, natural disasters, terrorist activities and other factors in the areas in which the properties are located.  Shopping centers, in particular, may be affected by changing perceptions of retailers or shoppers regarding the safety, convenience and attractiveness of the shopping center, increasing consumer purchases through online retail websites and catalogs, the ongoing consolidation in the retail sector and by the overall climate for the retail industry generally.  Real estate values are also affected by such factors as government regulations, interest rate levels, the availability of financing and potential liability under, and changes in, environmental, zoning, tax and other laws.  A significant portion of the Company’s income is derived from rental income from real property.  The Company’s income, cash flow, results of operations, financial condition, liquidity and ability to service its debt obligations could be materially and adversely affected if a significant number of its tenants were unable to meet their obligations, or if it were unable to lease on economically favorable terms a significant amount of space in its properties.  In the event of default by a tenant, the Company may experience delays in enforcing, and incur substantial costs to enforce, its rights as a landlord.  In addition, certain significant expenditures associated with each equity investment (such as mortgage payments, real estate taxes and maintenance costs) are generally not reduced when circumstances cause a reduction in income from the investment.
 

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The Company operates in a highly competitive market and competition may limit its ability to acquire desirable assets and to attract and retain tenants.
 
The Company operates in a highly competitive market.  The Company’s profitability depends, in large part, on its ability to acquire its assets at favorable prices and on trends impacting the retail industry in general, national, regional and local economic conditions, financial condition and operating results of current and prospective tenants and customers, availability and cost of capital, construction and renovation costs, taxes, governmental regulations, legislation and population trends.  Many of the Company’s competitors are substantially larger and have considerably greater financial, marketing and other resources than it does.  Other entities may raise significant amounts of capital and may have investment objectives that overlap with the Company’s.  In addition, the properties that the Company acquires may face competition from similar properties in the same market, as well as from e-commerce websites.  The presence of competitive alternatives affects the Company’s ability to lease space and the level of rents it can obtain. New construction, renovations and expansions at competing sites could also negatively affect the Company’s properties.
 
The Company may change any of its strategies, policies or procedures without stockholder consent, which could materially and adversely affect its business.
 
The Company may change any of its strategies, policies or procedures with respect to acquisitions, asset allocation, growth, operations, indebtedness, financing strategy and distributions, including those related to maintaining its REIT qualification, at any time without the consent of its stockholders, which could result in making acquisitions that are different from, and possibly riskier than, the types of acquisitions described in this Annual Report on Form 10-K.  A change in the Company’s strategy may increase its exposure to real estate market fluctuations, financing risk, default risk and interest rate risk.  Furthermore, a change in the Company’s asset allocation could result in the Company making acquisitions in asset categories different from those described in this Annual Report on Form 10-K.  These changes could materially and adversely affect the Company’s income, cash flow, results of operations, financial condition, liquidity, the ability to service its debt obligations, the market price of its common stock and its ability to pay dividends and other distributions to its stockholders.
 
The Company’s directors are subject to potential conflicts of interest.
 
The Company’s executive officers and directors may face conflicts of interest.  Except for Messrs. Tanz, Haines and Schoebel, none of the Company’s executive officers or directors are required to commit substantially all of their business time to the Company. Also, in the course of their other business activities, the Company’s directors may become aware of investment and business opportunities that may be appropriate for presentation to the Company as well as the other entities with which they are affiliated.  They may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
 
As a result of multiple business affiliations, the Company’s non-management directors may have legal obligations relating to presenting opportunities to acquire one or more properties, portfolios or real estate-related debt investments to other entities.  The Company’s non-management directors (including the Company’s non-executive Chairman) may present such opportunities to the other entities to which they owe pre-existing fiduciary duties before presenting such opportunities to the Company.  In addition, conflicts of interest may arise when the Company’s board of directors evaluates a particular opportunity.
 
Capital markets and economic conditions can materially affect the Company’s financial condition, its results of operations and the value of its assets.
 
There are many factors that can affect the value of the Company’s assets, including the state of the capital markets and economy.  Although there has been improvement in the credit and real estate markets since the great recession, any reduction in available financing may materially and adversely affect the Company’s ability to achieve its financial objectives.  Concern about the stability of the markets generally may limit the Company’s ability and the ability of its tenants to timely refinance maturing liabilities and access the capital markets to meet liquidity needs.  Although the Company will factor in these conditions in acquiring its assets, its long term success depends in part on general economic conditions and the stability and dependability of the financing market for retail real estate.  If the national economy or the local economies in which the Company operates were to experience uncertainty, or if general economic conditions were to worsen, the Company’s income, cash flow, results of operations, financial condition, liquidity, the ability to service its debt obligations, the market price of its common stock and its ability to pay dividends and other distributions to its stockholders could be materially and adversely affected.
 

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Bankruptcy or insolvency of tenants may decrease the Company’s revenues and available cash.
 
In the case of many retail properties, the bankruptcy or insolvency of a major tenant could cause the Company to suffer lower revenues and operational difficulties and could allow other tenants to exercise so-called “kick-out” clauses in their leases and terminate their lease or reduce their rents prior to the normal expiration of their lease terms.  As a result, the bankruptcy or insolvency of major tenants could materially and adversely affect the Company’s income, cash flow, results of operations, financial condition, liquidity, the ability to service its debt obligations, the market price of its common stock and its ability to pay dividends and other distributions to its stockholders.
 
Inflation or deflation may materially and adversely affect the Company’s income, cash flow, results of operations, financial condition, liquidity, the ability to service its debt obligations, the market price of its common stock and its ability to pay dividends and distributions to its stockholders.
 
Increased inflation could have a pronounced negative impact on the Company’s property operating expenses and general and administrative expenses, as these costs could increase at a rate higher than the Company’s rents.  Inflation could also have an adverse effect on consumer spending which could impact the Company’s tenants’ sales and, in turn, the Company’s percentage rents, where applicable, and the willingness and ability of tenants to enter into or renew leases and/or honor their obligations under existing leases.  Conversely, deflation could lead to downward pressure on rents and other sources of income.
 
Compliance or failure to comply with safety regulations and requirements could result in substantial costs.
 
The Company’s properties are subject to various federal, state and local regulatory requirements, such as state and local fire and life safety requirements.  If the Company fails to comply with these requirements, it could incur fines or private damage awards.  The Company does not know whether compliance with the requirements will require significant unanticipated expenditures that could affect its income, cash flow, results of operations, financial condition, liquidity, prospects and ability to service its debt obligations, the market price of its common stock and its ability to pay dividends and other distributions to its stockholders.
 
The Company expects to acquire additional properties and this may create risks.
 
The Company expects to acquire additional properties consistent with its investment strategies.  The Company may not, however, succeed in consummating desired acquisitions on time, within budget or at all.  In addition, the Company may face competition in pursuing acquisition opportunities, which could result in increased acquisition costs.  When the Company does pursue a project or acquisition, it may not succeed in leasing newly acquired properties at rents sufficient to cover its costs of acquisition.  Difficulties in integrating acquisitions may prove costly or time-consuming and could result in poorer than anticipated performance.  The Company may also abandon acquisition opportunities that it has begun pursuing and consequently fail to recover expenses already incurred.  Furthermore, acquisitions of new properties will expose the Company to the liabilities of those properties, including, for example, liabilities for clean-up of disclosed or undisclosed environmental contamination, claims by persons in respect of events transpiring or conditions existing before the Company’s acquisition and claims for indemnification by general partners, directors, officers and others indemnified by the former owners of properties.

In the event we seek to redevelop existing properties, these projects could be subject to delays or other risks and might not yield the returns we anticipate, which would harm our financial condition and operating results.

The Company may selectively engage in redevelopment projects at certain of our properties. To the extent the Company enters into redevelopment projects, it will be subject to a number of risks that could negatively affect its return on investment, financial condition, results of operations and our ability to make distributions to stockholders, including, among others:

higher than anticipated construction costs, including labor and material costs;

delayed ability or inability to reach projected occupancy, rental rates, profitability, and investment return;

timing delays due to weather, labor disruptions, zoning or other regulatory approvals, tenant decision delays, delays in anchor approvals of redevelopment plans, where required, acts of God (such as fires, significant storms, earthquakes or floods) and other factors outside our control, which might make a project less profitable or unprofitable, or delay profitability; and

expenditure of money and time on projects that might be significantly delayed before stabilization.

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If a project is unsuccessful, either because it is not meeting its expectations when operational or was not completed according to the project planning, the Company could lose its investment in the project or have to incur an impairment charge relating to the asset or development which could then adversely impact the Company’s financial condition and operating results.

Factors affecting the general retail environment could adversely affect the financial condition of the Company’s retail tenants and the willingness of retailers to lease space in its shopping centers, and in turn, materially and adversely affect the Company.
 
The Company’s properties are focused on the retail real estate market.  This means that the performance of the Company’s properties will be impacted by general retail market conditions, including the level of consumer spending and consumer confidence, the threat of terrorism and increasing competition from online retail websites and catalog companies.  In addition, the retail business is highly competitive and our tenants may fail to differentiate their shopping experiences, create an attractive value proposition or execute their business strategies. Furthermore, the Company believes that the increase in digital and mobile technology usage has increased the speed of the transition from shopping at physical locations to web-based purchases and that its tenants may be negatively affected by these changing consumer spending habits. These conditions could adversely affect the financial condition of the Company’s retail tenants and the willingness and ability of retailers to lease space, or renew existing leases, in the Company’s shopping centers and to honor their obligations under existing leases, and in turn, materially and adversely affect the Company.

The Company’s growth depends on external sources of capital, which may not be available in the future.
 
In order to maintain its qualification as a REIT, the Company is required under the Code to annually distribute at least 90% of its REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gain.  After the Company invests its cash on hand, it expects to depend primarily on the credit facility and other external financing (including debt and equity financings) to fund the growth of its business.  The Company’s access to debt or equity financing depends on the willingness of third parties to lend or make equity investments and on conditions in the capital markets generally.  As a result of changing economic conditions, the Company may be limited in its ability to obtain additional financing or to refinance existing debt maturities on favorable terms or at all and there can be no assurances as to when financing conditions will improve.
 
The Company does not have a formal policy limiting the amount of debt it may incur and its board of directors may change its leverage policy without stockholder consent, which could result in a different risk profile.
 
Although the Company’s charter and bylaws do not limit the amount of indebtedness the Company can incur, the Company’s policy is to employ prudent amounts of leverage and use debt as a means of providing additional funds for the acquisition of its assets and the diversification of its portfolio.  The amount of leverage the Company will deploy for particular investments will depend upon its management team’s assessment of a variety of factors, which may include the anticipated liquidity and price volatility of the assets in its portfolio, the potential for losses, the availability and cost of financing the assets, the Company’s opinion of the creditworthiness of its financing counterparties, the health of the U.S. economy and commercial mortgage markets, the Company’s outlook for the level, slope and volatility of interest rates, the credit quality of the tenants occupying space at the Company’s properties, and the need for the Company to comply with financial covenants contained in the Company’s credit agreements.  The Company’s board of directors may change its leverage policies at any time without the consent of its stockholders, which could result in an investment portfolio with a different risk profile.
 
The Company could be adversely affected if it or any of its subsidiaries are required to register as an investment company under the Investment Company Act of 1940 as amended (the “1940 Act”).
 
The Company conducts its operations so that neither it, nor the Operating Partnership nor any of the Company’s other subsidiaries, is required to register as investment companies under the 1940 Act.  If the Company, the Operating Partnership or the Company’s other subsidiaries are required to register as an investment company but fail to do so, the unregistered entity would be prohibited from engaging in certain business, and criminal and civil actions could be brought against such entity.  In addition, the contracts of such entity would be unenforceable unless a court required enforcement, and a court could appoint a receiver to take control of the entity and liquidate its business.
 
Real estate investments’ value and income fluctuate due to conditions in the general economy and the real estate business, which may materially and adversely affect the Company’s ability to service its debt and expenses.
 
The value of real estate fluctuates depending on conditions in the general and local economy and the real estate business.  These conditions may also limit the Company’s revenues and available cash.  The rents the Company receives and the occupancy
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levels at its properties may decline as a result of adverse changes in conditions in the general economy and the real estate business.  If rental revenues and/or occupancy levels decline, the Company generally would expect to have less cash available to pay indebtedness and for distribution to its stockholders.  In addition, some of the Company’s major expenses, including mortgage payments, real estate taxes and maintenance costs, generally do not decline when the related rents decline.
 
The lack of liquidity of the Company’s assets could materially and adversely affect the Company’s income, cash flow, results of operations, financial condition, liquidity, the ability to service its debt obligations, the market price of its common stock and its ability to pay dividends and other distributions to its stockholders, and could materially and adversely affect the Company’s ability to value and sell its assets.
 
Real estate investments are relatively difficult to buy and sell quickly.  As a result, the Company expects many of its investments will be illiquid and if it is required to liquidate all or a portion of its portfolio quickly, it may realize significantly less than the value at which it had previously recorded its investments.
 
The Company depends on leasing space to tenants on economically favorable terms and collecting rent from tenants, some of whom may not be able to pay.
 
The Company’s financial results depend significantly on leasing space in its properties to tenants on economically favorable terms.  In addition, as a substantial majority of the Company’s revenue comes from renting real property, the Company’s income, cash flow, results of operations, financial condition, liquidity, the ability to service its debt obligations, the market price of its common stock and its ability to pay dividends and other distributions to its stockholders could be materially and adversely affected if a significant number of its tenants cannot pay their rent or if the Company is not able to maintain occupancy levels on favorable terms.  If a tenant does not pay its rent, the Company may not be able to enforce its rights as landlord without delays and may incur substantial legal costs.

Some of the Company’s properties depend on anchor stores or major tenants to attract shoppers and could be materially and adversely affected by the loss of or a store closure by one or more of these tenants.
 
The Company’s shopping centers are primarily anchored by national and regional supermarkets and drug stores.  The value of the retail properties the Company acquires could be materially and adversely affected if these tenants fail to comply with their contractual obligations, seek concessions in order to continue operations or cease their operations.  Adverse economic conditions may result in the closure of existing stores by tenants which may result in increased vacancies at the Company’s properties.  Any periods of significant vacancies for the Company’s properties could materially and adversely impact the Company’s income, cash flow, results of operations, financial condition, liquidity, the ability to service its debt obligations, the market price of its common stock and its ability to pay dividends and other distributions to its stockholders.
 
Loss of revenues from major tenants could reduce the Company’s income, cash flow, results of operations, financial condition, liquidity, the ability to service its debt obligations, the market price of its common stock and its ability to pay dividends and other distributions to its stockholders.
 
The Company derives significant revenues from anchor tenants such as Albertson’s/Safeway Supermarkets, Kroger Supermarkets and JP Morgan Chase.  As of December 31, 2019, these tenants are the Company’s three largest tenants and accounted for 5.5%, 3.4% and 1.4%, respectively, of its annualized base rent on a pro-rata basis.  The Company’s income, cash flow, results of operations, financial condition, liquidity, the ability to service its debt obligations, the market price of its common stock and its ability to pay dividends and other distributions to its stockholders could be materially and adversely affected by the loss of revenues in the event a major tenant becomes bankrupt or insolvent, experiences a downturn in its business, materially defaults on its leases, does not renew its leases as they expire, or renews at lower rental rates.
 
The Company’s inability to receive reimbursements of Common Area Maintenance (“CAM”) costs from tenants could adversely affect the Company’s cash flow.
 
CAM costs typically include allocable energy costs, repairs, maintenance and capital improvements to common areas, janitorial services, administrative, property and liability insurance costs and security costs.  The Company may acquire properties with leases with variable CAM provisions that adjust to reflect inflationary increases or leases with a fixed CAM payment methodology which fixes its tenants’ CAM contributions.  With respect to both variable and fixed payment methodologies, the amount of reimbursements for CAM costs that the Company is entitled to receive from its tenants pursuant to the terms of the respective lease agreements may be less than the actual CAM costs at the Company’s properties. The Company’s inability to recover or pass on CAM costs to its tenants, whether due to the terms of the Company’s leases or vacancies at the Company’s properties, could adversely affect the Company’s cash flow.
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The Company may incur costs to comply with environmental laws.
 
The Company’s operations and properties are subject to various federal, state and local laws and regulations concerning the protection of the environment, including air and water quality, hazardous or toxic substances and health and safety.  Under some environmental laws, a current or previous owner or operator of real estate may be required to investigate and clean up hazardous or toxic substances released at a property.  The owner or operator may also be held liable to a governmental entity or to third parties for property damage or personal injuries and for investigation and clean-up costs incurred by those parties because of the contamination.  These laws often impose liability without regard to whether the owner or operator knew of the release of the substances or caused the release.  The presence of contamination or the failure to remediate contamination may impair the Company’s ability to sell or lease real estate or to borrow using the real estate as collateral.  Other laws and regulations govern indoor and outdoor air quality including those that can require the abatement or removal of asbestos-containing materials in the event of damage, demolition, renovation or remodeling and also govern emissions of and exposure to asbestos fibers in the air.  The maintenance and removal of lead paint and certain electrical equipment containing polychlorinated biphenyls (“PCBs”) and underground storage tanks are also regulated by federal and state laws.  The Company is also subject to risks associated with human exposure to chemical or biological contaminants such as molds, pollens, viruses and bacteria which, above certain levels, can be alleged to be connected to allergic or other health effects and symptoms in susceptible individuals.  The Company could incur fines for environmental compliance and be held liable for the costs of remedial action with respect to the foregoing regulated substances or tanks or related claims arising out of environmental contamination or human exposure to contamination at or from its properties.  Identification of compliance concerns or undiscovered areas of contamination, changes in the extent or known scope of contamination, discovery of additional sites, human exposure to the contamination or changes in cleanup or compliance requirements could result in significant costs to the Company. Moreover, compliance with new laws or regulations such as those related to climate change, including compliance with “green” building codes, or more stringent laws or regulations or stricter interpretations of existing laws may require material expenditures by the Company.
 
The Company faces risks associated with security breaches through cyber attacks, cyber intrusions or otherwise, as well as other significant disruptions of its information technology (“IT”) networks and related systems. 
 
The Company faces risks associated with security breaches, whether through cyber attacks or cyber intrusions over the Internet, malware, computer viruses, attachments to e-mails, persons inside the Company or persons with access to systems inside the Company, and other significant disruptions of the Company’s IT networks and related systems. The risk of a security breach or disruption, particularly through cyber attack or cyber intrusion, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. The Company’s IT networks and related systems are essential to the operation of its business and its ability to perform day-to-day operations (including managing its building systems). There can be no assurance that the Company’s efforts to maintain the security and integrity of these types of IT networks and related systems will be effective or that attempted security breaches or disruptions would not be successful or damaging. A security breach or other significant disruption involving the Company’s IT networks and related systems could materially and adversely impact the Company’s income, cash flow, results of operations, financial condition, liquidity, the ability to service its debt obligations, the market price of its common stock and its ability to pay dividends and other distributions to its stockholders.
 
The Company’s business and operations would suffer in the event of system failures. 
 
Despite system redundancy, the implementation of security measures and the existence of a disaster recovery plan for the Company’s internal information technology systems, its systems are vulnerable to damage from any number of sources, including computer viruses, unauthorized access, energy blackouts, natural disasters, terrorism, war and telecommunication failures.  Any system failure or accident that causes interruptions in the Company’s operations could result in a material disruption to its business.  The Company may also incur additional costs to remedy damages caused by such disruptions.

A prolonged economic slowdown, a lengthy or severe recession or declining real estate values could impair the Company’s assets and have a material and adverse effect on its income, cash flow, results of operations, financial condition, liquidity, the ability to service its debt obligations, the market price of its common stock and its ability to pay dividends and other distributions to its stockholders.
 
The Company believes the risks associated with its business will be more severe during periods of economic slowdown or recession if these periods are accompanied by declining real estate values.  Declines in real estate values, among other factors, could result in a determination that the Company’s assets have been impaired. If the Company determines that an impairment has occurred, the Company would be required to make an adjustment to the net carrying value of the asset which could have an
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adverse effect on its results of operations in the period in which the impairment charge is recorded. Although the Company will take current economic conditions into account in acquiring its assets, the Company’s long term success, and the value of its assets, depends in part on general economic conditions and other factors beyond the Company’s control.  If the national economy or the local economies in which the Company operates experience uncertainty, or if general economic conditions were to worsen, the value of the Company’s properties could decline, and the Company’s income, cash flow, results of operations, financial condition, liquidity, the ability to service its debt obligations, the market price of its common stock and its ability to pay dividends and other distributions to its stockholders, could be materially and adversely affected.
 
Loss of key personnel could harm the Company’s operations.
 
The Company is dependent on the efforts of certain key personnel of its senior management team.  While the Company has employment contracts with each of Messrs. Tanz, Haines and Schoebel, the loss of the services of any of these individuals could harm the Company’s operations and have a material and adverse effect on its income, cash flow, results of operations, financial condition, liquidity, the ability to service its debt obligations, the market price of its common stock and its ability to pay dividends and other distributions to its stockholders.
 
Under their employment agreements, certain members of the Company’s senior management team will have certain rights to terminate their employment and receive severance in connection with a change in control of the Company.
 
The Company’s employment agreements with each of Messrs. Tanz, Haines and Schoebel, which provide that, upon termination of his employment (i) by the applicable officer within 12 months following the occurrence of a change in control (as defined in the employment agreement), (ii) by the Company without cause (as defined in the employment agreement), (iii) by the applicable officer for good reason (as defined in the employment agreement), (iv) by non-renewal of the applicable officer’s employment agreement or (v) by reason of the applicable officer’s death or disability (as defined in the employment agreement), such executive officers would be entitled to certain termination or severance payments made by the Company (which may include a lump sum payment equal to defined percentages of annual salary and prior years’ average bonuses, paid in accordance with the terms and conditions of the respective agreement).  In addition, the vesting of all his outstanding unvested equity-based incentives and awards would accelerate.  These provisions make it costly to terminate their employment and could delay or prevent a transaction or a change in control of the Company that might involve a premium paid for shares of its common stock or otherwise be in the best interests of its stockholders.
 
Joint venture investments could be materially and adversely affected by the Company’s lack of sole decision-making authority or reliance on a joint venture partner’s financial condition.
 
The Company may enter into joint venture arrangements in the future.  Investments in joint ventures involve risks that are not otherwise present with properties which the Company owns entirely.  In a joint venture investment, the Company may not have exclusive control or sole decision-making authority over the development, financing, leasing, management and other aspects of these investments.  As a result, the joint venture partner might have economic or business interests or goals that are inconsistent with the Company’s goals or interests, take action contrary to the Company’s interests or otherwise impede the Company’s objectives.  Joint venture investments involve risks and uncertainties, including the risk of the joint venture partner failing to provide capital and fulfill its obligations, which may result in certain liabilities to the Company for guarantees and other commitments, the risk of conflicts arising between the Company and its partners and the difficulty of managing and resolving such conflicts, and the difficulty of managing or otherwise monitoring such business arrangements.  The joint venture partner also might become insolvent or bankrupt, which may result in significant losses to the Company.  Further, although the Company may own a controlling interest in a joint venture and may have authority over major decisions such as the sale or refinancing of investment properties, the Company may have fiduciary duties to the joint venture partners or the joint venture itself that may cause, or require, it to take or refrain from taking actions that it would otherwise take if it owned the investment properties outright.

Uninsured losses or a loss in excess of insured limits could materially and adversely affect the Company.
 
The Company carries comprehensive general liability, fire, extended coverage, loss of rent insurance, and environmental liability where applicable on its properties, with policy specifications and insured limits customarily carried for similar properties.  There are certain types of losses, such as losses resulting from wars or acts of God that generally are not insured because they are either uninsurable or not economically insurable.  Should an uninsured loss or a loss in excess of insured limits occur, the Company could lose capital invested in a property, as well as the anticipated future revenues from a property, while remaining obligated for any mortgage indebtedness, or other financial obligations or liabilities related to the property.  Any loss of these types could materially and adversely affect the Company’s income, cash flow, results of operations, financial condition,
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liquidity, prospects and ability to service its debt obligations, the market price of its common stock and its ability to pay dividends and other distributions to its stockholders.

The Company could be materially and adversely affected by poor market conditions where its properties are geographically concentrated.
 
The Company’s performance depends on the economic conditions in markets in which its properties are concentrated.  During the year ended December 31, 2019, the Company’s properties in California, Washington and Oregon accounted for 66%, 20% and 14%, respectively, of its consolidated property operating income.  The Company’s income, cash flow, results of operations, financial condition, liquidity, the ability to service its debt obligations, the market price of its common stock and its ability to pay dividends and other distributions to its stockholders could be materially and adversely affected by this geographic concentration if market conditions, such as an oversupply of space or a reduction in demand for real estate in an area, deteriorate in California, Washington and Oregon. Moreover, due to the geographic concentration of its properties, the Company may be disproportionately affected by general risks such as natural disasters, including major fires, floods and earthquakes, severe or inclement weather, and acts of terrorism should such developments occur in or near the markets in California, Washington and Oregon in which the Company’s properties are located.
 
Should the Company decide at some point in the future to expand into new markets, it may not be successful, which could materially and adversely affect its business, financial condition, liquidity and results of operations.
 
The Company’s properties are concentrated in California, Washington and Oregon. If the opportunity arises, the Company may explore acquisitions of properties in new markets inside or outside of these states. Each of the risks applicable to the Company’s ability to successfully acquire, integrate and operate properties in its current markets may also apply to its ability to successfully acquire, integrate and operate properties in new markets. In addition to these risks, the Company’s management team may not possess the same level of knowledge with respect to market dynamics and conditions of any new market in which the Company may attempt to expand, which could materially and adversely affect its ability to operate in any such markets. The Company may be unable to obtain the desired returns on its investments in these new markets, which could materially and adversely affect the Company’s income, cash flow, results of operations, financial condition, liquidity, prospects and ability to service its debt obligations, the market price of its common stock and its ability to pay dividends and other distributions to its stockholders.

Risks Related to Financing
 
The Company’s term loan, credit facility and unsecured senior notes contain restrictive covenants relating to its operations, which could limit the Company’s ability to respond to changing market conditions and its ability to pay dividends and other distributions to its stockholders.
 
The Company’s term loan, credit facility and unsecured senior notes contain restrictive covenants.  These or other limitations, including those that may apply to future Company borrowings, may materially and adversely affect the Company’s flexibility and its ability to achieve its operating plans and could result in the Company being limited in the amount of dividends and distributions it would be permitted to pay to its stockholders.
 
In addition, failure to comply with these covenants could cause a default under the applicable debt instrument, and the Company may then be required to repay such debt with capital from other sources.  Under those circumstances, other sources of capital may not be available to the Company, or may be available only on unattractive terms.
 
Certain of the Company’s mortgage financing arrangements and other indebtedness contain provisions that could limit the Company’s operating flexibility.
 
The Company’s existing mortgage financing contains, and future mortgage financing may in the future contain, customary covenants and provisions that limit the Company’s ability to pre-pay such mortgages before their scheduled maturity date or to transfer the underlying asset. Additionally, the Company’s ability to satisfy prospective mortgage lenders’ insurance requirements may be materially and adversely affected if lenders generally insist upon greater insurance coverage against certain risks than is available to the Company in the marketplace or on commercially reasonable terms.  In addition, because a mortgage is secured by a lien on the underlying real property, mortgage defaults subject the Company to the risk of losing the property through foreclosure.
 
The Company’s access to financing may be limited and thus its ability to potentially enhance its returns may be materially and adversely affected.
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The Company intends, when appropriate, to employ prudent amounts of leverage and use debt as a means of providing additional funds for the acquisition of its assets and the diversification of its portfolio.  As of December 31, 2019, the Company’s outstanding principal mortgage indebtedness was approximately $86.2 million, and the Company may incur significant additional debt to finance future acquisition and development activities.  The credit facility consists of a $600.0 million unsecured revolving credit facility and the Company has a $300.0 million term loan, of which $84.0 million and $300.0 million, respectively, were outstanding as of December 31, 2019.
 
In addition, the Operating Partnership issued $250.0 million aggregate principal amount of unsecured senior notes in December 2017 (the “Senior Notes Due 2027”), $200.0 million aggregate principal amount of unsecured senior notes in September 2016 (the “Senior Notes Due 2026”), $250.0 million aggregate principal amount of unsecured senior notes in December 2014 (the “Senior Notes Due 2024”) and $250.0 million aggregate principal amount of unsecured senior notes in December 2013 (the “Senior Notes Due 2023” and collectively with the Senior Notes Due 2024, the Senior Notes Due 2026 and the Senior Notes Due 2027, the “unsecured senior notes”), each of which were fully and unconditionally guaranteed by ROIC.
 
The Company’s access to financing will depend upon a number of factors, over which it has little or no control, including:
 
general market conditions;

the market’s view of the quality of the Company’s assets;

the market’s perception of the Company’s growth potential;

the Company’s eligibility to participate in and access capital from programs established by the U.S. government;

the Company’s current and potential future earnings and cash distributions; and

the market price of the shares of the Company’s common stock. 

Although the credit markets and real estate have recovered from the great recession, any reduction in available financing may materially and adversely affect the Company’s ability to achieve its financial objectives.  Concern about the stability of the markets generally could adversely affect one or more private lenders and could cause one or more private lenders to be unwilling or unable to provide the Company with financing or to increase the costs of that financing.  In addition, if regulatory capital requirements imposed on the Company’s private lenders change, they may be required to limit, or increase the cost of, financing they provide to the Company.  In general, this could potentially increase the Company’s financing costs and reduce its liquidity or require it to sell assets at an inopportune time or price.
 
During times when interest rates on mortgage loans are high or financing is otherwise unavailable on a timely basis, the Company may purchase certain properties for cash or equity securities, including OP Units, or a combination thereof.  Consequently, depending on market conditions at the relevant time, the Company may have to rely more heavily on additional equity issuances, which may be dilutive to its stockholders, or on less efficient forms of debt financing that require a larger portion of its cash flow from operations, thereby reducing funds available for its operations, future business opportunities, cash distributions to its stockholders and other purposes.  The Company cannot assure you that it will have access to such equity or debt capital on favorable terms (including, without limitation, cost and term) at the desired times, or at all, which may cause it to curtail its asset acquisition activities and/or dispose of assets, which could materially and adversely affect its income, cash flow, results of operations, financial condition, liquidity, the ability to service its debt obligations, the market price of its common stock and its ability to pay dividends and other distributions to its stockholders.
 
Increases in interest rates could increase the amount of the Company’s debt payments and materially and adversely affect its business, financial condition, liquidity and results of operations.
 
Interest the Company pays could reduce cash available for distributions. As of December 31, 2019, the Company had approximately $84.0 million and $300.0 million outstanding under the Company’s $600.0 million unsecured revolving credit facility and $300.0 million term loan, respectively, that bear interest at a variable rate. In addition, the Company may incur variable rate debt in the future, including mortgage debt, borrowings under the credit facility or new credit facilities. An increase in interest rates would increase the Company’s interest costs, which could adversely affect the Company’s cash flow, results of operations, ability to pay principal and interest on debt and pay dividends and other distributions to its stockholders, and reduce the Company’s access to capital markets. In addition, if the Company needs to repay existing debt during periods of rising interest rates, it may be required to incur additional indebtedness at higher rates. From time to time, the Company may
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enter into interest rate swap agreements and other interest rate hedging contracts with the intention of lessening the impact of rising interest rates. However, increased interest rates may increase the risk that the counterparties to such agreements may not be able to fulfill their obligations under these agreements, and there can be no assurance that these arrangements will be effective in reducing the Company’s exposure to interest rate changes.  These risks could materially and adversely affect the Company’s cash flow, results of operations, financial condition, liquidity, the ability to service its debt obligations, the market price of its common stock and its ability to pay dividends and other distributions to its stockholders. The Company’s use of interest rate hedging arrangements to manage risk associated with interest rate volatility may expose the Company to additional risks, including a risk that a counterparty to a hedging arrangement may fail to honor its obligations or that the Company could be required to fund the Company’s contractual payment obligations under such arrangements in relatively large amounts or on short notice. Developing an effective interest rate risk strategy is complex and no strategy can completely insulate the Company from risks associated with interest rate fluctuations. There can be no assurance that our hedging activities will have the desired beneficial impact on the Company’s results of operations, liquidity and financial condition.

Uncertainty regarding the London interbank offered rate (“LIBOR”) may adversely impact the Company’s borrowings.

In July 2017, the U.K. Financial Conduct Authority (the “FCA”) announced that it intends to stop persuading or compelling banks to submit the London Interbank Offered Rate (“LIBOR”) after 2021. As of December 31, 2019, the Company had outstanding approximately $384.0 million of variable rate debt that was indexed LIBOR. The Alternative Reference Rates Committee, a steering committee comprised of large U.S. financial institutions convened by the U.S. Federal Reserve, has recommended the Secured Overnight Financing Rate (“SOFR”) as a more robust reference rate alternative to U.S. dollar LIBOR. SOFR is calculated based on overnight transactions under repurchase agreements, backed by Treasury securities. SOFR is observed and backward looking, which stands in contrast with LIBOR under the current methodology, which is an estimated forward-looking rate and relies, to some degree, on the expert judgment of submitting panel members. Given that SOFR is a secured rate backed by government securities, it will be a rate that does not take into account bank credit risk (as is the case with LIBOR). SOFR is therefore likely to be lower than LIBOR and is less likely to correlate with the funding costs of financial institutions. It is not possible to predict the further effect of the rules of the FCA, any changes in the methods by which LIBOR is determined, whether or not SOFR will attain market traction as a LIBOR replacement tool, or any other reforms to LIBOR that may be enacted in the United Kingdom, the European Union or elsewhere. Any such developments may cause LIBOR to perform differently than in the past, be replaced or cease to exist or may result in, among other things, a sudden or prolonged increase or decrease in LIBOR, a delay in the publication of LIBOR, and changes in the rules or methodologies in LIBOR, which may discourage market participants from continuing to administer or to participate in LIBOR’s determination, and, in certain situations, could result in LIBOR no longer being determined and published. If a published LIBOR rate is unavailable after 2021, the interest rates on the Company’s debt which is indexed to LIBOR will be determined using various alternative methods, which may include SOFR, any of which may result in interest obligations which are more than or do not otherwise correlate over time with the payments that would have been made on such debt if LIBOR was available in its current form. Further, the same costs and risks that may lead to the discontinuation or unavailability of LIBOR may make one or more of the alternative methods impossible or impracticable to determine. Any of these proposals or consequences could have a material adverse effect on the Company’s financing costs.
 
Financing arrangements that the Company may use to finance its assets may require it to provide additional collateral or pay down debt.
 
The Company, when appropriate, uses traditional forms of financing including secured debt.  In the event the Company utilizes such financing arrangements, they would involve the risk that the market value of its assets which are secured may decline in value, in which case the lender may, in connection with a refinancing, require it to provide additional collateral, provide additional equity, or to repay all or a portion of the funds advanced.  The Company may not have the funds available to repay its debt or provide additional equity at that time, which would likely result in defaults unless it is able to raise the funds from alternative sources, which it may not be able to achieve on favorable terms or at all.  Providing additional collateral or equity would reduce the Company’s liquidity and limit its ability to leverage its assets.  If the Company cannot meet these requirements, the lender could accelerate the Company’s indebtedness, increase the interest rate on advanced funds and terminate its ability to borrow funds from them, which could materially and adversely affect the Company’s income, cash flow, results of operations, financial condition, liquidity, the ability to service its debt obligations, the market price of its common stock and its ability to pay dividends and other distributions to its stockholders.  The providers of secured debt may also require the Company to maintain a certain amount of cash or set aside assets sufficient to maintain a specified liquidity position.  As a result, the Company may not be able to leverage its assets as fully as it would choose which could reduce its return on assets.  There can be no assurance that the Company will be able to utilize such arrangements on favorable terms, or at all.
 

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A downgrade in the Company’s or the Operating Partnership’s credit ratings could materially adversely affect the Company’s business and financial condition. 
 
The credit ratings assigned to the Company’s obligations or to the debt securities of the Operating Partnership could change based upon, among other things, the Company’s and the Operating Partnership’s results of operations and financial condition. These ratings are subject to ongoing evaluation by credit rating agencies, and there can be no assurance that any rating will not be changed or withdrawn by a rating agency in the future if, in its judgment, circumstances warrant. Moreover, these credit ratings do not apply to the Company’s common stock and are not recommendations to buy, sell or hold any other securities. If any of the credit rating agencies that have rated the obligations of the Company or the debt securities of the Operating Partnership downgrades or lowers its credit ratings, or if any credit rating agency indicates that it has placed any such rating on a so-called “watch list” for a possible downgrading or lowering or otherwise indicates that its outlook for that rating is negative, it could have a material adverse effect on the Company’s costs and availability of capital, which could in turn materially and adversely impact the Company’s income, cash flow, results of operations, financial condition, liquidity, the ability to service its debt obligations, the market price of its common stock and its ability to pay dividends and other distributions to its stockholders.
 
Risks Related to the Company’s Organization and Structure
 
The Company depends on dividends and distributions from its direct and indirect subsidiaries.  The creditors and any preferred equity holders of these subsidiaries are entitled to amounts payable to them by the subsidiaries before the subsidiaries may pay any dividends or distributions to the Company.
 
Substantially all of the Company’s assets are held through the Operating Partnership, which holds substantially all of the Company’s properties and assets through subsidiaries.  The Operating Partnership’s cash flow is dependent on cash distributions to it by its subsidiaries, and in turn, substantially all of the Company’s cash flow is dependent on cash distributions to it by the Operating Partnership.  The creditors and any preferred equity holders of the Company’s direct and indirect subsidiaries are entitled to payment of that subsidiary’s obligations to them, when due and payable, before distributions may be made by that subsidiary to its common equity holders.  Thus, the Operating Partnership’s ability to make distributions to the Company and therefore the Company’s ability to make distributions to its stockholders will depend on its subsidiaries’ ability first to satisfy their obligations to creditors and any preferred equity holders and then to make distributions to the Operating Partnership.
 
In addition, the Company’s participation in any distribution of the assets of any of its direct or indirect subsidiaries upon the liquidation, reorganization or insolvency, is only after the claims of the creditors, including the holders of the unsecured senior notes and trade creditors, and preferred equity holders are satisfied.
 
Certain provisions of Maryland law may limit the ability of a third party to acquire control of the Company.
 
Certain provisions of the Maryland General Corporation Law (the “MGCL”) may have the effect of delaying, deferring or preventing a transaction or a change in control of the Company that might involve a premium price for holders of the Company’s common stock or otherwise be in their best interests, including:
 
“business combination” provisions that, subject to certain limitations, prohibit certain business combinations between the Company and an “interested stockholder” (defined generally as any person who beneficially owns 10% or more of the voting power of the Company’s shares or an affiliate thereof) for five years after the most recent date on which the stockholder becomes an interested stockholder, and thereafter impose special minimum price provisions and special stockholder voting requirements on these combinations; and

“control share” provisions that provide that “control shares” of the Company (defined as shares which, when aggregated with other shares controlled by the stockholder, entitle the stockholder to exercise one of three increasing ranges of voting power in electing directors) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of “control shares”) have no voting rights except to the extent approved by the Company’s stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares.

However, the provisions of the MGCL relating to business combinations do not apply to business combinations that are approved or exempted by the Company’s board of directors prior to the time that the interested stockholder becomes an interested stockholder.  In addition, the Company’s bylaws contain a provision exempting from the control share acquisition
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statute any and all acquisitions by any person of shares of the Company’s common stock.  There can be no assurance that such exemption will not be amended or eliminated at any time in the future.
 
Additionally, Title 3, Subtitle 8 of the MGCL permits the Company’s board of directors, without stockholder approval and regardless of what is currently provided in the Company’s charter or bylaws, to take certain actions that may have the effect of delaying, deferring or preventing a transaction or a change in control of the Company that might involve a premium to the market price of its common stock or otherwise be in the stockholders’ best interests.  These provisions of the MGCL permit the Company, by provision in its charter or bylaws or a resolution of its board of directors and notwithstanding any contrary provision in the charter or bylaws, to adopt:
 
a classified board;

a two-thirds vote requirement for removing a director;

a requirement that the number of directors be fixed only by vote of the board of directors;

a requirement that a vacancy on the board be filled only by the remaining directors in office and (if the board is classified) for the remainder of the full term of the class of directors in which the vacancy occurred; and

a majority requirement for the calling of a stockholder-requested special meeting of stockholders.

The authorized but unissued shares of preferred stock and the ownership limitations contained in the Company’s Charter may prevent a change in control.
 
The Company’s charter authorizes the Company to issue authorized but unissued shares of preferred stock.  In addition, the Company’s charter provides that the Company’s board of directors has the power, without stockholder approval, to authorize the Company to issue any authorized but unissued shares of stock, to classify any unissued shares of preferred stock and to reclassify any unissued shares of common stock or previously-classified shares of preferred stock into other classes or series of stock.  As a result, the Company’s board of directors may establish a series of shares of preferred stock or use such preferred stock to create a stockholder’s rights plan or so-called “poison pill” that could delay or prevent a transaction or a change in control that might involve a premium price for shares of the Company’s common stock or otherwise be in the best interests of the Company’s stockholders.
 
In addition, the Company’s charter contains restrictions limiting the ownership and transfer of shares of the Company’s common stock and other outstanding shares of capital stock.  The relevant sections of the Company’s charter provide that, subject to certain exceptions, ownership of shares of the Company’s common stock by any person is limited to 9.8% by value or by number of shares, whichever is more restrictive, of the outstanding shares of common stock (the common share ownership limit), and no more than 9.8% by value or number of shares, whichever is more restrictive, of the outstanding capital stock (the aggregate share ownership limit).  The common share ownership limit and the aggregate share ownership limit are collectively referred to herein as the “ownership limits.”  These provisions will restrict the ability of persons to purchase shares in excess of the relevant ownership limits.  The Company’s board of directors has established exemptions from this ownership limit which permit certain institutional investors to hold additional shares of the Company’s common stock.  The Company’s board of directors may in the future, in its sole discretion, establish additional exemptions from this ownership limit.
 
The Company’s failure to qualify as a REIT would subject it to U.S. federal income tax and potentially increased state and local taxes, which would reduce the amount of cash available for distribution to its stockholders.
 
The Company intends to operate in a manner that will enable it to continue to qualify as a REIT for U.S. federal income tax purposes.  The Company has not requested and does not intend to request a ruling from the U.S. Internal Revenue Service that it will continue to qualify as a REIT.  The U.S. federal income tax laws governing REITs are complex.  The complexity of these provisions and of the applicable U.S. Treasury Department regulations that have been promulgated under the Code (“Treasury Regulations”) is greater in the case of a REIT that holds assets through a partnership, such as the Company, and judicial and administrative interpretations of the U.S. federal income tax laws governing REIT qualification are limited.  To qualify as a REIT, the Company must meet, on an ongoing basis, various tests regarding the nature of its assets and its income, the ownership of its outstanding shares, and the amount of its distributions.  Moreover, new legislation, court decisions or administrative guidance, in each case possibly with retroactive effect, may make it more difficult or impossible for the Company to qualify as a REIT.  Thus, while the Company believes that it has operated and intends to continue to operate so that it will qualify as a REIT, given the highly complex nature of the rules governing REITs, the ongoing importance of factual
21


determinations, and the possibility of future changes in the Company’s circumstances, no assurance can be given that it has qualified or will continue to so qualify for any particular year.
 
If the Company fails to qualify as a REIT in any taxable year, and does not qualify for certain statutory relief provisions, it would be required to pay U.S. federal income tax on its taxable income, and distributions to its stockholders would not be deductible by it in determining its taxable income.  In such a case, the Company might need to borrow money or sell assets in order to pay its taxes.  The Company’s payment of income tax would decrease the amount of its income available for distribution to its stockholders.  Furthermore, if the Company fails to maintain its qualification as a REIT, it would no longer be required to distribute substantially all of its net taxable income to its stockholders.  In addition, unless the Company were eligible for certain statutory relief provisions, it would not be eligible to re-elect to qualify as a REIT for four taxable years following the year in which it failed to qualify as a REIT.
 
Failure to make required distributions would subject the Company to tax, which would reduce the cash available for distribution to its stockholders.

In order to qualify as a REIT, the Company must distribute to its stockholders each calendar year at least 90% of its REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gain. To the extent that the Company satisfies the 90% distribution requirement, but distributes less than 100% of its taxable income, it is subject to U.S. federal corporate income tax on its undistributed income. In addition, the Company will incur a 4% non-deductible excise tax on the amount, if any, by which its distributions in any calendar year are less than a minimum amount specified under U.S. federal income tax laws. The Company intends to distribute its net income to its stockholders in a manner intended to satisfy the REIT 90% distribution requirement and to avoid the 4% non-deductible excise tax.

The Company’s taxable income may exceed its net income as determined by the U.S. generally accepted accounting principles (“GAAP”) because, for example, realized capital losses will be deducted in determining its GAAP net income, but may not be deductible in computing its taxable income. In addition, the Company may invest in assets that generate taxable income in excess of economic income or in advance of the corresponding cash flow from the assets. For example, the Company may be required to accrue interest income on mortgage loans or other types of debt securities or interests in debt securities before it receives any payments of interest or principal on such assets. Similarly, some of the debt securities that the Company acquires may have been issued with original issue discount. The Company will generally be required to include such original issue discount in income based on a constant yield to maturity method. As a result of the foregoing, the Company may generate less cash flow than taxable income in a particular year. To the extent that the Company generates such non-cash taxable income in a taxable year, it may incur corporate income tax and the 4% non-deductible excise tax on that income if it does not distribute such income to stockholders in that year. In that event, the Company may be required to use cash reserves, incur debt or liquidate assets at rates or times that it regards as unfavorable or make a taxable distribution of its shares in order to satisfy the REIT 90% distribution requirement and to avoid U.S. federal corporate income tax and the 4% non-deductible excise tax in that year.

In order to qualify as a REIT, prior to the end of each taxable year, the Company is required to distribute any earnings and profits of any corporation acquired by the Company in certain tax-deferred transactions to the extent that such earnings accrued at a time when such corporation did not qualify as a REIT. The Company has entered into certain transactions involving the tax-deferred acquisition of target corporations. The Company believes that it did not inherit any earnings and profits of such target corporations attributable to any period that such corporations did not qualify as a REIT. However, no assurance can be provided in this regard, and if the Company were determined to have inherited and retained any such earnings and profits, the Company’s qualification as a REIT could be adversely impacted.
 
To maintain its REIT qualification, the Company may be forced to borrow funds during unfavorable market conditions.
 
In order to qualify as a REIT and avoid the payment of income and excise taxes, the Company may need to borrow funds on a short-term basis, or possibly on a long-term basis, to meet the REIT distribution requirements even if the then prevailing market conditions are not favorable for these borrowings.  These borrowing needs could result from, among other things, a difference in timing between the actual receipt of cash and inclusion of income for U.S. federal income tax purposes, the effect of non-deductible capital expenditures, the creation of reserves or required debt amortization payments.
 
Even if the Company qualifies as a REIT, it may be required to pay certain taxes.
 
Even if the Company qualifies for taxation as a REIT, it may be subject to certain U.S. federal, state and local taxes on its income and assets, including taxes on any undistributed income, taxes on income from some activities conducted as a result of a foreclosure and state or local income, franchise, property and transfer taxes, including mortgage recording taxes.  In addition,
22


the Company may hold some of its assets through taxable REIT subsidiary (“TRS”) corporations.  Any TRSs or other taxable corporations in which the Company owns an interest will be subject to U.S. federal, state and local corporate taxes.  Furthermore, the Company has entered into certain transactions in which the Company has acquired target entities in tax-deferred transactions. To the extent that such entities had outstanding U.S. federal income tax or other tax liabilities, the Company would succeed to such liabilities. Payment of these taxes generally would decrease the cash available for distribution to the Company’s stockholders.
 
Legislative, regulatory or administrative changes could adversely affect the Company.

The U.S. federal income tax laws and regulations governing REITs and their stockholders, as well as the administrative interpretations of those laws and regulations, are constantly under review and may be changed at any time, possibly with retroactive effect. No assurance can be given as to whether, when, or in what form, the U.S. federal income tax laws applicable to the Company and its stockholders may be enacted. Changes to the U.S. federal income tax laws and interpretations of U.S. federal tax laws could adversely affect an investment in the Company’s common stock.

The Tax Cuts and Jobs Act of 2017 (“TCJA”), which was signed into law on December 22, 2017, significantly changes U.S. federal income tax laws applicable to businesses and their owners, including REITs and their stockholders, and may lessen the relative competitive advantage of operating as a REIT rather than as a C corporation. For additional discussion, see “Recent U.S. Federal Income Tax Legislation”.
 
In certain circumstances, the Company may be liable for certain tax obligations of certain limited partners.
 
In certain circumstances, the Company may be liable for certain tax obligations of certain limited partners. The Company has entered into tax protection agreements under which it has agreed to minimize the tax consequences to certain limited partners resulting from the sale or other disposition of certain of the Company’s assets. The obligation to indemnify such limited partners against adverse tax consequences is expected to continue until 2027. The Company may enter into additional tax protection agreements in the future, which could extend the period of time during which the Company may be liable for tax obligations of certain limited partners. During the period of these obligations, the Company’s flexibility to dispose of the related assets will be limited. In addition, the amount of any indemnification obligations may be significant.
 
The Company cannot assure you of its ability to pay distributions in the future.
 
The Company intends to pay quarterly distributions and to make distributions to its stockholders in an amount such that it distributes all or substantially all of its REIT taxable income in each year, subject to certain adjustments.  The Company’s ability to pay distributions may be materially and adversely affected by a number of factors, including the risk factors described in this Annual Report on Form 10-K.  All distributions will be made, subject to Maryland law (or Delaware law, in the case of distributions by the Operating Partnership), at the discretion of the Company’s board of directors and will depend on the Company’s earnings, its financial condition, any debt covenants, maintenance of its REIT qualification and other factors as its board of directors may deem relevant from time to time.  The Company believes that a change in any one of the following factors could materially and adversely affect its income, cash flow, results of operations, financial condition, liquidity, the ability to service its debt obligations, the market price of its common stock and its ability to pay distributions to its stockholders:
 
the profitability of the assets acquired;

the Company’s ability to make profitable acquisitions;

unforeseen expenses that reduce the Company’s cash flow;

defaults in the Company’s asset portfolio or decreases in the value of its portfolio; and

the fact that anticipated operating expense levels may not prove accurate, as actual results may vary from estimates.

The Company cannot assure you that it will achieve results that will allow it to make a specified level of cash distributions or year-to-year increases in cash distributions in the future.  In addition, some of the Company’s distributions may include a return of capital.
 

23


Item 1B.  Unresolved Staff Comments

None.

Item 2.  Properties
 
The Company maintains its executive office at 11250 El Camino Real, Suite 200, San Diego, CA 92130.
 
As of December 31, 2019, the Company’s portfolio consisted of 89 properties (88 retail and one office) totaling approximately 10.1 million square feet of gross leasable area. As of December 31, 2019, the Company’s retail portfolio was approximately 97.9% leased.  During the year ended December 31, 2019, the Company leased or renewed a total of approximately 1.4 million square feet in its portfolio. The Company has committed approximately $27.5 million, or $59.40 per square foot, in tenant improvements, including building and site improvements, for new leases that occurred during the year ended December 31, 2019. The Company has committed approximately $1.4 million, or $3.11 per square foot, in leasing commissions, for the new leases that occurred during the year ended December 31, 2019. Additionally, the Company has committed approximately $1.7 million, or $1.89 per square foot, in tenant improvements for renewed leases that occurred during the year ended December 31, 2019. Leasing commission commitments for renewed leases were not material for the year ended December 31, 2019.  

The following table provides information regarding the Company’s retail properties as of December 31, 2019.
 
PropertyYear
Completed/ Renovated
Year
Acquired
Gross
Leasable
Sq. Feet
Number
of
Tenants
% LeasedPrincipal Tenants
Southern California      
Los Angeles metro area
Paramount Plaza1966/2010200995,062  14  98.0 %Grocery Outlet Supermarket, 99¢ Only Stores, Rite Aid Pharmacy
Claremont Promenade1982/2011201092,297  27  100.0 %Super King Supermarket
Gateway Village2003/2005201096,959  29  98.5 %Sprouts Market
Seabridge Marketplace2006201298,348  22  97.4 %Safeway (Vons) Supermarket
Glendora Shopping Center1992/20122012106,535  19  94.2 %Albertson’s Supermarket
Redondo Beach Plaza1993/20042012110,509  16  100.0 %Safeway (Vons) Supermarket, Petco
Diamond Bar Town Center19812013100,342  22  96.4 %Walmart Neighborhood Market, Crunch Fitness
Diamond Hills Plaza1973/20082013139,505  38  98.9 %H-Mart Supermarket, Planet Fitness
Plaza de la Canada1968/20102013100,425  13  100.0 %Gelson’s Supermarket, TJ Maxx, Rite Aid Pharmacy
Fallbrook Shopping Center1966/1986/ 2003/20152014755,299  49  100.0 %
Sprouts Market, Trader Joe’s, Kroger (Ralph’s) Supermarket (1), TJ Maxx
Moorpark Town Center1984/20142014133,547  23  95.4 %Kroger (Ralph’s) Supermarket, CVS Pharmacy
Ontario Plaza1997-19992015150,149  24  94.4 %El Super Supermarket, Rite Aid Pharmacy
Park Oaks Shopping Center1959/20052015110,092  24  88.4 %Safeway (Vons) Supermarket, Dollar Tree
Warner Plaza1973-1974/ 2016-20172015110,918  65  97.5 %
Sprouts Market, Kroger (Ralph’s) Supermarket (1), Rite Aid Pharmacy (1)
Magnolia Shopping Center1962/1972/ 1987/20162016116,360  22  85.9 %Kroger (Ralph’s) Supermarket
Casitas Plaza Shopping Center1972/19822016105,118  25  96.9 %Albertson’s Supermarket, CVS Pharmacy
Bouquet Center19852016148,903  27  95.5 %Safeway (Vons) Supermarket, CVS Pharmacy, Ross Dress For Less
North Ranch Shopping Center1977-19902016146,448  34  93.7 %Kroger (Ralph’s) Supermarket, Trader Joe’s, Rite Aid Pharmacy, Petco
The Knolls2000/2016201652,021   95.2 %Trader Joe’s, Pet Food Express
The Terraces1958/1970/ 19892017172,922  28  94.7 %Trader Joe’s, Marshall’s, LA Fitness
Orange County metro area
Santa Ana Downtown Plaza1987/20102010105,536  29  100.0 %Kroger (Food 4 Less) Supermarket, Marshall’s
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PropertyYear
Completed/ Renovated
Year
Acquired
Gross
Leasable
Sq. Feet
Number
of
Tenants
% LeasedPrincipal Tenants
Sycamore Creek2008201074,198  18  100.0 %
Safeway (Vons) Supermarket, CVS Pharmacy (1)
Desert Springs Marketplace1993-94 / 20132011113,718  20  97.7 %Kroger (Ralph’s) Supermarket, Rite Aid Pharmacy
Cypress Center West1970/1978 / 20142012109,046  32  95.5 %Kroger (Ralph’s) Supermarket, Rite Aid Pharmacy
Harbor Place Center19942012119,821  11  100.0 %AA Supermarket, Ross Dress For Less
5 Points Plaza1961-62 / 2012 / 20152013160,536  36  92.5 %Trader Joe’s, Pier 1
Peninsula Marketplace2000201395,416  13  98.9 %Kroger (Ralph’s) Supermarket, Planet Fitness
Fullerton Crossroads1977/1997/ 2010-20112017219,785  23  97.6 %Kroger (Ralph’s) Supermarket, Kohl’s, Jo-Ann Fabrics and Crafts
The Village at Nellie Gail Ranch1897 / 2014-2015201789,041  24  98.7 %Smart & Final Extra Supermarket
San Diego metro area
Marketplace Del Rio1990/20042011183,787  43  96.6 %Stater Brothers Supermarket, Walgreens
Renaissance Towne Centre1991/2011201153,272  31  100.0 %CVS Pharmacy
Euclid Plaza1982/2012201277,044   100.0 %Vallarta Supermarket, Walgreens
Bay Plaza1986/2013201273,324  29  100.0 %Seafood City Supermarket
Bernardo Heights Plaza1983/2006201337,729   100.0 %Sprouts Market
Hawthorne Crossings1993/19992013141,288  16  92.3 %Mitsuwa Supermarket, Ross Dress For Less, Staples
Creekside Plaza1993/20052014131,252  24  96.4 %Stater Brothers Supermarket, AMC Theatres
Northern California   
San Francisco metro area   
Pleasant Hill Marketplace1980201069,715   100.0 %Total Wine and More, Buy Buy Baby, Basset Furniture
Pinole Vista Shopping Center1981/20122011/2018135,962  28  99.3 %SaveMart (Lucky) Supermarket, Planet Fitness
Country Club Gate Center1974/20122011109,331  32  97.9 %SaveMart (Lucky) Supermarket, Rite Aid Pharmacy
Marlin Cove Shopping Center1972/2001201273,943  26  100.0 %99 Ranch Market
The Village at Novato2006201220,081   100.0 %Trader Joe’s, Pharmaca Pharmacy
Santa Teresa Village1974-79 / 20132012124,306  35  92.1 %Grocery Outlet Supermarket, Dollar Tree
Granada Shopping Center1962/1994201369,325  15  100.0 %SaveMart (Lucky) Supermarket
Country Club Village19952013111,093  24  98.8 %Walmart Neighborhood Market, CVS Pharmacy
North Park Plaza1997201476,697  17  99.1 %H-Mart Supermarket
Winston Manor1977/1988/ 2011/2015201549,852  16  100.0 %Grocery Outlet Supermarket
Jackson Square1972/19972015114,220  16  100.0 %Safeway Supermarket, CVS Pharmacy, 24 Hour Fitness
Gateway Centre19962015112,553  26  100.0 %SaveMart (Lucky) Supermarket, Walgreens
Iron Horse Plaza1998-1999201561,915  11  100.0 %Lunardi’s Market
Monterey Center2007201625,626   93.7 %Trader Joe’s, Pharmaca Pharmacy
Santa Rosa Southside Shopping Center1983-1984201788,535   95.9 %REI, Cost Plus World Market, DSW
Monta Loma Plaza1973/ 2009-2010201748,078  11  100.0 %Safeway Supermarket
Sacramento metro area
Mills Shopping Center1959/19962011235,514  31  88.0 %Viva Supermarket, Ross Dress For Less (dd’s Discounts), Dollar Tree
Green Valley Station2006/2007201252,245  20  90.9 %CVS Pharmacy
25


PropertyYear
Completed/ Renovated
Year
Acquired
Gross
Leasable
Sq. Feet
Number
of
Tenants
% LeasedPrincipal Tenants
Pacific Northwest   
Seattle Metropolitan   
Meridian Valley Plaza1978/2011201051,597  16  100.0 %Kroger (QFC) Supermarket
The Market at Lake Stevens2000201074,130   100.0 %Albertson’s (Haggen) Supermarket
Canyon Park Shopping Center1980/20122011123,592  24  100.0 %PCC Community Markets, Rite Aid Pharmacy, Petco
Hawks Prairie Shopping Center1988/20122011157,529  24  100.0 %Safeway Supermarket, Dollar Tree, Big Lots
The Kress Building1924/2005201174,616   100.0 %IGA Supermarket, TJMaxx
Gateway Shopping Center20072012104,298  20  96.1 %
WinCo Foods (1), Rite Aid Pharmacy, Ross Dress For Less
Aurora Square1980/19872012/2014108,558  16  100.0 %Central Supermarket, Marshall’s
Canyon Crossing2008-20092013120,398  28  100.0 %Safeway Supermarket
Crossroads Shopping Center1962/2004/ 20152010/2013475,413  95  99.5 %Kroger (QFC) Supermarket, Bed Bath & Beyond, Dick’s Sporting Goods
Bellevue Marketplace1971/1982/ 20172015113,758  20  100.0 %Asian Family Market
Four Corner Square1983/20152015119,531  29  100.0 %Grocery Outlet Supermarket, Walgreens, Johnsons Home & Garden
Bridle Trails Shopping Center1980/1984/ 19872016109,800  32  100.0 %Grocery Outlet Supermarket, Bartell Drugs, Dollar Tree
PCC Community Markets Plaza1981/2007201734,459   100.0 %PCC Community Markets
Highland Hill Shopping Center1956/1989/ 20062017163,926  20  100.0 %Safeway Supermarket, LA Fitness, Dollar Tree, Petco
North Lynnwood Shopping Center1963/1965/ 2003201763,606  10  95.8 %Grocery Outlet Supermarket
Stadium Center1926/2016201848,888   100.0 %Thriftway Supermarket
Summerwalk Village2014-2015201958,484   97.9 %Walmart Neighborhood Market
Portland metro area
Happy Valley Town Center20072010138,397  37  100.0 %New Seasons Supermarket
Wilsonville Old Town Square20112010/201249,937  19  100.0 %
Kroger (Fred Meyer) Supermarket (1)
Cascade Summit Town Square2000201094,934  31  100.0 %Safeway Supermarket
Heritage Market Center20002010107,468  19  100.0 %Safeway Supermarket, Dollar Tree
Division Crossing19922010103,561  20  100.0 %Rite Aid Pharmacy, Ross Dress For Less, Ace Hardware
Halsey Crossing1992201099,428  19  100.0 %24 Hour Fitness, Dollar Tree
Hillsboro Market Center2001-20022011156,021  23  100.0 %Albertson’s Supermarket, Dollar Tree, Ace Hardware
Robinwood Shopping Center1980/2012201370,831  16  100.0 %Walmart Neighborhood Market
Tigard Marketplace1988/20052014136,889  18  99.3 %H-Mart Supermarket, Bi-Mart
Wilsonville Town Center1991/19962014167,829  39  98.9 %Safeway Supermarket, Rite Aid Pharmacy, Dollar Tree
Tigard Promenade1996201588,043  16  100.0 %Safeway Supermarket
Sunnyside Village Square1996-1997201592,278  14  100.0 %Grocery Outlet Supermarket, 24 Hour Fitness, Ace Hardware
Johnson Creek Center2003/20092015108,588  15  100.0 %Trader Joe’s, Walgreens, Sportsman’s Warehouse
Rose City Center1993/2012201660,680   100.0 %Safeway Supermarket
Division Center1986-1987/ 2013-20142017116,420  23  100.0 %Grocery Outlet Supermarket, Rite Aid Pharmacy, Petco
Riverstone Marketplace2002-2004201795,774  24  100.0 %Kroger (QFC) Supermarket
King City Plaza1970/1980/ 1990201862,676  18  95.1 %Grocery Outlet Supermarket
Total Properties10,057,880  1,944  97.9 %
_______________
 
(1)Retailer is not a tenant of the Company.

26


As illustrated by the following tables, the Company’s shopping centers are substantially diversified by both tenant mix and by the staggering of its major tenant lease expirations.  For the year ended December 31, 2019, no single tenant comprised more than 5.5% of the total annual base rent of the Company’s portfolio.
 
The following table sets forth a summary schedule of the Company’s ten largest tenants by percent of total annual base rent, as of December 31, 2019.
 
TenantNumber of Leases
% of Total Annual
Base Rent (1)
Albertson’s / Safeway Supermarkets19  5.5 %
Kroger Supermarkets11  3.4 %
JP Morgan Chase21  1.4 %
Rite Aid Pharmacy12  1.4 %
SaveMart Supermarkets 1.4 %
Marshall’s / TJMaxx 1.3 %
Trader Joe’s 1.3 %
Sprouts Markets 1.3 %
Grocery Outlet Supermarkets 1.2 %
Ross Dress For Less / dd’s Discounts 1.2 %
 101  19.4 %
___________________
 
(1)Annual base rent (“ABR”) is equal to the annualized cash rent for all leases in place as of December 31, 2019 (including initial cash rent for new leases).

The following table sets forth a summary schedule of the annual lease expirations for leases in place across the Company’s total retail portfolio at December 31, 2019 (dollars in thousands).
 
Year of Expiration
Number of
Leases
Expiring (1)
Leased Square
Footage
Annual Base
Rent (2)
Percent of Total ABR
2020221  594,884  $13,929  6.6 %
2021308  1,026,868  23,297  10.9 %
2022297  1,146,907  25,969  12.1 %
2023301  1,476,227  33,108  15.5 %
2024272  1,203,051  28,409  13.3 %
2025175  1,050,000  20,301  9.5 %
202676  544,173  10,876  5.1 %
202770  351,079  8,104  3.8 %
202873  702,596  15,955  7.5 %
202958  503,228  11,193  5.2 %
Thereafter93  1,241,615  22,715  10.5 %
Total1,944  9,840,628  $213,856  100 %
___________________
 
(1)Assumes no tenants exercise renewal options or cancellation options.
(2)Annual base rent is equal to the annualized cash rent for all leases in place as of December 31, 2019 (including initial cash rent for new leases). 


27


The following table sets forth a summary schedule of the annual lease expirations for leases in place with the Company’s retail anchor tenants at December 31, 2019 (dollars in thousands).  Anchor tenants are tenants with leases occupying at least 15,000 square feet or more.
 
Year of Expiration
Number of
Leases
Expiring (1)
Leased Square
Footage
Annual Base
Rent (2)
Percent of Total ABR
2020 173,902  $1,837  0.9 %
202114  425,104  5,095  2.4 %
202218  530,799  7,055  3.3 %
202326  836,758  13,312  6.2 %
202416  595,384  9,669  4.5 %
202517  603,882  8,045  3.8 %
2026 336,444  4,707  2.2 %
2027 144,682  2,084  1.0 %
202814  514,446  9,360  4.4 %
202911  354,143  6,394  3.0 %
Thereafter26  948,458  14,105  6.6 %
Total163  5,464,002  $81,663  38.3 %
____________________
 
(1)Assumes no tenants exercise renewal or cancellation options.
(2)Annual base rent is equal to the annualized cash rent for all leases in place as of December 31, 2019 (including initial cash rent for new leases). 

Item 3.  Legal Proceedings
 
In the normal course of business, from time to time, the Company is involved in routine legal actions incidental to its business of 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.
 
Item 4.  Mine Safety Disclosures
 
Not applicable.

PART II

Item 5.  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
 
ROIC Market Information
 
ROIC’s common stock trades on the NASDAQ Global Select Market (“NASDAQ”) under the symbol “ROIC”.
 
Holders
 
As of February 14, 2020, ROIC had 74 registered holders.  Such information was obtained through the registrar and transfer agent.
 
Operating Partnership
 
As of December 31, 2019, the Operating Partnership had 49 registered holders, including Retail Opportunity Investments GP, LLC.
 
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Stockholder Return Performance
 
The above graph compares the cumulative total return on the Company’s common stock with that of the Standard and Poor’s 500 Stock Index (“S&P 500”) and the National Association of Real Estate Investment Trusts Equity Index (“FTSE NAREIT Equity REITs”) from December 31, 2014 through December 31, 2019.  The stock price performance graph assumes that an investor invested $100 in each of ROIC and the indices, and the reinvestment of any dividends.  The comparisons in the graph are provided in accordance with the SEC disclosure requirements and are not intended to forecast or be indicative of the future performance of ROIC’s shares of common stock.
 
 Period Ending
Index12/31/201412/31/201512/31/201612/31/201712/31/201812/31/2019
Retail Opportunity Investments Corp.$100.00  $111.07  $135.76  $133.08  $110.53  $128.62  
S&P500$100.00  $101.38  $113.51  $138.29  $132.23  $173.86  
FTSE NAREIT Equity REITs$100.00  $102.83  $111.70  $121.39  $116.48  $149.86  
 
Except to the extent that the Company specifically incorporates this information by reference, the foregoing Stockholder Return Performance information shall not be deemed incorporated by reference by any general statement incorporating by reference this Annual Report on Form 10-K into any filing under the Securities Act or under the Exchange Act.  This information shall not otherwise be deemed filed under such Acts.
 

29


Item 6.  Selected Financial Data
 
The following tables set forth selected financial and operating information on a historical basis for ROIC and the Operating Partnership, and should be read in conjunction with Item 7, “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” and the Company’s financial statements, including the notes, included elsewhere herein.
 
RETAIL OPPORTUNITY INVESTMENTS CORP.
CONSOLIDATED HISTORICAL FINANCIAL INFORMATION
(in thousands, except share data)
 Year Ended December 31,
Retail Opportunity Investments Corp.20192018201720162015
Statement of Operations Data:     
Total revenues$295,040  $295,798  $273,260  $237,189  $192,699  
Operating expenses192,845  192,434  179,595  160,018  133,364  
Gain on sale of real estate13,175  5,890  —  —  —  
Operating income115,370  109,254  93,665  77,171  59,335  
Interest expense and other finance expenses61,687  62,113  50,977  40,741  34,243  
Net income53,683  47,141  42,688  36,430  25,092  
Net Income Attributable to Retail Opportunity Investments Corp.48,844  42,736  38,477  32,754  23,864  
Weighted average shares outstanding – Basic:114,177,528  112,645,490  109,400,123  104,072,222  95,651,780  
Weighted average shares outstanding – Diluted:125,741,486  124,558,893  121,743,831  116,039,940  100,017,781  
Income per share – Basic and Diluted     
Net Income Attributable to Retail Opportunity Investments Corp.$0.42  $0.38  $0.35  $0.31  $0.25  
Dividends per common share$0.7880  $0.7800  $0.7500  $0.7200  $0.6800  
Balance Sheet Data:     
Real Estate Investments, net$2,753,925  $2,831,265  $2,849,282  $2,493,997  $2,162,306  
Cash and cash equivalents3,800  6,076  11,553  13,125  8,844  
Total assets2,913,757  3,003,071  3,039,198  2,662,969  2,301,448  
Total liabilities1,621,929  1,694,643  1,709,557  1,347,404  1,136,432  
Non-controlling interests – redeemable OP Units—  —  —  —  33,674  
Total equity1,291,828  1,308,428  1,329,641  1,315,565  1,131,342  
 
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RETAIL OPPORTUNITY INVESTMENTS PARTNERSHIP, LP
CONSOLIDATED HISTORICAL FINANCIAL INFORMATION
(in thousands, except share data)
 
Retail Opportunity Investments Partnership, LPYear Ended December 31,
20192018201720162015
Statement of Operations Data:     
Total revenues$295,040  $295,798  $273,260  $237,189  $192,699  
Operating expenses192,845  192,434  179,595  160,018  133,364  
Gain on sale of real estate13,175  5,890  —  —  —  
Operating income115,370  109,254  93,665  77,171  59,335  
Interest expense and other finance expenses61,687  62,113  50,977  40,741  34,243  
Net Income Attributable to Retail Opportunity Investments Partnership, LP53,683  47,141  42,688  36,430  25,092  
Weighted average units outstanding – Basic:125,511,936  124,271,802  121,460,958  115,819,731  99,738,504  
Weighted average units outstanding – Diluted:125,741,486  124,558,893  121,743,831  116,039,940  100,017,781  
Income per unit – Basic and Diluted     
Net Income Attributable to Retail Opportunity Investments Partnership, LP$0.42  $0.38  $0.35  $0.31  $0.25  
Distributions per unit$0.7880  $0.7800  $0.7500  $0.7200  $0.6800  
Balance Sheet Data:     
Real Estate Investments, net$2,753,925  $2,831,265  $2,849,282  $2,493,997  $2,162,306  
Cash and cash equivalents3,800  6,076  11,553  13,125  8,844  
Total assets2,913,757  3,003,071  3,039,198  2,662,969  2,301,448  
Total liabilities1,621,929  1,694,643  1,709,557  1,347,404  1,136,432  
Redeemable limited partners—  —  —  —  33,674  
Total capital1,291,828  1,308,428  1,329,641  1,315,565  1,131,342  
 

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Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
The following discussion should be read in conjunction with the Retail Opportunity Investments Corp. Consolidated Financial Statements and Notes thereto appearing elsewhere in this Annual Report on Form 10-K.  The Company makes statements in this section that are forward-looking statements within the meaning of the federal securities laws.  For a complete discussion of forward-looking statements, see the section in this Annual Report on Form 10-K entitled “Statements Regarding Forward-Looking Information.”  Certain risk factors may cause actual results, performance or achievements to differ materially from those expressed or implied by the following discussion.  For a discussion of such risk factors, see the section in this Annual Report on Form 10-K entitled “Risk Factors.”
 
Overview
 
The Company is organized in an 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 Operating Partnership, Retail Opportunity Investments Partnership, LP, a Delaware limited partnership, together with its subsidiaries.
 
ROIC commenced operations in October 2009 as a fully integrated and self-managed REIT, and as of December 31, 2019, ROIC owned an approximate 91.3% partnership interest and other limited partners owned the remaining 8.7% partnership interest in the Operating Partnership. ROIC specializes in the acquisition, ownership and management of necessity-based community and neighborhood shopping centers on the west coast of the United States, anchored by supermarkets and drugstores.
 
As of December 31, 2019, the Company’s portfolio consisted of 89 properties (88 retail and one office) totaling approximately 10.1 million square feet of GLA. As of December 31, 2019, the Company’s retail portfolio was approximately 97.9% leased. During the year ended December 31, 2019, the Company leased and renewed approximately 463,000 and 920,000 square feet, respectively, in its portfolio.
 
The table below provides a reconciliation of beginning of year vacant space to end of year vacant space for its retail portfolio as of December 31, 2019.
 
 Vacant Space Square Footage
Vacant space at December 31, 2018236,752  
Square footage vacated163,015  
Vacant space in acquired properties5,275  
Vacant space in sold properties(10,685) 
Square footage leased(181,448) 
Vacant space at December 31, 2019212,909  
 
The Company has committed approximately $27.5 million, or $59.40 per square foot, in tenant improvements, including building and site improvements, for new leases that occurred during the year ended December 31, 2019. The Company has committed approximately $1.4 million, or $3.11 per square foot, in leasing commissions for the new leases that occurred during the year ended December 31, 2019. Additionally, the Company has committed approximately $1.7 million, or $1.89 per square foot, in tenant improvements for renewed leases that occurred during the year ended December 31, 2019. Leasing commission commitments for renewed leases were not material for the year ended December 31, 2019.

Results of Operations
 
At December 31, 2019, the Company had 89 properties (88 retail and one office), all of which are consolidated in the accompanying financial statements. The Company believes, because of the location of the properties in densely populated areas, the nature of its investments provides for relatively stable revenue flows even during difficult economic times. The Company has a strong capital structure with manageable debt as of December 31, 2019. The Company expects to continue to actively explore acquisition opportunities consistent with its business strategy.
 
Property operating income is a non-GAAP financial measure of performance. The Company defines property operating income as operating revenues (base rent, recoveries from tenants and other income), less property and related expenses (property
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operating expenses and property taxes). Property operating income excludes general and administrative expenses, mortgage interest income, depreciation and amortization, acquisition transaction costs, other expense, interest expense, gains and losses from property acquisitions and dispositions, equity in earnings from unconsolidated joint ventures, extraordinary items, and amortization of tenant improvements and leasing commissions. Other REITs may use different methodologies for calculating property operating income, and accordingly, the Company’s property operating income may not be comparable to other REITs.
 
Property operating income is used by management to evaluate and compare the operating performance of the Company’s properties, to determine trends in earnings and to compute the fair value of the Company’s properties as this measure is not affected by the cost of our funding, the impact of depreciation and amortization expenses, gains or losses from the acquisition and sale of operating real estate assets, general and administrative expenses or other gains and losses that relate to our ownership of our properties. The Company believes the exclusion of these items from net income is useful because the resulting measure captures the actual revenue generated and actual expenses incurred in operating the Company’s properties as well as trends in occupancy rates, rental rates and operating costs.
 
Property operating income is a measure of the operating performance of the Company’s properties but does not measure the Company’s performance as a whole. Property operating income is therefore not a substitute for net income or operating income as computed in accordance with GAAP.
 
Results of Operations for the year ended December 31, 2019 compared to the year ended December 31, 2018.
 
Property Operating Income
 
The table below provides a reconciliation of consolidated operating income in accordance with GAAP to consolidated property operating income for the years ended December 31, 2019 and 2018 (in thousands).
 
  Year Ended December 31,
  20192018
Operating income per GAAP$115,370  $109,254  
Plus:Depreciation and amortization97,559  100,838  
 General and administrative expenses17,831  14,918  
 Other expense1,405  478  
Less:Gain on sale of real estate(13,175) (5,890) 
Property operating income$218,990  $219,598  
 
The following comparison for the year ended December 31, 2019 compared to the year ended December 31, 2018, makes reference to the effect of the same-center properties. Same-center properties, which totaled 85 of the Company’s 89 properties as of December 31, 2019, represent all operating properties owned by the Company during the entirety of both periods presented and consolidated into the Company’s financial statements during such periods, except for the Company’s corporate office headquarters.
 

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The table below provides a reconciliation of consolidated operating income in accordance with GAAP to property operating income for the year ended December 31, 2019 related to the 85 same-center properties owned by the Company during the entirety of both the years ended December 31, 2019 and 2018 and consolidated into the Company’s financial statements during such periods (in thousands). 

  Year Ended December 31, 2019
  Same-CenterNon Same-CenterTotal
Operating income (loss) per GAAP$119,065  $(3,695) $115,370  
Plus:Depreciation and amortization93,953  3,606  97,559  
 
General and administrative expenses (1)
—  17,831  17,831  
 
Other expense (1)
—  1,405  1,405  
Less:Gain on sale of real estate—  (13,175) (13,175) 
Property operating income$213,018  $5,972  $218,990  
______________________
 
(1)For illustration purposes, general and administrative expenses and other expenses are included in non same-center because the Company does not allocate these types of expenses between same-center and non same-center properties.

The table below provides a reconciliation of consolidated operating income in accordance with GAAP to property operating income for the year ended December 31, 2018 related to the 85 same-center properties owned by the Company during the entirety of both the years ended December 31, 2019 and 2018 and consolidated into the Company’s financial statements during such periods (in thousands).
 
  Year Ended December 31, 2018
  Same-CenterNon Same-CenterTotal
Operating income (loss) per GAAP$111,189  $(1,935) $109,254  
Plus:Depreciation and amortization96,292  4,546  100,838  
 
General and administrative expenses (1)
—  14,918  14,918  
 
Other expense (1)
—  478  478  
Less:Gain on sale of real estate—  (5,890) (5,890) 
Property operating income$207,481  $12,117  $219,598  
______________________
 
(1)For illustration purposes, general and administrative expenses and other expenses are included in non same-center because the Company does not allocate these types of expenses between same-center and non same-center properties.

During the year ended December 31, 2019, the Company generated property operating income of approximately $219.0 million compared to property operating income of $219.6 million generated during the year ended December 31, 2018, a decrease of approximately $608,000. The property operating income for the 85 same-center properties increased approximately $5.5 million primarily due to a $3.1 million increase due to the accelerated recognition of a below-market lease intangible liability resulting from a lease termination in the year ended December 31, 2019 and an increase in rental revenues, offset by a decrease in straight-line rent. The non same-center properties decreased property operating income in the year ended December 31, 2019 by approximately $6.1 million compared to the year ended December 31, 2018 primarily due to $2.2 million in lease settlement income received during the year ended December 31, 2018 for which there was none received during 2019 and property sales that occurred during the year ended December 31, 2019.

Depreciation and amortization
 
The Company incurred depreciation and amortization expenses during the year ended December 31, 2019 of approximately $97.6 million compared to $100.8 million incurred during the year ended December 31, 2018.
 

34


General and administrative expenses
 
The Company incurred general and administrative expenses during the year ended December 31, 2019 of approximately $17.8 million compared to $14.9 million incurred during the year ended December 31, 2018. General and administrative expenses increased approximately $2.9 million primarily as a result of the adoption, effective January 1, 2019, of ASU No. 2016-2 which requires that leasing payroll-related costs that are incurred regardless of whether leases are obtained are no longer capitalized as initial direct costs and instead are expensed as incurred, an overall increase in compensation-related expenses and an increase in legal fees related to a legal settlement that occurred during the year ended December 31, 2019.
 
Other expense
 
The Company incurred other expenses of approximately $1.4 million during the year ended December 31, 2019 compared to $478,000 during the year ended December 31, 2018. During the year ended December 31, 2019, the Company settled an ongoing lawsuit for approximately $1.4 million and accordingly, recorded a $950,000 charge to Other expense in the consolidated statements of operations and comprehensive income during the year ended December 31, 2019.

Gain on sale of real estate

On February 15, 2019, the Company sold Vancouver Market Center, a non-core shopping center located in Vancouver, Washington. The sales price of $17.0 million, less costs to sell, resulted in net proceeds of approximately $16.0 million. The Company recorded a gain on sale of real estate of approximately $2.6 million during the year ended December 31, 2019 related to this property disposition. On May 1, 2019, the Company sold Norwood Shopping Center, a non-core shopping center located in Sacramento, California for a sales price of $13.5 million. The Company recorded a gain on sale of real estate of approximately $180,000 during the year ended December 31, 2019 related to this property disposition. On August 1, 2019, the Company sold Morada Ranch, a non-core shopping center located in Stockton, California. The sales price of $30.0 million, less costs to sell, resulted in net proceeds of approximately $29.1 million. The Company recorded a gain on sale of real estate of approximately $10.4 million during the year ended December 31, 2019 related to this property disposition. On September 27, 2018, the Company sold Round Hill Square, a non-core shopping center located in Zephyr Cove, Nevada. The sales price of $28.0 million, less costs to sell, resulted in net proceeds of approximately $26.9 million. The Company recorded a gain on sale of real estate of approximately $5.9 million for the year ended December 31, 2018 related to this property disposition.

Interest expense and other finance expenses
 
During the year ended December 31, 2019, the Company incurred approximately $61.7 million of interest expense compared to approximately $62.1 million during the year ended December 31, 2018.

Results of Operations for the year ended December 31, 2018 compared to the year ended December 31, 2017.
 
Property Operating Income
 
The table below provides a reconciliation of consolidated operating income in accordance with GAAP to consolidated property operating income for the years ended December 31, 2018 and 2017 (in thousands).
 
  Year Ended December 31,
  20182017
Operating income per GAAP$109,254  $93,665  
Plus:Depreciation and amortization100,838  96,256  
General and administrative expenses14,918  14,103  
Acquisition transaction costs—   
Other expense478  418  
Less:Gain on sale of real estate(5,890) —  
Property operating income$219,598  $204,446  
 
The following comparison for the year ended December 31, 2018 compared to the year ended December 31, 2017, makes reference to the effect of the same-center properties. Same-center properties, which totaled 78 of the Company’s 92 properties as of December 31, 2018, represent all operating properties owned by the Company during the entirety of both periods
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presented and consolidated into the Company’s financial statements during such periods, except for one shopping center that was under contract to be sold and slated for new multi-family development and was no longer being managed as a retail asset and the Company’s corporate office headquarters.

The table below provides a reconciliation of consolidated operating income in accordance with GAAP to property operating income for the year ended December 31, 2018 related to the 78 same-center properties owned by the Company during the entirety of both the years ended December 31, 2018 and 2017 and consolidated into the Company’s financial statements during such periods (in thousands).

  Year Ended December 31, 2018
  Same-CenterNon Same-CenterTotal
Operating income per GAAP$101,121  $8,133  $109,254  
Plus:Depreciation and amortization86,317  14,521  100,838  
 
General and administrative expenses (1)
—  14,918  14,918  
 
Other expense (1)
—  478  478  
Less:Gain on sale of real estate—  (5,890) (5,890) 
Property operating income$187,438  $32,160  $219,598  
______________________

(1)For illustration purposes, general and administrative expenses and other expenses are included in non same-center because the Company does not allocate these types of expenses between same-center and non same-center properties.

The table below provides a reconciliation of consolidated operating income in accordance with GAAP to property operating income for the year ended December 31, 2017 related to the 78 same-center properties owned by the Company during the entirety of both the years ended December 31, 2018 and 2017 and consolidated into the Company’s financial statements during such periods (in thousands).
 
  Year Ended December 31, 2017
  Same-CenterNon Same-CenterTotal
Operating income (loss) per GAAP$101,072  $(7,407) $93,665  
Plus:Depreciation and amortization87,978  8,278  96,256  
 
General and administrative expenses (1)
—  14,103  14,103  
 Acquisition transaction costs—    
 
Other expense (1)
—  418  418  
Property operating income$189,050  $15,396  $204,446  
______________________
 
(1)For illustration purposes, general and administrative expenses and other expenses are included in non same-center because the Company does not allocate these types of expenses between same-center and non same-center properties.

During the year ended December 31, 2018, the Company generated property operating income of approximately $219.6 million compared to property operating income of $204.4 million generated during the year ended December 31, 2017. Property operating income increased by approximately $15.2 million during the year ended December 31, 2018 primarily as a result of an increase in the number of properties owned by the Company in 2018 compared to 2017 as well as $2.2 million of lease settlement income received in 2018 in connection with a property that was under contract to be sold and was slated for new multi-family development as of December 31, 2018.  As of December 31, 2018, the Company owned 92 properties as compared to 91 properties at December 31, 2017. The properties acquired during 2018 and 2017 increased property operating income in the year ended December 31, 2018 by approximately $16.8 million compared to the year ended December 31, 2017. The property operating income for the 78 same-center properties decreased approximately $1.6 million primarily due to a $2.7 million accelerated recognition of a below-market lease intangible liability resulting from a lease termination during the year ended December 31, 2017, offset by an increase in rental revenue during the year ended December 31, 2018.
 

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Depreciation and amortization
 
The Company incurred depreciation and amortization expenses during the year ended December 31, 2018 of approximately $100.8 million compared to $96.3 million incurred during the year ended December 31, 2017. Depreciation and amortization expenses were higher in 2018 as a result of an increase in the number of properties owned by the Company in 2018 compared to 2017.
 
General and administrative expenses
 
The Company incurred general and administrative expenses during the year ended December 31, 2018 of approximately $14.9 million compared to $14.1 million incurred during the year ended December 31, 2017. General and administrative expenses increased approximately $815,000 primarily as a result of an increase in compensation-related expenses.

Gain on sale of real estate

On September 27, 2018, the Company sold Round Hill Square, a non-core shopping center located in Zephyr Cove, Nevada. The sales price of $28.0 million, less costs to sell, resulted in net proceeds of approximately $26.9 million. The Company recorded a gain on sale of real estate of approximately $5.9 million for the year ended December 31, 2018 related to this property disposition. There were no property sales in the year ended December 31, 2017.

Interest expense and other finance expenses
 
During the year ended December 31, 2018, the Company incurred approximately $62.1 million of interest expense compared to approximately $51.0 million during the year ended December 31, 2017. Interest expense increased approximately $11.1 million primarily due to the incremental increase in interest expense recognized on the Senior Notes Due 2027 issued in December 2017 and increased interest rates payable on the credit facility.

Funds From Operations
 
Funds from operations (“FFO”), is a widely-recognized non-GAAP financial measure for REITs that the Company believes when considered with financial statements presented in accordance with GAAP, provides additional and useful means to assess its financial performance. FFO is frequently used by securities analysts, investors and other interested parties to evaluate the performance of REITs, most of which present FFO along with net income as calculated in accordance with GAAP.
 
The Company computes FFO in accordance with the “White Paper” on FFO published by the National Association of Real Estate Investment Trusts (“NAREIT”), which defines FFO as net income attributable to common stockholders (determined in accordance with GAAP) excluding gains or losses from debt restructuring, sales of depreciable property, and impairments, plus real estate related depreciation and amortization, and after adjustments for partnerships and unconsolidated joint ventures.

However, FFO:
 
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.

FFO as defined by the Company may not be comparable to similarly titled items reported by other REITs due to possible differences in the application of the NAREIT definition used by such REITs.
 

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The table below provides a reconciliation of net income applicable to stockholders in accordance with GAAP to FFO for the years ended December 31, 2019, 2018 and 2017 (in thousands).
 
 Year Ended December 31,
 201920182017
Net income attributable to ROIC$48,844  $42,736  $38,477  
Plus:  Depreciation and amortization97,559  100,838  96,256  
Less: Gain on sale of real estate(13,175) (5,890) —  
Funds from operations – basic133,228  137,684  134,733  
Net income attributable to non-controlling interests4,839  4,405  4,211  
Funds from operations – diluted$138,067  $142,089  $138,944  
 
Cash Net Operating Income (“NOI”)
 
Cash NOI is a non-GAAP financial measure of the Company’s performance. The most directly comparable GAAP financial measure is operating income. The Company defines cash NOI as operating revenues (base rent and recoveries from tenants), less property and related expenses (property operating expenses and property taxes), adjusted for non-cash revenue and operating expense items such as straight-line rent and amortization of lease intangibles, debt-related expenses, and other adjustments. Cash NOI also excludes general and administrative expenses, depreciation and amortization, acquisition transaction costs, other expense, interest expense, gains and losses from property acquisitions and dispositions, extraordinary items, tenant improvements and leasing commissions. Other REITs may use different methodologies for calculating cash NOI, and accordingly, the Company’s cash NOI may not be comparable to other REITs.
 
Cash NOI is used by management internally to evaluate and compare the operating performance of the Company’s properties. The Company believes cash NOI provides useful information to investors regarding the Company’s financial condition and results of operations because it reflects only those cash income and expense items that are incurred at the property level, and when compared across periods, can be used to determine trends in earnings of the Company’s properties as this measure is not affected by non-cash revenue and expense recognition items, the cost of the Company’s funding, the impact of depreciation and amortization expenses, gains or losses from the acquisition and sale of operating real estate assets, general and administrative expenses or other gains and losses that relate to the Company’s ownership of properties. The Company believes the exclusion of these items from operating income is useful because the resulting measure captures the actual revenue generated and actual expenses incurred in operating the Company’s properties as well as trends in occupancy rates, rental rates and operating costs.

Cash NOI is a measure of the operating performance of the Company’s properties but does not measure the Company’s performance as a whole and is therefore not a substitute for net income or operating income as computed in accordance with GAAP.


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Same-Center Cash NOI
 
The table below provides a reconciliation of same-center cash NOI to consolidated operating income in accordance with GAAP for the years ended December 31, 2019 and 2018. The table makes reference to the effect of the same-center properties. Same-center properties, which totaled 85 of the Company’s 89 properties as of December 31, 2019, represent all operating properties owned by the Company during the entirety of both periods presented and consolidated into the Company’s financial statements during such periods, except for the Company’s corporate office headquarters (in thousands).
 
 Year Ended December 31,
 20192018
GAAP operating income$115,370  $109,254  
Depreciation and amortization97,559  100,838  
General and administrative expenses17,831  14,918  
Other expense1,405  478  
Gain on sale of real estate(13,175) (5,890) 
Straight-line rent(3,083) (5,380) 
Amortization of above- and below-market rent(15,618) (13,965) 
Property revenues and other expenses (1)
(269) (711) 
Total Company cash NOI200,020  199,542  
Non same-center cash NOI(5,611) (11,889) 
Same-center cash NOI$194,409  $187,653  
______________________
 
(1)Includes anchor lease termination fees, net of contractual amounts, if any, expense and recovery adjustments related to prior periods and other miscellaneous adjustments.
 
During the year ended December 31, 2019, the Company generated same-center cash NOI of approximately $194.4 million compared to same-center cash NOI of approximately $187.7 million generated during the year ended December 31, 2018, representing a 3.6% increase. This increase is primarily due to an increase in base rents and recoveries from tenants.
 

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The table below provides a reconciliation of same-center cash NOI to consolidated operating income in accordance with GAAP for the years ended December 31, 2018 and 2017. The table makes reference to the effect of the same-center properties. Same-center properties, which totaled 78 of the Company’s 92 properties as of December 31, 2018, represent all operating properties owned by the Company during the entirety of both periods presented and consolidated into the Company’s financial statements during such periods except for one shopping center that was under contract to be sold and slated for new multi-family development and was no longer being managed as a retail asset and the Company’s corporate office headquarters (in thousands).
 
 Year Ended December 31,
 20182017
GAAP operating income$109,254  $93,665  
Depreciation and amortization100,838  96,256  
General and administrative expenses14,918  14,103  
Acquisition transaction costs—   
Other expense478  418  
Gain on sale of real estate(5,890) —  
Straight-line rent(5,380) (6,176) 
Amortization of above- and below-market rent(13,965) (17,078) 
Property revenues and other expenses (1)
438  762  
Total Company cash NOI200,691  181,954  
Non same-center cash NOI(28,163) (13,642) 
Same-center cash NOI$172,528  $168,312  
______________________
 
(1)Includes anchor lease termination fees, net of contractual amounts, if any, expense and recovery adjustments related to prior periods and other miscellaneous adjustments.
 
During the year ended December 31, 2018, the Company generated same-center cash NOI of approximately $172.5 million compared to same-center cash NOI of approximately $168.3 million generated during the year ended December 31, 2017, representing a 2.5% increase. This increase is primarily due to an increase in base rents and recoveries from tenants.

Critical Accounting Estimates
 
Critical accounting estimates are those that are both important to the presentation of the Company’s financial condition and results of operations and require management’s most difficult, complex or subjective judgments.  Set forth below is a summary of the accounting estimates that management believes are critical to the preparation of the consolidated financial statements.  This summary should be read in conjunction with the more complete discussion of the Company’s accounting policies included in Note 1 to the Company’s consolidated financial statements.

Revenue Recognition
 
The Company records base rents on a straight-line basis over the term of each lease.  The excess of rents recognized over amounts contractually due pursuant to the underlying leases is included in Tenant and other receivables in the accompanying consolidated balance sheets.  Most leases contain provisions that require tenants to reimburse a pro-rata share of real estate taxes and certain common area expenses.  Adjustments are also made throughout the year to tenant and other receivables and the related cost recovery income based upon the Company’s best estimate of the final amounts to be billed and collected.  In addition, the Company also provides an allowance for future credit losses in connection with the deferred straight-line rent receivable.
 
Allowance for Doubtful Accounts
 
The allowance for doubtful accounts is established based on a quarterly analysis of the risk of loss on specific accounts.  The analysis places particular emphasis on past-due accounts and considers information such as the nature and age of the receivables, the payment history of the tenants or other debtors, the financial condition of the tenants and any guarantors and management’s assessment of their ability to meet their lease obligations, the basis for any disputes and the status of related
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negotiations, among other things.  Management’s estimates of the required allowance is subject to revision as these factors change and is sensitive to the effects of economic and market conditions on tenants, particularly those at retail properties.  Estimates are used to establish reimbursements from tenants for common area maintenance, real estate tax and insurance costs.  The Company analyzes the balance of its estimated accounts receivable for real estate taxes, common area maintenance and insurance for each of its properties by comparing actual recoveries versus actual expenses and any actual write-offs.  Based on its analysis, the Company may record an additional amount in its allowance for doubtful accounts related to these items.  In addition, the Company also provides an allowance for future credit losses in connection with the deferred straight-line rent receivable.
 
Real Estate Investments
 
Land, buildings, property improvements, furniture/fixtures and tenant improvements are recorded at cost.  Expenditures for maintenance and repairs are charged to operations as incurred.  Renovations and/or replacements, which improve or extend the life of the asset, are capitalized and depreciated over their estimated useful lives.
 
The Company recognizes the acquisition of real estate properties, including acquired tangible (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) at their fair value (for acquisitions meeting the definition of a business) and relative fair value (for acquisitions not meeting the definition of a business).  Acquired lease intangible assets include above-market leases and acquired in-place leases, and Acquired lease intangible liabilities represent below-market leases in the accompanying consolidated balance sheets.  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.  
 
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 over the remaining non-cancellable terms of the respective leases.  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 is required to make subjective assessments as to the useful life of its properties for purposes of determining the amount of depreciation.  These assessments have a direct impact on its net income.

Properties are depreciated using the straight-line method over the estimated useful lives of the assets.  The estimated useful lives are as follows:

Buildings39-40 years
Property Improvements10-20 years
Furniture/Fixtures3-10 years
Tenant ImprovementsShorter of lease term or their useful life
 
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
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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.
 
REIT Qualification Requirements
 
The Company elected to be taxed as a REIT under the Code, and believes that it has been organized and has operated in a manner that will allow it to continue to qualify for taxation as a REIT under the Code.
 
The Company is subject to a number of operational and organizational requirements to qualify and then maintain qualification as a REIT.  If the Company does not qualify as a REIT, its income would become subject to U.S. federal, state and local income taxes at regular corporate rates that would be substantial and the Company may not be permitted to re-elect to qualify as a REIT for four taxable years following the year that it failed to qualify as a REIT.  The Company’s results of operations, liquidity and amounts distributable to stockholders would be significantly reduced.
 
Recent U.S. Federal Income Tax Legislation

On December 22, 2017, Congress enacted H.R. 1, also known as the TCJA.  The TCJA made major changes to the Internal Revenue Code, including the reduction of the tax rates applicable to individuals and subchapter C corporations, a reduction or elimination of certain deductions (including new limitations on the deductibility of interest expense), permitting immediate expensing of capital expenditures and significant changes in the taxation of earnings from non-U.S. sources.  The effect of the significant changes made by the TCJA is highly uncertain, and additional administrative guidance is still required in order to fully evaluate the effect of many provisions.  Technical corrections or other amendments to the new rules, and additional administrative guidance interpreting these new rules, may be forthcoming at any time but may also be significantly delayed.  While we do not currently expect this reform to have a significant impact to the Company’s consolidated financial statements, stockholders are urged to consult with their tax advisors regarding the effects of the TCJA or other legislative, regulatory or administrative developments on an investment in the Company’s common stock.

Liquidity and Capital Resources of the Company
 
In this “Liquidity and Capital Resources of the Company” section and in the “Liquidity and Capital Resources of the Operating Partnership” section, the term “the Company” refers to Retail Opportunity Investments Corp. on an unconsolidated basis, excluding the Operating Partnership.
 
The Company’s business is operated primarily through the Operating Partnership, of which the Company is the parent company, and which it consolidates for financial reporting purposes. Because the Company operates on a consolidated basis with the Operating Partnership, the section entitled “Liquidity and Capital Resources of the Operating Partnership” should be read in conjunction with this section to understand the liquidity and capital resources of the Company on a consolidated basis and how the Company is operated as a whole.
 
The Company issues public equity from time to time, but does not otherwise generate any capital itself or conduct any business itself, other than incurring certain expenses in operating as a public company. The Company itself does not hold any indebtedness other than guarantees of indebtedness of the Operating Partnership, and its only material assets are its ownership of direct or indirect partnership interests in the Operating Partnership and membership interest in Retail Opportunity Investments GP, LLC, the sole general partner of the Operating Partnership. Therefore, the consolidated assets and liabilities and the consolidated revenues and expenses of the Company and the Operating Partnership are the same on their respective financial statements. However, all debt is held directly or indirectly by the Operating Partnership. The Company’s principal funding requirement is the payment of dividends on its common stock. The Company’s principal source of funding for its dividend payments is distributions it receives from the Operating Partnership.
 
As the parent company of the Operating Partnership, the Company, indirectly, has the full, exclusive and complete responsibility for the Operating Partnership’s day-to-day management and control. The Company causes the Operating Partnership to distribute such portion of its available cash as the Company may in its discretion determine, in the manner provided in the Operating Partnership’s partnership agreement.
 
The Company is a well-known seasoned issuer with an effective shelf registration statement filed in April 2019 that allows the Company to register unspecified various classes of debt and equity securities. As circumstances warrant, the Company may issue equity from time to time on an opportunistic basis, dependent upon market conditions and available pricing. Any proceeds from such equity issuances would be contributed to the Operating Partnership. The Operating Partnership may use the proceeds to acquire additional properties, pay down debt, and for general working capital purposes.
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Liquidity is a measure of the Company’s ability to meet potential cash requirements, including ongoing commitments to repay borrowings, fund and maintain its assets and operations, make distributions to its stockholders and meet other general business needs.  The liquidity of the Company is dependent on the Operating Partnership’s ability to make sufficient distributions to the Company. The primary cash requirement of the Company is its payment of dividends to its stockholders.
 
During the year ended December 31, 2019, the Company’s primary sources of cash were distributions from the Operating Partnership and proceeds from the issuance of common stock. As of December 31, 2019, the Company has determined that it has adequate working capital to meet its dividend funding obligations for the next twelve months.

On May 1, 2018, ROIC entered into five separate Sales Agreements (the “Sales Agreements”) with each of Capital One Securities, Inc., Jefferies LLC, KeyBanc Capital Markets Inc., Raymond James & Associates, Inc., and Robert W. Baird & Co. Incorporated (each individually, an “Agent” and collectively, the “Agents”) pursuant to which ROIC may sell, from time to time, shares of ROIC’s common stock, par value $0.0001 per share, having an aggregate offering price of up to $250.0 million through the Agents either as agents or principals.

During the year ended December 31, 2019, ROIC sold a total of 1,861,036 shares under the Sales Agreements, which resulted in gross proceeds of approximately $34.2 million and commissions of approximately $342,000 paid to the Agents. During the year ended December 31, 2018, ROIC sold a total of 1,251,376 shares under the Sales Agreements, which resulted in gross proceeds of approximately $24.2 million and commissions of approximately $242,000 paid to the Agents.
 
For the year ended December 31, 2019, dividends paid to stockholders totaled approximately $90.8 million. Additionally, for the year ended December 31, 2019, the Operating Partnership made distributions of approximately $8.9 million to the non-controlling interest OP Unitholders. On a consolidated basis, cash flows from operations for the same period totaled approximately $132.0 million.  For the year ended December 31, 2018, dividends paid to stockholders totaled approximately $88.5 million. Additionally, for the year ended December 31, 2018, the Operating Partnership made distributions of approximately $9.1 million to the non-controlling interest OP Unitholders. On a consolidated basis, cash flows from operations for the same period totaled approximately $130.9 million.
 
Potential future sources of capital include equity issuances and distributions from the Operating Partnership.
 
Liquidity and Capital Resources of the Operating Partnership
 
In this “Liquidity and Capital Resources of the Operating Partnership” section, the terms the “Operating Partnership,” “we”, “our” and “us” refer to the Operating Partnership together with its consolidated subsidiaries or the Operating Partnership and the Company together with their respective consolidated subsidiaries, as the context requires.
 
During the year ended December 31, 2019, the Operating Partnership’s primary sources of cash were (i) cash flow from operations, (ii) proceeds from the sale of real estate, and (iii) cash contributed by ROIC from the issuance of common stock. As of December 31, 2019, the Operating Partnership has determined that it has adequate working capital to meet its debt obligations and operating expenses for the next twelve months.
 
The Company has an unsecured term loan agreement with several banks under which the lenders agreed to provide a $300.0 million unsecured term loan facility. Effective December 20, 2019, the Company entered into the First Amendment to First Amended and Restated Term Loan Agreement (as amended, the “Term Loan Agreement”) pursuant to which the maturity date of the term loan was extended from September 8, 2022 to January 20, 2025, without further options for extension. The Term Loan Agreement also provides that the Company may from time to time request increased aggregate commitments of $200.0 million under certain conditions set forth in the Term Loan Agreement, including the consent of the lenders for the additional commitments. Borrowings under the Term Loan Agreement accrue interest on the outstanding principal amount 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 U.S. dollar deposits for the relevant period (the “Eurodollar Rate”), 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 the Administrative Agent as its “prime rate,” and (c) the Eurodollar Rate plus 1.00%.
 
The Operating Partnership has an unsecured revolving credit facility with several banks. Effective December 20, 2019, the Company entered into the First Amendment to Second Amended and Restated Credit Agreement (as amended, the “Credit Facility Agreement”) pursuant to which the borrowing capacity under the credit facility is $600.0 million. The maturity date of the credit facility was extended from September 8, 2021 to February 20, 2024, with two six-month extension options, which may be exercised by the Operating Partnership upon satisfaction of certain conditions including the payment of extension fees.
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Additionally, the credit facility contains an accordion feature, which allows the Operating Partnership to increase the borrowing capacity under the credit facility up to an aggregate of $1.2 billion, subject to lender consents and other conditions. Borrowings under the credit facility accrue interest on the outstanding principal amount at a rate equal to an applicable rate based on the credit rating level of the Company, plus, as applicable, (i) the Eurodollar Rate, 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 as its “prime rate,” and (c) the Eurodollar Rate plus 0.90%. Additionally, the Operating Partnership is obligated to pay a facility fee at a rate based on the credit rating level of the Company, currently 0.20%, and a fronting fee at a rate of 0.125% per year with respect to each letter of credit issued under the credit facility.
 
Both the term loan and credit facility contain customary representations, financial and other covenants. The Operating Partnership’s ability to borrow under the credit facility and term loan is subject to its compliance with financial covenants and other restrictions on an ongoing basis. The Operating Partnership was in compliance with such covenants at December 31, 2019.
 
As of December 31, 2019, $300.0 million and $84.0 million were outstanding under the term loan and credit facility, respectively. The weighted average interest rates on the term loan and the credit facility during the year ended December 31, 2019 were 3.4% and 3.3%, respectively. As discussed in Note 11 of the accompanying financial statements, the Company uses interest rate swaps to manage its interest rate risk and accordingly, the swapped interest rate on the term loan is 3.0%. The Company had no available borrowings under the term loan at December 31, 2019. The Company had $516.0 million available to borrow under the credit facility at December 31, 2019.
 
Further, the Operating Partnership issued $250.0 million aggregate principal amount of unsecured senior notes in December 2017, $200.0 million aggregate principal amount of unsecured senior notes in September 2016, $250.0 million aggregate principal amount of unsecured senior notes in December 2014 and $250.0 million aggregate principal amount of unsecured senior notes in December 2013, each of which were fully and unconditionally guaranteed by ROIC.
 
While the Operating Partnership generally intends to hold its assets as long term investments, certain of its investments may be sold in order to manage the Operating Partnership’s interest rate risk and liquidity needs, meet other operating objectives and adapt to market conditions.  The timing and impact of future sales of its investments, if any, cannot be predicted with any certainty.
 
Cash Flows
 
The following table summarizes, for the periods indicated, selected items in our consolidated statements of cash flows (in thousands):
 
 Year Ended December 31,
 201920182017
Net Cash Provided by (Used in):   
Operating activities$132,039  $130,918  $128,938  
Investing activities$12,402  $(56,055) $(317,963) 
Financing activities$(146,432) $(84,379) $192,740  
 
Net Cash Flows from:
 
Operating Activities
 
Increase in cash flows provided by operating activities from 2018 to 2019:
 
Net cash flows provided by operating activities amounted to $132.0 million during the year ended December 31, 2019, which is materially consistent with $130.9 million during the year ended December 31, 2018.
 
Increase in cash flows provided by operating activities from 2017 to 2018:
 
Net cash flows provided by operating activities amounted to $130.9 million during the year ended December 31, 2018, compared to $128.9 million during the year ended December 31, 2017. During the year ended December 31, 2018, cash flows provided by operating activities increased by approximately $2.0 million primarily due to an increase in property operating
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income of approximately $15.2 million, offset by an increase in interest expense of approximately $11.1 million due to interest incurred related to the Senior Notes Due 2027 issued in December 2017 and increased interest rates payable on the credit facility and term loan and the timing of collections and payments of working capital accounts.

Investing Activities
 
Increase in cash flows provided by investing activities from 2018 to 2019:
 
Net cash flows provided by investing activities amounted to $12.4 million during the year ended December 31, 2019, compared to net cash flows used in investing activities of $56.1 million during the year ended December 31, 2018. During the year ended December 31, 2019, cash flows provided by investing activities increased approximately $68.5 million, primarily due to the decrease in investments in real estate of approximately $32.6 million, an increase in proceeds from the sale of real estate of approximately $32.1 million and a decrease in improvements to properties of approximately $4.1 million.
 
Decrease in cash flows used in investing activities from 2017 to 2018:
 
Net cash flows used in investing activities amounted to $56.1 million during the year ended December 31, 2018, compared to $318.0 million during the year ended December 31, 2017. During the year ended December 31, 2018, cash flows used in investing activities decreased approximately $261.9 million, primarily due to the decrease in investments in real estate of approximately $219.2 million, an increase in proceeds from the sale of real estate of approximately $26.9 million and a decrease in improvements to properties of approximately $14.9 million.
 
Financing Activities
 
Increase in cash flows used in financing activities from 2018 to 2019:
 
Net cash flows used in financing activities amounted to $146.4 million during the year ended December 31, 2019, compared to $84.4 million during the year ended December 31, 2018. This increase of approximately $62.1 million for the year ended December 31, 2019 is primarily due to the net increase in payments on the credit facility of $84.5 million, offset by the decrease in repayments on mortgages of approximately $19.1 million.

Decrease in cash flows provided by financing activities from 2017 to 2018:
 
Net cash flows used in financing activities amounted to $84.4 million during the year ended December 31, 2018, compared to net cash flows provided by financing activities of $192.7 million during the year ended December 31, 2017. This decrease of approximately $277.1 million for the year ended December 31, 2018 is primarily due to proceeds received during the year ended December 31, 2017 of $250.0 million related to the issuance of the Senior Notes Due 2027, the net decrease in proceeds from draws on the credit facility of $33.0 million, the increase in repayments on mortgages of approximately $10.8 million and the increase in dividend and distribution payments of approximately $5.9 million. These decreases were offset by the increase in proceeds from the sale of common stock of approximately $21.2 million.
 

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Contractual Obligations
 
The following table presents the Company’s operating lease obligations and the principal and interest amounts of the Company’s long-term debt maturing each year, including amortization of principal based on debt outstanding, at December 31, 2019 (in thousands):
 
 20202021202220232024ThereafterTotal
Contractual obligations:       
Mortgage Notes Payable Principal (1)
$577  $717  $24,132  $686  $26,708  $33,337  $86,157  
Mortgage Notes Payable Interest3,774  3,737  3,170  2,482  1,627  991  15,781  
Term loan (2)
—  —  —  —  —  300,000  300,000  
Credit facility (3)
—  —  —  —  84,000  —  84,000  
Senior Notes Due 2027 (4)
10,475  10,475  10,475  10,475  10,475  281,425  333,800  
Senior Notes Due 2026 (4)
7,900  7,900  7,900  7,900  7,900  215,800  255,300  
Senior Notes Due 2024 (5)
10,000  10,000  10,000  10,000  260,000  —  300,000  
Senior Notes Due 2023 (6)
12,500  12,500  12,500  262,500  —  —  300,000  
Operating lease obligations1,287  1,282  1,304  1,330  1,335  32,604  39,142  
Total$46,513  $46,611  $69,481  $295,373  $392,045  $864,157  $1,714,180  
__________________
 
(1)Does not include unamortized mortgage premium of approximately $1.6 million as of December 31, 2019.
(2)For the purpose of the above table, the Company has assumed that borrowings under the term loan accrue interest at the interest rate on the term loan as of December 31, 2019 which was 3.0%, inclusive of the swap agreements the Company has entered into.
(3)For the purpose of the above table, the Company has assumed that borrowings under the credit facility accrue interest at the interest rate on the credit facility as of December 31, 2019 which was 2.7%.
(4)Represents payments of interest only in years 2020 through 2024 and payments of both principal and interest thereafter.
(5)Represents payments of interest only in years 2020 through 2023 and payments of both principal and interest thereafter.
(6)Represents payments of interest only in years 2020 through 2022 and payments of both principal and interest thereafter.

The Company has committed approximately $29.2 million and $1.5 million in tenant improvements (including building and site improvements) and leasing commissions, respectively, for the new leases and renewals that occurred during the year ended December 31, 2019. As of December 31, 2019, the Company did not have any capital lease obligations.
 
The Company has entered into several lease agreements with an officer of the Company. Pursuant to the lease agreements, the Company is provided the use of storage space.

Off-Balance Sheet Arrangements
 
As of December 31, 2019, the Company does not have any off-balance sheet arrangements.

Real Estate Taxes
 
The Company’s leases generally require the tenants to be responsible for a pro-rata portion of the real estate taxes.

Inflation
 
The Company’s long-term leases contain provisions to mitigate the adverse impact of inflation on its operating results.  Such provisions include clauses entitling the Company to receive (a) scheduled base rent increases and (b) percentage rents based upon tenants’ gross sales which generally increase as prices rise.  In addition, many of the Company’s non-anchor leases are for terms of less than ten years, which permits the Company to seek increases in rents upon renewal at then-current market rates if rents provided in the expiring leases are below then-existing market rates.  Most of the Company’s leases require tenants to pay a share of operating expenses, including common area maintenance, real estate taxes, insurance and utilities, thereby reducing the Company’s exposure to increases in costs and operating expenses resulting from inflation.

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Leverage Policies
 
The Company employs prudent amounts of leverage and uses debt as a means of providing additional funds for the acquisition of its properties and the diversification of its portfolio. The Company seeks to primarily utilize unsecured debt in order to maintain liquidity and flexibility in its capital structure.
 
The Company has an unsecured term loan agreement with several banks under which the lenders agreed to provide a $300.0 million unsecured term loan facility. Effective December 20, 2019, the Company entered into the First Amendment to First Amended and Restated Term Loan Agreement (as amended, the “Term Loan Agreement”) pursuant to which the maturity date of the term loan was extended from September 8, 2022 to January 20, 2025, without further options for extension. The Term Loan Agreement also provides that the Company may from time to time request increased aggregate commitments of $200.0 million under certain conditions set forth in the Term Loan Agreement, including the consent of the lenders for the additional commitments. The Operating Partnership has an unsecured revolving credit facility with several banks. Effective December 20, 2019, the Company entered into the First Amendment to Second Amended and Restated Credit Agreement (as amended, the “Credit Facility Agreement”) pursuant to which the borrowing capacity under the credit facility is $600.0 million. The maturity date of the credit facility was extended from September 8, 2021 to February 20, 2024, with two six-month extension options, which may be exercised by the Operating Partnership upon satisfaction of certain conditions including the payment of extension fees. Additionally, the credit facility contains an accordion feature, which allows the Operating Partnership to increase the borrowing capacity under the credit facility up to an aggregate of $1.2 billion, subject to lender consents and other conditions.
 
Further, the Operating Partnership issued $250.0 million aggregate principal amount of unsecured senior notes in December 2017, $200.0 million aggregate principal amount of unsecured senior notes in September 2016, $250.0 million aggregate principal amount of unsecured senior notes in December 2014 and $250.0 million aggregate principal amount of unsecured senior notes in December 2013, all of which were fully and unconditionally guaranteed by ROIC.
 
The Company may borrow on a non-recourse basis at the corporate level or Operating Partnership level. Non-recourse indebtedness means the indebtedness of the borrower or its subsidiaries is secured only by specific assets without recourse to other assets of the borrower or any of its subsidiaries. Even with non-recourse indebtedness, however, a borrower or its subsidiaries will likely be required to guarantee against certain breaches of representations and warranties such as those relating to the absence of fraud, misappropriation, misapplication of funds, environmental conditions and material misrepresentations. Because non-recourse financing generally restricts the lender’s claim on the assets of the borrower, the lender generally may only proceed against the asset securing the debt. This may protect the Company’s other assets.
 
The Company plans to evaluate each investment opportunity and determine the appropriate leverage on a case-by-case basis and also on a Company-wide basis. The Company may seek to refinance indebtedness, such as when a decline in interest rates makes it beneficial to prepay an existing mortgage, when an existing mortgage matures or if an attractive investment becomes available and the proceeds from the refinancing can be used to purchase the investment.
 
The Company plans to finance future acquisitions through a combination of operating cashflow, borrowings under the credit facility, the assumption of existing mortgage debt, the issuance of OP Units, equity and debt offerings, and the potential sale of existing assets. In addition, the Company may acquire retail properties indirectly through joint ventures with third parties as a means of increasing the funds available for the acquisition of properties.


Distributions
 
The Operating Partnership and ROIC intend to make regular quarterly distributions to holders of their OP Units and common stock, respectively. The Operating Partnership pays distributions to ROIC directly as a holder of units of the Operating Partnership, and indirectly to ROIC through distributions to Retail Opportunity Investments GP, LLC, a wholly owned subsidiary of ROIC.  U.S. federal income tax law generally requires that a REIT distribute annually at least 90% of its REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains, and that it pay U.S. federal income tax at regular corporate rates to the extent that it annually distributes less than 100% of its net taxable income.  ROIC intends to pay regular quarterly dividends to its stockholders in an amount not less than its net taxable income, if and to the extent authorized by its board of directors.  If ROIC’s cash available for distribution is less than its net taxable income, ROIC could be required to sell assets or borrow funds to make cash distributions or the Company may make a portion of the required distribution in the form of a taxable stock distribution or distribution of debt securities.


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Item 7A.  Quantitative and Qualitative Disclosures About Market Risk
 
The Company’s primary market risk exposure is to changes in interest rates related to its debt.  There is inherent rollover risk for borrowings as they mature and are renewed at current market rates.  The extent of this risk is not quantifiable or predictable because of the variability of future interest rates and the Company’s future financing requirements.
 
As of December 31, 2019, the Company had $384.0 million of variable rate debt outstanding.  The Company has primarily used fixed-rate debt and forward starting interest rate swaps to manage its interest rate risk.  See the discussion under Note 11, “Derivative and Hedging Activities,” to the accompanying consolidated financial statements for certain quantitative details related to the interest rate swaps.
 
The Company entered into interest rate swaps in order to economically hedge against the risk of rising interest rates that would affect the Company’s interest expense related to its future anticipated debt issuances as part of its overall borrowing program.  The sensitivity analysis table presented below shows the estimated instantaneous parallel shift in the yield curve up and down by 50 and 100 basis points, respectively, on the clean market value of its interest rate derivatives as of December 31, 2019, exclusive of non-performance risk (in thousands).

Swap NotionalLess 100 basis pointsLess 50 basis pointsDecember 31, 2019
Value
Increase 50 basis pointsIncrease 100 basis points
$100,000  $(3,098) $(1,812) $(550) $696  $1,919  
$100,000  $(3,098) $(1,812) $(550) $696  $1,919  
$50,000  $(2,677) $(2,026) $(1,388) $(757) $(139) 
$50,000  $(2,682) $(2,031) $(1,393) $(762) $(143) 

See Note 11 of the accompanying consolidated financial statements for a discussion on how the Company values derivative financial instruments.  The Company calculates the value of its interest rate swaps based upon the present value of the future cash flows expected to be paid and received on each leg of the swap.  The cash flows on the fixed leg of the swap are agreed to at inception and the cash flows on the floating leg of a swap change over time as interest rates change.  To estimate the floating cash flows at each valuation date, the Company utilizes a forward curve which is constructed using LIBOR fixings, Eurodollar futures, and swap rates, which are observable in the market.  Both the fixed and floating legs’ cash flows are discounted at market discount factors.  For purposes of adjusting its derivative valuations, the Company incorporates the nonperformance risk for both itself and its counterparties to these contracts based upon management’s estimates of credit spreads, credit default swap spreads (if available) or IHS Markit ratings in order to derive a curve that considers the term structure of credit.
 
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 future income, cash flows and fair values relevant to financial instruments are dependent upon prevailing market interest rates.  Market risk refers to the risk of loss from adverse changes in market prices and interest rates.  The Company will be exposed to interest rate changes primarily as a result of long-term debt used to acquire properties.  The Company’s interest rate risk management objectives will be to limit the impact of interest rate changes on earnings and cash flows and to lower overall borrowing costs.  To achieve these objectives, the Company expects to borrow primarily at fixed rates or variable rates with the lowest margins available and, in some cases, with the ability to convert variable rates to fixed rates.  In addition, the Company can use derivative financial instruments to manage interest rate risk.  The Company will not use derivatives for trading or speculative purposes and will only enter into contracts with major financial institutions based on their credit rating and other factors.  Currently, the Company uses interest rate swaps to manage its interest rate risk.  See Note 11 of the accompanying consolidated financial statements.

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Item 8.  Financial Statements and Supplementary Data
 
Index to Consolidated Financial Statements and Financial Statement Schedule
 
 Page
  
Consolidated Financial Statements of Retail Opportunity Investments Corp.: 
  
Consolidated Financial Statements of Retail Opportunity Investments Partnership, LP: 
  
  
Schedules 
  
 
All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and therefore have been omitted.

49



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
The Board of Directors and Stockholders of
 
Retail Opportunity Investments Corp.
 
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Retail Opportunity Investments Corp. (the Company) as of December 31, 2019 and 2018, the related consolidated statements of operations and comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2019, and the related notes and financial statement schedule listed in the Index at Item 8 (collectively referred to as the “consolidated financial statements”).  In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with U.S. generally accepted accounting principles.  

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) and our report dated February 19, 2020 expressed an unqualified opinion thereon.

Basis for Opinion
These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
 
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of this critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.


50


Impairment of real estate investments
Description of the MatterAt December 31, 2019, the Company’s real estate investments totaled $2.7 billion. As discussed in Note 1 of the consolidated financial statements, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the real estate investments are not expected to be recovered through future undiscounted cash flows. The Company did not identify any assets that were impaired at December 31, 2019.
Auditing management’s assessment of impairment is challenging due to the high degree of subjective auditor judgment necessary in evaluating management’s identification of indicators of potential impairment and the related assessment of the severity of such indicators in determining whether a triggering event has occurred that requires the Company to evaluate the recoverability of the asset. The significant inputs used in the assessment included capitalization rates, current and estimated future cash flows associated with each property, which were based on market information including, where applicable, market rental rates, leasing trends, occupancy trends, expense ratios, and other quantitative and qualitative factors.
How We Addressed the Matter in Our AuditWe obtained an understanding of management’s process to identify indicators of impairment, including the qualitative and quantitative analysis and related inputs and assumptions used in performing the analyses. We evaluated the design and tested the operating effectiveness of the controls that address the identification of indicators of impairment, in addition to controls around the quantitative assessment of impairment. For example, we tested controls over the Company’s process to estimate the fair value of its real estate assets and to assess the recoverability of each investment, including controls over management’s development and review of the significant inputs and assumptions described above used in the quantitative assessment.
Our testing of the Company’s impairment assessment included, among other procedures, evaluating significant judgments applied in determining whether indicators of impairment were present at any given property by obtaining evidence to corroborate such judgments and searching for evidence contrary to such judgments. For example, we reviewed the bad debt reserves analysis and rent rolls for any tenants with large reserved balances or upcoming lease expirations, in addition to reviewing various industry market surveys that indicate potential tenants with deteriorating credit quality to determine if they occupied a substantial portion of any particular property.


/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2010
San Diego, California
February 19, 2020
 
51


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
The Board of Directors and Stockholders of
 
Retail Opportunity Investments Corp.
 
Opinion on Internal Control over Financial Reporting
We have audited Retail Opportunity Investments Corp.’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) (the COSO criteria). In our opinion, Retail Opportunity Investments Corp. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of Retail Opportunity Investments Corp. as of December 31, 2019 and 2018, the related consolidated statements of operations and comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2019 and the related notes and financial statement schedule listed in the Index at Item 8 and our report dated February 19, 2020 expressed an unqualified opinion thereon.

Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting (Retail Opportunity Investments Corp).  Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
 
We conducted our audit in accordance with the standards of the PCAOB.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.  

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.  We believe that our audit provides a reasonable basis for our opinion.
 
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed 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.  A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
 
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 
/s/ Ernst & Young LLP
San Diego, California
February 19, 2020
 

52


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
The Partners of Retail Opportunity Investments Partnership, LP
 
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Retail Opportunity Investments Partnership, LP (the “Operating Partnership”) as of December 31, 2019 and 2018, the related consolidated statements of operations and comprehensive income, Partners’ capital, and cash flows for each of the three years in the period ended December 31, 2019 and the related notes and financial statement schedule listed in the Index at Item 8 (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Operating Partnership at December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion
These financial statements are the responsibility of the Operating Partnership’s management.  Our responsibility is to express an opinion on the Operating Partnership’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Operating Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Operating Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Operating Partnership’s internal control over financial reporting. Accordingly, we express no such opinion.
 
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of this critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.


53


Impairment of real estate investments
Description of the MatterAt December 31, 2019, the Company’s real estate investments totaled $2.7 billion. As discussed in Note 1 of the consolidated financial statements, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the real estate investments are not expected to be recovered through future undiscounted cash flows. The Company did not identify any assets that were impaired at December 31, 2019.
Auditing management’s assessment of impairment is challenging due to the high degree of subjective auditor judgment necessary in evaluating management’s identification of indicators of potential impairment and the related assessment of the severity of such indicators in determining whether a triggering event has occurred that requires the Company to evaluate the recoverability of the asset. The significant inputs used in the assessment included capitalization rates, current and estimated future cash flows associated with each property, which were based on market information including, where applicable, market rental rates, leasing trends, occupancy trends, expense ratios, and other quantitative and qualitative factors.
How We Addressed the Matter in Our AuditWe obtained an understanding of management’s process to identify indicators of impairment, including the qualitative and quantitative analysis and related inputs and assumptions used in performing the analyses. We evaluated the design and tested the operating effectiveness of the controls that address the identification of indicators of impairment, in addition to controls around the quantitative assessment of impairment. For example, we tested controls over the Company’s process to estimate the fair value of its real estate assets and to assess the recoverability of each investment, including controls over management’s development and review of the significant inputs and assumptions described above used in the quantitative assessment.
Our testing of the Company’s impairment assessment included, among other procedures, evaluating significant judgments applied in determining whether indicators of impairment were present at any given property by obtaining evidence to corroborate such judgments and searching for evidence contrary to such judgments. For example, we reviewed the bad debt reserves analysis and rent rolls for any tenants with large reserved balances or upcoming lease expirations, in addition to reviewing various industry market surveys that indicate potential tenants with deteriorating credit quality to determine if they occupied a substantial portion of any particular property.

  
/s/ Ernst & Young LLP
We have served as the Operating Partnership’s auditor since 2013
San Diego, California
February 19, 2020


54


RETAIL OPPORTUNITY INVESTMENTS CORP.
Consolidated Balance Sheets
(In thousands, except share data)
December 31,
 20192018
ASSETS  
Real Estate Investments:  
Land$879,540  $894,240  
Building and improvements2,252,301  2,266,232  
 3,131,841  3,160,472  
Less:  accumulated depreciation390,916  329,207  
2,740,925  2,831,265  
Mortgage note receivable13,000    
Real Estate Investments, net2,753,925  2,831,265  
Cash and cash equivalents3,800  6,076  
Restricted cash1,658  1,373  
Tenant and other receivables, net45,821  46,832  
Acquired lease intangible assets, net59,701  72,109  
Prepaid expenses3,169  4,194  
Deferred charges, net27,652  33,857  
Other assets18,031  7,365  
Total assets$2,913,757  $3,003,071  
LIABILITIES AND EQUITY  
Liabilities:  
Term loan$298,330  $299,076  
Credit facility80,743  153,689  
Senior Notes942,850  941,449  
Mortgage notes payable87,523  88,511  
Acquired lease intangible liabilities, net144,757  166,146  
Accounts payable and accrued expenses17,562  15,488  
Tenants’ security deposits7,177  7,065  
Other liabilities42,987  23,219  
Total liabilities1,621,929  1,694,643  
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; 116,496,016 and 113,992,837 shares issued and outstanding at December 31, 2019 and 2018, respectively
12  11  
Additional paid-in capital1,481,466  1,441,080  
Dividends in excess of earnings(297,998) (256,438) 
Accumulated other comprehensive (loss) income(4,132) 3,561  
Total Retail Opportunity Investments Corp. stockholders’ equity1,179,348  1,188,214  
Non-controlling interests112,480  120,214  
Total equity1,291,828  1,308,428  
Total liabilities and equity$2,913,757  $3,003,071  
 
See accompanying notes to consolidated financial statements.
55


RETAIL OPPORTUNITY INVESTMENTS CORP.
Consolidated Statements of Operations and Comprehensive Income
(In thousands, except per share data)
 
 Year Ended December 31,
 201920182017
Revenues   
Rental revenue$291,263  $289,601  $269,382  
Other income3,777  6,197  3,878  
Total revenues295,040  295,798  273,260  
Operating expenses   
Property operating43,662  43,851  39,151  
Property taxes32,388  32,349  29,663  
Depreciation and amortization97,559  100,838  96,256  
General and administrative expenses17,831  14,918  14,103  
Acquisition transaction costs    4  
Other expense1,405  478  418  
Total operating expenses192,845  192,434  179,595  
Gain on sale of real estate13,175  5,890    
Operating income115,370  109,254  93,665  
Non-operating expenses   
Interest expense and other finance expenses(61,687) (62,113) (50,977) 
Net income53,683  47,141  42,688  
Net income attributable to non-controlling interests(4,839) (4,405) (4,211) 
Net Income Attributable to Retail Opportunity Investments Corp.$48,844  $42,736  $38,477  
Earnings per share – basic and diluted$0.42  $0.38  $0.35  
Dividends per common share$0.7880  $0.7800  $0.7500  
Comprehensive income:   
Net income$53,683  $47,141  $42,688  
Other comprehensive (loss) income:   
Unrealized swap derivative (loss) gain arising during the period(7,348) 1,648  3,665  
Reclassification adjustment for amortization of interest expense included in net income(345) 57  1,920  
Other comprehensive (loss) income(7,693) 1,705  5,585  
Comprehensive income45,990  48,846  48,273  
Comprehensive income attributable to non-controlling interests(4,839) (4,405) (4,211) 
Comprehensive income attributable to Retail Opportunity Investments Corp.$41,151  $44,441  $44,062  
 
See accompanying notes to consolidated financial statements.
 
56


RETAIL OPPORTUNITY INVESTMENTS CORP.
Consolidated Statements of Equity
(In thousands, except share data) 
 Common StockAdditional
paid-in capital
Accumulated dividends in excess of earningsAccumulated
other
comprehensive (loss) income
Non-
controlling
interests
Equity
 SharesAmount
Balance at December 31, 2016109,301,762  $11  $1,357,910  $(165,951) $(3,729) $127,324  $1,315,565  
Shares issued under the 2009 Equity Incentive Plan353,261  —  44  —  —  —  44  
Shares withheld for employee taxes(74,331) —  (1,571) —  —  —  (1,571) 
Cancellation of restricted stock(1,999) —  —  —  —  —  —  
Stock based compensation expense—  —  6,190  —  —  —  6,190  
Issuance of OP Units to non-controlling interests—  —  —  —  —  49,599  49,599  
Redemption / Exchange of OP Units2,555,933  —  50,155  —  —  (50,155) —  
Cash redemption for non-controlling interests—  —  —  —  —  (150) (150) 
Adjustment to non-controlling interests ownership in Operating Partnership—  —  (3,574) —  —  3,574  —  
Proceeds from the issuance of common stock212,825    4,481  —  —  —  4,481  
Registration expenditures—  —  (1,045) —  —  —  (1,045) 
Cash dividends ($0.7500 per share)
—  —  —  (82,781) —  (8,729) (91,510) 
Dividends payable to officers—  —  —  (235) —  —  (235) 
Net income attributable to Retail Opportunity Investments Corp.—  —  —  38,477  —  —  38,477  
Net income attributable to non-controlling interests—  —  —  —  —  4,211  4,211  
Other comprehensive income—  —  —  —  5,585  —  5,585  
Balance at December 31, 2017112,347,451  $11  $1,412,590  $(210,490) $1,856  $125,674  $1,329,641  
Shares issued under the 2009 Equity Incentive Plan397,861  —  269  —  —  —  269  
Shares withheld for employee taxes(70,168) —  (1,400) —  —  —  (1,400) 
Cancellation of restricted stock(8,997) —  —  —  —  —  —  
Stock based compensation expense—  —  7,392  —  —  —  7,392  
Cash redemption for non-controlling interests—  —  —  —  —  (3,713) (3,713) 
Adjustment to non-controlling interests ownership in Operating Partnership—  —  (2,904) —  —  2,904  —  
Proceeds from the issuance of common stock1,326,690    25,703  —  —  —  25,703  
Registration expenditures—  —  (570) —  —  —  (570) 
Cash dividends ($0.7800 per share)
—  —  —  (88,417) —  (9,056) (97,473) 
Dividends payable to officers—  —  —  (267) —  —  (267) 
Net income attributable to Retail Opportunity Investments Corp.—  —  —  42,736  —  —  42,736  
Net income attributable to non-controlling interests—  —  —  —  —  4,405  4,405  
Other comprehensive income—  —  —  —  1,705  —  1,705  
Balance at December 31, 2018113,992,837  $11  $1,441,080  $(256,438) $3,561  $120,214  $1,308,428  
Shares issued under the Equity Incentive Plan631,022  —  1,942  —  —  —  1,942  
Shares withheld for employee taxes(125,072) —  (1,986) —  —  —  (1,986) 
Cancellation of restricted stock(6,997) —  —  —  —  —  —  
Stock based compensation expense—  —  7,352  —  —  1,215  8,567  
Redemption of OP Units143,190  —  2,632  —  —  (2,632) —  
Cash redemption for non-controlling interests—  —  —  —  —  (5,043) (5,043) 
Adjustment to non-controlling interests ownership in Operating Partnership—  —  (2,983) —  —  2,983  —  
Proceeds from the issuance of common stock1,861,036  1  34,161  —  —  —  34,162  
Registration expenditures—  —  (732) —  —  —  (732) 
Cash dividends ($0.7880 per share)
—  —  —  (90,549) —  (8,921) (99,470) 
Dividends payable to officers—  —  —  145  —  (175) (30) 
Net income attributable to Retail Opportunity Investments Corp.—  —  —  48,844  —  —  48,844  
Net income attributable to non-controlling interests—  —  —  —  —  4,839  4,839  
Other comprehensive loss—  —  —  —  (7,693) —  (7,693) 
Balance at December 31, 2019116,496,016  $12  $1,481,466  $(297,998) $(4,132) $112,480  $1,291,828  

 See accompanying notes to consolidated financial statements.
57


RETAIL OPPORTUNITY INVESTMENTS CORP.
Consolidated Statements of Cash Flows
(In thousands) 
 Year Ended December 31,
 201920182017
CASH FLOWS FROM OPERATING ACTIVITIES   
Net income$53,683  $47,141  $42,688  
Adjustments to reconcile net income to cash provided by operating activities:   
Depreciation and amortization97,559  100,838  96,256  
Amortization of deferred financing costs and mortgage premiums, net2,076  1,899  2,026  
Straight-line rent adjustment(3,083) (5,380) (6,176) 
Amortization of above and below market rent(15,618) (13,965) (17,078) 
Amortization relating to stock based compensation8,567  7,392  6,190  
Provisions for tenant credit losses1,969  1,729  1,191  
Other noncash interest expense524  1,674  2,139  
Gain on sale of real estate(13,175) (5,890)   
Change in operating assets and liabilities:   
Tenant and other receivables543  (57) (2,452) 
Prepaid expenses962  (1,344) 464  
Accounts payable and accrued expenses303  (1,622) 456  
Other assets and liabilities, net(2,271) (1,497) 3,234  
Net cash provided by operating activities132,039  130,918  128,938  
CASH FLOWS FROM INVESTING ACTIVITIES  
Investments in real estate(11,601) (44,195) (263,366) 
Proceeds from sale of real estate58,930  26,880    
Improvements to properties(35,177) (39,240) (54,097) 
Deposits on real estate acquisitions, net  500  (500) 
Proceeds on repayment of mortgage note receivable250      
Net cash provided by (used in) investing activities12,402  (56,055) (317,963) 
CASH FLOWS FROM FINANCING ACTIVITIES   
Principal repayments on mortgages(551) (19,612) (8,848) 
Proceeds from draws on credit facility101,000  177,000  327,500  
Payments on credit facility(173,000) (164,500) (282,000) 
Proceeds from issuance of Senior Notes    250,000  
Redemption of OP Units(5,043) (3,713) (150) 
Distributions to OP Unitholders(8,921) (9,056) (8,729) 
Deferred financing and other costs(2,804)   (3,845) 
Proceeds from the sale of common stock34,162  25,703  4,481  
Registration expenditures(478) (570) (1,225) 
Dividends paid to common shareholders(90,753) (88,500) (82,917) 
Common shares issued under the Equity Incentive Plan1,942  269  44  
Shares withheld for employee taxes(1,986) (1,400) (1,571) 
Net cash (used in) provided by financing activities(146,432) (84,379) 192,740  
Net (decrease) increase in cash, cash equivalents and restricted cash(1,991) (9,516) 3,715  
Cash, cash equivalents and restricted cash at beginning of period7,449  16,965  13,250  
Cash, cash equivalents and restricted cash at end of period$5,458  $7,449  $16,965  

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:

Year Ended December 31,
201920182017
Cash and cash equivalents$3,800  $6,076  $11,553  
Restricted cash1,658  1,373  5,412  
Total cash, cash equivalents and restricted cash shown in Statements of Cash Flows$5,458  $7,449  $16,965  

 See accompanying notes to consolidated financial statements. 

58


RETAIL OPPORTUNITY INVESTMENTS PARTNERSHIP, LP
Consolidated Balance Sheets
(In thousands)

 December 31,
20192018
ASSETS  
Real Estate Investments:  
Land$879,540  $894,240  
Building and improvements2,252,301  2,266,232  
 3,131,841  3,160,472  
Less:  accumulated depreciation390,916  329,207  
2,740,925  2,831,265  
Mortgage note receivable13,000    
Real Estate Investments, net2,753,925  2,831,265  
Cash and cash equivalents3,800  6,076  
Restricted cash1,658  1,373  
Tenant and other receivables, net45,821  46,832  
Acquired lease intangible assets, net59,701  72,109  
Prepaid expenses3,169  4,194  
Deferred charges, net27,652  33,857  
Other assets18,031  7,365  
Total assets$2,913,757  $3,003,071  
LIABILITIES AND CAPITAL  
Liabilities:  
Term loan$298,330  $299,076  
Credit facility80,743  153,689  
Senior Notes942,850  941,449  
Mortgage notes payable87,523  88,511  
Acquired lease intangible liabilities, net144,757  166,146  
Accounts payable and accrued expenses17,562  15,488  
Tenants’ security deposits7,177  7,065  
Other liabilities42,987  23,219  
Total liabilities1,621,929  1,694,643  
Commitments and contingencies
Capital:  
Partners’ capital, unlimited partnership units authorized:  
ROIC capital1,183,480  1,184,653  
Limited partners’ capital112,480  120,214  
Accumulated other comprehensive (loss) income(4,132) 3,561  
Total capital1,291,828  1,308,428  
Total liabilities and capital$2,913,757  $3,003,071  
 
See accompanying notes to consolidated financial statements.
59


RETAIL OPPORTUNITY INVESTMENTS PARTNERSHIP, LP
Consolidated Statements of Operations and Comprehensive Income
(In thousands)
 
Year Ended December 31,
201920182017
Revenues           
Rental revenue  $291,263  $289,601  $269,382  
Other income  3,777  6,197  3,878  
Total revenues  295,040  295,798  273,260  
Operating expenses           
Property operating  43,662  43,851  39,151  
Property taxes  32,388  32,349  29,663  
Depreciation and amortization  97,559  100,838  96,256  
General and administrative expenses  17,831  14,918  14,103  
Acquisition transaction costs      4  
Other expense  1,405  478  418  
Total operating expenses  192,845  192,434  179,595  
Gain on sale of real estate  13,175  5,890    
Operating income  115,370  109,254  93,665  
Non-operating expenses           
Interest expense and other finance expenses  (61,687) (62,113) (50,977) 
Net Income Attributable to Retail Opportunity Investments Partnership, LP  $53,683  $47,141  $42,688  
Earnings per unit - basic and diluted  $0.42  $0.38  $0.35  
Distributions per unit  $0.7880  $0.7800  $0.7500  
Comprehensive income:           
Net income attributable to Retail Opportunity Investments Partnership, LP  $53,683  $47,141  $42,688  
Other comprehensive (loss) income:          
Unrealized swap derivative (loss) gain arising during the period (7,348) 1,648  3,665  
Reclassification adjustment for amortization of interest expense included in net income  (345) 57  1,920  
Other comprehensive (loss) income (7,693) 1,705  5,585  
Comprehensive income attributable to Retail Opportunity Investments Partnership, LP  $45,990  $48,846  $48,273  
 

See accompanying notes to consolidated financial statements.

60


RETAIL OPPORTUNITY INVESTMENTS PARTNERSHIP, LP
Consolidated Statements of Partners’ Capital
(In thousands, except unit data) 
 
Limited Partner’s Capital (1)
ROIC Capital (2)
 Accumulated
other
comprehensive (loss) income
 
 UnitsAmountUnitsAmountCapital
Balance at December 31, 201611,668,061  $127,324  109,301,762  $1,191,970  $(3,729) $1,315,565  
OP Units issued under the 2009 Equity Incentive Plan—  —  353,261  44  —  44  
OP Units withheld for employee taxes—  —  (74,331) (1,571) —  (1,571) 
Cancellation of OP Units—  —  (1,999) —  —  —  
Stock based compensation expense—  —  —  6,190  —  6,190  
Issuance of OP Units in connection with acquisitions2,573,927  49,599  —  —  —  49,599  
Equity redemption of OP Units(2,555,933) (50,155) 2,555,933  50,155  —  —  
Cash redemption of OP Units(7,064) (150) —  —  (150) 
Adjustment to non-controlling interests ownership in Operating Partnership—  3,574  —  (3,574) —  —  
Issuance of OP Units in connection with sale of common stock—  —  212,825  4,481  —  4,481  
Registration expenditures—  —  —  (1,045) —  (1,045) 
Cash distributions ($0.7500 per unit)
—  (8,729) —  (82,781) —  (91,510) 
Distributions payable to officers—  —  —  (235) —  (235) 
Net income attributable to Retail Opportunity Investments Partnership, LP—  4,211  —  38,477  —  42,688  
Other comprehensive income—  —  —  —  5,585  5,585  
Balance at December 31, 201711,678,991  $125,674  112,347,451  $1,202,111  $1,856  $1,329,641  
OP units issued under the 2009 Equity Incentive Plan—  —  397,861  269  —  269  
OP Units withheld for employee taxes—  —  (70,168) (1,400) —  (1,400) 
Cancellation of OP Units—  —  (8,997) —  —  —  
Stock based compensation expense—  —  —  7,392  —  7,392  
Cash redemption of OP Units(201,950) (3,713) —  —  —  (3,713) 
Adjustment to non-controlling interests ownership in Operating Partnership—  2,904  —  (2,904) —  —  
Issuance of OP Units in connection with sale of common stock—  —  1,326,690  25,703  —  25,703  
Registration expenditures—  —  —  (570) —  (570) 
Cash distributions ($0.7800 per unit)
—  (9,056) —  (88,417) —  (97,473) 
Distributions payable to officers—  —  —  (267) —  (267) 
Net income attributable to Retail Opportunity Investments Partnership, LP—  4,405  —  42,736  —  47,141  
Other comprehensive income—  —  —  —  1,705  1,705  
Balance at December 31, 201811,477,041  $120,214  113,992,837  $1,184,653  $3,561  $1,308,428  
OP units issued under the Equity Incentive Plan  —  —  631,022  1,942  —  1,942  
OP Units withheld for employee taxes  —  —  (125,072) (1,986) —  (1,986) 
Cancellation of OP Units  —  —  (6,997) —  —  —  
Stock based compensation expense  —  1,215  —  7,352  —  8,567  
Equity redemption of OP Units  (143,190) (2,632) 143,190  2,632  —  —  
Cash redemption of OP Units  (282,761) (5,043) —  —  —  (5,043) 
Adjustment to non-controlling interests ownership in Operating Partnership  —  2,983  —  (2,983) —  —  
Issuance of OP Units in connection with sale of common stock  —  —  1,861,036  34,162  —  34,162  
Registration expenditures  —  —  —  (732) —  (732) 
Cash distributions ($0.7880 per unit)
—  (8,921) —  (90,549) —  (99,470) 
Distributions payable to officers  —  (175) —  145  —  (30) 
Net income attributable to Retail Opportunity Investments Partnership, LP  —  4,839  —  48,844  —  53,683  
Other comprehensive loss  —  —  —  —  (7,693) (7,693) 
Balance at December 31, 201911,051,090  $112,480  116,496,016  $1,183,480  $(4,132) $1,291,828  
 
(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. 
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RETAIL OPPORTUNITY INVESTMENTS PARTNERSHIP, LP
Consolidated Statements of Cash Flows
(In thousands) 
Year Ended December 31,
 201920182017
CASH FLOWS FROM OPERATING ACTIVITIES     
Net income$53,683  $47,141  $42,688  
Adjustments to reconcile net income to cash provided by operating activities:   
Depreciation and amortization97,559  100,838  96,256  
Amortization of deferred financing costs and mortgage premiums, net2,076  1,899  2,026  
Straight-line rent adjustment(3,083) (5,380) (6,176) 
Amortization of above and below market rent(15,618) (13,965) (17,078) 
Amortization relating to stock based compensation8,567  7,392  6,190  
Provisions for tenant credit losses1,969  1,729  1,191  
Other noncash interest expense524  1,674  2,139  
Gain on sale of real estate(13,175) (5,890)   
Change in operating assets and liabilities:   
Tenant and other receivables543  (57) (2,452) 
Prepaid expenses962  (1,344) 464  
Accounts payable and accrued expenses303  (1,622) 456  
Other assets and liabilities, net(2,271) (1,497) 3,234  
Net cash provided by operating activities  132,039  130,918  128,938  
CASH FLOWS FROM INVESTING ACTIVITIES    
Investments in real estate(11,601) (44,195) (263,366) 
Proceeds from sale of real estate58,930  26,880    
Improvements to properties(35,177) (39,240) (54,097) 
Deposits on real estate acquisitions, net  500  (500) 
Proceeds on repayment of mortgage note receivable250      
Net cash provided by (used in) investing activities 12,402  (56,055) (317,963) 
CASH FLOWS FROM FINANCING ACTIVITIES     
Principal repayments on mortgages(551) (19,612) (8,848) 
Proceeds from draws on credit facility101,000  177,000  327,500  
Payments on credit facility(173,000) (164,500) (282,000) 
Proceeds from issuance of Senior Notes    250,000  
Redemption of OP Units(5,043) (3,713) (150) 
Deferred financing and other costs(2,804)   (3,845) 
Proceeds from the issuance of OP Units in connection with issuance of common stock34,162  25,703  4,481  
Registration expenditures(478) (570) (1,225) 
Distributions to OP Unitholders(99,674) (97,556) (91,646) 
Issuance of OP Units under the Equity Incentive Plan1,942  269  44  
OP Units withheld for employee taxes(1,986) (1,400) (1,571) 
Net cash (used in) provided by financing activities (146,432) (84,379) 192,740  
Net (decrease) increase in cash, cash equivalents and restricted cash (1,991) (9,516) 3,715  
Cash, cash equivalents and restricted cash at beginning of period  7,449  16,965  13,250  
Cash, cash equivalents and restricted cash at end of period  $5,458  $7,449  $16,965  
 
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:

Year Ended December 31,
201920182017
Cash and cash equivalents$3,800  $6,076  $11,553  
Restricted cash1,658  1,373  5,412  
Total cash, cash equivalents and restricted cash shown in Statements of Cash Flows$5,458  $7,449  $16,965  

See accompanying notes to consolidated financial statements.
62


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
1.  Organization, Basis of Presentation and Summary of Significant Accounting Policies
 
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 on the west coast of the United States anchored by supermarkets and drugstores.
 
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 operating partnership subsidiary, Retail Opportunity Investments Partnership, LP, a Delaware limited partnership (the “Operating Partnership”), together with 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 the Operating Partnership.
 
ROIC’s 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 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”) of the Operating Partnership.
 
Recent Accounting Pronouncements
 
In February 2016, the FASB issued Accounting Standard Update (“ASU”) No. 2016-2, “Leases.” ASU No. 2016-2 resulted in the recognition of a right-to-use asset and related liability to account for future obligations under ground lease agreements for which the Company is the lessee. In addition, this ASU requires that lessees and lessors capitalize, as initial direct costs, only those costs that are incurred due to the execution of a lease. Allocated payroll costs and other costs that are incurred regardless of whether the lease is obtained are no longer capitalized as initial direct costs and instead are expensed as incurred.

Under ASU No. 2016-2, each lease agreement will be evaluated to identify the lease components and nonlease components at lease inception. The total consideration in the lease agreement will be allocated to the lease and nonlease components based on their relative standalone selling prices. Lessors will continue to recognize the lease revenue component using an approach that is substantially equivalent to existing guidance for operating leases (straight-line basis). In July 2018, the FASB issued an amendment to ASU No. 2016-2 that allows lessors to elect, as a practical expedient, not to allocate the total consideration to lease and nonlease components based on their relative standalone selling prices. This practical expedient allows lessors to elect a combined single lease component presentation if (i) the timing and pattern of the revenue recognition of the combined single lease component is the same, and (ii) the related lease component and, the combined single lease component would be classified as an operating lease. The amendment also provides a transition option that permits the application of the new guidance as of the adoption date rather than to all periods presented.  The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted.

The Company adopted the provisions of ASU No. 2016-2 effective January 1, 2019 using the modified retrospective approach and accordingly, recognized a lease liability of approximately $18.0 million, which is included in Other liabilities in the accompanying balance sheet, and a related right-to-use asset of approximately $17.0 million, which is included in Other assets in the accompanying balance sheet, for all operating leases in which the Company is a lessee based on the present value of the minimum rental payments remaining as of the initial application date. The present value of the remaining lease payments was calculated for each operating lease using each respective remaining lease term and a corresponding estimated incremental borrowing rate, which is the interest rate that the Company estimates it would have to pay to borrow on a collateralized basis over a similar term.

Based on its election of the package of practical expedients, the Company was not required to reassess whether any expired or existing contracts are or contain leases, reassess the lease classification for any expired or existing leases, or reassess initial direct costs for any existing leases. Accordingly, the Company’s ground lease agreements for which the Company is the lessee
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will continue to be accounted for as operating leases under the new standard. Further, the Company elected the practical expedient to account for both its lease and non-lease components as a combined single lease component and elected the optional transition method permitting January 1, 2019 to be its initial application date. Additionally, leasing payroll-related costs that are incurred regardless of whether leases are obtained are no longer capitalized as initial direct costs and instead are expensed as incurred. These costs amounted to approximately $1.3 million and $1.2 million during the years ended December 31, 2018 and 2017, respectively. Further, bad debt, which has previously been recorded in Property operating, has now been classified as a contra-revenue account in Rental revenue in the Company’s consolidated statements of operations and comprehensive income.
 
In June 2016, the FASB issued ASU No. 2016-13 “Financial Instruments - Credit Topics.” ASU No. 2016-13 requires companies to adopt a new approach to estimating credit losses on certain types of financial instruments, such as trade and other receivables and loans. The standard requires entities to estimate a lifetime expected credit loss for most financial instruments, including trade receivables. ASU No. 2016-13 will be effective for the Company beginning on January 1, 2020, with early adoption permitted. The Company does not expect that the adoption of this pronouncement will have a material impact on the consolidated financial statements.
 
Principles of Consolidation
 
The accompanying consolidated financial statements are prepared on the accrual basis in accordance with GAAP.  In the opinion of management, the consolidated financial statements include all adjustments necessary, which are of a normal and recurring nature, for the fair presentation of the Company’s financial position and the results of operations and cash flows for the periods presented.

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. The Company has concluded that the Operating Partnership is a VIE, and because they have both the power and the rights to control the Operating Partnership, they are the primary beneficiary and are required to continue to consolidate the Operating Partnership.
 
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 modify the presentation of net income by requiring earnings and other comprehensive income to be attributed to controlling and non-controlling interests.
 
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 recoverability of assets to be held and used, purchase price allocations, depreciable lives, revenue recognition and the collectability of tenant receivables, other receivables, notes receivables, the valuation of performance-based restricted stock, LTIPs, and derivatives.  Actual results could differ from these estimates.
 
Federal Income Taxes
 
The Company 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 its REIT taxable income (determined without regard to the dividends paid deduction and excluding net capital gains) 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, the Company is subject to state income or franchise taxes in certain states in which some of its properties are located.  For all periods from inception through September 26, 2013 the Operating Partnership had been an entity disregarded from its sole owner, ROIC, for U.S. federal income tax purposes and
64


as such had not been subject to U.S. federal income taxes. Effective September 27, 2013, the Operating Partnership issued OP Units in connection with the acquisitions of two shopping centers. Accordingly, the Operating Partnership ceased being a disregarded entity and instead is being treated as a partnership for U.S. federal income tax purposes.   

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 December 31, 2019, the statute of limitations for tax years 2016 through and including 2018 remain open for examination by the Internal Revenue Service (“IRS”) and state taxing authorities. 
 
ROIC intends to make regular quarterly distributions to holders of its common stock.  U.S. federal income tax law generally requires that a REIT distribute annually at least 90% of its REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains, and that it pay U.S. federal income tax at regular corporate rates to the extent that it annually distributes less than 100% of its net taxable income.  ROIC intends to pay regular quarterly dividends to stockholders in an amount not less than its net taxable income, if and to the extent authorized by its board of directors.  Before ROIC pays any dividend, whether for U.S. federal income tax purposes or otherwise, it must first meet both its operating requirements and its debt service on debt.  If ROIC’s cash available for distribution is less than its net taxable income, it could be required to sell assets or borrow funds to make cash distributions or it may make a portion of the required distribution in the form of a taxable stock distribution or distribution of debt securities.
 
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.  During the years ended December 31, 2019 and 2018, capitalized costs related to the improvement or replacement of real estate properties were approximately $38.0 million and $40.3 million, respectively.

The Company evaluates each acquisition of real estate to determine if the acquired property meets the definition of a business and needs to be accounted for as a business combination. Under ASU No. 2017-1, the Company first determines whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If this threshold is met, the acquired property does not meet the definition of a business and is accounted for as an asset acquisition. The Company expects that acquisitions of real estate properties will not meet the revised definition of a business because substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets (i.e. land, buildings, and related intangible assets).
 
The Company recognizes the acquisition of real estate properties, including 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) at their fair value (for acquisitions meeting the definition of a business) and relative fair value (for acquisitions not meeting the definition of a business). The relative fair values used to allocate the cost of an asset acquisition are determined using the same methodologies and assumptions the Company utilizes to determine fair value in a business combination.

Acquired lease intangible assets include above-market leases and acquired in-place leases, and acquired lease intangible liabilities represent below-market leases, in the accompanying consolidated balance sheets. 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 management’s 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 sheets.

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
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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 is amortized to base rental income, over the terms of the respective leases including option periods, if applicable. The value of in-place leases is amortized to expense over the remaining non-cancellable terms of the respective leases. 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 expenses transaction costs associated with business combinations and unsuccessful property asset acquisitions in the period incurred and capitalizes transaction costs associated with successful property asset acquisitions.  In conjunction with the Company’s pursuit and acquisition of real estate investments, the Company did not expense any acquisition transaction costs during the years ended December 31, 2019 or 2018. The Company expensed acquisition transaction costs during the year ended December 31, 2017 of $4,000.

Sales of real estate are recognized only when it is determined that the Company will collect substantially all of the consideration to which it is entitled, possession and other attributes of ownership have been transferred to the buyer and the Company has no controlling financial interest. The application of these criteria can be complex and requires the Company to make assumptions. Management has determined that all of these criteria were met for all real estate sold during the periods presented.
  
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 December 31, 2019 or December 31, 2018.
 
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 the Company’s mortgage loans payable may 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. Prior to January 1, 2019, the Company considered property operating expense recoveries from tenants of common area maintenance, real estate taxes and other recoverable costs as lease components. Effective January 1, 2019, each lease agreement is evaluated to identify the lease and nonlease components at lease inception. The Company elected the single component practical expedient, which allows lessors to elect a combined single lease component presentation if (i) the timing and pattern of the revenue recognition of the combined single lease component is the same, and (ii) the related lease component and, the combined single lease component would be classified as an operating lease. As a result of this assessment, rental revenues and tenant recoveries from the lease of real estate assets are accounted for as a single component. Lease incentives are amortized as a reduction of rental revenue over the respective tenant lease terms.

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Termination fees (included in Other income in the consolidated statements of operations and comprehensive income) 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 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) collectability 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 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 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 December 31, 2019 and December 31, 2018 was approximately $8.2 million and $6.9 million, respectively.
 
Depreciation and Amortization
 
The Company uses the straight-line method for depreciation and amortization.  Buildings are depreciated over estimated useful lives which the Company estimates to be 39-40 years.  Property improvements are depreciated over 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 Leasing and Financing Costs
 
Costs incurred in obtaining tenant leases (principally leasing commissions and acquired lease origination costs) are amortized ratably over the life of the tenant leases. Costs incurred in obtaining long-term financing are amortized ratably over the related debt agreement. The amortization of deferred leasing and financing costs is included in Depreciation and amortization and Interest expense and other finance expenses, respectively, in the consolidated statements of operations and comprehensive income.
 
The unamortized balances of deferred leasing costs included in deferred charges in the Consolidated Balance Sheets as of December 31, 2019 that will be charged to future operations are as follows (in thousands):
 Lease Origination Costs
2020$5,804  
20214,922  
20224,115  
20233,261  
20242,523  
Thereafter7,027  
 $27,652  

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.
  
For the years ended December 31, 2019, 2018 and 2017, 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
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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 and LTIP Units outstanding under the Equity Incentive Plan described in Note 8 are excluded from the basic EPS calculation, as these units are not participating securities until they vest.
 
The following table sets forth the reconciliation between basic and diluted EPS for ROIC (in thousands, except share data):
 
 Year Ended December 31,
 201920182017
Numerator:   
Net income$53,683  $47,141  $42,688  
Less income attributable to non-controlling interests(4,839) (4,405) (4,211) 
Less earnings allocated to unvested shares(453) (401) (319) 
Net income available for common stockholders, basic$48,391  $42,335  $38,158  
Numerator:   
Net income$53,683  $47,141  $42,688  
Less earnings allocated to unvested shares(453) (401) (319) 
Net income available for common stockholders, diluted$53,230  $46,740  $42,369  
Denominator:   
Denominator for basic EPS – weighted average common equivalent shares114,177,528  112,645,490  109,400,123  
OP units11,334,408  11,626,312  12,060,835  
Performance-based restricted stock awards and LTIP Units206,100  183,683  153,807  
Stock options23,450  103,408  129,066  
Denominator for diluted EPS – weighted average common equivalent shares125,741,486  124,558,893  121,743,831  

Earnings Per Unit
 
The following table sets forth the reconciliation between basic and diluted earnings per unit for the Operating Partnership (in thousands, except unit data):
Year Ended December 31,
201920182017
Numerator:   
Net income$53,683  $47,141  $42,688  
Less earnings allocated to unvested shares(453) (401) (319) 
Net income available to unitholders, basic and diluted$53,230  $46,740  $42,369  
Denominator:   
Denominator for basic earnings per unit – weighted average common equivalent units125,511,936  124,271,802  121,460,958  
Performance-based restricted stock awards and LTIP Units206,100  183,683  153,807  
Stock options23,450  103,408  129,066  
Denominator for diluted earnings per unit – weighted average common equivalent units125,741,486  124,558,893  121,743,831  
 
Stock-Based Compensation
 
The Company has a stock-based employee compensation plan, which is more fully described in Note 8.
 
The Company accounts for its stock-based compensation plan based on the FASB guidance which requires that compensation expense be recognized based on the fair value of the stock awards less forfeitures.  Restricted stock grants vest based upon the
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completion of a service period (“time-based restricted stock grants”) and/or the Company meeting certain established market-indexed financial performance criteria (“performance-based restricted stock grants”).  Time-based grants are valued according to the market price for the Company’s common stock at the date of grant.  For performance-based restricted stock grants, a Monte Carlo valuation model is used, 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.  

The Company has made certain separate awards in the form of units of limited partnership interests in its Operating Partnership called LTIP Units. The LTIP Units are subject to such conditions and restrictions as the compensation committee may determine, including continued employment or service, achievement of pre-established operational performance goals and market-indexed performance criteria. For the LTIP Units subject to market-indexed performance criteria (the “marked-indexed LTIP Units”), a Monte Carlo valuation model is used, taking into account the underlying contingency risks associated with the performance criteria. All other LTIP Units (the “operational LTIP Units”) are valued according to the market price of the Company’s common stock at the date of grant.

Awards of stock options, time-based restricted stock grants and operational LTIP Units are expensed as compensation on a straight-line basis over the requisite service period.  Awards of performance-based restricted stock and market-indexed LTIP Units are expensed as compensation under the accelerated attribution method and are recognized in income regardless of the results of the performance criteria.
 
Derivatives
 
The Company records all derivatives on the balance sheets 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 forecasted transactions in a cash flow hedge. When the Company terminates a derivative for which cash flow hedging was being applied, the balance, which was recorded in Other comprehensive income, is amortized to interest expense over the remaining contractual term of the derivative as long as the hedged forecasted transactions continue to be probable of occurring. The Company includes cash payments made to terminate interest rate derivatives as an operating activity on the statement of cash flows, given the nature of the underlying cash flows that the derivative was hedging.
 
Segment Reporting
 
The Company’s primary business is the ownership, management, and redevelopment of retail real estate properties. The Company reviews operating and financial information for each property on an individual basis and therefore, each property represents an individual operating segment. The Company evaluates financial performance using property operating income, defined as operating revenues (base rent and recoveries from tenants), less property and related expenses (property operating expenses and property taxes). The Company has aggregated the properties into one reportable segment as the properties share similar long-term economic characteristics and have other similarities including the fact that they are operated using consistent business strategies, are typically located in major metropolitan areas, and have similar tenant mixes.


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Consolidated Statements of Cash Flows - Supplemental Disclosures

The following tables provides supplemental disclosures related to the consolidated statements of cash flows (in thousands):
Year Ended December 31,
201920182017
Supplemental disclosure of cash activities:   
Cash paid on gross receipts and income for federal and state purposes$275  $291  $253  
Interest paid$60,319  $60,494  $46,271  
Other non-cash investing and financing activities increase (decrease):   
Issuance of OP Units in connection with acquisitions$  $  $49,599  
Fair value of assumed mortgages upon acquisition$  $  $46,801  
Intangible lease liabilities$  $1,680  $48,684  
Interest rate swap asset$(4,931) $610  $3,446  
Interest rate swap liabilities$3,285  $580  $  
Accrued real estate improvement costs$3,222  $2,200  $3,568  
Equity redemption of OP Units$2,632  $  $50,155  
Disposition of real estate through issuance of mortgage note$13,250  $  $  

Reclassifications

Certain reclassifications have been made to the prior period consolidated financial statements and notes to conform to the current year presentation. In connection with the adoption of ASU No. 2016-2 and the Company’s practical expedient election to have a combined single lease component presentation, the Company combined Base rents and Recoveries from tenants into a single line item, Rental revenues, in its consolidated statements of operations and comprehensive income.

2.  Real Estate Investments
 
The following real estate investment transactions occurred during the years ended December 31, 2019 and 2018.
 
The Company evaluated the following acquisitions and determined that substantially all of the fair value related to each acquisition was concentrated in a single identifiable asset. The Company allocated the total consideration for each acquisition to the individual assets and liabilities acquired on a relative fair value basis. All transaction costs incurred in these acquisitions were capitalized.

Property Asset Acquisitions in 2019

On December 13, 2019, the Company acquired the property known as Summerwalk Village located in Lacey, Washington, within the Seattle metropolitan area, for an adjusted purchase price of approximately $11.6 million. Summerwalk Village is approximately 58,000 square feet and is anchored by Walmart Neighborhood Market. The property was acquired with borrowings under the credit facility.

Property Asset Acquisitions in 2018
 
During the year ended December 31, 2018, the Company acquired two properties with a total of approximately 112,000 square feet for an adjusted purchase price of approximately $35.0 million.


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The financial information set forth below summarizes the Company’s purchase price allocation for the properties acquired during the years ended December 31, 2019 and 2018 (in thousands).
 
December 31,
 20192018
Assets  
Land$2,320  $7,666  
Building and improvements9,281  35,629  
Acquired lease intangible asset  1,763  
Deferred charges  818  
Assets acquired$11,601  $45,876  
Liabilities  
Acquired lease intangible liability  1,680  
Liabilities assumed$  $1,680  
 
The following table summarizes the operating results included in the Company’s historical consolidated statement of operations for the year ended December 31, 2018 for the properties acquired during the year ended December 31, 2018 (in thousands).
 Year Ended December 31, 2018
Statement of operations: 
Revenues$2,343  
Net income attributable to Retail Opportunity Investments Corp.$753  
 
Property Dispositions in 2019

On February 15, 2019, the Company sold Vancouver Market Center, a non-core shopping center located in Vancouver, Washington. The sales price of $17.0 million, less costs to sell, resulted in net proceeds of approximately $16.0 million. The Company recorded a gain on sale of real estate of approximately $2.6 million during the year ended December 31, 2019 related to this property disposition.

On May 1, 2019, the Company sold Norwood Shopping Center, a non-core shopping center located in Sacramento, California for a sales price of $13.5 million. In connection with the sale of this property, the Company entered into a $13.3 million mortgage note with the buyer. The mortgage note is a four year interest only note whereby the interest rate increases 1% annually from 3% to 6%. The Company recorded a gain on sale of real estate of approximately $180,000 during the year ended December 31, 2019 related to this property disposition.

On August 1, 2019, the Company sold Morada Ranch, a non-core shopping center located in Stockton, California. The sales price of $30.0 million, less costs to sell, resulted in net proceeds of approximately $29.1 million. The Company recorded a gain on sale of real estate of approximately $10.4 million during the year ended December 31, 2019 related to this property disposition.

On December 12, 2019, the Company sold Mission Foothill Marketplace, located in Mission Viejo, California, as a redevelopment property. The Company retained ownership of two retail pads that will be the gateway to the buyer's planned single-family and townhome community. The sales price of approximately $13.6 million, less costs to sell, resulted in net proceeds of approximately $13.5 million.

Property Dispositions in 2018

On September 27, 2018, the Company sold Round Hill Square, a non-core shopping center located in Zephyr Cove, Nevada. The sales price of $28.0 million, less costs to sell, resulted in net proceeds of approximately $26.9 million. The Company recorded a gain on sale of real estate of approximately $5.9 million during the year ended December 31, 2018 related to this property disposition.
 
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Any reference to square footage or occupancy is unaudited and outside the scope of our independent registered public accounting firm’s audit of the Company’s financial statements in accordance with the standards of the United States Public Company Accounting Oversight Board.
 
3.  Acquired Lease Intangibles
 
Intangible assets and liabilities as of December 31, 2019 and 2018 consisted of the following (in thousands):
 
December 31,
 20192018
Assets:  
In-place leases$77,910  $92,354  
Accumulated amortization(31,686) (36,835) 
Above-market leases25,039  30,093  
Accumulated amortization(11,562) (13,503) 
Acquired lease intangible assets, net$59,701  $72,109  
Liabilities:  
Below-market leases$198,272  $217,212  
Accumulated amortization(53,515) (51,066) 
Acquired lease intangible liabilities, net$144,757  $166,146  
 
For the years ended December 31, 2019, 2018 and 2017, the net amortization of acquired lease intangible assets and acquired lease intangible liabilities for above and below market leases was $15.6 million, $14.0 million and $17.1 million, respectively, which amounts are included in Rental revenue in the accompanying consolidated statements of operations and comprehensive income.  For the years ended December 31, 2019, 2018 and 2017, the amortization of in-place leases was $8.1 million, $11.4 million and $14.4 million, respectively, which amounts are included in Depreciation and amortization in the accompanying consolidated statements of operations and comprehensive income.

The scheduled future amortization of acquired lease intangible assets as of December 31, 2019 is as follows (in thousands):

Year Ending December 31: 
2020$5,179  
20214,138  
20223,440  
20232,862  
20242,458  
Thereafter41,624  
Total future amortization of acquired lease intangible assets$59,701  
 
The scheduled future amortization of acquired lease intangible liabilities as of December 31, 2019 is as follows (in thousands):

Year Ending December 31: 
2020$12,289  
202111,123  
202210,229  
20239,485  
20249,324  
Thereafter92,307  
Total future amortization of acquired lease intangible liabilities$144,757  


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4.  Tenant Leases
 
Space in the Company’s shopping centers is leased to various tenants under operating leases that usually grant tenants renewal options and generally provide for additional rents based on certain operating expenses as well as tenants’ sales volume.

Future minimum rents to be received under non-cancellable leases as of December 31, 2019 are summarized as follows (in thousands):
Year Ending December 31: 
2020$201,202  
2021183,897  
2022159,296  
2023130,882  
202499,572  
Thereafter415,762  
Total minimum lease payments$1,190,611  

5.  Mortgage Notes Payable, Credit Facilities and Senior Notes
 
ROIC does not hold any indebtedness. All debt is held directly or indirectly by the Operating Partnership; however, ROIC has guaranteed the Operating Partnership’s term loan, unsecured revolving credit facility, carve-out guarantees on property-level debt, and the Senior Notes. Costs incurred in obtaining long-term financing are amortized ratably over the related debt agreement. The amortization of deferred financing costs is included in Interest expense and other finance expenses in the consolidated statements of operations and comprehensive income.

Mortgage Notes Payable
 
The mortgage notes payable collateralized by respective properties and assignment of leases at December 31, 2019 and December 31, 2018, respectively, were as follows (in thousands, except interest rates):
Maturity DateInterest RateDecember 31,
Property20192018
Casitas Plaza Shopping CenterJune 20225.320 %$7,001  $7,158  
Riverstone MarketplaceJuly 20224.960 %17,656  18,050  
Fullerton CrossroadsApril 20244.728 %26,000  26,000  
Diamond Hills PlazaOctober 20253.550 %35,500  35,500  
   86,157  86,708  
Mortgage premiums  1,594  2,074  
Net unamortized deferred financing costs  (228) (271) 
Total mortgage notes payable  $87,523  $88,511  
 
The combined aggregate principal maturities of mortgage notes payable during the next five years and thereafter are as follows (in thousands):
 Principal RepaymentsScheduled AmortizationMortgage PremiumTotal
2020$  $577  $481  $1,058  
2021  717  481  1,198  
202223,129  1,003  344  24,476  
2023  686  216  902  
202426,000  708  72  26,780  
Thereafter32,787  550    33,337  
Total$81,916  $4,241  $1,594  $87,751  
 

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Term Loan and Credit Facility 
  
The carrying values of the Company’s unsecured term loan (the “term loan”) were as follows (in thousands):

December 31,
 20192018
Term loan$300,000  $300,000  
Net unamortized deferred financing costs(1,670) (924) 
Term loan$298,330  $299,076  

The Company has an unsecured term loan agreement with several banks under which the lenders agreed to provide a $300.0 million unsecured term loan facility. Effective December 20, 2019, the Company entered into the First Amendment to First Amended and Restated Term Loan Agreement (as amended, the “Term Loan Agreement”) pursuant to which the maturity date of the term loan was extended from September 8, 2022 to January 20, 2025, without further options for extension. The Term Loan Agreement also provides that the Company may from time to time request increased aggregate commitments of $200.0 million under certain conditions set forth in the Term Loan Agreement, including the consent of the lenders for the additional commitments. Borrowings under the Term Loan Agreement accrue interest on the outstanding principal amount 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 U.S. dollar deposits for the relevant period (the “Eurodollar Rate”), 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 the Administrative Agent as its “prime rate,” and (c) the Eurodollar Rate plus 1.00%.

The carrying values of the Company’s unsecured revolving credit facility were as follows (in thousands):

December 31,
 20192018
Credit facility$84,000  $156,000  
Net unamortized deferred financing costs(3,257) (2,311) 
Credit facility$80,743  $153,689  

The Operating Partnership has an unsecured revolving credit facility with several banks. Effective December 20, 2019, the Company entered into the First Amendment to Second Amended and Restated Credit Agreement (as amended, the “Credit Facility Agreement”) pursuant to which the borrowing capacity under the credit facility is $600.0 million. The maturity date of the credit facility was extended from September 8, 2021 to February 20, 2024, with two six-month extension options, which may be exercised by the Operating Partnership upon satisfaction of certain conditions including the payment of extension fees. Additionally, the credit facility contains an accordion feature, which allows the Operating Partnership to increase the borrowing capacity under the credit facility up to an aggregate of $1.2 billion, subject to lender consents and other conditions. Borrowings under the credit facility accrue interest on the outstanding principal amount at a rate equal to an applicable rate based on the credit rating level of the Company, plus, as applicable, (i) the Eurodollar Rate, 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 as its “prime rate,” and (c) the Eurodollar Rate plus 0.90%. Additionally, the Operating Partnership is obligated to pay a facility fee at a rate based on the credit rating level of the Company, currently 0.20%, and a fronting fee at a rate of 0.125% per year with respect to each letter of credit issued under the credit facility. The Company has investment grade credit ratings from Moody’s Investors Service (Baa2) and Standard & Poor’s Ratings Services (BBB-).

Both the term loan and credit facility contain customary representations, financial and other covenants. The Operating Partnership’s ability to borrow under the term loan and credit facility are subject to its compliance with financial covenants and other restrictions on an ongoing basis. The Operating Partnership was in compliance with such covenants at December 31, 2019.

As of December 31, 2019, $300.0 million and $84.0 million were outstanding under the term loan and credit facility, respectively. The weighted average interest rates on the term loan and the credit facility during the year ended December 31, 2019 were 3.4% and 3.3%, respectively. As discussed in Note 11 of the accompanying financial statements, the Company uses interest rate swaps to manage its interest rate risk and accordingly, the swapped interest rate on the term loan is 3.0%. The
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Company had no available borrowings under the term loan at December 31, 2019. The Company had $516.0 million available to borrow under the credit facility at December 31, 2019.

Senior Notes Due 2027

The carrying value of the Company’s unsecured Senior Notes Due 2027 is as follows (in thousands):
 
December 31,
 20192018
Principal amount$250,000  $250,000  
Net unamortized deferred financing costs(998) (1,123) 
Senior Notes Due 2027$249,002  $248,877  

On November 10, 2017, the Operating Partnership entered into a Note Purchase Agreement which provided for the issuance of $250.0 million principal amount of 4.19% Senior Notes Due 2027 (the “Senior Notes Due 2027”) in a private placement effective December 15, 2017. The Senior Notes Due 2027 pay interest on June 15 and December 15 of each year, commencing on June 15, 2018, and mature on December 15, 2027, unless prepaid earlier by the Operating Partnership. The Operating Partnership’s performance of the obligations under the Note Purchase Agreement, including the payment of any outstanding indebtedness thereunder, are guaranteed, jointly and severally, by ROIC. The net proceeds were used to reduce borrowings under the credit facility.

Senior Notes Due 2026

The carrying value of the Company’s unsecured Senior Notes Due 2026 is as follows (in thousands):
 
December 31,
 20192018
Principal amount$200,000  $200,000  
Net unamortized deferred financing costs(191) (219) 
Senior Notes Due 2026$199,809  $199,781  

On July 26, 2016, the Operating Partnership entered into a Note Purchase Agreement, as amended, which provided for the issuance of $200.0 million principal amount of 3.95% Senior Notes Due 2026 (the “Senior Notes Due 2026”) in a private placement effective September 22, 2016. The Senior Notes Due 2026 pay interest on March 22 and September 22 of each year, commencing on March 22, 2017, and mature on September 22, 2026, unless prepaid earlier by the Operating Partnership. The Operating Partnership’s performance of the obligations under the Note Purchase Agreement, including the payment of any outstanding indebtedness thereunder, are guaranteed, jointly and severally, by ROIC. The net proceeds were used to reduce borrowings under the credit facility.

Senior Notes Due 2024

The carrying value of the Company’s unsecured Senior Notes Due 2024 is as follows (in thousands):

December 31,
 20192018
Principal amount$250,000  $250,000  
Unamortized debt discount(1,912) (2,252) 
Net unamortized deferred financing costs(1,094) (1,314) 
Senior Notes Due 2024$246,994  $246,434  
 
On December 3, 2014, the Operating Partnership completed a registered underwritten public offering of $250.0 million aggregate principal amount of 4.000% Senior Notes due 2024 (the “Senior Notes Due 2024”), fully and unconditionally guaranteed by ROIC. The Senior Notes Due 2024 pay interest semi-annually on June 15 and December 15, commencing on June 15, 2015, and mature on December 15, 2024, unless redeemed earlier by the Operating Partnership. The Senior Notes Due
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2024 are the Operating Partnership’s senior unsecured obligations that rank equally in right of payment with the Operating Partnership’s other unsecured indebtedness, and effectively junior to (i) all of the indebtedness and other liabilities, whether secured or unsecured, and any preferred equity of the Operating Partnership’s subsidiaries, and (ii) all of the Operating Partnership’s indebtedness that is secured by its assets, to the extent of the value of the collateral securing such indebtedness outstanding. ROIC fully and unconditionally guaranteed the Operating Partnership’s obligations under the Senior Notes Due 2024 on a senior unsecured basis, including the due and punctual payment of principal of, and premium, if any, and interest on, the notes, whether at stated maturity, upon acceleration, notice of redemption or otherwise. The guarantee is a senior unsecured obligation of ROIC and ranks equally in right of payment with all other senior unsecured indebtedness of ROIC. ROIC’s guarantee of the Senior Notes Due 2024 is effectively subordinated in right of payment to all liabilities, whether secured or unsecured, and any preferred equity of its subsidiaries (including the Operating Partnership and any entity ROIC accounts for under the equity method of accounting).
 
Senior Notes Due 2023
 
The carrying value of the Company’s unsecured Senior Notes Due 2023 is as follows (in thousands):

December 31,
 20192018
Principal amount$250,000  $250,000  
Unamortized debt discount(1,915) (2,339) 
Net unamortized deferred financing costs(1,040) (1,304) 
Senior Notes Due 2023$247,045  $246,357  
 
On December 9, 2013, the Operating Partnership completed a registered underwritten public offering of $250.0 million aggregate principal amount of 5.000% Senior Notes due 2023 (the “Senior Notes Due 2023”), fully and unconditionally guaranteed by ROIC. The Senior Notes Due 2023 pay interest semi-annually on June 15 and December 15, commencing on June 15, 2014, and mature on December 15, 2023, unless redeemed earlier by the Operating Partnership. The Senior Notes Due 2023 are the Operating Partnership’s senior unsecured obligations that rank equally in right of payment with the Operating Partnership’s other unsecured indebtedness, and effectively junior to (i) all of the indebtedness and other liabilities, whether secured or unsecured, and any preferred equity of the Operating Partnership’s subsidiaries, and (ii) all of the Operating Partnership’s indebtedness that is secured by its assets, to the extent of the value of the collateral securing such indebtedness outstanding. ROIC fully and unconditionally guaranteed the Operating Partnership’s obligations under the Senior Notes Due 2023 on a senior unsecured basis, including the due and punctual payment of principal of, and premium, if any, and interest on, the notes, whether at stated maturity, upon acceleration, notice of redemption or otherwise. The guarantee is a senior unsecured obligation of ROIC and will rank equally in right of payment with all other senior unsecured indebtedness of ROIC. ROIC’s guarantee of the Senior Notes Due 2023 is effectively subordinated in right of payment to all liabilities, whether secured or unsecured, and any preferred equity of its subsidiaries (including the Operating Partnership and any entity ROIC accounts for under the equity method of accounting).

The combined aggregate principal maturities of the Company’s unsecured senior notes payable during the next five years and thereafter are as follows (in thousands):
Principal Repayments
2020$  
2021  
2022  
2023250,000  
2024250,000  
Thereafter450,000  
Total$950,000  


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Deferred Financing Costs

The unamortized balances of deferred financing costs associated with the Company’s term loan, unsecured revolving credit facility, Senior Notes Due 2027, Senior Notes Due 2026, Senior Notes Due 2024, Senior Notes Due 2023, and mortgage notes payable included as a direct reduction from the carrying amount of the related debt instrument in the consolidated balance sheets as of December 31, 2019 that will be charged to future operations during the next five years and thereafter are as follows (in thousands):

 Financing Costs
2020$1,799  
20211,799  
20221,796  
20231,781  
2024836  
Thereafter467  
 $8,478  


6.  Preferred Stock of ROIC
 
The Company is authorized to issue 50,000,000 shares of preferred stock with such designations, voting and other rights and preferences as may be determined from time to time by the board of directors.  As of December 31, 2019 and 2018, there were no shares of preferred stock outstanding.

7.  Common Stock of ROIC
 
ATM
 
On May 1, 2018, ROIC entered into five separate Sales Agreements (the “Sales Agreements”) with each of Capital One Securities, Inc., Jefferies LLC, KeyBanc Capital Markets Inc., Raymond James & Associates, Inc., and Robert W. Baird & Co. Incorporated (each individually, an “Agent” and collectively, the “Agents”) pursuant to which ROIC may sell, from time to time, shares of ROIC’s common stock, par value $0.0001 per share, having an aggregate offering price of up to $250.0 million through the Agents either as agents or principals. In addition, on April 30, 2018, the Company terminated sales agreements with Jefferies, KeyBanc and Raymond James, dated as of September 19, 2014 and with Baird, dated as of May 23, 2016 (the “Prior Sales Agreements”), which the Company entered into in connection with its prior “at the market” offering.

During the year ended December 31, 2019, ROIC sold a total of 1,861,036 shares under the Sales Agreements, which resulted in gross proceeds of approximately $34.2 million and commissions of approximately $342,000 paid to the Agents. During the year ended December 31, 2018, ROIC sold a total of 1,251,376 shares under the Sales Agreements, which resulted in gross proceeds of approximately $24.2 million and commissions of approximately $242,000 paid to the Agents.
 
Stock Repurchase Program
 
On July 31, 2013, ROIC’s board of directors authorized a stock repurchase program to repurchase up to a maximum of $50.0 million of the Company’s common stock. Through the year ended December 31, 2019, the Company has not repurchased any shares of common stock under this program.

8.  Stock Compensation and Other Benefit Plans for ROIC
 
ROIC follows the FASB guidance related to stock compensation which establishes financial accounting and reporting standards for stock-based employee compensation plans, including all arrangements by which employees receive shares of stock or other equity instruments of the employer, or the employer incurs liabilities to employees in amounts based on the price of the employer’s stock. The guidance also defines a fair value-based method of accounting for an employee stock option or similar equity instrument.
 
In 2009, the Company adopted the 2009 Equity Incentive Plan. The 2009 Equity Incentive Plan provided for grants of restricted common stock and stock option awards up to an aggregate of 7.5% of the issued and outstanding shares of ROIC’s
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common stock at the time of the award, subject to a ceiling of 4,000,000 shares. The Company’s Annual Meeting of Stockholders was held on April 25, 2018 at which time the stockholders of the Company approved the Company’s Amended and Restated 2009 Equity Incentive Plan (the “Equity Incentive Plan”). The types of awards that may be granted under the Equity Incentive Plan include stock options, restricted shares, share appreciation rights, phantom shares, dividend equivalent rights and other equity-based awards. The Equity Incentive Plan has a fungible unit system that counts the number of shares of the Company’s common stock used in the issuance of full-value awards, such as restricted shares, differently than the number of shares of common stock used in the issuance of stock options. A total of 22,500,000 Fungible Units (as defined in the Equity Incentive Plan) are reserved for grant under the Equity Incentive Plan and the Fungible Unit-to-full-value award conversion ratio is 6.25 to 1.0. The Equity Incentive Plan will expire on April 25, 2028. Any available shares that had not been granted under the 2009 Equity Incentive Plan were incorporated into and made available for issuance under the Equity Incentive Plan.

The Company has made certain awards in the form of a separate series of units of limited partnership interests in its Operating Partnership called LTIP Units, which can be granted either as free-standing awards or in tandem with other awards under the Equity Incentive Plan. The LTIP Units are subject to such conditions and restrictions as the compensation committee may determine, including continued employment or service, achievement of pre-established operational performance goals and market-indexed performance criteria. Upon the occurrence of specified events and subject to the satisfaction of applicable vesting conditions, LTIP Units (after conversion into OP Units, in accordance with the Partnership Agreement) are ultimately redeemable for cash or for unregistered shares of ROIC common stock, at the option of ROIC, on a one-for-one basis.

Restricted Stock
 
During the year ended December 31, 2019, ROIC awarded 354,161 shares of time-based restricted common stock under the Equity Incentive Plan.
 
A summary of the status of the Company’s non-vested restricted stock awards as of December 31, 2019, and changes during the year ended December 31, 2019 are presented below:
 
 SharesWeighted Average
Grant Date Fair Value
Non-vested as of December 31, 20181,002,835  $16.88  
Granted354,161  $17.20  
Vested(364,913) $19.06  
Forfeited(37,286) $12.97  
Non-vested as of December 31, 2019954,797  $16.55  

As of December 31, 2019, there remained a total of approximately $6.1 million of unrecognized restricted stock compensation related to outstanding non-vested restricted stock grants awarded under the Equity Incentive Plan.  Restricted stock compensation is expected to be expensed over a remaining weighted average period of 1.6 years (irrespective of achievement of the performance conditions). The total fair value of restricted stock that vested during the years ended December 31, 2019, 2018 and 2017 was $5.8 million, $5.5 million and $6.3 million, respectively.

LTIP Units

During the year ended December 31, 2019, ROIC awarded 187,279 LTIP Units under the Equity Incentive Plan. The LTIP Units vest based on both pre-defined operational and market-indexed performance criteria with a vesting date on January 1, 2022. The LTIP Units were issued at a weighted average grant date fair value of $16.27.

As of December 31, 2019, there remained a total of approximately $2.4 million of unrecognized compensation expense related to outstanding non-vested LTIPs awarded under the Equity Incentive Plan.  LTIP compensation expense is expected to be expensed over a remaining weighted average period of 2.0 years.

Stock Options

During the year ended December 31, 2019, a total of 186,000 options were exercised at a weighted average exercise price of $10.44. The total intrinsic value of stock options exercised during the year ended December 31, 2019 was approximately $1.4 million.

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Stock Based Compensation Expense

For the years ended December 31, 2019, 2018 and 2017, the amounts charged to expense for all stock based compensation totaled approximately $8.6 million, $7.4 million and $6.2 million, respectively.

Profit Sharing and Savings Plan

During 2011, the Company established a profit sharing and savings plan (the “401K Plan”), which permits eligible employees to defer a portion of their compensation in accordance with the Code.  Under the 401K Plan, the Company made matching contributions on behalf of eligible employees.  The Company made contributions to the 401K Plan of approximately $87,000, $86,000 and $70,000 for the years ended December 31, 2019, 2018 and 2017, respectively.

9. Capital of the Operating Partnership
 
As of December 31, 2019, the Operating Partnership had 127,547,106 OP Units outstanding. ROIC owned an approximate 91.3% interest in the Operating Partnership at December 31, 2019, or 116,496,016 OP Units. The remaining 11,051,090 OP Units are owned by other limited partners. A share of ROIC’s common stock and the OP Units have essentially the same economic characteristics as they share equally in the total net income or loss and distributions of the Operating Partnership.
 
As of December 31, 2019, subject to certain exceptions, holders are able to redeem their OP Units, at the option of ROIC, for cash or for unregistered shares of ROIC common stock on a one-for-one basis. If cash is paid in the redemption, the redemption price is equal to the average closing price on the NASDAQ Stock Market for shares of ROIC’s common stock over the ten consecutive trading days immediately preceding the date a redemption notice is received by ROIC.

During the year ended December 31, 2019, ROIC received notices of redemption for a total of 425,951 OP Units. ROIC elected to redeem 282,761 OP Units in cash, and accordingly, a total of approximately $5.0 million was paid during the year ended December 31, 2019 to the holder of the respective OP Units. In accordance with the Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership, the redemption value of the OP Units was calculated based on the average closing price of ROIC’s common stock on the NASDAQ Stock Market for the ten consecutive trading days immediately preceding the date of receipt of the notice of redemption. ROIC elected to redeem the remaining 143,190 OP Units for shares of ROIC common stock on a one-for-one basis, and accordingly, 143,190 shares of ROIC common stock were issued.
 
The redemption value of the OP Units owned by the limited partners as of December 31, 2019, not including ROIC, had such units been redeemed at December 31, 2019, was approximately $191.5 million, calculated based on the average closing price on the NASDAQ Stock Market of ROIC common stock for the ten consecutive trading days immediately preceding December 31, 2019, which amounted to $17.33 per share.
 
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. As the sole general partner of the Operating Partnership, ROIC effectively controls the ability to issue common stock of ROIC upon redemption of any OP Units. The redemption provisions that permit ROIC to settle the redemption of OP Units in either cash or common stock, in the sole discretion of ROIC, are further evaluated in accordance with applicable accounting guidance to determine whether temporary or permanent equity classification on the balance sheet is appropriate. The Company evaluated this guidance, including the ability, in its sole discretion, to settle in unregistered shares of common stock, and determined that the OP Units meet the requirements to qualify for presentation as permanent equity.

10.  Fair Value of Financial Instruments
 
The Company follows the FASB guidance that defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.  The guidance applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements; accordingly, the standard does not require any new fair value measurements of reported balances.
 
The guidance emphasizes that fair value is a market-based measurement, not an entity-specific measurement.  Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability.  As a basis for considering market participant assumptions in fair value measurements, the guidance establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the
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reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).
 
Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access.  Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.  Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals.  Level 3 inputs are unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity.  In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety.  The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.
 
The following disclosures of estimated fair value were determined by management, using available market information and appropriate valuation methodologies as discussed in Note 1.  Considerable judgment is necessary to interpret market data and develop estimated fair value.  Accordingly, the estimates presented herein are not necessarily indicative of the amounts realizable upon disposition of the financial instruments.  The use of different market assumptions or estimation methodologies may have a material effect on the estimated fair value amounts.

The carrying values of cash and cash equivalents, restricted cash, tenant and other receivables, deposits, prepaid expenses, other assets, accounts payable and accrued expenses are reasonable estimates of their fair values because of the short-term nature of these instruments. The carrying values of the term loan and revolving credit facility are deemed to be at fair value since the outstanding debt is directly tied to monthly LIBOR contracts. The fair value of the outstanding Senior Notes Due 2027 and Senior Notes Due 2026 at December 31, 2019 was approximately $246.7 million and $195.0 million, respectively, calculated using significant inputs which are not observable in the market, or Level 3. The fair value of the outstanding Senior Notes Due 2024 and Senior Notes Due 2023 at December 31, 2019 was approximately $260.4 million and $269.3 million, respectively, based on inputs not quoted on active markets, but corroborated by market data, or Level 2. Assumed mortgage notes payable were recorded at their fair value at the time they were assumed. The Company’s outstanding mortgage notes payable were estimated to have a fair value of approximately $87.2 million with a weighted average interest rate of 3.8% as of December 31, 2019. These fair value measurements fall within Level 3 of the fair value hierarchy.

11.  Derivative and Hedging Activities
 
The Company’s objectives in using interest rate derivatives is to add stability to interest expense and to manage its exposure to interest rate movements.  To accomplish this objective, the Company uses interest rate swaps as part of its interest rate risk management strategy.  Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.
 
The following is a summary of the terms of the Company’s current interest rate swaps as of December 31, 2019 (in thousands):

Swap CounterpartyNotional AmountEffective DateMaturity Date
Interest Rate Swap Agreements:
Bank of Montreal$100,000  12/29/20178/31/2022
U.S. Bank$100,000  12/29/20178/31/2022
Regions Bank$50,000  1/31/20198/31/2022
Royal Bank of Canada$50,000  1/31/20198/31/2022

The changes in the fair value of derivatives that are designated as cash flow hedges are recorded in accumulated other comprehensive income (“AOCI”) and will be subsequently reclassified into earnings during the period in which the hedged forecasted transaction affects earnings. 

The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of the derivative.  This analysis reflects the contractual terms of the derivative, including
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the period to maturity, and uses observable market-based inputs, including interest rate curves, and implied volatilities.  The fair value of interest rate swaps is determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts).  The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. 

The Company incorporated credit valuation adjustments to appropriately reflect both its own non-performance risk and the respective counterparties non-performance risk in the fair value measurements.  In adjusting the fair value of its derivative contract for the effect of non-performance risk, the Company considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.
 
Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties.  However, as of December 31, 2019, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative position and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives.  As a result, the Company has determined that its derivative valuation in its entirety is classified in Level 2 of the fair value hierarchy.
 
The table below presents the Company’s assets and liabilities measured at fair value on a recurring basis, aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands).
 
 Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)Total
December 31, 2019:    
Liabilities
Derivative financial instruments$  $(3,865) $  $(3,865) 
December 31, 2018:            
Assets            
Derivative financial instruments$  $4,931  $  $4,931  
Liabilities
Derivative financial instruments$  $(580) $  $(580) 

Amounts paid, or received, to cash settle interest rate derivatives prior to their maturity date are recorded in AOCI at the cash settlement amount, and will be reclassified to interest expense as interest expense is recognized on the hedged debt. During the next twelve months, the Company estimates that $1.5 million will be reclassified as an increase to interest expense related to the Company’s four outstanding swap arrangements and it’s previously cash-settled swap arrangements.
 
The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the balance sheet as of December 31, 2019 and 2018, respectively (in thousands):

Derivatives designed as hedging instrumentsBalance sheet locationDecember 31, 2019 Fair ValueDecember 31, 2018 Fair Value
Interest rate productsOther assets$  $4,931  
Interest rate productsOther liabilities$(3,865) $(580) 


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Derivatives in Cash Flow Hedging Relationships
 
The table below details the location in the financial statements of the gain or loss recognized on interest rate derivatives designated as cash flow hedges for the years ended December 31, 2019, 2018, and 2017, respectively (in thousands).  Amounts reclassified from other comprehensive income (“OCI”) due to ineffectiveness are recognized as interest expense.
Year Ended December 31,
 201920182017
Amount of (loss) gain recognized in OCI on derivatives$(7,348) $1,648  $3,665  
Amount of (gain) loss reclassified from AOCI into interest$(345) $57  $1,920  

12.  Commitments and Contingencies
 
In the normal course of business, from time to time, 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 Company has signed several ground leases in which the Company is the lessee for the land beneath all or a portion of the buildings for certain properties. In accordance with ASU 2016-02, the Company recorded a right-of-use asset and related lease liability for these ground leases as of January 1, 2019. As of December 31, 2019, the Company’s weighted average remaining lease term is approximately 37.6 years and the weighted average discount rate used to calculate the Company’s lease liability is approximately 5.2%. Rent expense under the Company’s ground leases was approximately $1.6 million, $1.9 million, and $1.5 million for the years ended December 31, 2019, 2018, and 2017, respectively.

The following table represents a reconciliation of the Company’s undiscounted future minimum annual lease payments under operating leases to the lease liability as of December 31, 2019 (in thousands):
 Operating Leases
2020$1,287  
20211,282  
20221,304  
20231,330  
20241,335  
Thereafter32,604  
Total undiscounted future minimum lease payments39,142  
Future minimum lease payments, discount(21,467) 
Lease liability$17,675  
 
Tax Protection Agreements
 
In connection with certain acquisitions from September 2013 through March 2017, the Company entered into Tax Protection Agreements with certain limited partners of the Operating Partnership. The Tax Protection Agreements require the Company, subject to certain exceptions, to indemnify the respective sellers receiving OP Units against certain tax liabilities incurred by them, as calculated pursuant to the respective Tax Protection Agreements, for a period of 12 years (with respect to Tax Protection Agreements entered into in September 2013), or 10 years (with respect to Tax Protection Agreements entered into from December 2014 through March 2017) from the date of the Tax Protection Agreements. If the Company were to trigger the tax protection provisions under these agreements, the Company would be required to pay damages in the amount of the taxes owed by these limited partners (plus additional damages in the amount of the taxes incurred as a result of such payment).

Legal Settlement

During the year ended December 31, 2019, the Company settled an ongoing lawsuit for approximately $1.4 million and accordingly, recorded a $950,000 charge to Other expense in the accompanying consolidated statements of operations and comprehensive income during the year ended December 31, 2019.

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13.  Related Party Transactions
 
The Company has entered into several lease agreements with an officer of the Company, whereby pursuant to the lease agreements, the Company is provided the use of storage space.  For the years ended December 31, 2019, 2018, and 2017, the Company incurred approximately $84,000, $74,000 and $52,000, respectively, of expenses relating to the agreements which were included in General and administrative expenses in the accompanying consolidated statements of operations and comprehensive income.

14.  Quarterly Results of Operations (Unaudited)
 
The unaudited quarterly results of operations for the years ended December 31, 2019 and 2018 for ROIC are as follows (in thousands, except share data):
 
 Year Ended December 31, 2019
 March 31June 30September 30December 31
Total revenues$76,053  $72,930  $72,438  $73,619  
Net income$14,583  $8,346  $19,628  $11,126  
Net income attributable to ROIC$13,250  $7,585  $17,858  $10,151  
Basic and diluted income per share$0.12  $0.07  $0.16  $0.09  
 
 Year Ended December 31, 2018
 March 31June 30September 30December 31
Total revenues$74,395  $72,341  $73,904  $75,158  
Net income$11,824  $8,102  $15,647  $11,568  
Net income attributable to ROIC$10,702  $7,339  $14,194  $10,501  
Basic and diluted income per share$0.09  $0.06  $0.12  $0.09  

The unaudited quarterly results of operations for the years ended December 31, 2019 and 2018 for the Operating Partnership are as follows (in thousands, except unit data):
 Year Ended December 31, 2019
 March 31June 30September 30December 31
Total revenues$76,053  $72,930  $72,438  $73,619  
Net income attributable to the Operating Partnership$14,583  $8,346  $19,628  $11,126  
Basic and diluted income per unit$0.12  $0.07  $0.16  $0.09  
 
 Year Ended December 31, 2018
 March 31June 30September 30December 31
Total revenues$74,395  $72,341  $73,904  $75,158  
Net income attributable to the Operating Partnership$11,824  $8,102  $15,647  $11,568  
Basic and diluted income per unit$0.09  $0.06  $0.12  $0.09  

15.  Subsequent Events

On February 18, 2020, the Company’s board of directors declared a cash dividend on its common stock of $0.20 per share, payable on March 30, 2020 to holders of record on March 16, 2020.


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SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2019
(in thousands)

  Initial Cost to CompanyCost Capitalized Subsequent to AcquisitionAmount at Which Carried at Close of Period   
 Description and Location Encumbrances LandBuilding &
Improvements
 LandBuilding &
Improvements
 LandBuilding &
Improvements
 
Total (a)
Accumulated Depreciation (b) (1)
Date of Acquisition
Paramount Plaza, CA$—  $6,347  $10,274  $530  $2,127  $6,877  $12,401  $19,278  $3,997  12/22/2009
Santa Ana Downtown Plaza, CA—  7,895  9,890  —  4,029  7,895  13,919  21,814  3,812  1/26/2010
Meridian Valley Plaza, WA—  1,881  4,795  —  1,757  1,881  6,552  8,433  2,085  2/1/2010
The Market at Lake Stevens, WA—  3,087  12,397  —  392  3,087  12,789  15,876  3,782  3/16/2010
Pleasant Hill Marketplace, CA—  6,359  6,927  —  1,590  6,359  8,517  14,876  2,765  4/8/2010
Happy Valley Town Center, OR—  11,678  27,011  —  2,906  11,678  29,917  41,595  8,317  7/14/2010
Cascade Summit Town Square, OR—  8,853  7,732  —  482  8,853  8,214  17,067  2,952  8/20/2010
Heritage Market Center, WA—  6,595  17,399  —  756  6,595  18,155  24,750  4,751  9/23/2010
Claremont Promenade, CA—  5,975  1,019  183  4,388  6,158  5,407  11,565  2,763  9/23/2010
Sycamore Creek, CA—  3,747  11,584  —  520  3,747  12,104  15,851  3,949  9/30/2010
Gateway Village, CA—  5,917  27,298  —  1,247  5,917  28,545  34,462  7,450  12/16/2010
Division Crossing, OR—  3,706  8,327  —  5,586  3,706  13,913  17,619  4,482  12/22/2010
Halsey Crossing, OR (2)
—  —  7,773  —  7,793  —  15,566  15,566  3,701  12/22/2010
Marketplace Del Rio,CA—  13,420  22,251  9  2,905  13,429  25,156  38,585  7,084  1/3/2011
Pinole Vista Shopping Center, CA—  12,894  35,689  —  5,941  12,894  41,630  54,524  7,407  1/6/2011 / 8/27/2018
Desert Springs Marketplace, CA—  8,517  18,761  443  6,127  8,960  24,888  33,848  6,022  2/17/2011
Mills Shopping Center, CA—  4,084  16,833  —  11,004  4,084  27,837  31,921  8,990  2/17/2011
Renaissance Towne Centre, CA—  8,640  13,848  —  2,346  8,640  16,194  24,834  3,587  8/3/2011
Country Club Gate Center, CA—  6,487  17,341  —  777  6,487  18,118  24,605  4,593  7/8/2011
Canyon Park Shopping Center, WA—  9,352  15,916  —  9,013  9,352  24,929  34,281  6,443  7/29/2011
Hawks Prairie Shopping Center, WA—  5,334  20,694  —  2,225  5,334  22,919  28,253  5,505  9/8/2011
The Kress Building, WA—  5,693  20,866  —  4,839  5,693  25,705  31,398  7,043  9/30/2011
Hillsboro Market Center, OR  (2)
—  —  17,553  —  4,713  —  22,266  22,266  5,240  11/23/2011
Gateway Shopping Center, WA (2)
—  6,242  23,462  —  397  6,242  23,859  30,101  5,318  2/16/2012
Euclid Plaza, CA—  7,407  7,753  —  3,117  7,407  10,870  18,277  3,470  3/28/2012
Green Valley Station, CA—  1,685  8,999  —  785  1,685  9,784  11,469  2,676  4/2/2012
Aurora Square, WA—  10,325  13,336  —  2,662  10,325  15,998  26,323  2,888  5/3/2012 / 5/22/2014
Marlin Cove Shopping Center, CA—  8,815  6,797  —  2,151  8,815  8,948  17,763  2,599  5/4/2012
Seabridge Marketplace, CA—  5,098  17,164  —  3,584  5,098  20,748  25,846  4,485  5/31/2012
The Village at Novato, CA—  5,329  4,412  —  1,833  5,329  6,245  11,574  1,246  7/24/2012
Glendora Shopping Center, CA—  5,847  8,758  —  298  5,847  9,056  14,903  2,375  8/1/2012
Wilsonville Old Town Square, OR—  4,181  15,394  —  1,396  4,181  16,790  20,971  3,440  8/1/2012
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  Initial Cost to CompanyCost Capitalized Subsequent to AcquisitionAmount at Which Carried at Close of Period   
 Description and Location Encumbrances LandBuilding &
Improvements
 LandBuilding &
Improvements
 LandBuilding &
Improvements
 
Total (a)
Accumulated Depreciation (b) (1)
Date of Acquisition
Bay Plaza, CA—  5,454  14,857  —  1,084  5,454  15,941  21,395  3,577  10/5/2012
Santa Teresa Village, CA—  14,965  17,162  —  6,500  14,965  23,662  38,627  5,597  11/8/2012
Cypress Center West, CA—  15,480  11,819  124  2,051  15,604  13,870  29,474  3,618  12/7/2012
Redondo Beach Plaza, CA—  16,242  13,625  72  297  16,314  13,922  30,236  3,141  12/28/2012
Harbor Place Center, CA—  16,506  10,527  —  533  16,506  11,060  27,566  2,240  12/28/2012
Diamond Bar Town Center, CA—  9,540  16,795  —  3,775  9,540  20,570  30,110  5,585  2/1/2013
Bernardo Heights Plaza, CA—  3,192  8,940  —  728  3,192  9,668  12,860  2,219  2/6/2013
Canyon Crossing, WA—  7,941  24,659  —  2,959  7,941  27,618  35,559  6,814  4/15/2013
Diamond Hills Plaza, CA35,500  15,458  29,353  —  872  15,458  30,225  45,683  5,818  4/22/2013
Granada Shopping Center, CA—  3,673  13,459  —  842  3,673  14,301  17,974  3,005  6/27/2013
Hawthorne Crossings, CA—  10,383  29,277  —  221  10,383  29,498  39,881  5,703  6/27/2013
Robinwood Shopping Center, OR—  3,997  11,317  18  1,141  4,015  12,458  16,473  2,721  8/23/2013
5 Points Plaza, CA—  17,920  36,965  —  4,242  17,920  41,207  59,127  7,778  9/27/2013
Crossroads Shopping Center, WA—  68,366  67,756  —  19,067  68,366  86,823  155,189  17,347  9/27/2013
Peninsula Marketplace, CA—  14,730  19,214  —  1,979  14,730  21,193  35,923  4,162  11/1/2013
Country Club Village, CA—  9,986  26,579  —  1,797  9,986  28,376  38,362  5,845  11/26/2013
Plaza de la Canada, CA (2)
—  10,351  24,819  —  1,233  10,351  26,052  36,403  4,567  12/13/2013
Tigard Marketplace, OR—  13,587  9,603  —  692  13,587  10,295  23,882  2,533  2/18/2014
Creekside Plaza, CA—  14,807  29,476  —  2,495  14,807  31,971  46,778  5,737  2/28/2014
North Park Plaza, CA—  13,593  17,733  —  1,737  13,593  19,470  33,063  3,042  4/30/2014
Fallbrook Shopping Center, CA (2)
—  21,232  186,197  83  9,379  21,315  195,576  216,891  32,933  6/13/2014
Moorpark Town Center, CA—  7,063  19,694  —  1,631  7,063  21,325  28,388  4,498  12/4/2014
Mission Foothill Marketplace Pads, CA—  3,996  11,051  —  297  3,996  11,348  15,344  1,439  12/4/2014
Wilsonville Town Center, OR—  10,334  27,101  —  602  10,334  27,703  38,037  4,553  12/11/2014
Park Oaks Shopping Center, CA—  8,527  38,064  —  569  8,527  38,633  47,160  5,934  1/6/2016
Ontario Plaza, CA—  9,825  26,635  —  1,470  9,825  28,105  37,930  4,644  1/6/2015
Winston Manor, CA—  10,018  9,762  —  2,132  10,018  11,894  21,912  2,053  1/7/2015
Jackson Square, CA—  6,886  24,558  —  1,111  6,886  25,669  32,555  3,632  7/1/2015
Tigard Promenade, OR—  9,844  10,843  —  245  9,844  11,088  20,932  1,517  7/28/2015
Sunnyside Village Square, OR—  4,428  13,324  —  3,856  4,428  17,180  21,608  2,875  7/28/2015
Gateway Centre, CA—  16,275  28,308  —  4,178  16,275  32,486  48,761  4,231  9/1/2015
Johnson Creek Center, OR—  9,009  22,534  —  1,391  9,009  23,925  32,934  3,308  11/9/2015
Iron Horse Plaza, CA—  8,187  39,654  11  2,519  8,198  42,173  50,371  4,732  12/4/2015
Bellevue Marketplace, WA—  10,488  39,119  —  10,162  10,488  49,281  59,769  5,515  12/10/2015
Four Corner Square, WA—  9,926  31,415  —  491  9,926  31,906  41,832  4,106  12/21/2015
Warner Plaza, CA—  16,104  60,188  —  9,266  16,104  69,454  85,558  8,460  12/31/2015
Magnolia Shopping Center, CA—  12,501  27,040  —  2,046  12,501  29,086  41,587  3,621  3/10/2016
85


  Initial Cost to CompanyCost Capitalized Subsequent to AcquisitionAmount at Which Carried at Close of Period   
 Description and Location Encumbrances LandBuilding &
Improvements
 LandBuilding &
Improvements
 LandBuilding &
Improvements
 
Total (a)
Accumulated Depreciation (b) (1)
Date of Acquisition
Casitas Plaza Shopping Center, CA7,001  10,734  22,040  —  1,431  10,734  23,471  34,205  2,626  3/10/2016
Bouquet Center, CA—  10,040  48,362  —  606  10,040  48,968  59,008  5,373  4/28/2016
North Ranch Shopping Center, CA—  31,522  95,916  —  1,826  31,522  97,742  129,264  9,622  6/1/2016
Monterey Center, CA (2)
—  1,073  10,609  —  237  1,073  10,846  11,919  1,080  7/14/2016
Rose City Center, OR (2)
—  3,637  10,301  —  (78) 3,637  10,223  13,860  987  9/15/2016
The Knolls, CA—  9,726  18,299  —  21  9,726  18,320  28,046  1,827  10/3/2016
Bridle Trails Shopping Center, WA—  11,534  20,700  —  7,906  11,534  28,606  40,140  2,586  10/17/2016
Torrey Hills Corporate Center, CA—  5,579  3,915  —  2,435  5,579  6,350  11,929  1,320  12/6/2016
PCC Community Markets Plaza, WA—  1,856  6,914  —  7  1,856  6,921  8,777  657  1/25/2017
The Terraces, CA—  18,378  37,103  —  1,423  18,378  38,526  56,904  3,291  3/17/2017
Santa Rosa Southside Shopping Center, CA—  5,595  24,453  —  1,788  5,595  26,241  31,836  2,057  3/24/2017
Division Center, OR—  6,917  26,098  —  2,086  6,917  28,184  35,101  2,353  4/5/2017
Highland Hill Shopping Center, WA—  10,511  37,825  29  382  10,540  38,207  48,747  3,210  5/9/2017
Monta Loma Plaza, CA—  18,226  11,113  —  140  18,226  11,253  29,479  784  9/19/2017
Fullerton Crossroads, CA26,000  28,512  45,419  —  476  28,512  45,895  74,407  3,205  10/11/2017
Riverstone Marketplace, WA17,656  5,113  27,594  —  277  5,113  27,871  32,984  1,876  10/11/2017
North Lynnwood Shopping Center, WA—  4,955  10,335  9  710  4,964  11,045  16,009  766  10/19/2017
The Village at Nellie Gail Ranch, CA—  22,730  22,578  —  1,387  22,730  23,965  46,695  1,528  11/30/2017
Stadium Center, WA—  1,699  17,229  7  87  1,706  17,316  19,022  861  2/23/2018
King City Plaza, OR—  5,161  10,072  —  43  5,161  10,115  15,276  570  5/18/2018
Summerwalk Village, WA—  2,320  9,281  —  4  2,320  9,285  11,605  20  12/13/2019
 $86,157  $878,022  $2,023,831  $1,518  $228,470  $879,540  $2,252,301  $3,131,841  $390,916   

a.RECONCILIATION OF REAL ESTATE – OWNED SUBJECT TO OPERATING LEASES (in thousands)
 Year Ended December 31,
 201920182017
Balance at beginning of period:$3,160,472  $3,109,397  $2,687,018  
Property improvements during the year37,985  40,300  54,481  
Properties acquired during the year11,601  43,387  374,004  
Properties sold during the year(69,056) (24,427)   
Assets written off during the year(9,161) (8,185) (6,106) 
Balance at end of period:$3,131,841  $3,160,472  $3,109,397  
 

86


b.RECONCILIATION OF ACCUMULATED DEPRECIATION (in thousands)
 Year Ended December 31,
 201920182017
Balance at beginning of period:$329,207  $260,115  $193,021  
Depreciation expenses82,419  81,107  72,725  
Properties sold during the year(10,775) (3,551)   
Property assets fully depreciated and written off(9,935) (8,464) (5,631) 
Balance at end of period:$390,916  $329,207  $260,115  
 
(1)Depreciation and investments in building and improvements reflected in the consolidated statements of operations is calculated over the estimated useful life of the assets as follows:

Building:  39-40 years
Property Improvements:  10-20 years 

(2)Property, or a portion thereof, is subject to a ground lease.

(3)The aggregate cost for Federal Income Tax Purposes for real estate was approximately $2.9 billion at December 31, 2019.

87


SCHEDULE IV – MORTGAGE LOANS ON REAL ESTATE
December 31, 2019
(in thousands)

a.RECONCILIATION OF MORTGAGE LOANS ON REAL ESTATE (in thousands)

Year Ended December 31,
201920182017
Balance at beginning of period:$  $  $  
Mortgage loans acquired during the current period13,250      
Repayments on mortgage note receivable(250)     
Balance at end of period:$13,000  $  $  

Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
 
None
 
Item 9A.  Controls and Procedures
 
Evaluation of Disclosure Controls and Procedures (Retail Opportunity Investments Corp.)
 
ROIC maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to its management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, ROIC’s management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and its management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
 
ROIC’s Chief Executive Officer and Chief Financial Officer, based on their evaluation of ROIC’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) required by paragraph (b) of Rule 13a-15 or Rule 15d-15, have concluded that as of the end of the period covered by this report, ROIC’s disclosure controls and procedures were effective to give reasonable assurances to the timely collection, evaluation and disclosure of information relating to ROIC that would potentially be subject to disclosure under the Exchange Act and the rules and regulations promulgated thereunder.
 
During the year ended December 31, 2019, there was no change in ROIC’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, ROIC’s internal control over financial reporting.
 
Evaluation of Disclosure Controls and Procedures (Retail Opportunity Investments Partnership, LP)
 
The Operating Partnership maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to its management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, the Operating Partnership’s management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and its management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
 
The Company’s Chief Executive Officer and Chief Financial Officer, based on their evaluation of the Operating Partnership’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) required by paragraph (b) of Rule 13a-15 or Rule 15d-15, have concluded that as of the end of the period covered by this report, the Operating Partnership’s disclosure controls and procedures were effective to give reasonable assurances to the timely collection, evaluation and disclosure of information relating to the Operating Partnership that would potentially be subject to disclosure under the Exchange Act and the rules and regulations promulgated thereunder.
 
88


During the year ended December 31, 2019, there was no change in the Operating Partnership’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Operating Partnership’s internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting (Retail Opportunity Investments Corp.)
 
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f).  Under the supervision and with the participation of ROIC’s management, including the Chief Executive Officer and Chief Financial Officer, ROIC conducted an evaluation of the effectiveness of its internal control over financial reporting as of December 31, 2019 based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework).  Based on that evaluation, Management concluded that its internal control over financial reporting was effective as of December 31, 2019.
 
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
 
The effectiveness of internal control over financial reporting as of December 31, 2019, has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in its report which appears on page 50 of this Annual Report on Form 10-K.
 
Management’s Report on Internal Control over Financial Reporting (Retail Opportunity Investments Partnership, LP)
 
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f).  Under the supervision and with the participation of the Operating Partnership’s management, including the Chief Executive Officer and Chief Financial Officer of ROIC, the Operating Partnership conducted an evaluation of the effectiveness of its internal control over financial reporting as of December 31, 2019 based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework).  Based on that evaluation, Management concluded that its internal control over financial reporting was effective as of December 31, 2019.
 
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
 
Changes in Internal Control over Financial Reporting
 
There was no change in ROIC’s or the Operating Partnership’s internal control over financial reporting (as such term is defined in Exchange Act Rule 13a-15(f)) that occurred during its most recent quarter that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.

Item 9B.  Other Information
 
None.

PART III
 
Item 10.  Directors, Executive Officers and Corporate Governance
 
Information required by this Item is hereby incorporated by reference to the material appearing in the Proxy Statement for the Company’s 2020 Annual Meeting of Stockholders to be filed within 120 days after December 31, 2019.
 
Item 11.  Executive Compensation
 
Information required by this Item is hereby incorporated by reference to the material appearing in the Proxy Statement for the Company’s 2020 Annual Meeting of Stockholders to be filed within 120 days after December 31, 2019.


89


Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
 
Information required by this Item is hereby incorporated by reference to the material appearing in the Proxy Statement for the Company’s 2020 Annual Meeting of Stockholders to be filed within 120 days after December 31, 2019.

Item 13.  Certain Relationships and Related Transactions, and Director Independence
 
Information required by this Item is hereby incorporated by reference to the material appearing in the Proxy Statement for the Company’s 2020 Annual Meeting of Stockholders to be filed within 120 days after December 31, 2019.

Item 14.  Principal Accounting Fees and Services
 
Information required by this Item is hereby incorporated by reference to the material appearing in the Proxy Statement for the Company’s 2020 Annual Meeting of Stockholders to be filed within 120 days after December 31, 2019.

PART IV

Item 15.  Exhibits and Financial Statement Schedule
 
(a)(1) and (2) Financial Statements and Schedule
 
Please refer to the Index to Consolidated Financial Statements included under Part II, Item 8. Financial Statements and Supplementary Data.
 
(a)(3) Exhibits
Bylaws (2)
90


91


10.30
10.31
101 SCHInline XBRL Taxonomy Extension Schema Document
92


101 CALInline XBRL Taxonomy Extension Calculation Linkbase Document
101 DEFInline Taxonomy Extension Definition Linkbase Document
101 LABInline XBRL Taxonomy Extension Label Linkbase Document
101 PREInline XBRL Taxonomy Extension Presentation Linkbase Document
104The cover page from this Annual Report on Form 10-K for the year ended December 31, 2019, formatted in Inline XBRL (and contained in Exhibit 101)
________________________
 
(1)Incorporated by reference to the Company’s current report on Form 8-K filed on October 26, 2009.
(2)Incorporated by reference to the Company’s current report on Form 8-K filed on June 3, 2011.
(3)Incorporated by reference to the Company’s current report on Form 8-K filed on April 5, 2012.
(4)Incorporated by reference to the Company’s current report on Form 8-K filed on January 3, 2013.
(5)Incorporated by reference to the Company’s current report on Form 8-K filed on October 2, 2013.
(6)Incorporated by reference to the Company’s current report on Form 8-K filed on December 9, 2013.
(7)Incorporated by reference to the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2013, filed on February 25, 2014.
(8)Incorporated by reference to the Company’s current report on Form 8-K filed on December 3, 2014.
(9)Incorporated by reference to the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2014, filed on February 25, 2015.
(10)Incorporated by reference to the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2015, filed on February 24, 2016.
(11)Incorporated by reference to the Company’s current report on Form 8-K filed on March 16, 2016.
(12)Incorporated by reference to the Company’s quarterly report on Form 10-Q for the fiscal quarter ended September 30, 2016 filed on October 26, 2016.
(13)Incorporated by reference to the Company’s current report on Form 8-K filed on March 24, 2017.
(14)Incorporated by reference to the Company’s quarterly report on Form 10-Q for the fiscal quarter ended March 31, 2017 filed on April 27, 2017.
(15)Incorporated by reference to the Company’s current report on Form 8-K filed on September 13, 2017.
(16)Incorporated by reference to the Company’s current report on Form 8-K filed on October 17, 2017.
(17)Incorporated by reference to the Company’s quarterly report on Form 10-Q for the fiscal quarter ended September 30, 2017 filed on October 25, 2017.
(18)Incorporated by reference to the Company’s current report on Form 8-K filed on November 13, 2017.
(19)Incorporated by reference to the Company’s current report on Form 8-K filed on May 1, 2018.
(20)Incorporated by reference to the Company’s current report on Form 8-K filed on May 2, 2018.
(21)Incorporated by reference to the Company’s current report on Form 8-K filed on December 27, 2019.
* Filed herewith.
** Furnished with this report.
+ Unless otherwise noted, all exhibits have File No. 001-33479.

Item 16. Form 10-K Summary
 
None.

93


SIGNATURES
 
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 RETAIL OPPORTUNITY INVESTMENTS CORP.
Registrant
Date: February 19, 2020By:  /s/ Stuart A. Tanz
 Stuart A. Tanz
 President and Chief Executive Officer
 (Principal Executive Officer)
 
 

94


POWER OF ATTORNEY
 
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Stuart A. Tanz and Michael B. Haines, and each of them, with full power to act without the other, such person’s true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign this Form 10-K and any and all amendments thereto, and to file the same, with exhibits and schedule thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing necessary or desirable to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
 
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Date: February 19, 2020/s/ Richard A. Baker
 Richard A. Baker
 Non-Executive Chairman of the Board

Date: February 19, 2020/s/ Stuart A. Tanz
 Stuart A. Tanz
 President, Chief Executive Officer and Director
 
(Principal Executive Officer)

Date: February 19, 2020/s/ Michael B. Haines
 Michael B. Haines
 Chief Financial Officer
 
(Principal Financial Officer and Principal Accounting Officer)
 

Date: February 19, 2020/s/ Laurie A. Sneve
 Laurie A. Sneve
 Chief Accounting Officer

Date: February 19, 2020/s/ Michael J. Indiveri
 Michael J. Indiveri
 Director

Date: February 19, 2020/s/ Edward H. Meyer
 Edward H. Meyer
 Director

 
Date: February 19, 2020/s/ Lee S. Neibart
 Lee S. Neibart
 Director
 
95


Date: February 19, 2020/s/ Charles J. Persico
 Charles J. Persico
 Director
 
Date: February 19, 2020/s/ Laura H. Pomerantz
 Laura H. Pomerantz
 Director
 
Date: February 19, 2020/s/ Eric S. Zorn
 Eric S. Zorn
 Director
 

96


SIGNATURES
 
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 RETAIL OPPORTUNITY INVESTMENTS PARTNERSHIP, LP, by Retail Opportunity Investments GP, LLC, its sole general partner
Registrant
 
Date: February 19, 2020By:  /s/ Stuart A. Tanz
 Stuart A. Tanz
 President and Chief Executive Officer
 (Principal Executive Officer)
 
 
 
 
 
 

97


POWER OF ATTORNEY
 
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Stuart A. Tanz and Michael B. Haines, and each of them, with full power to act without the other, such person’s true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign this Form 10-K and any and all amendments thereto, and to file the same, with exhibits and schedule thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing necessary or desirable to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
 
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
 
Date: February 19, 2020/s/ Richard A. Baker
 Richard A. Baker
 Non-Executive Chairman of the Board
 
Date: February 19, 2020/s/ Stuart A. Tanz
 Stuart A. Tanz
 President, Chief Executive Officer and Director
 
(Principal Executive Officer)
 
Date: February 19, 2020/s/ Michael B. Haines
 Michael B. Haines
 Chief Financial Officer
 
(Principal Financial Officer and Principal Accounting Officer)
 

Date: February 19, 2020/s/ Laurie A. Sneve
 Laurie A. Sneve
 Chief Accounting Officer

Date: February 19, 2020/s/ Michael J. Indiveri
 Michael J. Indiveri
 Director

Date: February 19, 2020/s/ Edward H. Meyer
 Edward H. Meyer
 Director

Date: February 19, 2020/s/ Lee S. Neibart
 Lee S. Neibart
 Director
 
Date: February 19, 2020/s/ Charles J. Persico
 Charles J. Persico
 Director
98


 
Date: February 19, 2020/s/ Laura H. Pomerantz
 Laura H. Pomerantz
 Director
 
Date: February 19, 2020/s/ Eric S. Zorn
 Eric S. Zorn
 Director

99
Document

EXHIBIT 4.7

DESCRIPTION OF SECURITIES OF RETAIL OPPORTUNITY INVESTMENTS CORP.
The following description of the material terms of the common stock, par value $0.0001 per share, of Retail Opportunity Investments Corp. (“common stock”) is only a summary and is subject to, and qualified in its entirety by reference to, the more complete description of the common stock in the following documents: (a) Retail Opportunity Investments Corp.’s charter, and (b) Retail Opportunity Investments Corp.’s bylaws, both of which are exhibits to our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. Please note that references to “we,” “our” and “us” herein refer only to Retail Opportunity Investments Corp. and not to its subsidiaries or Retail Opportunity Investments Partnership, LP, unless the context requires otherwise. This summary description is not meant to be a complete descriptions of the common stock.
Description of Common Stock
Retail Opportunity Investments Corp. was formed on July 10, 2007.  Our charter provides that we may issue up to 500,000,000 shares of common stock, par value $0.0001 per share, and up to 50,000,000 shares of preferred stock, par value $0.0001 per share.  Our charter also authorizes our board of directors to amend the charter by a majority vote of the entire board of directors and without stockholder approval to increase or decrease the aggregate number of authorized shares of stock or the authorized number of shares of stock of any class or series.  As of February 14, 2020, 116,455,432 shares of our common stock were issued and outstanding.  Under Maryland law, our stockholders will not be personally liable for any of our debts or obligations solely as a result of their status as stockholders.
All outstanding shares of our common stock are duly authorized, validly issued, fully paid and nonassessable.  Subject to the preferential rights, if any, of holders of any other class or series of our stock and to the provisions of our charter regarding the restrictions on ownership and transfer of our stock, holders of outstanding shares of common stock are entitled to receive dividends and other distributions on such shares of common stock out of assets legally available for such purposes if, as and when authorized by our board of directors and declared by us, and the holders of outstanding shares of common stock are entitled to share ratably in our assets legally available for distribution to our stockholders in the event of our liquidation, dissolution or winding up after payment of or adequate provision for all our known debts and liabilities and payment of any liquidation amounts for any issued and outstanding preferred stock.
Subject to the provisions of our charter regarding the restrictions on ownership and transfer of our stock and except as may otherwise be specified in the terms of any class or series of our stock, each outstanding share of common stock entitles the holder to one vote on all matters submitted to a vote of stockholders, including the election of directors, and, except as provided with respect to any other class or series of stock, the holders of shares of common stock will possess the exclusive voting power.  A plurality of the votes cast in the election of directors is sufficient to elect a director and there is no cumulative voting in the election of directors, which means that the holders of a majority of the outstanding shares of common stock generally can elect all of the directors then standing for election, and the holders of the remaining shares will not be able to elect any directors. However, pursuant to our majority vote policy for the election of directors, in an uncontested election, any nominee who receives a greater number of votes “withheld” from his or her election than votes “for” such election is required to tender his or her resignation to our board of directors. Our nominating and corporate governance committee is required to promptly consider the resignation and make a recommendation to our board of directors for its consideration.
Holders of shares of common stock have no preference, conversion, exchange, sinking fund or redemption rights and have no pre-emptive rights to subscribe for any securities of our company.  Our charter provides that our stockholders generally have no appraisal rights unless our board of directors determines prospectively that appraisal rights will apply to one or more transactions in which holders of our common stock would otherwise be entitled to exercise appraisal rights.  Subject to the provisions of our charter regarding the restrictions on ownership and transfer of our stock, holders of shares of common stock will have equal dividend, liquidation and other rights.
Under the Maryland General Corporation Law (the “MGCL”), a Maryland corporation generally cannot dissolve, amend its charter, merge or consolidate with another entity, sell all or substantially all of its assets, convert to another entity or engage in a statutory share exchange unless the action is advised by its board of directors and approved by the affirmative vote of stockholders entitled to cast at least two-thirds of the votes entitled to be cast on the matter, unless a lesser percentage (but not less than a majority of all of the votes entitled to be cast on the matter) is specified in the corporation’s charter.  Our charter
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provides that these actions (other than certain amendments to the provisions of our charter related to the removal of directors and the restrictions on ownership and transfer of our stock, and the vote required to amend such provisions, which must be approved by the affirmative vote of at least two-thirds of the votes entitled to be cast on the amendment) may be approved by a majority of all of the votes entitled to be cast on the matter.
Power to Reclassify Our Unissued Shares of Stock
Our charter authorizes our board of directors to classify and reclassify from time to time any unissued shares of common or preferred stock into other classes or series of stock, including one or more classes or series of stock that have priority with respect to voting rights, dividends or upon liquidation over our common stock, and authorizes us to issue the newly-classified shares.  Prior to the issuance of shares of each new class or series, our board of directors is required by Maryland law and by our charter to set, subject to the provisions of our charter regarding the restrictions on ownership and transfer of our stock, the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications and terms and conditions of redemption for each class or series.  Our board of directors may take these actions without stockholder approval unless stockholder approval is required by the rules of any stock exchange or automatic quotation system on which our securities are listed or traded or the terms of any class or series of stock we may issue in the future.  No shares of preferred stock are presently outstanding, and we currently have no plans to issue any shares of preferred stock.
Power to Increase or Decrease Authorized Shares of Stock and Issue Additional Shares of Capital Stock
We believe that the power of our board of directors to amend our charter to increase or decrease the number of authorized shares of capital stock, to authorize us to issue additional authorized but unissued shares of common or preferred stock in one or more classes or series and to classify or reclassify unissued shares of common or preferred stock and thereafter to authorize us to issue such classified or reclassified shares of stock will provide us with increased flexibility in structuring possible future financings and acquisitions and in meeting other needs that might arise.  The additional classes or series of capital stock, as well as the additional shares of common stock, will be available for issuance without further action by our stockholders, unless such approval is required by the rules of any stock exchange or automated quotation system on which our securities may be listed or traded or the terms of any class or series of stock we may issue in the future.  
Restrictions on Ownership and Transfer
In order for us to qualify as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”), shares of our stock must be beneficially owned by 100 or more persons during at least 335 days of a taxable year of 12 months (other than the first year for which an election to be a REIT has been made) or during a proportionate part of a shorter taxable year.  Also, not more than 50% of the value of the outstanding shares of our stock may be owned, directly or indirectly, by five or fewer individuals (as defined in the Code to include certain entities) during the last half of a taxable year (other than the first year for which an election to be a REIT has been made).  To qualify as a REIT, we must satisfy other requirements as well.
Our charter contains restrictions on the ownership and transfer of our outstanding common stock and capital stock which are intended, among other purposes, to assist us in complying with these requirements and continuing to qualify as a REIT.  The relevant sections of our charter provide that, subject to the exceptions described below, no person or entity may own, or be deemed to own, beneficially or by virtue of the applicable constructive ownership provisions of the Code, more than 9.8% by value or number of shares, whichever is more restrictive, of the outstanding shares of our common stock, or 9.8% by value or number of shares, whichever is more restrictive, of the outstanding shares of all classes and series of our capital stock.  We refer to these limits collectively as the “ownership limit.”  An individual or entity is referred to as a “prohibited owner” if, but for the ownership limit or other restrictions on ownership and transfer of our stock described below, had a violative transfer or other event been effective, the individual or entity would have been a beneficial owner or, if appropriate, a record owner of shares of our stock.
The constructive ownership rules under the Code are complex and may cause shares of stock owned actually or constructively by a group of related individuals and/or entities to be owned constructively by one individual or entity.  As a result, the acquisition of less than 9.8% by value or number of shares, whichever is more restrictive, of the outstanding shares of our common stock, or 9.8% by value or number of shares, whichever is more restrictive, of the outstanding shares of all classes and series of our capital stock (or the acquisition of an interest in an entity that owns, actually or constructively, shares
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of our stock by an individual or entity), could, nevertheless, cause that individual or entity, or another individual or entity, to constructively own in excess of the applicable ownership limit.
Our board of directors may, in its sole discretion, subject to such conditions as it may determine and the receipt of certain representations and undertakings, prospectively or retroactively, waive the ownership limit or establish a different limit on ownership, or excepted holder limit, for a particular person if the person’s ownership in excess of the ownership limit would not result in our being “closely held” within the meaning of Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year) or otherwise would result in our failing to qualify as a REIT.  As a condition of its waiver or grant of excepted holder limit, our board of directors may, but is not required to, require an opinion of counsel or ruling from the Internal Revenue Service (the “IRS”), satisfactory to our board of directors in order to determine or ensure our qualification as a REIT and may impose such other conditions and limitations as our board of directors may determine.
In connection with granting a waiver of the ownership limit, creating an excepted holder limit or at any other time, our board of directors may from time to time increase or decrease the ownership limit for all other individuals and entities unless, after giving effect to such increase, five or fewer individuals could beneficially own in the aggregate more than 49.9% by value of the shares of all classes and series of our capital stock then outstanding or we would otherwise fail to qualify as a REIT.  Prior to the modification of the ownership limit, our board of directors may require such opinions of counsel, affidavits, undertakings or agreements as it may deem necessary or advisable in order to determine or ensure our qualification as a REIT.  A reduced ownership limit will not apply to any person or entity whose percentage ownership of our common stock or stock of all classes and series, as applicable, is in excess of such decreased ownership limit until such time as such individual’s or entity’s percentage ownership of our common stock or stock of all classes and series, as applicable, equals or falls below the decreased ownership limit, but any further acquisition of shares of our common stock or stock of any other class or series, as applicable, in excess of such percentage ownership of our common stock or stock of all classes and series will be in violation of the ownership limit.
Our charter further prohibits:
any person from beneficially or constructively owning, applying certain attribution rules of the Code, shares of our stock that would result in our being “closely held” under Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year) or otherwise cause us to fail to qualify as a REIT (including, but not limited to, beneficial ownership or constructive ownership that would result in us owning, actually or constructively, an interest in a tenant that is described in Section 856(d)(2)(B) of the Code if the income derived by us from such tenant could cause us to fail to satisfy any of the gross income requirements of Section 856(c) of the Code); and
any person from transferring shares of our stock if such transfer would result in shares of our stock being owned by fewer than 100 persons (determined without reference to any rules of attribution).
Any person who acquires or attempts or intends to acquire beneficial or constructive ownership of shares of our stock that will or may violate the ownership limit or any of the other foregoing restrictions on ownership and transfer of our stock, or who would have owned shares of our stock transferred to a trust as described below, must immediately give us written notice of the event or, in the case of an attempted or proposed transaction, must give at least 15 days prior written notice to us and provide us with such other information as we may request in order to determine the effect of such transfer on our qualification as a REIT.  The foregoing restrictions on ownership and transfer of our stock will not apply if our board of directors determines that it is no longer in our best interest to attempt to qualify, or to continue to qualify, as a REIT or that compliance with the restrictions and limitations on ownership and transfer of our stock as described above is no longer required in order for us to qualify as a REIT.
If any transfer of shares of our stock would result in shares of our stock being beneficially owned by fewer than 100 persons, such transfer will be null and void and the intended transferee will acquire no rights in such shares.  In addition, if any purported transfer of shares of our stock or any other event would otherwise result in any person violating the ownership limit or an excepted holder limit established by our board of directors or in our being “closely held” under Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year) or otherwise failing to qualify as a REIT, then that number of shares (rounded up to the nearest whole share) that would cause such person to violate
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such restrictions will be automatically transferred to, and held by, a trust for the exclusive benefit of one or more charitable organizations selected by us and the intended transferee will acquire no rights in such shares.  The automatic transfer will be effective as of the close of business on the business day prior to the date of the violative transfer or other event that results in a transfer to the trust.  Any dividend or other distribution paid to the prohibited owner, prior to our discovery that the shares had been automatically transferred to a trust as described above, must be repaid to the trustee upon demand for distribution to the beneficiary by the trust.  If the transfer to the trust as described above is not automatically effective, for any reason, to prevent violation of the applicable ownership limit or our being “closely held” under Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year) or otherwise failing to qualify as a REIT, then our charter provides that the transfer of the shares will be null and void, and the intended transferee will acquire no rights in such shares.
Shares of our stock transferred to the trustee are deemed offered for sale to us, or our designee, at a price per share equal to the lesser of (1) the price paid by the prohibited owner for the shares (or, if the event that resulted in the transfer to the trust did not involve a purchase of such shares of stock at market price, which is generally the last sales price reported on The Nasdaq Global Select Market on the trading day immediately preceding the day of the event which resulted in the transfer of such shares of stock to the trust, the per-share market price) and (2) the market price on the date we accept, or our designee accepts, such offer.  We may reduce this amount by the amount of any dividend or other distribution that we have paid to the prohibited owner before we discovered that the shares had been automatically transferred to the trust and that are then owed to the trustee as described above, and we may pay the amount of any such reduction to the trustee for the benefit of the charitable beneficiary.  We have the right to accept such offer until the trustee has sold the shares of our stock held in the trust as discussed below.  Upon a sale to us, the interest of the charitable beneficiary in the shares sold terminates, the trustee must distribute the net proceeds of the sale to the prohibited owner and any dividends or other distributions held by the trustee with respect to such shares of stock will be paid to the charitable beneficiary.
If we do not buy the shares, the trustee must, within 20 days of receiving notice from us of the transfer of shares to the trust, sell the shares to a person or entity designated by the trustee who could own the shares without violating the ownership limit or the other restrictions on ownership and transfer of our stock.  After the sale of the shares, the interest of the charitable beneficiary in the shares transferred to the trust will terminate and the trustee must distribute to the prohibited owner an amount equal to the lesser of (1) the price paid by the prohibited owner for the shares (or, if the event which resulted in the transfer to the trust did not involve a purchase of such shares at market price, the market price of the shares) and (2) the sales proceeds (net of commissions and other expenses of sale) received by the trust for the shares.  The trustee may reduce the amount payable to the prohibited owner by the amount of any dividend or other distribution that we paid to the prohibited owner before we discovered that the shares had been automatically transferred to the trust and that are then owed to the trustee as described above.  Any net sales proceeds in excess of the amount payable to the prohibited owner will be immediately paid to the beneficiary of the trust, together with any dividends or other distributions thereon.  In addition, if, prior to discovery by us that shares of stock have been transferred to a trust, such shares of stock are sold by a prohibited owner, then such shares will be deemed to have been sold on behalf of the trust and, to the extent that the prohibited owner received an amount for or in respect of such shares that exceeds the amount that such prohibited owner was entitled to receive, such excess amount must be paid to the trustee upon demand.  The prohibited owner has no rights in the shares held by the trustee.
The trustee will be designated by us and must be unaffiliated with us and with any prohibited owner.  Prior to the sale of any shares by the trust, the trustee will receive, in trust for the beneficiary of the trust, all dividends and other distributions paid by us with respect to the shares held in trust and may also exercise all voting rights with respect to the shares held in trust.  These rights will be exercised for the exclusive benefit of the beneficiary of the trust.
Subject to Maryland law, effective as of the date that the shares have been transferred to the trust, the trustee will have the authority, at the trustee’s sole discretion:
to rescind as void any vote cast by a prohibited owner prior to our discovery that the shares have been transferred to the trust; and
to recast the vote in accordance with the desires of the trustee acting for the benefit of the beneficiary of the trust.
However, if we have already taken irreversible corporate action, then the trustee may not rescind and recast the vote.
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In addition, if our board of directors determines in good faith that a proposed transfer or other event would violate the restrictions on ownership and transfer of our stock, our board of directors may take such action as it deems advisable to refuse to give effect to or to prevent such transfer, including, but not limited to, causing us to redeem the shares of stock, refusing to give effect to the transfer on our books or instituting proceedings to enjoin the transfer.
Every owner of 5% or more (or such lower percentage as is required by the Code or the regulations promulgated thereunder) of our stock, within 30 days after the end of each taxable year, must give us written notice, stating the stockholder’s name and address, the number of shares of each class and series of our stock that the stockholder beneficially owns and a description of the manner in which the shares are held.  Each such owner must provide to us in writing such additional information as we may request in order to determine the effect, if any, of the stockholder’s beneficial ownership on our qualification as a REIT and to ensure compliance with the ownership limit.  In addition, each stockholder must provide to us such information as we may request in good faith in order to determine our qualification as a REIT and to comply with the requirements of any taxing authority or governmental authority or to determine such compliance.
Any certificates representing shares of our stock shall bear a legend referring to the restrictions described above.
These restrictions on ownership and transfer could delay, defer or prevent a transaction or a change in control that might involve a premium price for the common stock or otherwise be in the best interest of the stockholders.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is Computershare, Inc.
Certain Provisions of the Maryland General Corporation Law and Our Charter and Bylaws
Our Board of Directors
Our charter and bylaws provide that the number of directors we have may be established only by our board of directors but may not be fewer than the minimum required under the MGCL, which is currently one, and our bylaws provide that the number of our directors may not be more than 15. Subject to the terms of any class or series of stock, vacancies on our board of directors may be filled only by a majority of the remaining directors, even if the remaining directors do not constitute a quorum, and any director elected to fill a vacancy will hold office for the remainder of the full term of the directorship in which the vacancy occurred.
Removal of Directors
Our charter provides that, subject to the rights of holders of one or more classes or series of preferred stock to elect or remove one or more directors, a director may be removed, with or without cause, only by the affirmative vote of at least two-thirds of the votes entitled to be cast in the election of directors. This provision, when coupled with the exclusive power of our board of directors to fill vacancies on our board of directors, precludes stockholders from (1) removing incumbent directors except upon a two-thirds vote and (2) filling the vacancies created by such removal with their own nominees.
Business Combinations
Under the MGCL, certain “business combinations” (including a merger, consolidation, statutory share exchange or, in certain circumstances, an asset transfer or issuance or reclassification of equity securities) between a Maryland corporation and an interested stockholder (defined generally as any person who beneficially owns, directly or indirectly, 10% or more of the voting power of the corporation’s outstanding voting stock or an affiliate or associate of the corporation who, at any time during the two-year period prior to the date in question, was the beneficial owner, directly or indirectly, of 10% or more of the voting power of the then outstanding voting stock of the corporation) or an affiliate of such an interested stockholder are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder. Thereafter, any such business combination must generally be recommended by the board of directors of such corporation and approved by the affirmative vote of at least (a) 80% of the votes entitled to be cast by holders of outstanding voting stock of the corporation and (b) two-thirds of the votes entitled to be cast by holders of voting stock of the corporation
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other than shares held by the interested stockholder with whom (or with whose affiliate) the business combination is to be effected or held by an affiliate or associate of the interested stockholder, unless, among other conditions, the corporation’s common stockholders receive a minimum price (as defined in the MGCL) for their shares and the consideration is received in cash or in the same form as previously paid by the interested stockholder for its shares. A person is not an interested stockholder under the business combination statute if the Maryland corporation’s board of directors approved in advance the transaction by which the person otherwise would have become an interested stockholder. The board of directors may provide that its approval is subject to compliance, at or after the time of approval, with any terms and conditions determined by it.
These provisions of the MGCL do not apply, however, to business combinations that are approved or exempted by a Maryland corporation’s board of directors prior to the time that the interested stockholder becomes an interested stockholder. Pursuant to the statute, our board of directors has by resolution exempted business combinations (1) between us and any other person, provided that such business combination is first approved by our board of directors (including a majority of our directors who are not affiliates or associates of such person) and (2) among persons acting in concert with any of the foregoing. As a result, any person described above may be able to enter into business combinations with us that may not be in the best interest of our stockholders, without compliance with the supermajority vote requirements and other provisions of the business combination statute. 
The business combination statute may discourage others from trying to acquire control of us and increase the difficulty of consummating any offer.
Control Share Acquisitions
The MGCL provides that a holder of “control shares” of a Maryland corporation acquired in a “control share acquisition” has no voting rights with respect to such shares except to the extent approved by the affirmative vote of at least two-thirds of the votes entitled to be cast on the matter, excluding shares of stock of the corporation in respect of which any of the following persons is entitled to exercise or direct the exercise of the voting power of such shares in the election of directors: (i) a person who has made or proposes to make the control share acquisition; (ii) an officer of the corporation; or (iii) an employee of the corporation who is also a director of the corporation. “Control shares” are voting shares of stock which, if aggregated with all other such shares of stock owned by the acquirer, or in respect of which the acquirer is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquirer to exercise voting power in electing directors within one of the following ranges of voting power: (A) one-tenth or more but less than one-third; (B) one-third or more but less than a majority; or (C) a majority of all voting power. Control shares do not include shares that the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval or shares acquired directly from the corporation. A “control share acquisition” means the acquisition, directly or indirectly, of issued and outstanding control shares, subject to certain exceptions.
A person who has made or proposes to make a control share acquisition, upon satisfaction of certain conditions (including an undertaking to pay expenses and making an “acquiring person statement” as described in the MGCL), may compel the corporation’s board of directors to call a special meeting of stockholders to be held within 50 days of demand to consider the voting rights of the shares. If no request for a meeting is made, the corporation may itself present the question at any stockholders meeting.
If voting rights are not approved at the meeting or if the acquiring person does not deliver an “acquiring person statement” as required by the statute, then, subject to certain conditions and limitations, the corporation may redeem any or all of the control shares (except those for which voting rights have previously been approved) for fair value determined, without regard to the absence of voting rights for the control shares, as of the date of the last control share acquisition by the acquirer or, if a meeting of stockholders is held at which the voting rights of such shares are considered and not approved, as of the date of such meeting. If voting rights for control shares are approved at a stockholders meeting and the acquirer becomes entitled to exercise or direct the exercise of a majority of all voting power, all other stockholders may exercise appraisal rights. The fair value of the shares as determined for purposes of such appraisal rights may not be less than the highest price per share paid by the acquirer in the control share acquisition.
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The control share acquisition statute does not apply to, among other things, (a) shares acquired in a merger, consolidation or statutory share exchange if the corporation is a party to the transaction or (b) acquisitions approved or exempted by the charter or bylaws of the corporation.
Our bylaws contain a provision exempting from the control share acquisition statute any and all acquisitions by any person of shares of our stock. 
Subtitle 8
Subtitle 8 of Title 3 of the MGCL permits a Maryland corporation with a class of equity securities registered under the Exchange Act and at least three independent directors to elect to be subject, by provision in its charter or bylaws or a resolution of its board of directors and notwithstanding any contrary provision in the charter or bylaws, to any or all of five provisions of the MGCL which provide, respectively, for:
  
 a classified board;
  
 a two-thirds vote requirement for removing a director;
  
 a requirement that the number of directors be fixed only by vote of the board of directors;
  
 a requirement that a vacancy on the board be filled only by the remaining directors in office and for the remainder of the full term of the class of directors in which the vacancy occurred; and
  
 a majority requirement for the calling of a stockholder-requested special meeting of stockholders.
We have elected in our charter to be subject to the provision of Subtitle 8 that provides that vacancies on our board may be filled only by the remaining directors and that directors elected to fill vacancies will serve for the remainder of the term of the directorship in which the vacancy occurred. Through provisions in our charter and bylaws unrelated to Subtitle 8, we already (1) will require the affirmative vote of stockholders entitled to cast not less than two-thirds of all of the votes entitled to be cast generally in the election of directors for the removal of any director, which removal may be with or without cause, (2) vest in the board the exclusive power to fix the number of directorships and (3) require, unless called by the chairman of our board of directors, chief executive officer, president or board of directors, the written request of stockholders entitled to cast a majority of all votes entitled to be cast at such a meeting on such matter to call a special meeting on any matter.
Meetings of Stockholders
Pursuant to our bylaws, a meeting of our stockholders for the election of directors and the transaction of any business will be held annually on a date and at the time and place set by our board of directors. The chairman of our board of directors, our chief executive officer, our president or our board of directors may call a special meeting of our stockholders. Subject to the provisions of our bylaws, a special meeting of our stockholders to act on any matter that may properly be brought before a meeting of our stockholders will also be called by our secretary upon the written request of the stockholders entitled to cast a majority of all the votes entitled to be cast at the meeting on such matter and containing the information required by our bylaws. Our secretary will inform the requesting stockholders of the reasonably estimated cost of preparing and delivering the notice of meeting (including our proxy materials), and the requesting stockholder must pay such estimated cost before our secretary is required to prepare and deliver the notice of the special meeting.
Amendment to Our Bylaws
Our board of directors has the exclusive power to adopt, alter or repeal any provision of our bylaws and to make new bylaws.
Advance Notice of Director Nominations and New Business
Our bylaws provide that, with respect to an annual meeting of stockholders, nominations of individuals for election to our board of directors and the proposal of other business to be considered by our stockholders may be made only (1) pursuant
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to our notice of the meeting, (2) by or at the direction of our board of directors or (3) by a stockholder who was a stockholder of record both at the time of giving the notice required by our bylaws and at the time of the meeting, who is entitled to vote at the meeting on such business or in the election of each such nominee and who has provided notice to us within the time period, containing the information specified by the advance notice provisions set forth in our bylaws.
With respect to special meetings of stockholders, only the business specified in our notice of meeting may be brought before the meeting. Nominations of individuals for election to our board of directors may be made only (1) by or at the direction of our board of directors or (2) provided that the meeting has been properly called for the purpose of electing directors, by a stockholder who was a stockholder of record both at the time of giving the notice required by our bylaws and at the time of the special meeting, who is entitled to vote at the meeting in the election of each such nominee and who has provided notice to us within the time period, containing the information specified by the advance notice provisions set forth in our bylaws.
Indemnification and Limitation of Directors’ and Officers’ Liability
Maryland law permits a Maryland corporation to include in its charter a provision eliminating the liability of its directors and officers to the corporation and its stockholders for money damages except for liability resulting from actual receipt of an improper benefit or profit in money, property or services or active and deliberate dishonesty that was established by a final judgment and was material to the cause of action. Our charter contains a provision that eliminates the liability of our directors and officers to us and our stockholders to the maximum extent permitted by Maryland law. 
The MGCL requires us (unless our charter provides otherwise, which our charter does not) to indemnify any of our directors or officers who have been successful, on the merits or otherwise, in the defense of any proceeding to which he or she is made a party by reason of his or her service in that capacity with us. The MGCL permits us to indemnify our present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to which they may be made or threatened to be made a party by reason of their service in those or other capacities unless it is established that:
  
 the act or omission of the director or officer was material to the matter giving rise to the proceeding and (1) was committed in bad faith or (2) was the result of active and deliberate dishonesty;
  
 the director or officer actually received an improper personal benefit in money, property or services; or
  
 in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful.
Under the MGCL, we may not indemnify a director or officer in a suit brought by us or on our behalf in which the director or officer was adjudged liable to us or in a suit in which the director or officer was adjudged liable on the basis that personal benefit was improperly received. A court may order indemnification if it determines that the director or officer is fairly and reasonably entitled to indemnification, even though the director or officer did not meet the prescribed standard of conduct or was adjudged liable on the basis that personal benefit was improperly received. However, indemnification for an adverse judgment in a suit by us or on our behalf, or for a judgment of liability on the basis that personal benefit was improperly received, is limited to expenses.
In addition, the MGCL permits us to advance reasonable expenses to a director or officer upon our receipt of:
  
 a written affirmation by the director or officer of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification by us; and
  
 a written undertaking by the director or officer or on the director’s or officer’s behalf to repay the amount paid or reimbursed by us if it is ultimately determined that the director or officer did not meet the standard of conduct.
Our charter authorizes us to obligate ourselves and our bylaws obligate us, to the maximum extent permitted by Maryland law in effect from time to time, to indemnify and, without requiring a preliminary determination of the ultimate entitlement to indemnification, pay or reimburse reasonable expenses in advance of final disposition of a proceeding to:
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  any present or former director or officer who is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity; or
  any individual who, while a director or officer of our company and at our request, serves or has served as a director, officer, partner, manager, managing member or trustee of another corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or any other enterprise and who is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity.
Our charter and bylaws also permit us to indemnify and advance expenses to any person who served a predecessor of ours in any of the capacities described above and to any employee or agent of our company or a predecessor of our company.
We have entered into indemnification agreements with each of our directors and officers that provide for indemnification to the maximum extent permitted by Maryland law. 
Insofar as the foregoing provisions permit indemnification of directors, officers or persons controlling us for liability arising under the Securities Act, we have been informed that, in the opinion of the SEC, this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
REIT Qualification
Our charter provides that our board of directors may authorize us to revoke or otherwise terminate our REIT election, without approval of our stockholders, if it determines that it is no longer in our best interests to continue to qualify as a REIT.


9
Document

EXHIBIT 21.1
 
LIST OF SUBSIDIARIES OF RETAIL OPPORTUNITY INVESTMENTS CORP.
 
CompanyJurisdiction of
Organization
Retail Opportunity Investments Partnership, LPDelaware
Retail Opportunity Investments GP, LLCDelaware
ROIC Paramount Plaza, LLCDelaware
ROIC Santa Ana, LLCDelaware
ROIC Washington, LLCDelaware
ROIC Oregon, LLCDelaware
ROIC California, LLCDelaware
ROIC Crossroads GP, LLCDelaware
ROIC Crossroads LP, LLCDelaware
ROIC Pinole Vista, LLCDelaware
ROIC Hillsboro, LLCDelaware
ROIC Cypress West, LLCDelaware
ROIC Redondo Beach Plaza, LLCDelaware
ROIC DBTC, LLCDelaware
Terranomics Crossroads Associates, LPDelaware
SARM Five Points Plaza, LLCDelaware
ROIC Robinwood, LLCDelaware
ROIC Creekside Plaza, LLCDelaware
ROIC Park Oaks, LLCDelaware
ROIC Diamond Hills Plaza, LLCDelaware
ROIC Warner Plaza, LLCDelaware
ROIC Four Corner Square, LLCDelaware
ROIC Casitas Plaza, LLCDelaware
ROIC Bouquet Center, LLCDelaware
ROIC Monterey, LLCDelaware
ROIC IGAP, LLCDelaware
ROIC TUO, LLCDelaware
Sunhill Properties, LLCCalifornia
Uhlmann-Burbank, LLCCalifornia
ROIC Riverstone Marketplace, LLCDelaware
ROIC Fullerton Crossroads, LLCDelaware


Document

EXHIBIT 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following Registration Statements:
(1)Registration Statement (Form S-8 No. 333-170692) pertaining to the 2009 Equity Incentive Plan of Retail Opportunity Investments Corp.,

(2)Post-Effective Amendment No. 1 to Form S-1/MEF on Registration Statement (Form S-3 No. 333-146777), and in the related Prospectus, of Retail Opportunity Investments Corp,

(3)Registration Statement (Form S-3 No. 333-198974), and the related Prospectus, of Retail Opportunity Investments Corp.,

(4)Registration Statement (Form S-3 ASR No. 333-210413), and the related Prospectus, of Retail Opportunity Investments Corp.,

(5)Registration Statement (Form S-3 ASR No. 333-231088), and the related Prospectus, of Retail Opportunity Investments Corp. and Retail Opportunity Investments Partnership, LP, and

(6)Registration Statement (Form S-8 No. 333-229053) pertaining to the 2009 Equity Incentive Plan and Amended and Restated 2009 Equity Incentive Plan

of our reports dated February 19, 2020, with respect to the consolidated financial statements and schedule of Retail Opportunity Investments Corp. and the effectiveness of internal control over financial reporting of Retail Opportunity Investments Corp., included in this Annual Report (Form 10-K) for the year ended December 31, 2019.


/s/ Ernst & Young LLP
San Diego, California
February 19, 2020




Document

EXHIBIT 23.2

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following Registration Statement (Form S-3 ASR No. 333-231088-01) of Retail Opportunity Investments Corp. and Retail Opportunity Investments Partnership, LP and in the related Prospectus of our reports dated February 19, 2020, with respect to the consolidated financial statements and schedule of Retail Opportunity Investments Partnership, LP, included in this Annual Report (Form 10-K) for the year ended December 31, 2019.     

/s/ Ernst & Young LLP
San Diego, California
February 19, 2020





Document

EXHIBIT 31.1

RETAIL OPPORTUNITY INVESTMENTS CORP.
CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Stuart A. Tanz, certify that:

1.I have reviewed this Annual Report on Form 10-K 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: February 19, 2020 By:  /s/ Stuart A. Tanz
   Name:  Stuart A. Tanz
   Title:  Chief Executive Officer





RETAIL OPPORTUNITY INVESTMENTS PARTNERSHIP, LP
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
 
I, Stuart A. Tanz, certify that:

1.I have reviewed this Annual Report on Form 10-K 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: February 19, 2020 By:  /s/ Stuart A. Tanz
   Name:  Stuart A. Tanz
   Title:  Chief Executive Officer


Document

EXHIBIT 31.2
 
RETAIL OPPORTUNITY INVESTMENTS CORP.
CERTIFICATION OF CHIEF FINANCIAL OFFICER
 
I, Michael B. Haines, certify that:
 
1.I have reviewed this Annual Report on Form 10-K 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: February 19, 2020 By:  /s/ Michael B. Haines
   Name:  Michael B. Haines
   Title:  Chief Financial Officer





RETAIL OPPORTUNITY INVESTMENTS PARTNERSHIP, LP
CERTIFICATION OF CHIEF FINANCIAL OFFICER
 
I, Michael B. Haines, certify that:
 
1.I have reviewed this Annual Report on Form 10-K 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: February 19, 2020 By:  /s/ Michael B. Haines
   Name:  Michael B. Haines
   Title:  Chief Financial Officer


Document

EXHIBIT 32.1
 
RETAIL OPPORTUNITY INVESTMENTS CORP.
Certification of Chief Executive Officer 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
 
The undersigned, the Chief Executive Officer of Retail Opportunity Investments Corp. (the “Company”), hereby certifies to the best of his knowledge on the date hereof, pursuant to 18 U.S.C. 1350(a), as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002, that the Annual Report on Form 10-K for the year ended December 31, 2019 (the “Form 10-K”), filed concurrently herewith by the Company, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 19, 2020 By:  /s/ Stuart A. Tanz
   Name:  Stuart A. Tanz
   Title:  Chief Executive Officer
   

The undersigned, the Chief Financial Officer of Retail Opportunity Investments Corp. (the “Company”), hereby certifies to the best of his knowledge on the date hereof, pursuant to 18 U.S.C. 1350(a), as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002, that the Annual Report on Form 10-K for the year ended December 31, 2019 (the “Form 10-K”), filed concurrently herewith by the Company, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 19, 2020 By:  /s/ Michael B. Haines
   Name:  Michael B. Haines
   Title:  Chief Financial Officer
   
 
Pursuant to the Securities and Exchange Commission release 33-8238 dated June 5, 2003, this certification is being furnished and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended or incorporated by reference in any registration statement of the Company filed under the Securities Act of 1933, as amended.
 
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.









RETAIL OPPORTUNITY INVESTMENTS PARTNERSHIP, LP
Certification of Chief Executive Officer 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
 
The undersigned, the Chief Executive Officer of Retail Opportunity Investments GP, LLC, the sole general partner of Retail Opportunity Investments Partnership, LP (the “Operating Partnership”), hereby certifies to the best of his knowledge on the date hereof, pursuant to 18 U.S.C. 1350(a), as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002, that the Annual Report on Form 10-K for the year ended December 31, 2019 (the “Form 10-K”), filed concurrently herewith by the Operating Partnership, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Operating Partnership.

Date: February 19, 2020 By:  /s/ Stuart A. Tanz
   Name:  Stuart A. Tanz
   Title:  Chief Executive Officer
   
 

The undersigned, the Chief Financial Officer of Retail Opportunity Investments GP, LLC, the sole general partner of Retail Opportunity Investments Partnership, LP (the “Operating Partnership”), hereby certifies to the best of his knowledge on the date hereof, pursuant to 18 U.S.C. 1350(a), as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002, that the Annual Report on Form 10-K for the year ended December 31, 2019 (the “Form 10-K”), filed concurrently herewith by the Operating Partnership, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Operating Partnership.

Date: February 19, 2020 By:  /s/ Michael B. Haines
   Name:  Michael B. Haines
   Title:  Chief Financial Officer
   

Pursuant to the Securities and Exchange Commission release 33-8238 dated June 5, 2003, this certification is being furnished and shall not be deemed filed by the Operating Partnership for purposes of Section 18 of the Securities Exchange Act of 1934, as amended or incorporated by reference in any registration statement of the Operating Partnership filed under the Securities Act of 1933, as amended.
 
A signed original of this written statement required by Section 906 has been provided to the Operating Partnership and will be retained by the Operating Partnership and furnished to the Securities and Exchange Commission or its staff upon request.
 

 



v3.19.3.a.u2
Related Party Transactions
12 Months Ended
Dec. 31, 2019
Related Party Transactions [Abstract]  
Related Party Transactions Related Party Transactions
 
The Company has entered into several lease agreements with an officer of the Company, whereby pursuant to the lease agreements, the Company is provided the use of storage space.  For the years ended December 31, 2019, 2018, and 2017, the Company incurred approximately $84,000, $74,000 and $52,000, respectively, of expenses relating to the agreements which were included in General and administrative expenses in the accompanying consolidated statements of operations and comprehensive income.
v3.19.3.a.u2
Schedule IV - Mortgage Loans on Real Estate
12 Months Ended
Dec. 31, 2019
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Abstract]  
Schedule IV - Mortgage Loans on Real Estate
SCHEDULE IV – MORTGAGE LOANS ON REAL ESTATE
December 31, 2019
(in thousands)

a.RECONCILIATION OF MORTGAGE LOANS ON REAL ESTATE (in thousands)

Year Ended December 31,
201920182017
Balance at beginning of period:$—  $—  $—  
Mortgage loans acquired during the current period13,250  —  —  
Repayments on mortgage note receivable(250) —  —  
Balance at end of period:$13,000  $—  $—  
v3.19.3.a.u2
Fair Value of Financial Instruments (Schedule) (Details)
$ in Millions
12 Months Ended
Dec. 31, 2019
USD ($)
Weighted Average  
Fair Value of Financial Instruments (Details) [Line Items]  
Interest rate (in percentage) 3.80%
Significant Unobservable Inputs (Level 3)  
Fair Value of Financial Instruments (Details) [Line Items]  
Notes payable, fair value $ 87.2
Senior Notes | Significant Unobservable Inputs (Level 3) | Senior Notes Due 2027  
Fair Value of Financial Instruments (Details) [Line Items]  
Long-term debt, fair value 246.7
Senior Notes | Significant Unobservable Inputs (Level 3) | Senior Notes Due 2026  
Fair Value of Financial Instruments (Details) [Line Items]  
Long-term debt, fair value 195.0
Senior Notes | Significant Other Observable Inputs (Level 2) | Senior Notes Due 2024  
Fair Value of Financial Instruments (Details) [Line Items]  
Long-term debt, fair value 260.4
Senior Notes | Significant Other Observable Inputs (Level 2) | Senior Notes Due 2023  
Fair Value of Financial Instruments (Details) [Line Items]  
Long-term debt, fair value $ 269.3
v3.19.3.a.u2
Commitments and Contingencies (Details) - Future Minimum Annual Lease Payments Under Operating Leases
$ in Thousands
Dec. 31, 2019
USD ($)
Commitments and Contingencies Disclosure [Abstract]  
2020 $ 1,287
2021 1,282
2022 1,304
2023 1,330
2024 1,335
Thereafter 32,604
Total undiscounted future minimum lease payments 39,142
Future minimum lease payments, discount (21,467)
Lease liability $ 17,675
v3.19.3.a.u2
Subsequent Events (Details) - $ / shares
12 Months Ended
Feb. 18, 2020
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Subsequent Events (Details) [Line Items]        
Dividends per share (in dollars per share)   $ 0.7880 $ 0.7800 $ 0.7500
Subsequent Event        
Subsequent Events (Details) [Line Items]        
Dividends per share (in dollars per share) $ 0.20      
v3.19.3.a.u2
Acquired Lease Intangibles (Details) - Future Amortization of Acquired Lease Intangible Liabilities - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Acquired Lease Intangibles (Details) - Future Amortization of Acquired Lease Intangible Liabilities [Line Items]    
Acquired lease intangible liabilities, net $ 144,757 $ 166,146
Acquired Lease Intangible Liabilities    
Acquired Lease Intangibles (Details) - Future Amortization of Acquired Lease Intangible Liabilities [Line Items]    
2020 12,289  
2021 11,123  
2022 10,229  
2023 9,485  
2024 9,324  
Thereafter 92,307  
Acquired lease intangible liabilities, net $ 144,757  
v3.19.3.a.u2
Real Estate Investments (Details) - Operating Results Included in the Company's Historical Consolidated Statement of Operations for Properties Acquired During the Reported Periods
$ in Thousands
12 Months Ended
Dec. 31, 2018
USD ($)
Business Combinations [Abstract]  
Revenues $ 2,343
Net income attributable to Retail Opportunity Investments Corp. $ 753
v3.19.3.a.u2
Consolidated Balance Sheets - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Real Estate Investments:    
Land $ 879,540 $ 894,240
Building and improvements 2,252,301 2,266,232
Total real estate investments 3,131,841 3,160,472
Less:  accumulated depreciation 390,916 329,207
Net real estate before mortgage notes 2,740,925 2,831,265
Mortgage note receivable 13,000 0
Real Estate Investments, net 2,753,925 2,831,265
Cash and cash equivalents 3,800 6,076
Restricted cash 1,658 1,373
Tenant and other receivables, net 45,821 46,832
Acquired lease intangible assets, net 59,701 72,109
Prepaid expenses 3,169 4,194
Deferred charges, net 27,652 33,857
Other assets 18,031 7,365
Total assets 2,913,757 3,003,071
Liabilities:    
Term loan 298,330 299,076
Credit facility 80,743 153,689
Senior Notes 942,850 941,449
Mortgage notes payable 87,523 88,511
Acquired lease intangible liabilities, net 144,757 166,146
Accounts payable and accrued expenses 17,562 15,488
Tenants’ security deposits 7,177 7,065
Other liabilities 42,987 23,219
Total liabilities 1,621,929 1,694,643
Commitments and contingencies
Equity/Capital:    
Preferred stock, $.0001 par value 50,000,000 shares authorized; none issued and outstanding 0 0
Common stock, $0.0001 par value, 500,000,000 shares authorized; 116,496,016 and 113,992,837 shares issued and outstanding at December 31, 2019 and 2018, respectively 12 11
Additional paid-in-capital 1,481,466 1,441,080
Dividends in excess of earnings (297,998) (256,438)
Accumulated other comprehensive (loss) income (4,132) 3,561
Total Retail Opportunity Investments Corp. stockholders' equity 1,179,348 1,188,214
Non-controlling interests 112,480 120,214
Total equity/capital 1,291,828 1,308,428
Total liabilities and equity/capital 2,913,757 3,003,071
Retail Opportunity Investments Partnership L.P.    
Real Estate Investments:    
Land 879,540 894,240
Building and improvements 2,252,301 2,266,232
Total real estate investments 3,131,841 3,160,472
Less:  accumulated depreciation 390,916 329,207
Net real estate before mortgage notes 2,740,925 2,831,265
Mortgage note receivable 13,000 0
Real Estate Investments, net 2,753,925 2,831,265
Cash and cash equivalents 3,800 6,076
Restricted cash 1,658 1,373
Tenant and other receivables, net 45,821 46,832
Acquired lease intangible assets, net 59,701 72,109
Prepaid expenses 3,169 4,194
Deferred charges, net 27,652 33,857
Other assets 18,031 7,365
Total assets 2,913,757 3,003,071
Liabilities:    
Term loan 298,330 299,076
Credit facility 80,743 153,689
Senior Notes 942,850 941,449
Mortgage notes payable 87,523 88,511
Acquired lease intangible liabilities, net 144,757 166,146
Accounts payable and accrued expenses 17,562 15,488
Tenants’ security deposits 7,177 7,065
Other liabilities 42,987 23,219
Total liabilities 1,621,929 1,694,643
Equity/Capital:    
ROIC capital 1,183,480 1,184,653
Limited partners’ capital 112,480 120,214
Accumulated other comprehensive (loss) income (4,132) 3,561
Total equity/capital 1,291,828 1,308,428
Total liabilities and equity/capital $ 2,913,757 $ 3,003,071
v3.19.3.a.u2
Consolidated Statements of Cash Flows - USD ($)
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES      
Net income $ 53,683,000 $ 47,141,000 $ 42,688,000
Adjustments to reconcile net income to cash provided by operating activities:      
Depreciation and amortization 97,559,000 100,838,000 96,256,000
Amortization of deferred financing costs and mortgage premiums, net 2,076,000 1,899,000 2,026,000
Straight-line rent adjustment (3,083,000) (5,380,000) (6,176,000)
Amortization of above and below market rent (15,618,000) (13,965,000) (17,078,000)
Amortization relating to stock based compensation 8,567,000 7,392,000 6,190,000
Provisions for tenant credit losses 1,969,000 1,729,000 1,191,000
Other noncash interest expense 524,000 1,674,000 2,139,000
Gain on sale of real estate (13,175,000) (5,890,000) 0
Change in operating assets and liabilities:      
Tenant and other receivables 543,000 (57,000) (2,452,000)
Prepaid expenses 962,000 (1,344,000) 464,000
Accounts payable and accrued expenses 303,000 (1,622,000) 456,000
Other assets and liabilities, net (2,271,000) (1,497,000) 3,234,000
Net cash provided by operating activities 132,039,000 130,918,000 128,938,000
CASH FLOWS FROM INVESTING ACTIVITIES      
Investments in real estate (11,601,000) (44,195,000) (263,366,000)
Proceeds from sale of real estate 58,930,000 26,880,000 0
Improvements to properties (35,177,000) (39,240,000) (54,097,000)
Deposits on real estate acquisitions, net 0 500,000 (500,000)
Proceeds on repayment of mortgage note receivable 250,000 0 0
Net cash provided by (used in) investing activities 12,402,000 (56,055,000) (317,963,000)
CASH FLOWS FROM FINANCING ACTIVITIES      
Principal repayments on mortgages (551,000) (19,612,000) (8,848,000)
Proceeds from draws on credit facility 101,000,000 177,000,000 327,500,000
Payments on credit facility (173,000,000) (164,500,000) (282,000,000)
Proceeds from issuance of Senior Notes 0 0 250,000,000
Redemption of OP Units (5,043,000) (3,713,000) (150,000)
Distributions to OP Unitholders (8,921,000) (9,056,000) (8,729,000)
Deferred financing and other costs (2,804,000) 0 (3,845,000)
Proceeds from the issuance of common stock 34,162,000 25,703,000 4,481,000
Registration expenditures (478,000) (570,000) (1,225,000)
Dividends paid to common shareholders (90,753,000) (88,500,000) (82,917,000)
Common shares issued under the Equity Incentive Plan 1,942,000 269,000 44,000
Shares withheld for employee taxes (1,986,000) (1,400,000) (1,571,000)
Net cash (used in) provided by financing activities (146,432,000) (84,379,000) 192,740,000
Net (decrease) increase in cash, cash equivalents and restricted cash (1,991,000) (9,516,000) 3,715,000
Cash, cash equivalents and restricted cash at beginning of period 7,449,000 16,965,000 13,250,000
Cash, cash equivalents and restricted cash at end of period 5,458,000 7,449,000 16,965,000
Reconciliation of Cash and Cash Equivalents [Abstract]      
Total cash, cash equivalents and restricted cash shown in Statements of Cash Flows 7,449,000 7,449,000 16,965,000
Retail Opportunity Investments Partnership L.P.      
CASH FLOWS FROM OPERATING ACTIVITIES      
Net income 53,683,000 47,141,000 42,688,000
Adjustments to reconcile net income to cash provided by operating activities:      
Depreciation and amortization 97,559,000 100,838,000 96,256,000
Amortization of deferred financing costs and mortgage premiums, net 2,076,000 1,899,000 2,026,000
Straight-line rent adjustment (3,083,000) (5,380,000) (6,176,000)
Amortization of above and below market rent (15,618,000) (13,965,000) (17,078,000)
Amortization relating to stock based compensation 8,567,000 7,392,000 6,190,000
Provisions for tenant credit losses 1,969,000 1,729,000 1,191,000
Other noncash interest expense 524,000 1,674,000 2,139,000
Gain on sale of real estate (13,175,000) (5,890,000) 0
Change in operating assets and liabilities:      
Tenant and other receivables 543,000 (57,000) (2,452,000)
Prepaid expenses 962,000 (1,344,000) 464,000
Accounts payable and accrued expenses 303,000 (1,622,000) 456,000
Other assets and liabilities, net (2,271,000) (1,497,000) 3,234,000
Net cash provided by operating activities 132,039,000 130,918,000 128,938,000
CASH FLOWS FROM INVESTING ACTIVITIES      
Investments in real estate (11,601,000) (44,195,000) (263,366,000)
Proceeds from sale of real estate 58,930,000 26,880,000 0
Improvements to properties (35,177,000) (39,240,000) (54,097,000)
Deposits on real estate acquisitions, net 0 500,000 (500,000)
Proceeds on repayment of mortgage note receivable 250,000 0 0
Net cash provided by (used in) investing activities 12,402,000 (56,055,000) (317,963,000)
CASH FLOWS FROM FINANCING ACTIVITIES      
Principal repayments on mortgages (551,000) (19,612,000) (8,848,000)
Proceeds from draws on credit facility 101,000,000 177,000,000 327,500,000
Payments on credit facility (173,000,000) (164,500,000) (282,000,000)
Proceeds from issuance of Senior Notes 0 0 250,000,000
Redemption of OP Units (5,043,000) (3,713,000) (150,000)
Distributions to OP Unitholders (99,674,000) (97,556,000) (91,646,000)
Deferred financing and other costs (2,804,000) 0 (3,845,000)
Proceeds from the issuance of common stock 34,162,000 25,703,000 4,481,000
Registration expenditures (478,000) (570,000) (1,225,000)
Common shares issued under the Equity Incentive Plan 1,942,000 269,000 44,000
Shares withheld for employee taxes (1,986,000) (1,400,000) (1,571,000)
Net cash (used in) provided by financing activities (146,432,000) (84,379,000) 192,740,000
Net (decrease) increase in cash, cash equivalents and restricted cash (1,991,000) (9,516,000) 3,715,000
Cash, cash equivalents and restricted cash at beginning of period 7,449,000 16,965,000 13,250,000
Cash, cash equivalents and restricted cash at end of period 5,458,000 7,449,000 16,965,000
Reconciliation of Cash and Cash Equivalents [Abstract]      
Total cash, cash equivalents and restricted cash shown in Statements of Cash Flows $ 7,449,000 $ 7,449,000 $ 13,250,000
v3.19.3.a.u2
Schedule III - Real Estate and Accumulated Depreciation (Details) - Reconciliation of Real Estate - Owned Subject to Operating Leases - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]      
Balance $ 3,160,472 $ 3,109,397 $ 2,687,018
Property improvements during the year 37,985 40,300 54,481
Properties acquired during the year 11,601 43,387 374,004
Properties sold during the year 69,056 24,427 0
Assets written off during the year (9,161) (8,185) (6,106)
Balance $ 3,131,841 $ 3,160,472 $ 3,109,397
v3.19.3.a.u2
Mortgage Notes Payable, Credit Facilities and Senior Notes - Carrying Value of the Company’s Unsecured Debt (Details) - USD ($)
Dec. 31, 2019
Dec. 20, 2019
Dec. 31, 2018
Nov. 10, 2017
Jul. 26, 2016
Dec. 03, 2014
Dec. 09, 2013
Debt Instrument [Line Items]              
Credit facility $ 80,743,000   $ 153,689,000        
Senior Notes 942,850,000   941,449,000        
Term Loan Agreement              
Debt Instrument [Line Items]              
Principal amount 300,000,000 $ 300,000,000.0 300,000,000        
Net unamortized deferred financing costs (1,670,000)   (924,000)        
Term loan 298,330,000   299,076,000        
Senior Notes              
Debt Instrument [Line Items]              
Principal amount 950,000,000            
Senior Notes | Senior Notes Due 2027              
Debt Instrument [Line Items]              
Principal amount 250,000,000   250,000,000 $ 250,000,000.0      
Net unamortized deferred financing costs (998,000)   (1,123,000)        
Senior Notes 249,002,000   248,877,000        
Senior Notes | Senior Notes Due 2026              
Debt Instrument [Line Items]              
Principal amount 200,000,000   200,000,000   $ 200,000,000.0    
Net unamortized deferred financing costs (191,000)   (219,000)        
Senior Notes 199,809,000   199,781,000        
Senior Notes | Senior Notes Due 2024              
Debt Instrument [Line Items]              
Principal amount 250,000,000   250,000,000     $ 250,000,000.0  
Unamortized debt discount (1,912,000)   (2,252,000)        
Net unamortized deferred financing costs (1,094,000)   (1,314,000)        
Senior Notes 246,994,000   246,434,000        
Senior Notes | Senior Notes Due 2023              
Debt Instrument [Line Items]              
Principal amount 250,000,000   250,000,000       $ 250,000,000.0
Unamortized debt discount (1,915,000)   (2,339,000)        
Net unamortized deferred financing costs (1,040,000)   (1,304,000)        
Senior Notes 247,045,000   246,357,000        
Revolving Credit Facility              
Debt Instrument [Line Items]              
Credit facility 84,000,000   156,000,000        
Net unamortized deferred financing costs (3,257,000)   (2,311,000)        
Credit facility $ 80,743,000   $ 153,689,000        
v3.19.3.a.u2
Common Stock of ROIC (Narrative) (Details)
12 Months Ended
May 01, 2018
USD ($)
agreement
$ / shares
Dec. 31, 2019
USD ($)
$ / shares
shares
Dec. 31, 2018
USD ($)
$ / shares
shares
Dec. 31, 2017
USD ($)
Jul. 31, 2013
USD ($)
Common Stock and Warrants of ROIC (Details) [Line Items]          
Common stock, par value (in usd per share) | $ / shares   $ 0.0001 $ 0.0001    
Proceeds from the issuance of common stock   $ 34,162,000 $ 25,703,000 $ 4,481,000  
Stock issuance costs   $ 478,000 $ 570,000 $ 1,225,000  
Stock repurchase program, authorized amount         $ 50,000,000.0
Sales Agreement          
Common Stock and Warrants of ROIC (Details) [Line Items]          
Number of sales agreements | agreement 5        
Common stock, par value (in usd per share) | $ / shares $ 0.0001        
Common shares that may be sold under a sales agreement aggregate offering price, maximum $ 250,000,000.0        
Common stock issued (in shares) | shares   1,861,036 1,251,376    
Proceeds from the issuance of common stock   $ 34,200,000 $ 24,200,000    
Stock issuance costs   $ 342,000 $ 242,000    
v3.19.3.a.u2
Organization, Basis of Presentation and Summary of Significant Accounting Policies (Narrative) (Details)
12 Months Ended
Dec. 31, 2019
USD ($)
segment
Dec. 31, 2018
USD ($)
Dec. 31, 2017
USD ($)
Jan. 01, 2019
USD ($)
Organization, Basis of Presentation and Summary of Significant Accounting Policies (Details) [Line Items]        
Lease liability $ 17,675,000      
Payroll related costs capitalized   $ 1,300,000 $ 1,200,000  
Taxable income minimum distribution portion not subject to federal taxation (in percentage) 90.00%      
Real estate improvements $ 38,000,000.0 40,300,000    
Acquisition transaction costs 0 0 $ 4,000  
Allowance for doubtful accounts receivable $ 8,200,000 $ 6,900,000    
Number of segments | segment 1      
Minimum | Building        
Organization, Basis of Presentation and Summary of Significant Accounting Policies (Details) [Line Items]        
PPE useful life (in years) 39 years      
Minimum | Building Improvements        
Organization, Basis of Presentation and Summary of Significant Accounting Policies (Details) [Line Items]        
PPE useful life (in years) 10 years      
Minimum | Furniture and Fixtures        
Organization, Basis of Presentation and Summary of Significant Accounting Policies (Details) [Line Items]        
PPE useful life (in years) 3 years      
Maximum | Building        
Organization, Basis of Presentation and Summary of Significant Accounting Policies (Details) [Line Items]        
PPE useful life (in years) 40 years      
Maximum | Building Improvements        
Organization, Basis of Presentation and Summary of Significant Accounting Policies (Details) [Line Items]        
PPE useful life (in years) 20 years      
Maximum | Furniture and Fixtures        
Organization, Basis of Presentation and Summary of Significant Accounting Policies (Details) [Line Items]        
PPE useful life (in years) 10 years      
Accounting Standards Update 2016-02        
Organization, Basis of Presentation and Summary of Significant Accounting Policies (Details) [Line Items]        
Lease liability       $ 18,000,000.0
Operating lease, right-of-use asset       $ 17,000,000.0
v3.19.3.a.u2
Stock Compensation and Other Benefit Plans for ROIC (Tables)
12 Months Ended
Dec. 31, 2019
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Schedule of Nonvested Restricted Stock Units Activity
 SharesWeighted Average
Grant Date Fair Value
Non-vested as of December 31, 20181,002,835  $16.88  
Granted354,161  $17.20  
Vested(364,913) $19.06  
Forfeited(37,286) $12.97  
Non-vested as of December 31, 2019954,797  $16.55  
v3.19.3.a.u2
Organization, Basis of Presentation and Summary of Significant Accounting Policies
12 Months Ended
Dec. 31, 2019
Accounting Policies [Abstract]  
Organization, Basis of Presentation and Summary of Significant Accounting Policies Organization, Basis of Presentation and Summary of Significant Accounting Policies
 
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 on the west coast of the United States anchored by supermarkets and drugstores.
 
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 operating partnership subsidiary, Retail Opportunity Investments Partnership, LP, a Delaware limited partnership (the “Operating Partnership”), together with 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 the Operating Partnership.
 
ROIC’s 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 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”) of the Operating Partnership.
 
Recent Accounting Pronouncements
 
In February 2016, the FASB issued Accounting Standard Update (“ASU”) No. 2016-2, “Leases.” ASU No. 2016-2 resulted in the recognition of a right-to-use asset and related liability to account for future obligations under ground lease agreements for which the Company is the lessee. In addition, this ASU requires that lessees and lessors capitalize, as initial direct costs, only those costs that are incurred due to the execution of a lease. Allocated payroll costs and other costs that are incurred regardless of whether the lease is obtained are no longer capitalized as initial direct costs and instead are expensed as incurred.

Under ASU No. 2016-2, each lease agreement will be evaluated to identify the lease components and nonlease components at lease inception. The total consideration in the lease agreement will be allocated to the lease and nonlease components based on their relative standalone selling prices. Lessors will continue to recognize the lease revenue component using an approach that is substantially equivalent to existing guidance for operating leases (straight-line basis). In July 2018, the FASB issued an amendment to ASU No. 2016-2 that allows lessors to elect, as a practical expedient, not to allocate the total consideration to lease and nonlease components based on their relative standalone selling prices. This practical expedient allows lessors to elect a combined single lease component presentation if (i) the timing and pattern of the revenue recognition of the combined single lease component is the same, and (ii) the related lease component and, the combined single lease component would be classified as an operating lease. The amendment also provides a transition option that permits the application of the new guidance as of the adoption date rather than to all periods presented.  The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted.

The Company adopted the provisions of ASU No. 2016-2 effective January 1, 2019 using the modified retrospective approach and accordingly, recognized a lease liability of approximately $18.0 million, which is included in Other liabilities in the accompanying balance sheet, and a related right-to-use asset of approximately $17.0 million, which is included in Other assets in the accompanying balance sheet, for all operating leases in which the Company is a lessee based on the present value of the minimum rental payments remaining as of the initial application date. The present value of the remaining lease payments was calculated for each operating lease using each respective remaining lease term and a corresponding estimated incremental borrowing rate, which is the interest rate that the Company estimates it would have to pay to borrow on a collateralized basis over a similar term.

Based on its election of the package of practical expedients, the Company was not required to reassess whether any expired or existing contracts are or contain leases, reassess the lease classification for any expired or existing leases, or reassess initial direct costs for any existing leases. Accordingly, the Company’s ground lease agreements for which the Company is the lessee
will continue to be accounted for as operating leases under the new standard. Further, the Company elected the practical expedient to account for both its lease and non-lease components as a combined single lease component and elected the optional transition method permitting January 1, 2019 to be its initial application date. Additionally, leasing payroll-related costs that are incurred regardless of whether leases are obtained are no longer capitalized as initial direct costs and instead are expensed as incurred. These costs amounted to approximately $1.3 million and $1.2 million during the years ended December 31, 2018 and 2017, respectively. Further, bad debt, which has previously been recorded in Property operating, has now been classified as a contra-revenue account in Rental revenue in the Company’s consolidated statements of operations and comprehensive income.
 
In June 2016, the FASB issued ASU No. 2016-13 “Financial Instruments - Credit Topics.” ASU No. 2016-13 requires companies to adopt a new approach to estimating credit losses on certain types of financial instruments, such as trade and other receivables and loans. The standard requires entities to estimate a lifetime expected credit loss for most financial instruments, including trade receivables. ASU No. 2016-13 will be effective for the Company beginning on January 1, 2020, with early adoption permitted. The Company does not expect that the adoption of this pronouncement will have a material impact on the consolidated financial statements.
 
Principles of Consolidation
 
The accompanying consolidated financial statements are prepared on the accrual basis in accordance with GAAP.  In the opinion of management, the consolidated financial statements include all adjustments necessary, which are of a normal and recurring nature, for the fair presentation of the Company’s financial position and the results of operations and cash flows for the periods presented.

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. The Company has concluded that the Operating Partnership is a VIE, and because they have both the power and the rights to control the Operating Partnership, they are the primary beneficiary and are required to continue to consolidate the Operating Partnership.
 
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 modify the presentation of net income by requiring earnings and other comprehensive income to be attributed to controlling and non-controlling interests.
 
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 recoverability of assets to be held and used, purchase price allocations, depreciable lives, revenue recognition and the collectability of tenant receivables, other receivables, notes receivables, the valuation of performance-based restricted stock, LTIPs, and derivatives.  Actual results could differ from these estimates.
 
Federal Income Taxes
 
The Company 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 its REIT taxable income (determined without regard to the dividends paid deduction and excluding net capital gains) 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, the Company is subject to state income or franchise taxes in certain states in which some of its properties are located.  For all periods from inception through September 26, 2013 the Operating Partnership had been an entity disregarded from its sole owner, ROIC, for U.S. federal income tax purposes and
as such had not been subject to U.S. federal income taxes. Effective September 27, 2013, the Operating Partnership issued OP Units in connection with the acquisitions of two shopping centers. Accordingly, the Operating Partnership ceased being a disregarded entity and instead is being treated as a partnership for U.S. federal income tax purposes.   

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 December 31, 2019, the statute of limitations for tax years 2016 through and including 2018 remain open for examination by the Internal Revenue Service (“IRS”) and state taxing authorities. 
 
ROIC intends to make regular quarterly distributions to holders of its common stock.  U.S. federal income tax law generally requires that a REIT distribute annually at least 90% of its REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains, and that it pay U.S. federal income tax at regular corporate rates to the extent that it annually distributes less than 100% of its net taxable income.  ROIC intends to pay regular quarterly dividends to stockholders in an amount not less than its net taxable income, if and to the extent authorized by its board of directors.  Before ROIC pays any dividend, whether for U.S. federal income tax purposes or otherwise, it must first meet both its operating requirements and its debt service on debt.  If ROIC’s cash available for distribution is less than its net taxable income, it could be required to sell assets or borrow funds to make cash distributions or it may make a portion of the required distribution in the form of a taxable stock distribution or distribution of debt securities.
 
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.  During the years ended December 31, 2019 and 2018, capitalized costs related to the improvement or replacement of real estate properties were approximately $38.0 million and $40.3 million, respectively.

The Company evaluates each acquisition of real estate to determine if the acquired property meets the definition of a business and needs to be accounted for as a business combination. Under ASU No. 2017-1, the Company first determines whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If this threshold is met, the acquired property does not meet the definition of a business and is accounted for as an asset acquisition. The Company expects that acquisitions of real estate properties will not meet the revised definition of a business because substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets (i.e. land, buildings, and related intangible assets).
 
The Company recognizes the acquisition of real estate properties, including 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) at their fair value (for acquisitions meeting the definition of a business) and relative fair value (for acquisitions not meeting the definition of a business). The relative fair values used to allocate the cost of an asset acquisition are determined using the same methodologies and assumptions the Company utilizes to determine fair value in a business combination.

Acquired lease intangible assets include above-market leases and acquired in-place leases, and acquired lease intangible liabilities represent below-market leases, in the accompanying consolidated balance sheets. 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 management’s 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 sheets.

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 is amortized to base rental income, over the terms of the respective leases including option periods, if applicable. The value of in-place leases is amortized to expense over the remaining non-cancellable terms of the respective leases. 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 expenses transaction costs associated with business combinations and unsuccessful property asset acquisitions in the period incurred and capitalizes transaction costs associated with successful property asset acquisitions.  In conjunction with the Company’s pursuit and acquisition of real estate investments, the Company did not expense any acquisition transaction costs during the years ended December 31, 2019 or 2018. The Company expensed acquisition transaction costs during the year ended December 31, 2017 of $4,000.

Sales of real estate are recognized only when it is determined that the Company will collect substantially all of the consideration to which it is entitled, possession and other attributes of ownership have been transferred to the buyer and the Company has no controlling financial interest. The application of these criteria can be complex and requires the Company to make assumptions. Management has determined that all of these criteria were met for all real estate sold during the periods presented.
  
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 December 31, 2019 or December 31, 2018.
 
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 the Company’s mortgage loans payable may 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. Prior to January 1, 2019, the Company considered property operating expense recoveries from tenants of common area maintenance, real estate taxes and other recoverable costs as lease components. Effective January 1, 2019, each lease agreement is evaluated to identify the lease and nonlease components at lease inception. The Company elected the single component practical expedient, which allows lessors to elect a combined single lease component presentation if (i) the timing and pattern of the revenue recognition of the combined single lease component is the same, and (ii) the related lease component and, the combined single lease component would be classified as an operating lease. As a result of this assessment, rental revenues and tenant recoveries from the lease of real estate assets are accounted for as a single component. Lease incentives are amortized as a reduction of rental revenue over the respective tenant lease terms.
Termination fees (included in Other income in the consolidated statements of operations and comprehensive income) 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 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) collectability 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 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 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 December 31, 2019 and December 31, 2018 was approximately $8.2 million and $6.9 million, respectively.
 
Depreciation and Amortization
 
The Company uses the straight-line method for depreciation and amortization.  Buildings are depreciated over estimated useful lives which the Company estimates to be 39-40 years.  Property improvements are depreciated over 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 Leasing and Financing Costs
 
Costs incurred in obtaining tenant leases (principally leasing commissions and acquired lease origination costs) are amortized ratably over the life of the tenant leases. Costs incurred in obtaining long-term financing are amortized ratably over the related debt agreement. The amortization of deferred leasing and financing costs is included in Depreciation and amortization and Interest expense and other finance expenses, respectively, in the consolidated statements of operations and comprehensive income.
 
The unamortized balances of deferred leasing costs included in deferred charges in the Consolidated Balance Sheets as of December 31, 2019 that will be charged to future operations are as follows (in thousands):
 Lease Origination Costs
2020$5,804  
20214,922  
20224,115  
20233,261  
20242,523  
Thereafter7,027  
 $27,652  

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.
  
For the years ended December 31, 2019, 2018 and 2017, 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 and LTIP Units outstanding under the Equity Incentive Plan described in Note 8 are excluded from the basic EPS calculation, as these units are not participating securities until they vest.
 
The following table sets forth the reconciliation between basic and diluted EPS for ROIC (in thousands, except share data):
 
 Year Ended December 31,
 201920182017
Numerator:   
Net income$53,683  $47,141  $42,688  
Less income attributable to non-controlling interests(4,839) (4,405) (4,211) 
Less earnings allocated to unvested shares(453) (401) (319) 
Net income available for common stockholders, basic$48,391  $42,335  $38,158  
Numerator:   
Net income$53,683  $47,141  $42,688  
Less earnings allocated to unvested shares(453) (401) (319) 
Net income available for common stockholders, diluted$53,230  $46,740  $42,369  
Denominator:   
Denominator for basic EPS – weighted average common equivalent shares114,177,528  112,645,490  109,400,123  
OP units11,334,408  11,626,312  12,060,835  
Performance-based restricted stock awards and LTIP Units206,100  183,683  153,807  
Stock options23,450  103,408  129,066  
Denominator for diluted EPS – weighted average common equivalent shares125,741,486  124,558,893  121,743,831  

Earnings Per Unit
 
The following table sets forth the reconciliation between basic and diluted earnings per unit for the Operating Partnership (in thousands, except unit data):
Year Ended December 31,
201920182017
Numerator:   
Net income$53,683  $47,141  $42,688  
Less earnings allocated to unvested shares(453) (401) (319) 
Net income available to unitholders, basic and diluted$53,230  $46,740  $42,369  
Denominator:   
Denominator for basic earnings per unit – weighted average common equivalent units125,511,936  124,271,802  121,460,958  
Performance-based restricted stock awards and LTIP Units206,100  183,683  153,807  
Stock options23,450  103,408  129,066  
Denominator for diluted earnings per unit – weighted average common equivalent units125,741,486  124,558,893  121,743,831  
 
Stock-Based Compensation
 
The Company has a stock-based employee compensation plan, which is more fully described in Note 8.
 
The Company accounts for its stock-based compensation plan based on the FASB guidance which requires that compensation expense be recognized based on the fair value of the stock awards less forfeitures.  Restricted stock grants vest based upon the
completion of a service period (“time-based restricted stock grants”) and/or the Company meeting certain established market-indexed financial performance criteria (“performance-based restricted stock grants”).  Time-based grants are valued according to the market price for the Company’s common stock at the date of grant.  For performance-based restricted stock grants, a Monte Carlo valuation model is used, 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.  

The Company has made certain separate awards in the form of units of limited partnership interests in its Operating Partnership called LTIP Units. The LTIP Units are subject to such conditions and restrictions as the compensation committee may determine, including continued employment or service, achievement of pre-established operational performance goals and market-indexed performance criteria. For the LTIP Units subject to market-indexed performance criteria (the “marked-indexed LTIP Units”), a Monte Carlo valuation model is used, taking into account the underlying contingency risks associated with the performance criteria. All other LTIP Units (the “operational LTIP Units”) are valued according to the market price of the Company’s common stock at the date of grant.

Awards of stock options, time-based restricted stock grants and operational LTIP Units are expensed as compensation on a straight-line basis over the requisite service period.  Awards of performance-based restricted stock and market-indexed LTIP Units are expensed as compensation under the accelerated attribution method and are recognized in income regardless of the results of the performance criteria.
 
Derivatives
 
The Company records all derivatives on the balance sheets 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 forecasted transactions in a cash flow hedge. When the Company terminates a derivative for which cash flow hedging was being applied, the balance, which was recorded in Other comprehensive income, is amortized to interest expense over the remaining contractual term of the derivative as long as the hedged forecasted transactions continue to be probable of occurring. The Company includes cash payments made to terminate interest rate derivatives as an operating activity on the statement of cash flows, given the nature of the underlying cash flows that the derivative was hedging.
 
Segment Reporting
 
The Company’s primary business is the ownership, management, and redevelopment of retail real estate properties. The Company reviews operating and financial information for each property on an individual basis and therefore, each property represents an individual operating segment. The Company evaluates financial performance using property operating income, defined as operating revenues (base rent and recoveries from tenants), less property and related expenses (property operating expenses and property taxes). The Company has aggregated the properties into one reportable segment as the properties share similar long-term economic characteristics and have other similarities including the fact that they are operated using consistent business strategies, are typically located in major metropolitan areas, and have similar tenant mixes.
Consolidated Statements of Cash Flows - Supplemental Disclosures

The following tables provides supplemental disclosures related to the consolidated statements of cash flows (in thousands):
Year Ended December 31,
201920182017
Supplemental disclosure of cash activities:   
Cash paid on gross receipts and income for federal and state purposes$275  $291  $253  
Interest paid$60,319  $60,494  $46,271  
Other non-cash investing and financing activities increase (decrease):   
Issuance of OP Units in connection with acquisitions$—  $—  $49,599  
Fair value of assumed mortgages upon acquisition$—  $—  $46,801  
Intangible lease liabilities$—  $1,680  $48,684  
Interest rate swap asset$(4,931) $610  $3,446  
Interest rate swap liabilities$3,285  $580  $—  
Accrued real estate improvement costs$3,222  $2,200  $3,568  
Equity redemption of OP Units$2,632  $—  $50,155  
Disposition of real estate through issuance of mortgage note$13,250  $—  $—  

Reclassifications
Certain reclassifications have been made to the prior period consolidated financial statements and notes to conform to the current year presentation. In connection with the adoption of ASU No. 2016-2 and the Company’s practical expedient election to have a combined single lease component presentation, the Company combined Base rents and Recoveries from tenants into a single line item, Rental revenues, in its consolidated statements of operations and comprehensive income.
v3.19.3.a.u2
Mortgage Notes Payable, Credit Facilities and Senior Notes
12 Months Ended
Dec. 31, 2019
Debt Disclosure [Abstract]  
Mortgage Notes Payable, Credit Facilities and Senior Notes Mortgage Notes Payable, Credit Facilities and Senior Notes
 
ROIC does not hold any indebtedness. All debt is held directly or indirectly by the Operating Partnership; however, ROIC has guaranteed the Operating Partnership’s term loan, unsecured revolving credit facility, carve-out guarantees on property-level debt, and the Senior Notes. Costs incurred in obtaining long-term financing are amortized ratably over the related debt agreement. The amortization of deferred financing costs is included in Interest expense and other finance expenses in the consolidated statements of operations and comprehensive income.

Mortgage Notes Payable
 
The mortgage notes payable collateralized by respective properties and assignment of leases at December 31, 2019 and December 31, 2018, respectively, were as follows (in thousands, except interest rates):
Maturity DateInterest RateDecember 31,
Property20192018
Casitas Plaza Shopping CenterJune 20225.320 %$7,001  $7,158  
Riverstone MarketplaceJuly 20224.960 %17,656  18,050  
Fullerton CrossroadsApril 20244.728 %26,000  26,000  
Diamond Hills PlazaOctober 20253.550 %35,500  35,500  
   86,157  86,708  
Mortgage premiums  1,594  2,074  
Net unamortized deferred financing costs  (228) (271) 
Total mortgage notes payable  $87,523  $88,511  
 
The combined aggregate principal maturities of mortgage notes payable during the next five years and thereafter are as follows (in thousands):
 Principal RepaymentsScheduled AmortizationMortgage PremiumTotal
2020$—  $577  $481  $1,058  
2021—  717  481  1,198  
202223,129  1,003  344  24,476  
2023—  686  216  902  
202426,000  708  72  26,780  
Thereafter32,787  550  —  33,337  
Total$81,916  $4,241  $1,594  $87,751  
 
Term Loan and Credit Facility 
  
The carrying values of the Company’s unsecured term loan (the “term loan”) were as follows (in thousands):

December 31,
 20192018
Term loan$300,000  $300,000  
Net unamortized deferred financing costs(1,670) (924) 
Term loan$298,330  $299,076  

The Company has an unsecured term loan agreement with several banks under which the lenders agreed to provide a $300.0 million unsecured term loan facility. Effective December 20, 2019, the Company entered into the First Amendment to First Amended and Restated Term Loan Agreement (as amended, the “Term Loan Agreement”) pursuant to which the maturity date of the term loan was extended from September 8, 2022 to January 20, 2025, without further options for extension. The Term Loan Agreement also provides that the Company may from time to time request increased aggregate commitments of $200.0 million under certain conditions set forth in the Term Loan Agreement, including the consent of the lenders for the additional commitments. Borrowings under the Term Loan Agreement accrue interest on the outstanding principal amount 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 U.S. dollar deposits for the relevant period (the “Eurodollar Rate”), 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 the Administrative Agent as its “prime rate,” and (c) the Eurodollar Rate plus 1.00%.

The carrying values of the Company’s unsecured revolving credit facility were as follows (in thousands):

December 31,
 20192018
Credit facility$84,000  $156,000  
Net unamortized deferred financing costs(3,257) (2,311) 
Credit facility$80,743  $153,689  

The Operating Partnership has an unsecured revolving credit facility with several banks. Effective December 20, 2019, the Company entered into the First Amendment to Second Amended and Restated Credit Agreement (as amended, the “Credit Facility Agreement”) pursuant to which the borrowing capacity under the credit facility is $600.0 million. The maturity date of the credit facility was extended from September 8, 2021 to February 20, 2024, with two six-month extension options, which may be exercised by the Operating Partnership upon satisfaction of certain conditions including the payment of extension fees. Additionally, the credit facility contains an accordion feature, which allows the Operating Partnership to increase the borrowing capacity under the credit facility up to an aggregate of $1.2 billion, subject to lender consents and other conditions. Borrowings under the credit facility accrue interest on the outstanding principal amount at a rate equal to an applicable rate based on the credit rating level of the Company, plus, as applicable, (i) the Eurodollar Rate, 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 as its “prime rate,” and (c) the Eurodollar Rate plus 0.90%. Additionally, the Operating Partnership is obligated to pay a facility fee at a rate based on the credit rating level of the Company, currently 0.20%, and a fronting fee at a rate of 0.125% per year with respect to each letter of credit issued under the credit facility. The Company has investment grade credit ratings from Moody’s Investors Service (Baa2) and Standard & Poor’s Ratings Services (BBB-).

Both the term loan and credit facility contain customary representations, financial and other covenants. The Operating Partnership’s ability to borrow under the term loan and credit facility are subject to its compliance with financial covenants and other restrictions on an ongoing basis. The Operating Partnership was in compliance with such covenants at December 31, 2019.

As of December 31, 2019, $300.0 million and $84.0 million were outstanding under the term loan and credit facility, respectively. The weighted average interest rates on the term loan and the credit facility during the year ended December 31, 2019 were 3.4% and 3.3%, respectively. As discussed in Note 11 of the accompanying financial statements, the Company uses interest rate swaps to manage its interest rate risk and accordingly, the swapped interest rate on the term loan is 3.0%. The
Company had no available borrowings under the term loan at December 31, 2019. The Company had $516.0 million available to borrow under the credit facility at December 31, 2019.

Senior Notes Due 2027

The carrying value of the Company’s unsecured Senior Notes Due 2027 is as follows (in thousands):
 
December 31,
 20192018
Principal amount$250,000  $250,000  
Net unamortized deferred financing costs(998) (1,123) 
Senior Notes Due 2027$249,002  $248,877  

On November 10, 2017, the Operating Partnership entered into a Note Purchase Agreement which provided for the issuance of $250.0 million principal amount of 4.19% Senior Notes Due 2027 (the “Senior Notes Due 2027”) in a private placement effective December 15, 2017. The Senior Notes Due 2027 pay interest on June 15 and December 15 of each year, commencing on June 15, 2018, and mature on December 15, 2027, unless prepaid earlier by the Operating Partnership. The Operating Partnership’s performance of the obligations under the Note Purchase Agreement, including the payment of any outstanding indebtedness thereunder, are guaranteed, jointly and severally, by ROIC. The net proceeds were used to reduce borrowings under the credit facility.

Senior Notes Due 2026

The carrying value of the Company’s unsecured Senior Notes Due 2026 is as follows (in thousands):
 
December 31,
 20192018
Principal amount$200,000  $200,000  
Net unamortized deferred financing costs(191) (219) 
Senior Notes Due 2026$199,809  $199,781  

On July 26, 2016, the Operating Partnership entered into a Note Purchase Agreement, as amended, which provided for the issuance of $200.0 million principal amount of 3.95% Senior Notes Due 2026 (the “Senior Notes Due 2026”) in a private placement effective September 22, 2016. The Senior Notes Due 2026 pay interest on March 22 and September 22 of each year, commencing on March 22, 2017, and mature on September 22, 2026, unless prepaid earlier by the Operating Partnership. The Operating Partnership’s performance of the obligations under the Note Purchase Agreement, including the payment of any outstanding indebtedness thereunder, are guaranteed, jointly and severally, by ROIC. The net proceeds were used to reduce borrowings under the credit facility.

Senior Notes Due 2024

The carrying value of the Company’s unsecured Senior Notes Due 2024 is as follows (in thousands):

December 31,
 20192018
Principal amount$250,000  $250,000  
Unamortized debt discount(1,912) (2,252) 
Net unamortized deferred financing costs(1,094) (1,314) 
Senior Notes Due 2024$246,994  $246,434  
 
On December 3, 2014, the Operating Partnership completed a registered underwritten public offering of $250.0 million aggregate principal amount of 4.000% Senior Notes due 2024 (the “Senior Notes Due 2024”), fully and unconditionally guaranteed by ROIC. The Senior Notes Due 2024 pay interest semi-annually on June 15 and December 15, commencing on June 15, 2015, and mature on December 15, 2024, unless redeemed earlier by the Operating Partnership. The Senior Notes Due
2024 are the Operating Partnership’s senior unsecured obligations that rank equally in right of payment with the Operating Partnership’s other unsecured indebtedness, and effectively junior to (i) all of the indebtedness and other liabilities, whether secured or unsecured, and any preferred equity of the Operating Partnership’s subsidiaries, and (ii) all of the Operating Partnership’s indebtedness that is secured by its assets, to the extent of the value of the collateral securing such indebtedness outstanding. ROIC fully and unconditionally guaranteed the Operating Partnership’s obligations under the Senior Notes Due 2024 on a senior unsecured basis, including the due and punctual payment of principal of, and premium, if any, and interest on, the notes, whether at stated maturity, upon acceleration, notice of redemption or otherwise. The guarantee is a senior unsecured obligation of ROIC and ranks equally in right of payment with all other senior unsecured indebtedness of ROIC. ROIC’s guarantee of the Senior Notes Due 2024 is effectively subordinated in right of payment to all liabilities, whether secured or unsecured, and any preferred equity of its subsidiaries (including the Operating Partnership and any entity ROIC accounts for under the equity method of accounting).
 
Senior Notes Due 2023
 
The carrying value of the Company’s unsecured Senior Notes Due 2023 is as follows (in thousands):

December 31,
 20192018
Principal amount$250,000  $250,000  
Unamortized debt discount(1,915) (2,339) 
Net unamortized deferred financing costs(1,040) (1,304) 
Senior Notes Due 2023$247,045  $246,357  
 
On December 9, 2013, the Operating Partnership completed a registered underwritten public offering of $250.0 million aggregate principal amount of 5.000% Senior Notes due 2023 (the “Senior Notes Due 2023”), fully and unconditionally guaranteed by ROIC. The Senior Notes Due 2023 pay interest semi-annually on June 15 and December 15, commencing on June 15, 2014, and mature on December 15, 2023, unless redeemed earlier by the Operating Partnership. The Senior Notes Due 2023 are the Operating Partnership’s senior unsecured obligations that rank equally in right of payment with the Operating Partnership’s other unsecured indebtedness, and effectively junior to (i) all of the indebtedness and other liabilities, whether secured or unsecured, and any preferred equity of the Operating Partnership’s subsidiaries, and (ii) all of the Operating Partnership’s indebtedness that is secured by its assets, to the extent of the value of the collateral securing such indebtedness outstanding. ROIC fully and unconditionally guaranteed the Operating Partnership’s obligations under the Senior Notes Due 2023 on a senior unsecured basis, including the due and punctual payment of principal of, and premium, if any, and interest on, the notes, whether at stated maturity, upon acceleration, notice of redemption or otherwise. The guarantee is a senior unsecured obligation of ROIC and will rank equally in right of payment with all other senior unsecured indebtedness of ROIC. ROIC’s guarantee of the Senior Notes Due 2023 is effectively subordinated in right of payment to all liabilities, whether secured or unsecured, and any preferred equity of its subsidiaries (including the Operating Partnership and any entity ROIC accounts for under the equity method of accounting).

The combined aggregate principal maturities of the Company’s unsecured senior notes payable during the next five years and thereafter are as follows (in thousands):
Principal Repayments
2020$—  
2021—  
2022—  
2023250,000  
2024250,000  
Thereafter450,000  
Total$950,000  
Deferred Financing Costs

The unamortized balances of deferred financing costs associated with the Company’s term loan, unsecured revolving credit facility, Senior Notes Due 2027, Senior Notes Due 2026, Senior Notes Due 2024, Senior Notes Due 2023, and mortgage notes payable included as a direct reduction from the carrying amount of the related debt instrument in the consolidated balance sheets as of December 31, 2019 that will be charged to future operations during the next five years and thereafter are as follows (in thousands):

 Financing Costs
2020$1,799  
20211,799  
20221,796  
20231,781  
2024836  
Thereafter467  
 $8,478  
v3.19.3.a.u2
Capital of the Operating Partnership
12 Months Ended
Dec. 31, 2019
Partners' Capital Notes [Abstract]  
Capital of the Operating Partnership Capital of the Operating Partnership
 
As of December 31, 2019, the Operating Partnership had 127,547,106 OP Units outstanding. ROIC owned an approximate 91.3% interest in the Operating Partnership at December 31, 2019, or 116,496,016 OP Units. The remaining 11,051,090 OP Units are owned by other limited partners. A share of ROIC’s common stock and the OP Units have essentially the same economic characteristics as they share equally in the total net income or loss and distributions of the Operating Partnership.
 
As of December 31, 2019, subject to certain exceptions, holders are able to redeem their OP Units, at the option of ROIC, for cash or for unregistered shares of ROIC common stock on a one-for-one basis. If cash is paid in the redemption, the redemption price is equal to the average closing price on the NASDAQ Stock Market for shares of ROIC’s common stock over the ten consecutive trading days immediately preceding the date a redemption notice is received by ROIC.

During the year ended December 31, 2019, ROIC received notices of redemption for a total of 425,951 OP Units. ROIC elected to redeem 282,761 OP Units in cash, and accordingly, a total of approximately $5.0 million was paid during the year ended December 31, 2019 to the holder of the respective OP Units. In accordance with the Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership, the redemption value of the OP Units was calculated based on the average closing price of ROIC’s common stock on the NASDAQ Stock Market for the ten consecutive trading days immediately preceding the date of receipt of the notice of redemption. ROIC elected to redeem the remaining 143,190 OP Units for shares of ROIC common stock on a one-for-one basis, and accordingly, 143,190 shares of ROIC common stock were issued.
 
The redemption value of the OP Units owned by the limited partners as of December 31, 2019, not including ROIC, had such units been redeemed at December 31, 2019, was approximately $191.5 million, calculated based on the average closing price on the NASDAQ Stock Market of ROIC common stock for the ten consecutive trading days immediately preceding December 31, 2019, which amounted to $17.33 per share.
 
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. As the sole general partner of the Operating Partnership, ROIC effectively controls the ability to issue common stock of ROIC upon redemption of any OP Units. The redemption provisions that permit ROIC to settle the redemption of OP Units in either cash or common stock, in the sole discretion of ROIC, are further evaluated in accordance with applicable accounting guidance to determine whether temporary or permanent equity classification on the balance sheet is appropriate. The Company evaluated this guidance, including the ability, in its sole discretion, to settle in unregistered shares of common stock, and determined that the OP Units meet the requirements to qualify for presentation as permanent equity.
v3.19.3.a.u2
Consolidated Statements of Operations and Comprehensive Income - USD ($)
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Revenues      
Rental revenue $ 291,263,000 $ 289,601,000 $ 269,382,000
Other income 3,777,000 6,197,000 3,878,000
Total revenues 295,040,000 295,798,000 273,260,000
Operating expenses      
Property operating 43,662,000 43,851,000 39,151,000
Property taxes 32,388,000 32,349,000 29,663,000
Depreciation and amortization 97,559,000 100,838,000 96,256,000
General and administrative expenses 17,831,000 14,918,000 14,103,000
Acquisition transaction costs 0 0 4,000
Other expense 1,405,000 478,000 418,000
Total operating expenses 192,845,000 192,434,000 179,595,000
Gain on sale of real estate 13,175,000 5,890,000 0
Operating income 115,370,000 109,254,000 93,665,000
Non-operating expenses      
Interest expense and other finance expenses (61,687,000) (62,113,000) (50,977,000)
Net income 53,683,000 47,141,000 42,688,000
Net income attributable to non-controlling interests (4,839,000) (4,405,000) (4,211,000)
Net Income Attributable to Retail Opportunity Investments Corp. $ 48,844,000 $ 42,736,000 $ 38,477,000
Earnings per share/unit - basic and diluted (in usd per share) $ 0.42 $ 0.38 $ 0.35
Dividends per share (in dollars per share) $ 0.7880 $ 0.7800 $ 0.7500
Comprehensive income:      
Net income $ 53,683,000 $ 47,141,000 $ 42,688,000
Unrealized swap derivative (loss) gain arising during the period (7,348,000) 1,648,000 3,665,000
Reclassification adjustment for amortization of interest expense included in net income (345,000) 57,000 1,920,000
Other comprehensive (loss) income (7,693,000) 1,705,000 5,585,000
Comprehensive income 45,990,000 48,846,000 48,273,000
Comprehensive income attributable to non-controlling interests (4,839,000) (4,405,000) (4,211,000)
Comprehensive income attributable to Retail Opportunity Investments Corp. 41,151,000 44,441,000 44,062,000
Retail Opportunity Investments Partnership L.P.      
Revenues      
Rental revenue 291,263,000 289,601,000 269,382,000
Other income 3,777,000 6,197,000 3,878,000
Total revenues 295,040,000 295,798,000 273,260,000
Operating expenses      
Property operating 43,662,000 43,851,000 39,151,000
Property taxes 32,388,000 32,349,000 29,663,000
Depreciation and amortization 97,559,000 100,838,000 96,256,000
General and administrative expenses 17,831,000 14,918,000 14,103,000
Acquisition transaction costs 0 0 4,000
Other expense 1,405,000 478,000 418,000
Total operating expenses 192,845,000 192,434,000 179,595,000
Gain on sale of real estate 13,175,000 5,890,000 0
Operating income 115,370,000 109,254,000 93,665,000
Non-operating expenses      
Interest expense and other finance expenses (61,687,000) (62,113,000) (50,977,000)
Net income $ 53,683,000 $ 47,141,000 $ 42,688,000
Earnings per share/unit - basic and diluted (in usd per share) $ 0.42 $ 0.38 $ 0.35
Dividends per share (in dollars per share) $ 0.7880 $ 0.7800 $ 0.7500
Comprehensive income:      
Net income $ 53,683,000 $ 47,141,000 $ 42,688,000
Unrealized swap derivative (loss) gain arising during the period (7,348,000) 1,648,000 3,665,000
Reclassification adjustment for amortization of interest expense included in net income (345,000) 57,000 1,920,000
Other comprehensive (loss) income (7,693,000) 1,705,000 5,585,000
Comprehensive income $ 45,990,000 $ 48,846,000 $ 48,273,000
v3.19.3.a.u2
Schedule III - Real Estate and Accumulated Depreciation (Details) - Real Estate and Accumulated Depreciation - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Real Estate Properties [Line Items]        
Encumbrances $ 86,157      
Initial Cost to Company, Land 878,022      
Initial Cost to Company, Buildings & Improvements 2,023,831      
Cost Capitalized Subsequent to Acquisition, Land 1,518      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 228,470      
Amount at Which Carried at Close of Period. Land 879,540      
Amount at Which Carried at Close of Period, Buildings & Improvements 2,252,301      
Total real estate investments 3,131,841 $ 3,160,472 $ 3,109,397 $ 2,687,018
Accumulated Depreciation 390,916      
Paramount Plaza, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 6,347      
Initial Cost to Company, Buildings & Improvements 10,274      
Cost Capitalized Subsequent to Acquisition, Land 530      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 2,127      
Amount at Which Carried at Close of Period. Land 6,877      
Amount at Which Carried at Close of Period, Buildings & Improvements 12,401      
Total real estate investments 19,278      
Accumulated Depreciation 3,997      
Santa Ana Downtown Plaza, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 7,895      
Initial Cost to Company, Buildings & Improvements 9,890      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 4,029      
Amount at Which Carried at Close of Period. Land 7,895      
Amount at Which Carried at Close of Period, Buildings & Improvements 13,919      
Total real estate investments 21,814      
Accumulated Depreciation 3,812      
Meridian Valley Plaza, WA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 1,881      
Initial Cost to Company, Buildings & Improvements 4,795      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 1,757      
Amount at Which Carried at Close of Period. Land 1,881      
Amount at Which Carried at Close of Period, Buildings & Improvements 6,552      
Total real estate investments 8,433      
Accumulated Depreciation 2,085      
The Market at Lake Stevens, WA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 3,087      
Initial Cost to Company, Buildings & Improvements 12,397      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 392      
Amount at Which Carried at Close of Period. Land 3,087      
Amount at Which Carried at Close of Period, Buildings & Improvements 12,789      
Total real estate investments 15,876      
Accumulated Depreciation 3,782      
Pleasant Hill Marketplace, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 6,359      
Initial Cost to Company, Buildings & Improvements 6,927      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 1,590      
Amount at Which Carried at Close of Period. Land 6,359      
Amount at Which Carried at Close of Period, Buildings & Improvements 8,517      
Total real estate investments 14,876      
Accumulated Depreciation 2,765      
Happy Valley Town Center, OR        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 11,678      
Initial Cost to Company, Buildings & Improvements 27,011      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 2,906      
Amount at Which Carried at Close of Period. Land 11,678      
Amount at Which Carried at Close of Period, Buildings & Improvements 29,917      
Total real estate investments 41,595      
Accumulated Depreciation 8,317      
Cascade Summit Town Square, OR        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 8,853      
Initial Cost to Company, Buildings & Improvements 7,732      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 482      
Amount at Which Carried at Close of Period. Land 8,853      
Amount at Which Carried at Close of Period, Buildings & Improvements 8,214      
Total real estate investments 17,067      
Accumulated Depreciation 2,952      
Heritage Market Center, WA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 6,595      
Initial Cost to Company, Buildings & Improvements 17,399      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 756      
Amount at Which Carried at Close of Period. Land 6,595      
Amount at Which Carried at Close of Period, Buildings & Improvements 18,155      
Total real estate investments 24,750      
Accumulated Depreciation 4,751      
Claremont Promenade, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 5,975      
Initial Cost to Company, Buildings & Improvements 1,019      
Cost Capitalized Subsequent to Acquisition, Land 183      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 4,388      
Amount at Which Carried at Close of Period. Land 6,158      
Amount at Which Carried at Close of Period, Buildings & Improvements 5,407      
Total real estate investments 11,565      
Accumulated Depreciation 2,763      
Sycamore Creek, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 3,747      
Initial Cost to Company, Buildings & Improvements 11,584      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 520      
Amount at Which Carried at Close of Period. Land 3,747      
Amount at Which Carried at Close of Period, Buildings & Improvements 12,104      
Total real estate investments 15,851      
Accumulated Depreciation 3,949      
Gateway Village, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 5,917      
Initial Cost to Company, Buildings & Improvements 27,298      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 1,247      
Amount at Which Carried at Close of Period. Land 5,917      
Amount at Which Carried at Close of Period, Buildings & Improvements 28,545      
Total real estate investments 34,462      
Accumulated Depreciation 7,450      
Division Crossing, OR        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 3,706      
Initial Cost to Company, Buildings & Improvements 8,327      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 5,586      
Amount at Which Carried at Close of Period. Land 3,706      
Amount at Which Carried at Close of Period, Buildings & Improvements 13,913      
Total real estate investments 17,619      
Accumulated Depreciation 4,482      
Halsey Crossing, OR        
Real Estate Properties [Line Items]        
Initial Cost to Company, Buildings & Improvements 7,773      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 7,793      
Amount at Which Carried at Close of Period, Buildings & Improvements 15,566      
Total real estate investments 15,566      
Accumulated Depreciation 3,701      
Marketplace Del Rio,CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 13,420      
Initial Cost to Company, Buildings & Improvements 22,251      
Cost Capitalized Subsequent to Acquisition, Land 9      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 2,905      
Amount at Which Carried at Close of Period. Land 13,429      
Amount at Which Carried at Close of Period, Buildings & Improvements 25,156      
Total real estate investments 38,585      
Accumulated Depreciation 7,084      
Pinole Vista Shopping Center, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 12,894      
Initial Cost to Company, Buildings & Improvements 35,689      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 5,941      
Amount at Which Carried at Close of Period. Land 12,894      
Amount at Which Carried at Close of Period, Buildings & Improvements 41,630      
Total real estate investments 54,524      
Accumulated Depreciation 7,407      
Desert Springs Marketplace, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 8,517      
Initial Cost to Company, Buildings & Improvements 18,761      
Cost Capitalized Subsequent to Acquisition, Land 443      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 6,127      
Amount at Which Carried at Close of Period. Land 8,960      
Amount at Which Carried at Close of Period, Buildings & Improvements 24,888      
Total real estate investments 33,848      
Accumulated Depreciation 6,022      
Mills Shopping Center, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 4,084      
Initial Cost to Company, Buildings & Improvements 16,833      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 11,004      
Amount at Which Carried at Close of Period. Land 4,084      
Amount at Which Carried at Close of Period, Buildings & Improvements 27,837      
Total real estate investments 31,921      
Accumulated Depreciation 8,990      
Renaissance Towne Centre, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 8,640      
Initial Cost to Company, Buildings & Improvements 13,848      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 2,346      
Amount at Which Carried at Close of Period. Land 8,640      
Amount at Which Carried at Close of Period, Buildings & Improvements 16,194      
Total real estate investments 24,834      
Accumulated Depreciation 3,587      
Country Club Gate Center, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 6,487      
Initial Cost to Company, Buildings & Improvements 17,341      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 777      
Amount at Which Carried at Close of Period. Land 6,487      
Amount at Which Carried at Close of Period, Buildings & Improvements 18,118      
Total real estate investments 24,605      
Accumulated Depreciation 4,593      
Canyon Park Shopping Center, WA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 9,352      
Initial Cost to Company, Buildings & Improvements 15,916      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 9,013      
Amount at Which Carried at Close of Period. Land 9,352      
Amount at Which Carried at Close of Period, Buildings & Improvements 24,929      
Total real estate investments 34,281      
Accumulated Depreciation 6,443      
Hawks Prairie Shopping Center, WA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 5,334      
Initial Cost to Company, Buildings & Improvements 20,694      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 2,225      
Amount at Which Carried at Close of Period. Land 5,334      
Amount at Which Carried at Close of Period, Buildings & Improvements 22,919      
Total real estate investments 28,253      
Accumulated Depreciation 5,505      
The Kress Building, WA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 5,693      
Initial Cost to Company, Buildings & Improvements 20,866      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 4,839      
Amount at Which Carried at Close of Period. Land 5,693      
Amount at Which Carried at Close of Period, Buildings & Improvements 25,705      
Total real estate investments 31,398      
Accumulated Depreciation 7,043      
Hillsboro Market Center, OR        
Real Estate Properties [Line Items]        
Initial Cost to Company, Buildings & Improvements 17,553      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 4,713      
Amount at Which Carried at Close of Period, Buildings & Improvements 22,266      
Total real estate investments 22,266      
Accumulated Depreciation 5,240      
Gateway Shopping Center, WA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 6,242      
Initial Cost to Company, Buildings & Improvements 23,462      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 397      
Amount at Which Carried at Close of Period. Land 6,242      
Amount at Which Carried at Close of Period, Buildings & Improvements 23,859      
Total real estate investments 30,101      
Accumulated Depreciation 5,318      
Euclid Plaza, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 7,407      
Initial Cost to Company, Buildings & Improvements 7,753      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 3,117      
Amount at Which Carried at Close of Period. Land 7,407      
Amount at Which Carried at Close of Period, Buildings & Improvements 10,870      
Total real estate investments 18,277      
Accumulated Depreciation 3,470      
Green Valley Station, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 1,685      
Initial Cost to Company, Buildings & Improvements 8,999      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 785      
Amount at Which Carried at Close of Period. Land 1,685      
Amount at Which Carried at Close of Period, Buildings & Improvements 9,784      
Total real estate investments 11,469      
Accumulated Depreciation 2,676      
Aurora Square, WA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 10,325      
Initial Cost to Company, Buildings & Improvements 13,336      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 2,662      
Amount at Which Carried at Close of Period. Land 10,325      
Amount at Which Carried at Close of Period, Buildings & Improvements 15,998      
Total real estate investments 26,323      
Accumulated Depreciation 2,888      
Marlin Cove Shopping Center, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 8,815      
Initial Cost to Company, Buildings & Improvements 6,797      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 2,151      
Amount at Which Carried at Close of Period. Land 8,815      
Amount at Which Carried at Close of Period, Buildings & Improvements 8,948      
Total real estate investments 17,763      
Accumulated Depreciation 2,599      
Seabridge Marketplace, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 5,098      
Initial Cost to Company, Buildings & Improvements 17,164      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 3,584      
Amount at Which Carried at Close of Period. Land 5,098      
Amount at Which Carried at Close of Period, Buildings & Improvements 20,748      
Total real estate investments 25,846      
Accumulated Depreciation 4,485      
The Village at Novato, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 5,329      
Initial Cost to Company, Buildings & Improvements 4,412      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 1,833      
Amount at Which Carried at Close of Period. Land 5,329      
Amount at Which Carried at Close of Period, Buildings & Improvements 6,245      
Total real estate investments 11,574      
Accumulated Depreciation 1,246      
Glendora Shopping Center, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 5,847      
Initial Cost to Company, Buildings & Improvements 8,758      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 298      
Amount at Which Carried at Close of Period. Land 5,847      
Amount at Which Carried at Close of Period, Buildings & Improvements 9,056      
Total real estate investments 14,903      
Accumulated Depreciation 2,375      
Wilsonville Old Town Square, OR        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 4,181      
Initial Cost to Company, Buildings & Improvements 15,394      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 1,396      
Amount at Which Carried at Close of Period. Land 4,181      
Amount at Which Carried at Close of Period, Buildings & Improvements 16,790      
Total real estate investments 20,971      
Accumulated Depreciation 3,440      
Bay Plaza, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 5,454      
Initial Cost to Company, Buildings & Improvements 14,857      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 1,084      
Amount at Which Carried at Close of Period. Land 5,454      
Amount at Which Carried at Close of Period, Buildings & Improvements 15,941      
Total real estate investments 21,395      
Accumulated Depreciation 3,577      
Santa Teresa Village, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 14,965      
Initial Cost to Company, Buildings & Improvements 17,162      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 6,500      
Amount at Which Carried at Close of Period. Land 14,965      
Amount at Which Carried at Close of Period, Buildings & Improvements 23,662      
Total real estate investments 38,627      
Accumulated Depreciation 5,597      
Cypress Center West, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 15,480      
Initial Cost to Company, Buildings & Improvements 11,819      
Cost Capitalized Subsequent to Acquisition, Land 124      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 2,051      
Amount at Which Carried at Close of Period. Land 15,604      
Amount at Which Carried at Close of Period, Buildings & Improvements 13,870      
Total real estate investments 29,474      
Accumulated Depreciation 3,618      
Redondo Beach Plaza, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 16,242      
Initial Cost to Company, Buildings & Improvements 13,625      
Cost Capitalized Subsequent to Acquisition, Land 72      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 297      
Amount at Which Carried at Close of Period. Land 16,314      
Amount at Which Carried at Close of Period, Buildings & Improvements 13,922      
Total real estate investments 30,236      
Accumulated Depreciation 3,141      
Harbor Place Center, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 16,506      
Initial Cost to Company, Buildings & Improvements 10,527      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 533      
Amount at Which Carried at Close of Period. Land 16,506      
Amount at Which Carried at Close of Period, Buildings & Improvements 11,060      
Total real estate investments 27,566      
Accumulated Depreciation 2,240      
Diamond Bar Town Center, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 9,540      
Initial Cost to Company, Buildings & Improvements 16,795      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 3,775      
Amount at Which Carried at Close of Period. Land 9,540      
Amount at Which Carried at Close of Period, Buildings & Improvements 20,570      
Total real estate investments 30,110      
Accumulated Depreciation 5,585      
Bernardo Heights Plaza, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 3,192      
Initial Cost to Company, Buildings & Improvements 8,940      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 728      
Amount at Which Carried at Close of Period. Land 3,192      
Amount at Which Carried at Close of Period, Buildings & Improvements 9,668      
Total real estate investments 12,860      
Accumulated Depreciation 2,219      
Canyon Crossing, WA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 7,941      
Initial Cost to Company, Buildings & Improvements 24,659      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 2,959      
Amount at Which Carried at Close of Period. Land 7,941      
Amount at Which Carried at Close of Period, Buildings & Improvements 27,618      
Total real estate investments 35,559      
Accumulated Depreciation 6,814      
Diamond Hills Plaza, CA        
Real Estate Properties [Line Items]        
Encumbrances 35,500      
Initial Cost to Company, Land 15,458      
Initial Cost to Company, Buildings & Improvements 29,353      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 872      
Amount at Which Carried at Close of Period. Land 15,458      
Amount at Which Carried at Close of Period, Buildings & Improvements 30,225      
Total real estate investments 45,683      
Accumulated Depreciation 5,818      
Granada Shopping Center, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 3,673      
Initial Cost to Company, Buildings & Improvements 13,459      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 842      
Amount at Which Carried at Close of Period. Land 3,673      
Amount at Which Carried at Close of Period, Buildings & Improvements 14,301      
Total real estate investments 17,974      
Accumulated Depreciation 3,005      
Hawthorne Crossings, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 10,383      
Initial Cost to Company, Buildings & Improvements 29,277      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 221      
Amount at Which Carried at Close of Period. Land 10,383      
Amount at Which Carried at Close of Period, Buildings & Improvements 29,498      
Total real estate investments 39,881      
Accumulated Depreciation 5,703      
Robinwood Shopping Center, OR        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 3,997      
Initial Cost to Company, Buildings & Improvements 11,317      
Cost Capitalized Subsequent to Acquisition, Land 18      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 1,141      
Amount at Which Carried at Close of Period. Land 4,015      
Amount at Which Carried at Close of Period, Buildings & Improvements 12,458      
Total real estate investments 16,473      
Accumulated Depreciation 2,721      
5 Points Plaza, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 17,920      
Initial Cost to Company, Buildings & Improvements 36,965      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 4,242      
Amount at Which Carried at Close of Period. Land 17,920      
Amount at Which Carried at Close of Period, Buildings & Improvements 41,207      
Total real estate investments 59,127      
Accumulated Depreciation 7,778      
Crossroads Shopping Center, WA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 68,366      
Initial Cost to Company, Buildings & Improvements 67,756      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 19,067      
Amount at Which Carried at Close of Period. Land 68,366      
Amount at Which Carried at Close of Period, Buildings & Improvements 86,823      
Total real estate investments 155,189      
Accumulated Depreciation 17,347      
Peninsula Marketplace, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 14,730      
Initial Cost to Company, Buildings & Improvements 19,214      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 1,979      
Amount at Which Carried at Close of Period. Land 14,730      
Amount at Which Carried at Close of Period, Buildings & Improvements 21,193      
Total real estate investments 35,923      
Accumulated Depreciation 4,162      
Country Club Village, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 9,986      
Initial Cost to Company, Buildings & Improvements 26,579      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 1,797      
Amount at Which Carried at Close of Period. Land 9,986      
Amount at Which Carried at Close of Period, Buildings & Improvements 28,376      
Total real estate investments 38,362      
Accumulated Depreciation 5,845      
Plaza de la Canada, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 10,351      
Initial Cost to Company, Buildings & Improvements 24,819      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 1,233      
Amount at Which Carried at Close of Period. Land 10,351      
Amount at Which Carried at Close of Period, Buildings & Improvements 26,052      
Total real estate investments 36,403      
Accumulated Depreciation 4,567      
Tigard Marketplace, OR        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 13,587      
Initial Cost to Company, Buildings & Improvements 9,603      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 692      
Amount at Which Carried at Close of Period. Land 13,587      
Amount at Which Carried at Close of Period, Buildings & Improvements 10,295      
Total real estate investments 23,882      
Accumulated Depreciation 2,533      
Creekside Plaza, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 14,807      
Initial Cost to Company, Buildings & Improvements 29,476      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 2,495      
Amount at Which Carried at Close of Period. Land 14,807      
Amount at Which Carried at Close of Period, Buildings & Improvements 31,971      
Total real estate investments 46,778      
Accumulated Depreciation 5,737      
North Park Plaza, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 13,593      
Initial Cost to Company, Buildings & Improvements 17,733      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 1,737      
Amount at Which Carried at Close of Period. Land 13,593      
Amount at Which Carried at Close of Period, Buildings & Improvements 19,470      
Total real estate investments 33,063      
Accumulated Depreciation 3,042      
Fallbrook Shopping Center        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 21,232      
Initial Cost to Company, Buildings & Improvements 186,197      
Cost Capitalized Subsequent to Acquisition, Land 83      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 9,379      
Amount at Which Carried at Close of Period. Land 21,315      
Amount at Which Carried at Close of Period, Buildings & Improvements 195,576      
Total real estate investments 216,891      
Accumulated Depreciation 32,933      
Moorpark Town Center, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 7,063      
Initial Cost to Company, Buildings & Improvements 19,694      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 1,631      
Amount at Which Carried at Close of Period. Land 7,063      
Amount at Which Carried at Close of Period, Buildings & Improvements 21,325      
Total real estate investments 28,388      
Accumulated Depreciation 4,498      
Mission Foothill Marketplace Pads, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 3,996      
Initial Cost to Company, Buildings & Improvements 11,051      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 297      
Amount at Which Carried at Close of Period. Land 3,996      
Amount at Which Carried at Close of Period, Buildings & Improvements 11,348      
Total real estate investments 15,344      
Accumulated Depreciation 1,439      
Wilsonville Town Center, OR        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 10,334      
Initial Cost to Company, Buildings & Improvements 27,101      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 602      
Amount at Which Carried at Close of Period. Land 10,334      
Amount at Which Carried at Close of Period, Buildings & Improvements 27,703      
Total real estate investments 38,037      
Accumulated Depreciation 4,553      
Park Oaks Shopping Center, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 8,527      
Initial Cost to Company, Buildings & Improvements 38,064      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 569      
Amount at Which Carried at Close of Period. Land 8,527      
Amount at Which Carried at Close of Period, Buildings & Improvements 38,633      
Total real estate investments 47,160      
Accumulated Depreciation 5,934      
Ontario Plaza, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 9,825      
Initial Cost to Company, Buildings & Improvements 26,635      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 1,470      
Amount at Which Carried at Close of Period. Land 9,825      
Amount at Which Carried at Close of Period, Buildings & Improvements 28,105      
Total real estate investments 37,930      
Accumulated Depreciation 4,644      
Winston Manor, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 10,018      
Initial Cost to Company, Buildings & Improvements 9,762      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 2,132      
Amount at Which Carried at Close of Period. Land 10,018      
Amount at Which Carried at Close of Period, Buildings & Improvements 11,894      
Total real estate investments 21,912      
Accumulated Depreciation 2,053      
Jackson Square, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 6,886      
Initial Cost to Company, Buildings & Improvements 24,558      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 1,111      
Amount at Which Carried at Close of Period. Land 6,886      
Amount at Which Carried at Close of Period, Buildings & Improvements 25,669      
Total real estate investments 32,555      
Accumulated Depreciation 3,632      
Tigard Promenade, OR        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 9,844      
Initial Cost to Company, Buildings & Improvements 10,843      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 245      
Amount at Which Carried at Close of Period. Land 9,844      
Amount at Which Carried at Close of Period, Buildings & Improvements 11,088      
Total real estate investments 20,932      
Accumulated Depreciation 1,517      
Sunnyside Village Square, OR        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 4,428      
Initial Cost to Company, Buildings & Improvements 13,324      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 3,856      
Amount at Which Carried at Close of Period. Land 4,428      
Amount at Which Carried at Close of Period, Buildings & Improvements 17,180      
Total real estate investments 21,608      
Accumulated Depreciation 2,875      
Gateway Centre, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 16,275      
Initial Cost to Company, Buildings & Improvements 28,308      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 4,178      
Amount at Which Carried at Close of Period. Land 16,275      
Amount at Which Carried at Close of Period, Buildings & Improvements 32,486      
Total real estate investments 48,761      
Accumulated Depreciation 4,231      
Johnson Creek Center, OR        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 9,009      
Initial Cost to Company, Buildings & Improvements 22,534      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 1,391      
Amount at Which Carried at Close of Period. Land 9,009      
Amount at Which Carried at Close of Period, Buildings & Improvements 23,925      
Total real estate investments 32,934      
Accumulated Depreciation 3,308      
Iron Horse Plaza, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 8,187      
Initial Cost to Company, Buildings & Improvements 39,654      
Cost Capitalized Subsequent to Acquisition, Land 11      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 2,519      
Amount at Which Carried at Close of Period. Land 8,198      
Amount at Which Carried at Close of Period, Buildings & Improvements 42,173      
Total real estate investments 50,371      
Accumulated Depreciation 4,732      
Bellevue Marketplace, WA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 10,488      
Initial Cost to Company, Buildings & Improvements 39,119      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 10,162      
Amount at Which Carried at Close of Period. Land 10,488      
Amount at Which Carried at Close of Period, Buildings & Improvements 49,281      
Total real estate investments 59,769      
Accumulated Depreciation 5,515      
Four Corner Square, WA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 9,926      
Initial Cost to Company, Buildings & Improvements 31,415      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 491      
Amount at Which Carried at Close of Period. Land 9,926      
Amount at Which Carried at Close of Period, Buildings & Improvements 31,906      
Total real estate investments 41,832      
Accumulated Depreciation 4,106      
Warner Plaza, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 16,104      
Initial Cost to Company, Buildings & Improvements 60,188      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 9,266      
Amount at Which Carried at Close of Period. Land 16,104      
Amount at Which Carried at Close of Period, Buildings & Improvements 69,454      
Total real estate investments 85,558      
Accumulated Depreciation 8,460      
Magnolia Shopping Center, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 12,501      
Initial Cost to Company, Buildings & Improvements 27,040      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 2,046      
Amount at Which Carried at Close of Period. Land 12,501      
Amount at Which Carried at Close of Period, Buildings & Improvements 29,086      
Total real estate investments 41,587      
Accumulated Depreciation 3,621      
Casitas Plaza Shopping Center, CA        
Real Estate Properties [Line Items]        
Encumbrances 7,001      
Initial Cost to Company, Land 10,734      
Initial Cost to Company, Buildings & Improvements 22,040      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 1,431      
Amount at Which Carried at Close of Period. Land 10,734      
Amount at Which Carried at Close of Period, Buildings & Improvements 23,471      
Total real estate investments 34,205      
Accumulated Depreciation 2,626      
Bouquet Center, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 10,040      
Initial Cost to Company, Buildings & Improvements 48,362      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 606      
Amount at Which Carried at Close of Period. Land 10,040      
Amount at Which Carried at Close of Period, Buildings & Improvements 48,968      
Total real estate investments 59,008      
Accumulated Depreciation 5,373      
North Ranch Shopping Center, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 31,522      
Initial Cost to Company, Buildings & Improvements 95,916      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 1,826      
Amount at Which Carried at Close of Period. Land 31,522      
Amount at Which Carried at Close of Period, Buildings & Improvements 97,742      
Total real estate investments 129,264      
Accumulated Depreciation 9,622      
Monterey Center, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 1,073      
Initial Cost to Company, Buildings & Improvements 10,609      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 237      
Amount at Which Carried at Close of Period. Land 1,073      
Amount at Which Carried at Close of Period, Buildings & Improvements 10,846      
Total real estate investments 11,919      
Accumulated Depreciation 1,080      
Rose City Center, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 3,637      
Initial Cost to Company, Buildings & Improvements 10,301      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements (78)      
Amount at Which Carried at Close of Period. Land 3,637      
Amount at Which Carried at Close of Period, Buildings & Improvements 10,223      
Total real estate investments 13,860      
Accumulated Depreciation 987      
The Knolls, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 9,726      
Initial Cost to Company, Buildings & Improvements 18,299      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 21      
Amount at Which Carried at Close of Period. Land 9,726      
Amount at Which Carried at Close of Period, Buildings & Improvements 18,320      
Total real estate investments 28,046      
Accumulated Depreciation 1,827      
Bridle Trails Shopping Center, WA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 11,534      
Initial Cost to Company, Buildings & Improvements 20,700      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 7,906      
Amount at Which Carried at Close of Period. Land 11,534      
Amount at Which Carried at Close of Period, Buildings & Improvements 28,606      
Total real estate investments 40,140      
Accumulated Depreciation 2,586      
Torrey Hills Corporate Center, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 5,579      
Initial Cost to Company, Buildings & Improvements 3,915      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 2,435      
Amount at Which Carried at Close of Period. Land 5,579      
Amount at Which Carried at Close of Period, Buildings & Improvements 6,350      
Total real estate investments 11,929      
Accumulated Depreciation 1,320      
PCC Community Markets Plaza, WA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 1,856      
Initial Cost to Company, Buildings & Improvements 6,914      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 7      
Amount at Which Carried at Close of Period. Land 1,856      
Amount at Which Carried at Close of Period, Buildings & Improvements 6,921      
Total real estate investments 8,777      
Accumulated Depreciation 657      
The Terraces, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 18,378      
Initial Cost to Company, Buildings & Improvements 37,103      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 1,423      
Amount at Which Carried at Close of Period. Land 18,378      
Amount at Which Carried at Close of Period, Buildings & Improvements 38,526      
Total real estate investments 56,904      
Accumulated Depreciation 3,291      
Santa Rosa Southside Shopping Center, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 5,595      
Initial Cost to Company, Buildings & Improvements 24,453      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 1,788      
Amount at Which Carried at Close of Period. Land 5,595      
Amount at Which Carried at Close of Period, Buildings & Improvements 26,241      
Total real estate investments 31,836      
Accumulated Depreciation 2,057      
Division Center, OR        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 6,917      
Initial Cost to Company, Buildings & Improvements 26,098      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 2,086      
Amount at Which Carried at Close of Period. Land 6,917      
Amount at Which Carried at Close of Period, Buildings & Improvements 28,184      
Total real estate investments 35,101      
Accumulated Depreciation 2,353      
Highland Hill Shopping Center, WA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 10,511      
Initial Cost to Company, Buildings & Improvements 37,825      
Cost Capitalized Subsequent to Acquisition, Land 29      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 382      
Amount at Which Carried at Close of Period. Land 10,540      
Amount at Which Carried at Close of Period, Buildings & Improvements 38,207      
Total real estate investments 48,747      
Accumulated Depreciation 3,210      
Monta Loma Plaza, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 18,226      
Initial Cost to Company, Buildings & Improvements 11,113      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 140      
Amount at Which Carried at Close of Period. Land 18,226      
Amount at Which Carried at Close of Period, Buildings & Improvements 11,253      
Total real estate investments 29,479      
Accumulated Depreciation 784      
Fullerton Crossroads, CA        
Real Estate Properties [Line Items]        
Encumbrances 26,000      
Initial Cost to Company, Land 28,512      
Initial Cost to Company, Buildings & Improvements 45,419      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 476      
Amount at Which Carried at Close of Period. Land 28,512      
Amount at Which Carried at Close of Period, Buildings & Improvements 45,895      
Total real estate investments 74,407      
Accumulated Depreciation 3,205      
Riverstone Marketplace, CA        
Real Estate Properties [Line Items]        
Encumbrances 17,656      
Initial Cost to Company, Land 5,113      
Initial Cost to Company, Buildings & Improvements 27,594      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 277      
Amount at Which Carried at Close of Period. Land 5,113      
Amount at Which Carried at Close of Period, Buildings & Improvements 27,871      
Total real estate investments 32,984      
Accumulated Depreciation 1,876      
North Lynnwood Shopping Center, WA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 4,955      
Initial Cost to Company, Buildings & Improvements 10,335      
Cost Capitalized Subsequent to Acquisition, Land 9      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 710      
Amount at Which Carried at Close of Period. Land 4,964      
Amount at Which Carried at Close of Period, Buildings & Improvements 11,045      
Total real estate investments 16,009      
Accumulated Depreciation 766      
The Village at Nellie Gail Ranch, CA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 22,730      
Initial Cost to Company, Buildings & Improvements 22,578      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 1,387      
Amount at Which Carried at Close of Period. Land 22,730      
Amount at Which Carried at Close of Period, Buildings & Improvements 23,965      
Total real estate investments 46,695      
Accumulated Depreciation 1,528      
Stadium Center, WA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 1,699      
Initial Cost to Company, Buildings & Improvements 17,229      
Cost Capitalized Subsequent to Acquisition, Land 7      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 87      
Amount at Which Carried at Close of Period. Land 1,706      
Amount at Which Carried at Close of Period, Buildings & Improvements 17,316      
Total real estate investments 19,022      
Accumulated Depreciation 861      
King City Plaza, OR        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 5,161      
Initial Cost to Company, Buildings & Improvements 10,072      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 43      
Amount at Which Carried at Close of Period. Land 5,161      
Amount at Which Carried at Close of Period, Buildings & Improvements 10,115      
Total real estate investments 15,276      
Accumulated Depreciation 570      
Summerwalk Village, WA        
Real Estate Properties [Line Items]        
Initial Cost to Company, Land 2,320      
Initial Cost to Company, Buildings & Improvements 9,281      
Cost Capitalized Subsequent to Acquisition, Buildings & Improvements 4      
Amount at Which Carried at Close of Period. Land 2,320      
Amount at Which Carried at Close of Period, Buildings & Improvements 9,285      
Total real estate investments 11,605      
Accumulated Depreciation $ 20      
v3.19.3.a.u2
Consolidated Balance Sheets (Parentheticals) - $ / shares
Dec. 31, 2019
Dec. 31, 2018
Preferred stock par value (in usd per share) $ 0.0001 $ 0.0001
Preferred stock, shares authorized (in shares) 50,000,000 50,000,000
Preferred stock, shares issued (in shares) 0 0
Preferred stock, shares outstanding (in shares) 0 0
Common stock, par value (in usd per share) $ 0.0001 $ 0.0001
Common stock, shares authorized (in shares) 500,000,000 500,000,000
Common stock, shares issued (in shares) 116,496,016 113,992,837
Common stock, shares outstanding (in shares) 116,496,016 113,992,837
v3.19.3.a.u2
Mortgage Notes Payable, Credit Facilities and Senior Notes Mortgage Notes Payable, Credit Facility and Senior Notes - Principal Repayments of Unsecured Senior Notes (Details) - Senior Notes
Dec. 31, 2019
USD ($)
Debt Instrument [Line Items]  
2020 $ 0
2021 0
2022 0
2023 250,000,000
2024 250,000,000
Thereafter 450,000,000
Total $ 950,000,000
v3.19.3.a.u2
Stock Compensation and Other Benefit Plans for ROIC (Narrative) (Details)
$ / shares in Units, $ in Thousands
12 Months Ended
Dec. 31, 2019
USD ($)
$ / shares
shares
Dec. 31, 2018
USD ($)
Dec. 31, 2017
USD ($)
Dec. 31, 2009
shares
Apr. 25, 2018
shares
Stock Compensation and Other Benefit Plans for ROIC (Details) [Line Items]          
Exercises in period (in shares) | shares 186,000        
Exercises in period (in dollars per share) | $ / shares $ 10.44        
Intrinsic value for exercises in period $ 1,400        
Share-based compensation expense 8,600 $ 7,400 $ 6,200    
Employer discretionary contribution amount $ 87 86 70    
2009 Equity Incentive Plan          
Stock Compensation and Other Benefit Plans for ROIC (Details) [Line Items]          
Percentage of outstanding stock maximum (in percentage)       7.50%  
Maximum number of shares (in shares) | shares       4,000,000  
Equity Incentive Plan          
Stock Compensation and Other Benefit Plans for ROIC (Details) [Line Items]          
Number of shares authorized | shares         22,500,000
Fungible Unit to full value award conversion ratio         6.25
Restricted Stock          
Stock Compensation and Other Benefit Plans for ROIC (Details) [Line Items]          
Granted (in shares) | shares 354,161        
Granted (in dollars per share) | $ / shares $ 17.20        
Compensation cost not yet recognized $ 6,100        
Compensation cost not yet recognized, period for recognition (in years) 1 year 7 months 6 days        
Vested in period, fair value $ 5,800 $ 5,500 $ 6,300    
LTIP Units          
Stock Compensation and Other Benefit Plans for ROIC (Details) [Line Items]          
Granted (in dollars per share) | $ / shares $ 16.27        
Compensation cost not yet recognized $ 2,400        
Compensation cost not yet recognized, period for recognition (in years) 2 years        
LTIP Units | Vesting on January 1, 2022          
Stock Compensation and Other Benefit Plans for ROIC (Details) [Line Items]          
Granted (in shares) | shares 187,279        
v3.19.3.a.u2
Quarterly Results of Operations (Unaudited) (Tables)
12 Months Ended
Dec. 31, 2019
Quarterly Results of Operations (Unaudited) (Tables) [Line Items]  
Schedule of Quarterly Financial Information
The unaudited quarterly results of operations for the years ended December 31, 2019 and 2018 for ROIC are as follows (in thousands, except share data):
 
 Year Ended December 31, 2019
 March 31June 30September 30December 31
Total revenues$76,053  $72,930  $72,438  $73,619  
Net income$14,583  $8,346  $19,628  $11,126  
Net income attributable to ROIC$13,250  $7,585  $17,858  $10,151  
Basic and diluted income per share$0.12  $0.07  $0.16  $0.09  
 
 Year Ended December 31, 2018
 March 31June 30September 30December 31
Total revenues$74,395  $72,341  $73,904  $75,158  
Net income$11,824  $8,102  $15,647  $11,568  
Net income attributable to ROIC$10,702  $7,339  $14,194  $10,501  
Basic and diluted income per share$0.09  $0.06  $0.12  $0.09  
Retail Opportunity Investments Partnership L.P.  
Quarterly Results of Operations (Unaudited) (Tables) [Line Items]  
Schedule of Quarterly Financial Information
The unaudited quarterly results of operations for the years ended December 31, 2019 and 2018 for the Operating Partnership are as follows (in thousands, except unit data):
 Year Ended December 31, 2019
 March 31June 30September 30December 31
Total revenues$76,053  $72,930  $72,438  $73,619  
Net income attributable to the Operating Partnership$14,583  $8,346  $19,628  $11,126  
Basic and diluted income per unit$0.12  $0.07  $0.16  $0.09  
 
 Year Ended December 31, 2018
 March 31June 30September 30December 31
Total revenues$74,395  $72,341  $73,904  $75,158  
Net income attributable to the Operating Partnership$11,824  $8,102  $15,647  $11,568  
Basic and diluted income per unit$0.09  $0.06  $0.12  $0.09  
v3.19.3.a.u2
Mortgage Notes Payable, Credit Facilities and Senior Notes (Tables)
12 Months Ended
Dec. 31, 2019
Debt Disclosure [Abstract]  
Schedule of Debt
The mortgage notes payable collateralized by respective properties and assignment of leases at December 31, 2019 and December 31, 2018, respectively, were as follows (in thousands, except interest rates):
Maturity DateInterest RateDecember 31,
Property20192018
Casitas Plaza Shopping CenterJune 20225.320 %$7,001  $7,158  
Riverstone MarketplaceJuly 20224.960 %17,656  18,050  
Fullerton CrossroadsApril 20244.728 %26,000  26,000  
Diamond Hills PlazaOctober 20253.550 %35,500  35,500  
   86,157  86,708  
Mortgage premiums  1,594  2,074  
Net unamortized deferred financing costs  (228) (271) 
Total mortgage notes payable  $87,523  $88,511  
Schedule of Maturities of Long-term Debt
The combined aggregate principal maturities of mortgage notes payable during the next five years and thereafter are as follows (in thousands):
 Principal RepaymentsScheduled AmortizationMortgage PremiumTotal
2020$—  $577  $481  $1,058  
2021—  717  481  1,198  
202223,129  1,003  344  24,476  
2023—  686  216  902  
202426,000  708  72  26,780  
Thereafter32,787  550  —  33,337  
Total$81,916  $4,241  $1,594  $87,751  
The combined aggregate principal maturities of the Company’s unsecured senior notes payable during the next five years and thereafter are as follows (in thousands):
Principal Repayments
2020$—  
2021—  
2022—  
2023250,000  
2024250,000  
Thereafter450,000  
Total$950,000  
Schedule of Long-term Debt Instruments
The carrying values of the Company’s unsecured term loan (the “term loan”) were as follows (in thousands):

December 31,
 20192018
Term loan$300,000  $300,000  
Net unamortized deferred financing costs(1,670) (924) 
Term loan$298,330  $299,076  
The carrying values of the Company’s unsecured revolving credit facility were as follows (in thousands):

December 31,
 20192018
Credit facility$84,000  $156,000  
Net unamortized deferred financing costs(3,257) (2,311) 
Credit facility$80,743  $153,689  
The carrying value of the Company’s unsecured Senior Notes Due 2027 is as follows (in thousands):
 
December 31,
 20192018
Principal amount$250,000  $250,000  
Net unamortized deferred financing costs(998) (1,123) 
Senior Notes Due 2027$249,002  $248,877  
The carrying value of the Company’s unsecured Senior Notes Due 2026 is as follows (in thousands):
 
December 31,
 20192018
Principal amount$200,000  $200,000  
Net unamortized deferred financing costs(191) (219) 
Senior Notes Due 2026$199,809  $199,781  
The carrying value of the Company’s unsecured Senior Notes Due 2024 is as follows (in thousands):

December 31,
 20192018
Principal amount$250,000  $250,000  
Unamortized debt discount(1,912) (2,252) 
Net unamortized deferred financing costs(1,094) (1,314) 
Senior Notes Due 2024$246,994  $246,434  
 
The carrying value of the Company’s unsecured Senior Notes Due 2023 is as follows (in thousands):

December 31,
 20192018
Principal amount$250,000  $250,000  
Unamortized debt discount(1,915) (2,339) 
Net unamortized deferred financing costs(1,040) (1,304) 
Senior Notes Due 2023$247,045  $246,357  
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure
The unamortized balances of deferred financing costs associated with the Company’s term loan, unsecured revolving credit facility, Senior Notes Due 2027, Senior Notes Due 2026, Senior Notes Due 2024, Senior Notes Due 2023, and mortgage notes payable included as a direct reduction from the carrying amount of the related debt instrument in the consolidated balance sheets as of December 31, 2019 that will be charged to future operations during the next five years and thereafter are as follows (in thousands):

 Financing Costs
2020$1,799  
20211,799  
20221,796  
20231,781  
2024836  
Thereafter467  
 $8,478  
v3.19.3.a.u2
Fair Value of Financial Instruments
12 Months Ended
Dec. 31, 2019
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments Fair Value of Financial Instruments
 
The Company follows the FASB guidance that defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.  The guidance applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements; accordingly, the standard does not require any new fair value measurements of reported balances.
 
The guidance emphasizes that fair value is a market-based measurement, not an entity-specific measurement.  Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability.  As a basis for considering market participant assumptions in fair value measurements, the guidance establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the
reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).
 
Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access.  Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.  Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals.  Level 3 inputs are unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity.  In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety.  The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.
 
The following disclosures of estimated fair value were determined by management, using available market information and appropriate valuation methodologies as discussed in Note 1.  Considerable judgment is necessary to interpret market data and develop estimated fair value.  Accordingly, the estimates presented herein are not necessarily indicative of the amounts realizable upon disposition of the financial instruments.  The use of different market assumptions or estimation methodologies may have a material effect on the estimated fair value amounts.

The carrying values of cash and cash equivalents, restricted cash, tenant and other receivables, deposits, prepaid expenses, other assets, accounts payable and accrued expenses are reasonable estimates of their fair values because of the short-term nature of these instruments. The carrying values of the term loan and revolving credit facility are deemed to be at fair value since the outstanding debt is directly tied to monthly LIBOR contracts. The fair value of the outstanding Senior Notes Due 2027 and Senior Notes Due 2026 at December 31, 2019 was approximately $246.7 million and $195.0 million, respectively, calculated using significant inputs which are not observable in the market, or Level 3. The fair value of the outstanding Senior Notes Due 2024 and Senior Notes Due 2023 at December 31, 2019 was approximately $260.4 million and $269.3 million, respectively, based on inputs not quoted on active markets, but corroborated by market data, or Level 2. Assumed mortgage notes payable were recorded at their fair value at the time they were assumed. The Company’s outstanding mortgage notes payable were estimated to have a fair value of approximately $87.2 million with a weighted average interest rate of 3.8% as of December 31, 2019. These fair value measurements fall within Level 3 of the fair value hierarchy.
v3.19.3.a.u2
Real Estate Investments
12 Months Ended
Dec. 31, 2019
Business Combinations [Abstract]  
Real Estate Investments Real Estate Investments
 
The following real estate investment transactions occurred during the years ended December 31, 2019 and 2018.
 
The Company evaluated the following acquisitions and determined that substantially all of the fair value related to each acquisition was concentrated in a single identifiable asset. The Company allocated the total consideration for each acquisition to the individual assets and liabilities acquired on a relative fair value basis. All transaction costs incurred in these acquisitions were capitalized.

Property Asset Acquisitions in 2019

On December 13, 2019, the Company acquired the property known as Summerwalk Village located in Lacey, Washington, within the Seattle metropolitan area, for an adjusted purchase price of approximately $11.6 million. Summerwalk Village is approximately 58,000 square feet and is anchored by Walmart Neighborhood Market. The property was acquired with borrowings under the credit facility.

Property Asset Acquisitions in 2018
 
During the year ended December 31, 2018, the Company acquired two properties with a total of approximately 112,000 square feet for an adjusted purchase price of approximately $35.0 million.
The financial information set forth below summarizes the Company’s purchase price allocation for the properties acquired during the years ended December 31, 2019 and 2018 (in thousands).
 
December 31,
 20192018
Assets  
Land$2,320  $7,666  
Building and improvements9,281  35,629  
Acquired lease intangible asset—  1,763  
Deferred charges—  818  
Assets acquired$11,601  $45,876  
Liabilities  
Acquired lease intangible liability—  1,680  
Liabilities assumed$—  $1,680  
 
The following table summarizes the operating results included in the Company’s historical consolidated statement of operations for the year ended December 31, 2018 for the properties acquired during the year ended December 31, 2018 (in thousands).
 Year Ended December 31, 2018
Statement of operations: 
Revenues$2,343  
Net income attributable to Retail Opportunity Investments Corp.$753  
 
Property Dispositions in 2019

On February 15, 2019, the Company sold Vancouver Market Center, a non-core shopping center located in Vancouver, Washington. The sales price of $17.0 million, less costs to sell, resulted in net proceeds of approximately $16.0 million. The Company recorded a gain on sale of real estate of approximately $2.6 million during the year ended December 31, 2019 related to this property disposition.

On May 1, 2019, the Company sold Norwood Shopping Center, a non-core shopping center located in Sacramento, California for a sales price of $13.5 million. In connection with the sale of this property, the Company entered into a $13.3 million mortgage note with the buyer. The mortgage note is a four year interest only note whereby the interest rate increases 1% annually from 3% to 6%. The Company recorded a gain on sale of real estate of approximately $180,000 during the year ended December 31, 2019 related to this property disposition.

On August 1, 2019, the Company sold Morada Ranch, a non-core shopping center located in Stockton, California. The sales price of $30.0 million, less costs to sell, resulted in net proceeds of approximately $29.1 million. The Company recorded a gain on sale of real estate of approximately $10.4 million during the year ended December 31, 2019 related to this property disposition.

On December 12, 2019, the Company sold Mission Foothill Marketplace, located in Mission Viejo, California, as a redevelopment property. The Company retained ownership of two retail pads that will be the gateway to the buyer's planned single-family and townhome community. The sales price of approximately $13.6 million, less costs to sell, resulted in net proceeds of approximately $13.5 million.

Property Dispositions in 2018

On September 27, 2018, the Company sold Round Hill Square, a non-core shopping center located in Zephyr Cove, Nevada. The sales price of $28.0 million, less costs to sell, resulted in net proceeds of approximately $26.9 million. The Company recorded a gain on sale of real estate of approximately $5.9 million during the year ended December 31, 2018 related to this property disposition.
 
Any reference to square footage or occupancy is unaudited and outside the scope of our independent registered public accounting firm’s audit of the Company’s financial statements in accordance with the standards of the United States Public Company Accounting Oversight Board.
v3.19.3.a.u2
Preferred Stock of ROIC
12 Months Ended
Dec. 31, 2019
Equity [Abstract]  
Preferred Stock of ROIC Preferred Stock of ROIC
 
The Company is authorized to issue 50,000,000 shares of preferred stock with such designations, voting and other rights and preferences as may be determined from time to time by the board of directors.  As of December 31, 2019 and 2018, there were no shares of preferred stock outstanding.
v3.19.3.a.u2
Quarterly Results of Operations (Unaudited)
12 Months Ended
Dec. 31, 2019
Quarterly Financial Information Disclosure [Abstract]  
Quarterly Results of Operations (Unaudited) Quarterly Results of Operations (Unaudited)
 
The unaudited quarterly results of operations for the years ended December 31, 2019 and 2018 for ROIC are as follows (in thousands, except share data):
 
 Year Ended December 31, 2019
 March 31June 30September 30December 31
Total revenues$76,053  $72,930  $72,438  $73,619  
Net income$14,583  $8,346  $19,628  $11,126  
Net income attributable to ROIC$13,250  $7,585  $17,858  $10,151  
Basic and diluted income per share$0.12  $0.07  $0.16  $0.09  
 
 Year Ended December 31, 2018
 March 31June 30September 30December 31
Total revenues$74,395  $72,341  $73,904  $75,158  
Net income$11,824  $8,102  $15,647  $11,568  
Net income attributable to ROIC$10,702  $7,339  $14,194  $10,501  
Basic and diluted income per share$0.09  $0.06  $0.12  $0.09  

The unaudited quarterly results of operations for the years ended December 31, 2019 and 2018 for the Operating Partnership are as follows (in thousands, except unit data):
 Year Ended December 31, 2019
 March 31June 30September 30December 31
Total revenues$76,053  $72,930  $72,438  $73,619  
Net income attributable to the Operating Partnership$14,583  $8,346  $19,628  $11,126  
Basic and diluted income per unit$0.12  $0.07  $0.16  $0.09  
 
 Year Ended December 31, 2018
 March 31June 30September 30December 31
Total revenues$74,395  $72,341  $73,904  $75,158  
Net income attributable to the Operating Partnership$11,824  $8,102  $15,647  $11,568  
Basic and diluted income per unit$0.09  $0.06  $0.12  $0.09  
v3.19.3.a.u2
Organization, Basis of Presentation and Summary of Significant Accounting Policies (Policies)
12 Months Ended
Dec. 31, 2019
Accounting Policies [Abstract]  
New Accounting Pronouncements
Recent Accounting Pronouncements
 
In February 2016, the FASB issued Accounting Standard Update (“ASU”) No. 2016-2, “Leases.” ASU No. 2016-2 resulted in the recognition of a right-to-use asset and related liability to account for future obligations under ground lease agreements for which the Company is the lessee. In addition, this ASU requires that lessees and lessors capitalize, as initial direct costs, only those costs that are incurred due to the execution of a lease. Allocated payroll costs and other costs that are incurred regardless of whether the lease is obtained are no longer capitalized as initial direct costs and instead are expensed as incurred.

Under ASU No. 2016-2, each lease agreement will be evaluated to identify the lease components and nonlease components at lease inception. The total consideration in the lease agreement will be allocated to the lease and nonlease components based on their relative standalone selling prices. Lessors will continue to recognize the lease revenue component using an approach that is substantially equivalent to existing guidance for operating leases (straight-line basis). In July 2018, the FASB issued an amendment to ASU No. 2016-2 that allows lessors to elect, as a practical expedient, not to allocate the total consideration to lease and nonlease components based on their relative standalone selling prices. This practical expedient allows lessors to elect a combined single lease component presentation if (i) the timing and pattern of the revenue recognition of the combined single lease component is the same, and (ii) the related lease component and, the combined single lease component would be classified as an operating lease. The amendment also provides a transition option that permits the application of the new guidance as of the adoption date rather than to all periods presented.  The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted.

The Company adopted the provisions of ASU No. 2016-2 effective January 1, 2019 using the modified retrospective approach and accordingly, recognized a lease liability of approximately $18.0 million, which is included in Other liabilities in the accompanying balance sheet, and a related right-to-use asset of approximately $17.0 million, which is included in Other assets in the accompanying balance sheet, for all operating leases in which the Company is a lessee based on the present value of the minimum rental payments remaining as of the initial application date. The present value of the remaining lease payments was calculated for each operating lease using each respective remaining lease term and a corresponding estimated incremental borrowing rate, which is the interest rate that the Company estimates it would have to pay to borrow on a collateralized basis over a similar term.

Based on its election of the package of practical expedients, the Company was not required to reassess whether any expired or existing contracts are or contain leases, reassess the lease classification for any expired or existing leases, or reassess initial direct costs for any existing leases. Accordingly, the Company’s ground lease agreements for which the Company is the lessee
will continue to be accounted for as operating leases under the new standard. Further, the Company elected the practical expedient to account for both its lease and non-lease components as a combined single lease component and elected the optional transition method permitting January 1, 2019 to be its initial application date. Additionally, leasing payroll-related costs that are incurred regardless of whether leases are obtained are no longer capitalized as initial direct costs and instead are expensed as incurred. These costs amounted to approximately $1.3 million and $1.2 million during the years ended December 31, 2018 and 2017, respectively. Further, bad debt, which has previously been recorded in Property operating, has now been classified as a contra-revenue account in Rental revenue in the Company’s consolidated statements of operations and comprehensive income.
 
In June 2016, the FASB issued ASU No. 2016-13 “Financial Instruments - Credit Topics.” ASU No. 2016-13 requires companies to adopt a new approach to estimating credit losses on certain types of financial instruments, such as trade and other receivables and loans. The standard requires entities to estimate a lifetime expected credit loss for most financial instruments, including trade receivables. ASU No. 2016-13 will be effective for the Company beginning on January 1, 2020, with early adoption permitted. The Company does not expect that the adoption of this pronouncement will have a material impact on the consolidated financial statements.
Principles of Consolidation
Principles of Consolidation
 
The accompanying consolidated financial statements are prepared on the accrual basis in accordance with GAAP.  In the opinion of management, the consolidated financial statements include all adjustments necessary, which are of a normal and recurring nature, for the fair presentation of the Company’s financial position and the results of operations and cash flows for the periods presented.

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. The Company has concluded that the Operating Partnership is a VIE, and because they have both the power and the rights to control the Operating Partnership, they are the primary beneficiary and are required to continue to consolidate the Operating Partnership.
 
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 modify the presentation of net income by requiring earnings and other comprehensive income to be attributed to controlling and non-controlling interests.
Use of Estimates
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 recoverability of assets to be held and used, purchase price allocations, depreciable lives, revenue recognition and the collectability of tenant receivables, other receivables, notes receivables, the valuation of performance-based restricted stock, LTIPs, and derivatives.  Actual results could differ from these estimates.
Federal Income Taxes
Federal Income Taxes
 
The Company 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 its REIT taxable income (determined without regard to the dividends paid deduction and excluding net capital gains) 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, the Company is subject to state income or franchise taxes in certain states in which some of its properties are located.  For all periods from inception through September 26, 2013 the Operating Partnership had been an entity disregarded from its sole owner, ROIC, for U.S. federal income tax purposes and
as such had not been subject to U.S. federal income taxes. Effective September 27, 2013, the Operating Partnership issued OP Units in connection with the acquisitions of two shopping centers. Accordingly, the Operating Partnership ceased being a disregarded entity and instead is being treated as a partnership for U.S. federal income tax purposes.   

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 December 31, 2019, the statute of limitations for tax years 2016 through and including 2018 remain open for examination by the Internal Revenue Service (“IRS”) and state taxing authorities. 
 
ROIC intends to make regular quarterly distributions to holders of its common stock.  U.S. federal income tax law generally requires that a REIT distribute annually at least 90% of its REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains, and that it pay U.S. federal income tax at regular corporate rates to the extent that it annually distributes less than 100% of its net taxable income.  ROIC intends to pay regular quarterly dividends to stockholders in an amount not less than its net taxable income, if and to the extent authorized by its board of directors.  Before ROIC pays any dividend, whether for U.S. federal income tax purposes or otherwise, it must first meet both its operating requirements and its debt service on debt.  If ROIC’s cash available for distribution is less than its net taxable income, it could be required to sell assets or borrow funds to make cash distributions or it may make a portion of the required distribution in the form of a taxable stock distribution or distribution of debt securities.
Real Estate Investments
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.  During the years ended December 31, 2019 and 2018, capitalized costs related to the improvement or replacement of real estate properties were approximately $38.0 million and $40.3 million, respectively.

The Company evaluates each acquisition of real estate to determine if the acquired property meets the definition of a business and needs to be accounted for as a business combination. Under ASU No. 2017-1, the Company first determines whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If this threshold is met, the acquired property does not meet the definition of a business and is accounted for as an asset acquisition. The Company expects that acquisitions of real estate properties will not meet the revised definition of a business because substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets (i.e. land, buildings, and related intangible assets).
 
The Company recognizes the acquisition of real estate properties, including 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) at their fair value (for acquisitions meeting the definition of a business) and relative fair value (for acquisitions not meeting the definition of a business). The relative fair values used to allocate the cost of an asset acquisition are determined using the same methodologies and assumptions the Company utilizes to determine fair value in a business combination.

Acquired lease intangible assets include above-market leases and acquired in-place leases, and acquired lease intangible liabilities represent below-market leases, in the accompanying consolidated balance sheets. 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 management’s 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 sheets.

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 is amortized to base rental income, over the terms of the respective leases including option periods, if applicable. The value of in-place leases is amortized to expense over the remaining non-cancellable terms of the respective leases. 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.
Asset Impairment
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.
Cash and Cash Equivalents
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.
Restricted Cash
Restricted Cash
 
The terms of the Company’s mortgage loans payable may 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
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. Prior to January 1, 2019, the Company considered property operating expense recoveries from tenants of common area maintenance, real estate taxes and other recoverable costs as lease components. Effective January 1, 2019, each lease agreement is evaluated to identify the lease and nonlease components at lease inception. The Company elected the single component practical expedient, which allows lessors to elect a combined single lease component presentation if (i) the timing and pattern of the revenue recognition of the combined single lease component is the same, and (ii) the related lease component and, the combined single lease component would be classified as an operating lease. As a result of this assessment, rental revenues and tenant recoveries from the lease of real estate assets are accounted for as a single component. Lease incentives are amortized as a reduction of rental revenue over the respective tenant lease terms.
Termination fees (included in Other income in the consolidated statements of operations and comprehensive income) 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 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) collectability 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 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 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.
Depreciation and Amortization
Depreciation and Amortization
 
The Company uses the straight-line method for depreciation and amortization.  Buildings are depreciated over estimated useful lives which the Company estimates to be 39-40 years.  Property improvements are depreciated over 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 Leasing and Financing Costs
 
Costs incurred in obtaining tenant leases (principally leasing commissions and acquired lease origination costs) are amortized ratably over the life of the tenant leases. Costs incurred in obtaining long-term financing are amortized ratably over the related debt agreement. The amortization of deferred leasing and financing costs is included in Depreciation and amortization and Interest expense and other finance expenses, respectively, in the consolidated statements of operations and comprehensive income.
Concentration Credit Risk
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
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.
  
For the years ended December 31, 2019, 2018 and 2017, 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 and LTIP Units outstanding under the Equity Incentive Plan described in Note 8 are excluded from the basic EPS calculation, as these units are not participating securities until they vest.
Share-based Compensation
Stock-Based Compensation
 
The Company has a stock-based employee compensation plan, which is more fully described in Note 8.
 
The Company accounts for its stock-based compensation plan based on the FASB guidance which requires that compensation expense be recognized based on the fair value of the stock awards less forfeitures.  Restricted stock grants vest based upon the
completion of a service period (“time-based restricted stock grants”) and/or the Company meeting certain established market-indexed financial performance criteria (“performance-based restricted stock grants”).  Time-based grants are valued according to the market price for the Company’s common stock at the date of grant.  For performance-based restricted stock grants, a Monte Carlo valuation model is used, 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.  

The Company has made certain separate awards in the form of units of limited partnership interests in its Operating Partnership called LTIP Units. The LTIP Units are subject to such conditions and restrictions as the compensation committee may determine, including continued employment or service, achievement of pre-established operational performance goals and market-indexed performance criteria. For the LTIP Units subject to market-indexed performance criteria (the “marked-indexed LTIP Units”), a Monte Carlo valuation model is used, taking into account the underlying contingency risks associated with the performance criteria. All other LTIP Units (the “operational LTIP Units”) are valued according to the market price of the Company’s common stock at the date of grant.
Awards of stock options, time-based restricted stock grants and operational LTIP Units are expensed as compensation on a straight-line basis over the requisite service period.  Awards of performance-based restricted stock and market-indexed LTIP Units are expensed as compensation under the accelerated attribution method and are recognized in income regardless of the results of the performance criteria.
Derivatives
Derivatives
 
The Company records all derivatives on the balance sheets 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 forecasted transactions in a cash flow hedge. When the Company terminates a derivative for which cash flow hedging was being applied, the balance, which was recorded in Other comprehensive income, is amortized to interest expense over the remaining contractual term of the derivative as long as the hedged forecasted transactions continue to be probable of occurring. The Company includes cash payments made to terminate interest rate derivatives as an operating activity on the statement of cash flows, given the nature of the underlying cash flows that the derivative was hedging.
Segment Reporting
Segment Reporting
 
The Company’s primary business is the ownership, management, and redevelopment of retail real estate properties. The Company reviews operating and financial information for each property on an individual basis and therefore, each property represents an individual operating segment. The Company evaluates financial performance using property operating income, defined as operating revenues (base rent and recoveries from tenants), less property and related expenses (property operating expenses and property taxes). The Company has aggregated the properties into one reportable segment as the properties share similar long-term economic characteristics and have other similarities including the fact that they are operated using consistent business strategies, are typically located in major metropolitan areas, and have similar tenant mixes.
Reclassifications ReclassificationsCertain reclassifications have been made to the prior period consolidated financial statements and notes to conform to the current year presentation. In connection with the adoption of ASU No. 2016-2 and the Company’s practical expedient election to have a combined single lease component presentation, the Company combined Base rents and Recoveries from tenants into a single line item, Rental revenues, in its consolidated statements of operations and comprehensive income.
v3.19.3.a.u2
Schedule III - Real Estate and Accumulated Depreciation - Summary (Details)
$ in Billions
12 Months Ended
Dec. 31, 2019
USD ($)
Schedule III - Real Estate and Accumulated Depreciation [Line Items]  
SEC Schedule III, Real Estate, Federal Income Tax Basis (in Dollars) $ 2.9
Minimum | Building  
Schedule III - Real Estate and Accumulated Depreciation [Line Items]  
PPE useful life (in years) 39 years
Minimum | Building Improvements  
Schedule III - Real Estate and Accumulated Depreciation [Line Items]  
PPE useful life (in years) 10 years
Maximum | Building  
Schedule III - Real Estate and Accumulated Depreciation [Line Items]  
PPE useful life (in years) 40 years
Maximum | Building Improvements  
Schedule III - Real Estate and Accumulated Depreciation [Line Items]  
PPE useful life (in years) 20 years
v3.19.3.a.u2
Derivative and Hedging Activities (Assets and liabilities measured at fair value) (Details) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Derivative [Line Items]    
In the next 12 months will be reclassified as an increase to interest expense $ 1,500  
Interest Rate Swap | Fair Value, Measurements, Recurring    
Derivative [Line Items]    
Derivative asset   $ 4,931
Derivative liability (3,865) (580)
Interest Rate Swap | Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) | Fair Value, Measurements, Recurring    
Derivative [Line Items]    
Derivative asset   0
Derivative liability 0 0
Interest Rate Swap | Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring    
Derivative [Line Items]    
Derivative asset   4,931
Derivative liability (3,865) (580)
Interest Rate Swap | Significant Unobservable Inputs (Level 3) | Fair Value, Measurements, Recurring    
Derivative [Line Items]    
Derivative asset   0
Derivative liability 0 0
Interest Rate Swap | Other assets | Designated as Hedging Instrument    
Derivative [Line Items]    
Derivative asset 0 4,931
Interest Rate Swap | Other liabilities | Designated as Hedging Instrument    
Derivative [Line Items]    
Derivative liability (3,865) $ (580)
Interest Rate Swap Maturing 8/31/2022 | Bank of Montreal | Designated as Hedging Instrument    
Derivative [Line Items]    
Derivative, notional amount 100,000  
Interest Rate Swap Maturing 8/31/2022 | U.S. Bank | Designated as Hedging Instrument    
Derivative [Line Items]    
Derivative, notional amount 100,000  
Interest Rate Swap Maturing 8/31/2022 | Regions Bank | Designated as Hedging Instrument    
Derivative [Line Items]    
Derivative, notional amount 50,000  
Interest Rate Swap Maturing 8/31/2022 | Royal Bank of Canada | Designated as Hedging Instrument    
Derivative [Line Items]    
Derivative, notional amount $ 50,000  
v3.19.3.a.u2
Related Party Transactions (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Related Party Lease Agreements | General and Administrative Expense      
Related Party Transactions (Details) [Line Items]      
SG&A expense with related party $ 84 $ 74 $ 52
v3.19.3.a.u2
Acquired Lease Intangibles (Details) - Future Amortization of Acquired Lease Intangible Assets - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Acquired Lease Intangibles (Details) - Future Amortization of Acquired Lease Intangible Assets [Line Items]    
Acquired lease intangible assets, net $ 59,701 $ 72,109
Acquired Lease Intangible Assets    
Acquired Lease Intangibles (Details) - Future Amortization of Acquired Lease Intangible Assets [Line Items]    
2020 5,179  
2021 4,138  
2022 3,440  
2023 2,862  
2024 2,458  
Thereafter 41,624  
Acquired lease intangible assets, net $ 59,701  
v3.19.3.a.u2
Real Estate Investments (Details) - Purchase Price Allocation of Properties Acquired - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Assets    
Land $ 2,320 $ 7,666
Building and improvements 9,281 35,629
Acquired lease intangible asset 0 1,763
Deferred charges 0 818
Assets acquired 11,601 45,876
Liabilities    
Acquired lease intangible liability 0 1,680
Liabilities assumed $ 0 $ 1,680
v3.19.3.a.u2
Mortgage Notes Payable, Credit Facilities and Senior Notes - Combined Aggregate Principal Maturities of Mortgage Notes Payable (Details) - Mortgage Notes Payable
$ in Thousands
Dec. 31, 2019
USD ($)
Principal Repayments  
2020 $ 0
2021 0
2022 23,129
2023 0
2024 26,000
Thereafter 32,787
Term loan 81,916
Scheduled Amortization  
2020 577
2021 717
2022 1,003
2023 686
2024 708
Thereafter 550
Total 4,241
Mortgage Premium  
2020 481
2021 481
2022 344
2023 216
2024 72
Thereafter 0
Total 1,594
Total  
2020 1,058
2021 1,198
2022 24,476
2023 902
2024 26,780
Thereafter 33,337
Total mortgage notes payable $ 87,751
v3.19.3.a.u2
Preferred Stock of ROIC (Details) - shares
Dec. 31, 2019
Dec. 31, 2018
Equity [Abstract]    
Preferred stock, shares authorized (in shares) 50,000,000 50,000,000
Preferred stock, shares outstanding (in shares) 0 0
v3.19.3.a.u2
Capital of the Operating Partnership (Narrative) (Details) - USD ($)
$ / shares in Units, $ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Capital of the Operating Partnership [Line Items]        
Partnership units ( in shares) 127,547,106      
Shares outstanding (in shares) 116,496,016 113,992,837    
Notices of redemptions received 425,951      
Cash redemption of OP Units (in shares) 282,761      
Cash redemption for non-controlling interests $ 5,043 $ 3,713 $ 150  
Equity Redemption of OP Units (in shares) 143,190      
Common Stock        
Capital of the Operating Partnership [Line Items]        
Shares outstanding (in shares) 116,496,016 113,992,837 112,347,451 109,301,762
Equity Redemption of OP Units (in shares) 143,190   2,555,933  
OP Units        
Capital of the Operating Partnership [Line Items]        
Non-controlling interest redemption value $ 191,500      
Non-controlling interest redemption value (in usd per share) $ 17.33      
Retail Opportunity Investments Partnership L.P.        
Capital of the Operating Partnership [Line Items]        
Cash redemption for non-controlling interests $ 5,043 $ 3,713 $ 150  
Limited Partner’s Capital | Retail Opportunity Investments Partnership L.P.        
Capital of the Operating Partnership [Line Items]        
Partnership units ( in shares) [1] 11,051,090 11,477,041 11,678,991 11,668,061
Cash redemption of OP Units (in shares) [1] 282,761 201,950 7,064  
Cash redemption for non-controlling interests [1] $ 5,043 $ 3,713 $ 150  
Equity Redemption of OP Units (in shares) [1] (143,190)   (2,555,933)  
Retail Opportunity Investments Partnership L.P.        
Capital of the Operating Partnership [Line Items]        
ROIC ownership percentage in ROIP LP 91.30%      
[1] Consists of limited partnership interests held by third parties.
v3.19.3.a.u2
Cover Page - USD ($)
$ in Billions
12 Months Ended
Dec. 31, 2019
Feb. 14, 2020
Jun. 30, 2019
Document Information [Line Items]      
Document Type 10-K    
Document Annual Report true    
Document Period End Date Dec. 31, 2019    
Document Transition Report false    
Entity Registrant Name RETAIL OPPORTUNITY INVESTMENTS CORP.    
Entity File Number 001-33749    
Entity Incorporation, State or Country Code MD    
Entity Tax Identification Number 26-0500600    
Entity Address, Address Line One 11250 El Camino Real    
Entity Address, City or Town San Diego,    
Entity Address, State or Province CA    
Entity Address, Postal Zip Code 92130    
City Area Code 858    
Local Phone Number 677-0900    
Entity Well-known Seasoned Issuer Yes    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Large Accelerated Filer    
Entity Small Business false    
Entity Emerging Growth Company false    
Entity Shell Company false    
Title of 12(b) Security Common Stock, par value $0.0001 per share    
Trading Symbol ROIC    
Security Exchange Name NASDAQ    
Entity Public Float     $ 1.9
Entity Common Stock, Shares Outstanding   116,455,432  
Current Fiscal Year End Date --12-31    
Amendment Flag false    
Entity Central Index Key 0001407623    
Document Fiscal Year Focus 2019    
Document Fiscal Period Focus FY    
Retail Opportunity Investments Partnership L.P.      
Document Information [Line Items]      
Entity Registrant Name RETAIL OPPORTUNITY INVESTMENTS PARTNERSHIP, LP    
Entity File Number 333-189057-01    
Entity Incorporation, State or Country Code DE    
Entity Tax Identification Number 94-2969738    
Entity Well-known Seasoned Issuer Yes    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Non-accelerated Filer    
Entity Small Business false    
Entity Emerging Growth Company false    
Entity Shell Company false    
Current Fiscal Year End Date --12-31    
Amendment Flag false    
Entity Central Index Key 0001577230    
Document Fiscal Year Focus 2019    
Document Fiscal Period Focus FY    
v3.19.3.a.u2
Consolidated Statement of Partners' Capital - USD ($)
$ in Thousands
Total
Retail Opportunity Investments Partnership L.P.
Retail Opportunity Investments Partnership L.P.
Officer
Retail Opportunity Investments Partnership L.P.
Limited Partner’s Capital
Retail Opportunity Investments Partnership L.P.
Limited Partner’s Capital
Officer
Retail Opportunity Investments Partnership L.P.
ROIC Capital
Retail Opportunity Investments Partnership L.P.
ROIC Capital
Officer
[2]
Retail Opportunity Investments Partnership L.P.
Accumulated other comprehensive (loss) income
Total (in shares)       11,668,061 [1]   109,301,762 [2]    
Balance (in shares) at Dec. 31, 2016       11,668,061 [1]   109,301,762 [2]    
Balance at Dec. 31, 2016   $ 1,315,565   $ 127,324 [1]   $ 1,191,970 [2]   $ (3,729)
OP Units issued under the Equity Incentive Plan (in shares) [2]           353,261    
OP Units issued under the Equity Incentive Plan $ 44 44       $ 44 [2]    
OP Units withheld for employee taxes (in shares) [2]           (74,331)    
OP Units withheld for employee taxes (1,571) (1,571)       $ (1,571) [2]    
Cancellation of OP Units (in shares) [2]           (1,999)    
Stock based compensation expense 6,190 6,190       $ 6,190 [2]    
Issuance of OP Units in connection with acquisition (in shares) [1]       2,573,927        
Issuance of OP Units in connection with acquisition   49,599   $ 49,599 [1]        
Equity Redemption of OP Units (in shares)       (2,555,933) [1]   2,555,933 [2]    
Equity Redemption of OP Units       $ 50,155 [1]   $ (50,155) [2]    
Cash redemption of OP Units (in shares) [1]       (7,064)        
Cash redemption of OP Units (150) (150)   $ (150) [1]        
Adjustment to non-controlling interests ownership in Operating Partnership       3,574 [1]   $ (3,574) [2]    
Issuance of OP Units in connection with common stock offering (in shares) [2]           212,825    
Issuance of OP Units in connection with common stock offering 4,481 4,481       $ 4,481 [2]    
Registration expenditures (1,045) (1,045)       (1,045) [2]    
Cash distributions   (91,510) $ (235) (8,729) [1]   (82,781) [2] $ (235)  
Net income 42,688 42,688   $ 4,211 [1]   $ 38,477 [2]    
Other comprehensive income (loss) 5,585 5,585           5,585
Total (in shares)       11,678,991 [1]   112,347,451 [2]    
Balance (in shares) at Dec. 31, 2017       11,678,991 [1]   112,347,451 [2]    
Balance at Dec. 31, 2017   1,329,641   $ 125,674 [1]   $ 1,202,111 [2]   1,856
Total (in shares)       11,678,991 [1]   112,347,451 [2]    
OP Units issued under the Equity Incentive Plan (in shares) [2]           397,861    
OP Units issued under the Equity Incentive Plan 269 269       $ 269 [2]    
OP Units withheld for employee taxes (in shares) [2]           (70,168)    
OP Units withheld for employee taxes (1,400) (1,400)       $ (1,400) [2]    
Cancellation of OP Units (in shares) [2]           (8,997)    
Stock based compensation expense 7,392 7,392       $ 7,392 [2]    
Cash redemption of OP Units (in shares) [1]       (201,950)        
Cash redemption of OP Units (3,713) (3,713)   $ (3,713) [1]        
Adjustment to non-controlling interests ownership in Operating Partnership       2,904 [1]   $ (2,904) [2]    
Issuance of OP Units in connection with common stock offering (in shares) [2]           1,326,690    
Issuance of OP Units in connection with common stock offering 25,703 25,703       $ 25,703 [2]    
Registration expenditures (570) (570)       (570) [2]    
Cash distributions   (97,473) (267) (9,056) [1]   (88,417) [2] (267)  
Net income 47,141 47,141   $ 4,405 [1]   $ 42,736 [2]    
Other comprehensive income (loss) 1,705 1,705           1,705
Total (in shares)       11,477,041 [1]   113,992,837 [2]    
Balance (in shares) at Dec. 31, 2018       11,477,041 [1]   113,992,837 [2]    
Balance at Dec. 31, 2018   1,308,428   $ 120,214 [1]   $ 1,184,653 [2]   3,561
Total (in shares)       11,477,041 [1]   113,992,837 [2]    
OP Units issued under the Equity Incentive Plan (in shares) [2]           631,022    
OP Units issued under the Equity Incentive Plan 1,942 1,942       $ 1,942 [2]    
OP Units withheld for employee taxes (in shares) [2]           (125,072)    
OP Units withheld for employee taxes (1,986) (1,986)       $ (1,986) [2]    
Cancellation of OP Units (in shares) [2]           (6,997)    
Stock based compensation expense $ 8,567 8,567   $ 1,215 [1]   $ 7,352 [2]    
Equity Redemption of OP Units (in shares) 143,190     (143,190) [1]   143,190 [2]    
Equity Redemption of OP Units       $ 2,632 [1]   $ (2,632) [2]    
Cash redemption of OP Units (in shares) (282,761)     (282,761) [1]        
Cash redemption of OP Units $ (5,043) (5,043)   $ (5,043) [1]        
Adjustment to non-controlling interests ownership in Operating Partnership       2,983 [1]   $ (2,983) [2]    
Issuance of OP Units in connection with common stock offering (in shares) [2]           1,861,036    
Issuance of OP Units in connection with common stock offering 34,162 34,162       $ 34,162 [2]    
Registration expenditures (732) (732)       (732) [2]    
Cash distributions   (99,470) $ (30) (8,921) [1] $ (175) (90,549) [2] $ 145  
Net income 53,683 53,683   $ 4,839 [1]   $ 48,844 [2]    
Other comprehensive income (loss) $ (7,693) (7,693)           (7,693)
Total (in shares) 127,547,106     11,051,090 [1]   116,496,016 [2]    
Balance (in shares) at Dec. 31, 2019 127,547,106     11,051,090 [1]   116,496,016 [2]    
Balance at Dec. 31, 2019   $ 1,291,828   $ 112,480 [1]   $ 1,183,480 [2]   $ (4,132)
Total (in shares) 127,547,106     11,051,090 [1]   116,496,016 [2]    
[1] Consists of limited partnership interests held by third parties.
[2] Consists of general and limited partnership interests held by ROIC.
v3.19.3.a.u2
Schedule III - Real Estate and Accumulated Depreciation (Details) - Reconciliation of Accumulated Depreciation - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]      
Balance $ 329,207 $ 260,115 $ 193,021
Depreciation expenses 82,419 81,107 72,725
Properties sold during the year 10,775 3,551 0
Property assets fully depreciated and written off (9,935) (8,464) (5,631)
Balance $ 390,916 $ 329,207 $ 260,115
v3.19.3.a.u2
Consolidated Statement of Partners' Capital (Parentheticals) - $ / shares
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Cash distributions per unit (usd per share) $ 0.7880 $ 0.7800 $ 0.7500
Retail Opportunity Investments Partnership L.P.      
Cash distributions per unit (usd per share) $ 0.7880 $ 0.7800 $ 0.7500
v3.19.3.a.u2
Tenant Leases
12 Months Ended
Dec. 31, 2019
Leases [Abstract]  
Tenant Leases Tenant Leases
 
Space in the Company’s shopping centers is leased to various tenants under operating leases that usually grant tenants renewal options and generally provide for additional rents based on certain operating expenses as well as tenants’ sales volume.

Future minimum rents to be received under non-cancellable leases as of December 31, 2019 are summarized as follows (in thousands):
Year Ending December 31: 
2020$201,202  
2021183,897  
2022159,296  
2023130,882  
202499,572  
Thereafter415,762  
Total minimum lease payments$1,190,611  
v3.19.3.a.u2
Stock Compensation and Other Benefit Plans for ROIC
12 Months Ended
Dec. 31, 2019
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock Compensation and Other Benefit Plans for ROIC Stock Compensation and Other Benefit Plans for ROIC
 
ROIC follows the FASB guidance related to stock compensation which establishes financial accounting and reporting standards for stock-based employee compensation plans, including all arrangements by which employees receive shares of stock or other equity instruments of the employer, or the employer incurs liabilities to employees in amounts based on the price of the employer’s stock. The guidance also defines a fair value-based method of accounting for an employee stock option or similar equity instrument.
 
In 2009, the Company adopted the 2009 Equity Incentive Plan. The 2009 Equity Incentive Plan provided for grants of restricted common stock and stock option awards up to an aggregate of 7.5% of the issued and outstanding shares of ROIC’s
common stock at the time of the award, subject to a ceiling of 4,000,000 shares. The Company’s Annual Meeting of Stockholders was held on April 25, 2018 at which time the stockholders of the Company approved the Company’s Amended and Restated 2009 Equity Incentive Plan (the “Equity Incentive Plan”). The types of awards that may be granted under the Equity Incentive Plan include stock options, restricted shares, share appreciation rights, phantom shares, dividend equivalent rights and other equity-based awards. The Equity Incentive Plan has a fungible unit system that counts the number of shares of the Company’s common stock used in the issuance of full-value awards, such as restricted shares, differently than the number of shares of common stock used in the issuance of stock options. A total of 22,500,000 Fungible Units (as defined in the Equity Incentive Plan) are reserved for grant under the Equity Incentive Plan and the Fungible Unit-to-full-value award conversion ratio is 6.25 to 1.0. The Equity Incentive Plan will expire on April 25, 2028. Any available shares that had not been granted under the 2009 Equity Incentive Plan were incorporated into and made available for issuance under the Equity Incentive Plan.

The Company has made certain awards in the form of a separate series of units of limited partnership interests in its Operating Partnership called LTIP Units, which can be granted either as free-standing awards or in tandem with other awards under the Equity Incentive Plan. The LTIP Units are subject to such conditions and restrictions as the compensation committee may determine, including continued employment or service, achievement of pre-established operational performance goals and market-indexed performance criteria. Upon the occurrence of specified events and subject to the satisfaction of applicable vesting conditions, LTIP Units (after conversion into OP Units, in accordance with the Partnership Agreement) are ultimately redeemable for cash or for unregistered shares of ROIC common stock, at the option of ROIC, on a one-for-one basis.

Restricted Stock
 
During the year ended December 31, 2019, ROIC awarded 354,161 shares of time-based restricted common stock under the Equity Incentive Plan.
 
A summary of the status of the Company’s non-vested restricted stock awards as of December 31, 2019, and changes during the year ended December 31, 2019 are presented below:
 
 SharesWeighted Average
Grant Date Fair Value
Non-vested as of December 31, 20181,002,835  $16.88  
Granted354,161  $17.20  
Vested(364,913) $19.06  
Forfeited(37,286) $12.97  
Non-vested as of December 31, 2019954,797  $16.55  

As of December 31, 2019, there remained a total of approximately $6.1 million of unrecognized restricted stock compensation related to outstanding non-vested restricted stock grants awarded under the Equity Incentive Plan.  Restricted stock compensation is expected to be expensed over a remaining weighted average period of 1.6 years (irrespective of achievement of the performance conditions). The total fair value of restricted stock that vested during the years ended December 31, 2019, 2018 and 2017 was $5.8 million, $5.5 million and $6.3 million, respectively.

LTIP Units

During the year ended December 31, 2019, ROIC awarded 187,279 LTIP Units under the Equity Incentive Plan. The LTIP Units vest based on both pre-defined operational and market-indexed performance criteria with a vesting date on January 1, 2022. The LTIP Units were issued at a weighted average grant date fair value of $16.27.

As of December 31, 2019, there remained a total of approximately $2.4 million of unrecognized compensation expense related to outstanding non-vested LTIPs awarded under the Equity Incentive Plan.  LTIP compensation expense is expected to be expensed over a remaining weighted average period of 2.0 years.

Stock Options

During the year ended December 31, 2019, a total of 186,000 options were exercised at a weighted average exercise price of $10.44. The total intrinsic value of stock options exercised during the year ended December 31, 2019 was approximately $1.4 million.
Stock Based Compensation Expense

For the years ended December 31, 2019, 2018 and 2017, the amounts charged to expense for all stock based compensation totaled approximately $8.6 million, $7.4 million and $6.2 million, respectively.

Profit Sharing and Savings Plan

During 2011, the Company established a profit sharing and savings plan (the “401K Plan”), which permits eligible employees to defer a portion of their compensation in accordance with the Code.  Under the 401K Plan, the Company made matching contributions on behalf of eligible employees.  The Company made contributions to the 401K Plan of approximately $87,000, $86,000 and $70,000 for the years ended December 31, 2019, 2018 and 2017, respectively.
v3.19.3.a.u2
Organization, Basis of Presentation and Summary of Significant Accounting Policies (Details) - Unamortized Balances of Deferred Charges - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Organization, Basis of Presentation and Summary of Significant Accounting Policies (Details) - Unamortized Balances of Deferred Charges [Line Items]    
Deferred charges, net $ 27,652 $ 33,857
Lease Origination Costs    
Organization, Basis of Presentation and Summary of Significant Accounting Policies (Details) - Unamortized Balances of Deferred Charges [Line Items]    
2020 5,804  
2021 4,922  
2022 4,115  
2023 3,261  
2024 2,523  
Thereafter 7,027  
Deferred charges, net $ 27,652  
v3.19.3.a.u2
Derivative and Hedging Activities (Tables)
12 Months Ended
Dec. 31, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of Interest Rate Derivatives
The following is a summary of the terms of the Company’s current interest rate swaps as of December 31, 2019 (in thousands):

Swap CounterpartyNotional AmountEffective DateMaturity Date
Interest Rate Swap Agreements:
Bank of Montreal$100,000  12/29/20178/31/2022
U.S. Bank$100,000  12/29/20178/31/2022
Regions Bank$50,000  1/31/20198/31/2022
Royal Bank of Canada$50,000  1/31/20198/31/2022
Schedule of Derivative Assets and Liabilities at Fair Value
The table below presents the Company’s assets and liabilities measured at fair value on a recurring basis, aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands).
 
 Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)Total
December 31, 2019:    
Liabilities
Derivative financial instruments$—  $(3,865) $—  $(3,865) 
December 31, 2018:            
Assets            
Derivative financial instruments$—  $4,931  $—  $4,931  
Liabilities
Derivative financial instruments$—  $(580) $—  $(580) 
Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location
The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the balance sheet as of December 31, 2019 and 2018, respectively (in thousands):

Derivatives designed as hedging instrumentsBalance sheet locationDecember 31, 2019 Fair ValueDecember 31, 2018 Fair Value
Interest rate productsOther assets$—  $4,931  
Interest rate productsOther liabilities$(3,865) $(580) 
Derivative Instruments, Gain (Loss)
The table below details the location in the financial statements of the gain or loss recognized on interest rate derivatives designated as cash flow hedges for the years ended December 31, 2019, 2018, and 2017, respectively (in thousands).  Amounts reclassified from other comprehensive income (“OCI”) due to ineffectiveness are recognized as interest expense.
Year Ended December 31,
 201920182017
Amount of (loss) gain recognized in OCI on derivatives$(7,348) $1,648  $3,665  
Amount of (gain) loss reclassified from AOCI into interest$(345) $57  $1,920  
v3.19.3.a.u2
Acquired Lease Intangibles (Tables)
12 Months Ended
Dec. 31, 2019
Acquired Lease Intangibles (Tables) [Line Items]  
Schedule of Acquired Finite-Lived Intangible Assets by Major Class
Intangible assets and liabilities as of December 31, 2019 and 2018 consisted of the following (in thousands):
 
December 31,
 20192018
Assets:  
In-place leases$77,910  $92,354  
Accumulated amortization(31,686) (36,835) 
Above-market leases25,039  30,093  
Accumulated amortization(11,562) (13,503) 
Acquired lease intangible assets, net$59,701  $72,109  
Liabilities:  
Below-market leases$198,272  $217,212  
Accumulated amortization(53,515) (51,066) 
Acquired lease intangible liabilities, net$144,757  $166,146  
Acquired Lease Intangible Assets  
Acquired Lease Intangibles (Tables) [Line Items]  
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense
The scheduled future amortization of acquired lease intangible assets as of December 31, 2019 is as follows (in thousands):

Year Ending December 31: 
2020$5,179  
20214,138  
20223,440  
20232,862  
20242,458  
Thereafter41,624  
Total future amortization of acquired lease intangible assets$59,701  
Acquired Lease Intangible Liabilities  
Acquired Lease Intangibles (Tables) [Line Items]  
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense
The scheduled future amortization of acquired lease intangible liabilities as of December 31, 2019 is as follows (in thousands):

Year Ending December 31: 
2020$12,289  
202111,123  
202210,229  
20239,485  
20249,324  
Thereafter92,307  
Total future amortization of acquired lease intangible liabilities$144,757  
v3.19.3.a.u2
Commitments and Contingencies
12 Months Ended
Dec. 31, 2019
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
 
In the normal course of business, from time to time, 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 Company has signed several ground leases in which the Company is the lessee for the land beneath all or a portion of the buildings for certain properties. In accordance with ASU 2016-02, the Company recorded a right-of-use asset and related lease liability for these ground leases as of January 1, 2019. As of December 31, 2019, the Company’s weighted average remaining lease term is approximately 37.6 years and the weighted average discount rate used to calculate the Company’s lease liability is approximately 5.2%. Rent expense under the Company’s ground leases was approximately $1.6 million, $1.9 million, and $1.5 million for the years ended December 31, 2019, 2018, and 2017, respectively.

The following table represents a reconciliation of the Company’s undiscounted future minimum annual lease payments under operating leases to the lease liability as of December 31, 2019 (in thousands):
 Operating Leases
2020$1,287  
20211,282  
20221,304  
20231,330  
20241,335  
Thereafter32,604  
Total undiscounted future minimum lease payments39,142  
Future minimum lease payments, discount(21,467) 
Lease liability$17,675  
 
Tax Protection Agreements
 
In connection with certain acquisitions from September 2013 through March 2017, the Company entered into Tax Protection Agreements with certain limited partners of the Operating Partnership. The Tax Protection Agreements require the Company, subject to certain exceptions, to indemnify the respective sellers receiving OP Units against certain tax liabilities incurred by them, as calculated pursuant to the respective Tax Protection Agreements, for a period of 12 years (with respect to Tax Protection Agreements entered into in September 2013), or 10 years (with respect to Tax Protection Agreements entered into from December 2014 through March 2017) from the date of the Tax Protection Agreements. If the Company were to trigger the tax protection provisions under these agreements, the Company would be required to pay damages in the amount of the taxes owed by these limited partners (plus additional damages in the amount of the taxes incurred as a result of such payment).

Legal Settlement

During the year ended December 31, 2019, the Company settled an ongoing lawsuit for approximately $1.4 million and accordingly, recorded a $950,000 charge to Other expense in the accompanying consolidated statements of operations and comprehensive income during the year ended December 31, 2019.
v3.19.3.a.u2
Schedule III - Real Estate and Accumulated Depreciation
12 Months Ended
Dec. 31, 2019
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation Disclosure [Abstract]  
SEC Schedule III, Real Estate and Accumulated Depreciation Disclosure
SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2019
(in thousands)

  Initial Cost to CompanyCost Capitalized Subsequent to AcquisitionAmount at Which Carried at Close of Period   
 Description and Location Encumbrances LandBuilding &
Improvements
 LandBuilding &
Improvements
 LandBuilding &
Improvements
 
Total (a)
Accumulated Depreciation (b) (1)
Date of Acquisition
Paramount Plaza, CA$—  $6,347  $10,274  $530  $2,127  $6,877  $12,401  $19,278  $3,997  12/22/2009
Santa Ana Downtown Plaza, CA—  7,895  9,890  —  4,029  7,895  13,919  21,814  3,812  1/26/2010
Meridian Valley Plaza, WA—  1,881  4,795  —  1,757  1,881  6,552  8,433  2,085  2/1/2010
The Market at Lake Stevens, WA—  3,087  12,397  —  392  3,087  12,789  15,876  3,782  3/16/2010
Pleasant Hill Marketplace, CA—  6,359  6,927  —  1,590  6,359  8,517  14,876  2,765  4/8/2010
Happy Valley Town Center, OR—  11,678  27,011  —  2,906  11,678  29,917  41,595  8,317  7/14/2010
Cascade Summit Town Square, OR—  8,853  7,732  —  482  8,853  8,214  17,067  2,952  8/20/2010
Heritage Market Center, WA—  6,595  17,399  —  756  6,595  18,155  24,750  4,751  9/23/2010
Claremont Promenade, CA—  5,975  1,019  183  4,388  6,158  5,407  11,565  2,763  9/23/2010
Sycamore Creek, CA—  3,747  11,584  —  520  3,747  12,104  15,851  3,949  9/30/2010
Gateway Village, CA—  5,917  27,298  —  1,247  5,917  28,545  34,462  7,450  12/16/2010
Division Crossing, OR—  3,706  8,327  —  5,586  3,706  13,913  17,619  4,482  12/22/2010
Halsey Crossing, OR (2)
—  —  7,773  —  7,793  —  15,566  15,566  3,701  12/22/2010
Marketplace Del Rio,CA—  13,420  22,251   2,905  13,429  25,156  38,585  7,084  1/3/2011
Pinole Vista Shopping Center, CA—  12,894  35,689  —  5,941  12,894  41,630  54,524  7,407  1/6/2011 / 8/27/2018
Desert Springs Marketplace, CA—  8,517  18,761  443  6,127  8,960  24,888  33,848  6,022  2/17/2011
Mills Shopping Center, CA—  4,084  16,833  —  11,004  4,084  27,837  31,921  8,990  2/17/2011
Renaissance Towne Centre, CA—  8,640  13,848  —  2,346  8,640  16,194  24,834  3,587  8/3/2011
Country Club Gate Center, CA—  6,487  17,341  —  777  6,487  18,118  24,605  4,593  7/8/2011
Canyon Park Shopping Center, WA—  9,352  15,916  —  9,013  9,352  24,929  34,281  6,443  7/29/2011
Hawks Prairie Shopping Center, WA—  5,334  20,694  —  2,225  5,334  22,919  28,253  5,505  9/8/2011
The Kress Building, WA—  5,693  20,866  —  4,839  5,693  25,705  31,398  7,043  9/30/2011
Hillsboro Market Center, OR  (2)
—  —  17,553  —  4,713  —  22,266  22,266  5,240  11/23/2011
Gateway Shopping Center, WA (2)
—  6,242  23,462  —  397  6,242  23,859  30,101  5,318  2/16/2012
Euclid Plaza, CA—  7,407  7,753  —  3,117  7,407  10,870  18,277  3,470  3/28/2012
Green Valley Station, CA—  1,685  8,999  —  785  1,685  9,784  11,469  2,676  4/2/2012
Aurora Square, WA—  10,325  13,336  —  2,662  10,325  15,998  26,323  2,888  5/3/2012 / 5/22/2014
Marlin Cove Shopping Center, CA—  8,815  6,797  —  2,151  8,815  8,948  17,763  2,599  5/4/2012
Seabridge Marketplace, CA—  5,098  17,164  —  3,584  5,098  20,748  25,846  4,485  5/31/2012
The Village at Novato, CA—  5,329  4,412  —  1,833  5,329  6,245  11,574  1,246  7/24/2012
Glendora Shopping Center, CA—  5,847  8,758  —  298  5,847  9,056  14,903  2,375  8/1/2012
Wilsonville Old Town Square, OR—  4,181  15,394  —  1,396  4,181  16,790  20,971  3,440  8/1/2012
  Initial Cost to CompanyCost Capitalized Subsequent to AcquisitionAmount at Which Carried at Close of Period   
 Description and Location Encumbrances LandBuilding &
Improvements
 LandBuilding &
Improvements
 LandBuilding &
Improvements
 
Total (a)
Accumulated Depreciation (b) (1)
Date of Acquisition
Bay Plaza, CA—  5,454  14,857  —  1,084  5,454  15,941  21,395  3,577  10/5/2012
Santa Teresa Village, CA—  14,965  17,162  —  6,500  14,965  23,662  38,627  5,597  11/8/2012
Cypress Center West, CA—  15,480  11,819  124  2,051  15,604  13,870  29,474  3,618  12/7/2012
Redondo Beach Plaza, CA—  16,242  13,625  72  297  16,314  13,922  30,236  3,141  12/28/2012
Harbor Place Center, CA—  16,506  10,527  —  533  16,506  11,060  27,566  2,240  12/28/2012
Diamond Bar Town Center, CA—  9,540  16,795  —  3,775  9,540  20,570  30,110  5,585  2/1/2013
Bernardo Heights Plaza, CA—  3,192  8,940  —  728  3,192  9,668  12,860  2,219  2/6/2013
Canyon Crossing, WA—  7,941  24,659  —  2,959  7,941  27,618  35,559  6,814  4/15/2013
Diamond Hills Plaza, CA35,500  15,458  29,353  —  872  15,458  30,225  45,683  5,818  4/22/2013
Granada Shopping Center, CA—  3,673  13,459  —  842  3,673  14,301  17,974  3,005  6/27/2013
Hawthorne Crossings, CA—  10,383  29,277  —  221  10,383  29,498  39,881  5,703  6/27/2013
Robinwood Shopping Center, OR—  3,997  11,317  18  1,141  4,015  12,458  16,473  2,721  8/23/2013
5 Points Plaza, CA—  17,920  36,965  —  4,242  17,920  41,207  59,127  7,778  9/27/2013
Crossroads Shopping Center, WA—  68,366  67,756  —  19,067  68,366  86,823  155,189  17,347  9/27/2013
Peninsula Marketplace, CA—  14,730  19,214  —  1,979  14,730  21,193  35,923  4,162  11/1/2013
Country Club Village, CA—  9,986  26,579  —  1,797  9,986  28,376  38,362  5,845  11/26/2013
Plaza de la Canada, CA (2)
—  10,351  24,819  —  1,233  10,351  26,052  36,403  4,567  12/13/2013
Tigard Marketplace, OR—  13,587  9,603  —  692  13,587  10,295  23,882  2,533  2/18/2014
Creekside Plaza, CA—  14,807  29,476  —  2,495  14,807  31,971  46,778  5,737  2/28/2014
North Park Plaza, CA—  13,593  17,733  —  1,737  13,593  19,470  33,063  3,042  4/30/2014
Fallbrook Shopping Center, CA (2)
—  21,232  186,197  83  9,379  21,315  195,576  216,891  32,933  6/13/2014
Moorpark Town Center, CA—  7,063  19,694  —  1,631  7,063  21,325  28,388  4,498  12/4/2014
Mission Foothill Marketplace Pads, CA—  3,996  11,051  —  297  3,996  11,348  15,344  1,439  12/4/2014
Wilsonville Town Center, OR—  10,334  27,101  —  602  10,334  27,703  38,037  4,553  12/11/2014
Park Oaks Shopping Center, CA—  8,527  38,064  —  569  8,527  38,633  47,160  5,934  1/6/2016
Ontario Plaza, CA—  9,825  26,635  —  1,470  9,825  28,105  37,930  4,644  1/6/2015
Winston Manor, CA—  10,018  9,762  —  2,132  10,018  11,894  21,912  2,053  1/7/2015
Jackson Square, CA—  6,886  24,558  —  1,111  6,886  25,669  32,555  3,632  7/1/2015
Tigard Promenade, OR—  9,844  10,843  —  245  9,844  11,088  20,932  1,517  7/28/2015
Sunnyside Village Square, OR—  4,428  13,324  —  3,856  4,428  17,180  21,608  2,875  7/28/2015
Gateway Centre, CA—  16,275  28,308  —  4,178  16,275  32,486  48,761  4,231  9/1/2015
Johnson Creek Center, OR—  9,009  22,534  —  1,391  9,009  23,925  32,934  3,308  11/9/2015
Iron Horse Plaza, CA—  8,187  39,654  11  2,519  8,198  42,173  50,371  4,732  12/4/2015
Bellevue Marketplace, WA—  10,488  39,119  —  10,162  10,488  49,281  59,769  5,515  12/10/2015
Four Corner Square, WA—  9,926  31,415  —  491  9,926  31,906  41,832  4,106  12/21/2015
Warner Plaza, CA—  16,104  60,188  —  9,266  16,104  69,454  85,558  8,460  12/31/2015
Magnolia Shopping Center, CA—  12,501  27,040  —  2,046  12,501  29,086  41,587  3,621  3/10/2016
  Initial Cost to CompanyCost Capitalized Subsequent to AcquisitionAmount at Which Carried at Close of Period   
 Description and Location Encumbrances LandBuilding &
Improvements
 LandBuilding &
Improvements
 LandBuilding &
Improvements
 
Total (a)
Accumulated Depreciation (b) (1)
Date of Acquisition
Casitas Plaza Shopping Center, CA7,001  10,734  22,040  —  1,431  10,734  23,471  34,205  2,626  3/10/2016
Bouquet Center, CA—  10,040  48,362  —  606  10,040  48,968  59,008  5,373  4/28/2016
North Ranch Shopping Center, CA—  31,522  95,916  —  1,826  31,522  97,742  129,264  9,622  6/1/2016
Monterey Center, CA (2)
—  1,073  10,609  —  237  1,073  10,846  11,919  1,080  7/14/2016
Rose City Center, OR (2)
—  3,637  10,301  —  (78) 3,637  10,223  13,860  987  9/15/2016
The Knolls, CA—  9,726  18,299  —  21  9,726  18,320  28,046  1,827  10/3/2016
Bridle Trails Shopping Center, WA—  11,534  20,700  —  7,906  11,534  28,606  40,140  2,586  10/17/2016
Torrey Hills Corporate Center, CA—  5,579  3,915  —  2,435  5,579  6,350  11,929  1,320  12/6/2016
PCC Community Markets Plaza, WA—  1,856  6,914  —   1,856  6,921  8,777  657  1/25/2017
The Terraces, CA—  18,378  37,103  —  1,423  18,378  38,526  56,904  3,291  3/17/2017
Santa Rosa Southside Shopping Center, CA—  5,595  24,453  —  1,788  5,595  26,241  31,836  2,057  3/24/2017
Division Center, OR—  6,917  26,098  —  2,086  6,917  28,184  35,101  2,353  4/5/2017
Highland Hill Shopping Center, WA—  10,511  37,825  29  382  10,540  38,207  48,747  3,210  5/9/2017
Monta Loma Plaza, CA—  18,226  11,113  —  140  18,226  11,253  29,479  784  9/19/2017
Fullerton Crossroads, CA26,000  28,512  45,419  —  476  28,512  45,895  74,407  3,205  10/11/2017
Riverstone Marketplace, WA17,656  5,113  27,594  —  277  5,113  27,871  32,984  1,876  10/11/2017
North Lynnwood Shopping Center, WA—  4,955  10,335   710  4,964  11,045  16,009  766  10/19/2017
The Village at Nellie Gail Ranch, CA—  22,730  22,578  —  1,387  22,730  23,965  46,695  1,528  11/30/2017
Stadium Center, WA—  1,699  17,229   87  1,706  17,316  19,022  861  2/23/2018
King City Plaza, OR—  5,161  10,072  —  43  5,161  10,115  15,276  570  5/18/2018
Summerwalk Village, WA—  2,320  9,281  —   2,320  9,285  11,605  20  12/13/2019
 $86,157  $878,022  $2,023,831  $1,518  $228,470  $879,540  $2,252,301  $3,131,841  $390,916   

a.RECONCILIATION OF REAL ESTATE – OWNED SUBJECT TO OPERATING LEASES (in thousands)
 Year Ended December 31,
 201920182017
Balance at beginning of period:$3,160,472  $3,109,397  $2,687,018  
Property improvements during the year37,985  40,300  54,481  
Properties acquired during the year11,601  43,387  374,004  
Properties sold during the year(69,056) (24,427) —  
Assets written off during the year(9,161) (8,185) (6,106) 
Balance at end of period:$3,131,841  $3,160,472  $3,109,397  
 
b.RECONCILIATION OF ACCUMULATED DEPRECIATION (in thousands)
 Year Ended December 31,
 201920182017
Balance at beginning of period:$329,207  $260,115  $193,021  
Depreciation expenses82,419  81,107  72,725  
Properties sold during the year(10,775) (3,551) —  
Property assets fully depreciated and written off(9,935) (8,464) (5,631) 
Balance at end of period:$390,916  $329,207  $260,115  
 
(1)Depreciation and investments in building and improvements reflected in the consolidated statements of operations is calculated over the estimated useful life of the assets as follows:

Building:  39-40 years
Property Improvements:  10-20 years 

(2)Property, or a portion thereof, is subject to a ground lease.

(3)The aggregate cost for Federal Income Tax Purposes for real estate was approximately $2.9 billion at December 31, 2019.
v3.19.3.a.u2
Real Estate Investments (Tables)
12 Months Ended
Dec. 31, 2019
Business Combinations [Abstract]  
Schedule of purchase price allocation
The financial information set forth below summarizes the Company’s purchase price allocation for the properties acquired during the years ended December 31, 2019 and 2018 (in thousands).
 
December 31,
 20192018
Assets  
Land$2,320  $7,666  
Building and improvements9,281  35,629  
Acquired lease intangible asset—  1,763  
Deferred charges—  818  
Assets acquired$11,601  $45,876  
Liabilities  
Acquired lease intangible liability—  1,680  
Liabilities assumed$—  $1,680  
Condensed Income Statement
The following table summarizes the operating results included in the Company’s historical consolidated statement of operations for the year ended December 31, 2018 for the properties acquired during the year ended December 31, 2018 (in thousands).
 Year Ended December 31, 2018
Statement of operations: 
Revenues$2,343  
Net income attributable to Retail Opportunity Investments Corp.$753  
v3.19.3.a.u2
Tenant Leases (Details) - Minimum Future Rentals to be Received under Non-cancellable Leases
$ in Thousands
Dec. 31, 2019
USD ($)
Leases [Abstract]  
2020 $ 201,202
2021 183,897
2022 159,296
2023 130,882
2024 99,572
Thereafter 415,762
Total minimum lease payments $ 1,190,611
v3.19.3.a.u2
Acquired Lease Intangibles (Narrative) (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]      
Amortization of above and below Market Leases $ 15,618 $ 13,965 $ 17,078
Amortization of acquired in place leases $ 8,100 $ 11,400 $ 14,400
v3.19.3.a.u2
Organization, Basis of Presentation and Summary of Significant Accounting Policies (Supplemental Cash Flow Disclosure) (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Other non-cash investing and financing activities [Abstract]      
Cash paid on gross receipts and income for federal and state purposes $ 275 $ 291 $ 253
Interest paid 60,319 60,494 46,271
Issuance of OP Units in connection with acquisitions 0 0 49,599
Fair value of assumed mortgages upon acquisition 0 0 46,801
Intangible lease liabilities 0 1,680 48,684
Interest rate swap asset (4,931) 610 3,446
Interest rate swap liabilities 3,285 580 0
Accrued real estate improvement costs 3,222 2,200 3,568
Equity redemption of OP Units 2,632 0 50,155
Disposition of real estate through issuance of mortgage note $ 13,250 $ 0 $ 0
v3.19.3.a.u2
Commitments and Contingencies (Narrative) (Details) - USD ($)
$ in Thousands
1 Months Ended 12 Months Ended 28 Months Ended
Sep. 30, 2013
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Mar. 31, 2017
Commitments and Contingencies (Details) [Line Items]          
Operating Lease, Weighted Average Remaining Lease Term   37 years 7 months 6 days      
Operating Lease, Weighted Average Discount Rate, Percent   5.20%      
Operating lease, rent expense   $ 1,600 $ 1,900 $ 1,500  
Tax protection agreements, period (in years)         10 years
Litigation settlement, amount awarded to other party   1,400      
Litigation settlement expense   $ 950      
Terranomics Crossroads Associates LP Member and SARM Five Points LLC          
Commitments and Contingencies (Details) [Line Items]          
Tax protection agreements, period (in years) 12 years        
v3.19.3.a.u2
Quarterly Results of Operations (Unaudited) (Details) - Quarterly Results of Operations for the Operating Partnership - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2019
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Quarterly Results of Operations (Unaudited) (Details) - Quarterly Results of Operations for the Operating Partnership [Line Items]                      
Total revenues $ 73,619 $ 72,438 $ 72,930 $ 76,053 $ 75,158 $ 73,904 $ 72,341 $ 74,395 $ 295,040 $ 295,798 $ 273,260
Net income attributable to the Operating Partnership $ 11,126 $ 19,628 $ 8,346 $ 14,583 $ 11,568 $ 15,647 $ 8,102 $ 11,824 $ 53,683 $ 47,141 $ 42,688
Earnings per unit - basic and diluted (in usd per share) $ 0.09 $ 0.16 $ 0.07 $ 0.12 $ 0.09 $ 0.12 $ 0.06 $ 0.09 $ 0.42 $ 0.38 $ 0.35
Retail Opportunity Investments Partnership L.P.                      
Quarterly Results of Operations (Unaudited) (Details) - Quarterly Results of Operations for the Operating Partnership [Line Items]                      
Total revenues $ 73,619 $ 72,438 $ 72,930 $ 76,053 $ 75,158 $ 73,904 $ 72,341 $ 74,395 $ 295,040 $ 295,798 $ 273,260
Net income attributable to the Operating Partnership $ 11,126 $ 19,628 $ 8,346 $ 14,583 $ 11,568 $ 15,647 $ 8,102 $ 11,824 $ 53,683 $ 47,141 $ 42,688
Earnings per unit - basic and diluted (in usd per share) $ 0.09 $ 0.16 $ 0.07 $ 0.12 $ 0.09 $ 0.12 $ 0.06 $ 0.09 $ 0.42 $ 0.38 $ 0.35
v3.19.3.a.u2
Organization, Basis of Presentation and Summary of Significant Accounting Policies (Tables)
12 Months Ended
Dec. 31, 2019
Organization, Basis of Presentation and Summary of Significant Accounting Policies (Tables) [Line Items]  
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure
The unamortized balances of deferred leasing costs included in deferred charges in the Consolidated Balance Sheets as of December 31, 2019 that will be charged to future operations are as follows (in thousands):
 Lease Origination Costs
2020$5,804  
20214,922  
20224,115  
20233,261  
20242,523  
Thereafter7,027  
 $27,652  
Schedule of Cash Flow, Supplemental Disclosures
The following tables provides supplemental disclosures related to the consolidated statements of cash flows (in thousands):
Year Ended December 31,
201920182017
Supplemental disclosure of cash activities:   
Cash paid on gross receipts and income for federal and state purposes$275  $291  $253  
Interest paid$60,319  $60,494  $46,271  
Other non-cash investing and financing activities increase (decrease):   
Issuance of OP Units in connection with acquisitions$—  $—  $49,599  
Fair value of assumed mortgages upon acquisition$—  $—  $46,801  
Intangible lease liabilities$—  $1,680  $48,684  
Interest rate swap asset$(4,931) $610  $3,446  
Interest rate swap liabilities$3,285  $580  $—  
Accrued real estate improvement costs$3,222  $2,200  $3,568  
Equity redemption of OP Units$2,632  $—  $50,155  
Disposition of real estate through issuance of mortgage note$13,250  $—  $—  
ROIC  
Organization, Basis of Presentation and Summary of Significant Accounting Policies (Tables) [Line Items]  
Schedule of Earnings Per Share, Basic and Diluted
The following table sets forth the reconciliation between basic and diluted EPS for ROIC (in thousands, except share data):
 
 Year Ended December 31,
 201920182017
Numerator:   
Net income$53,683  $47,141  $42,688  
Less income attributable to non-controlling interests(4,839) (4,405) (4,211) 
Less earnings allocated to unvested shares(453) (401) (319) 
Net income available for common stockholders, basic$48,391  $42,335  $38,158  
Numerator:   
Net income$53,683  $47,141  $42,688  
Less earnings allocated to unvested shares(453) (401) (319) 
Net income available for common stockholders, diluted$53,230  $46,740  $42,369  
Denominator:   
Denominator for basic EPS – weighted average common equivalent shares114,177,528  112,645,490  109,400,123  
OP units11,334,408  11,626,312  12,060,835  
Performance-based restricted stock awards and LTIP Units206,100  183,683  153,807  
Stock options23,450  103,408  129,066  
Denominator for diluted EPS – weighted average common equivalent shares125,741,486  124,558,893  121,743,831  
Retail Opportunity Investments Partnership L.P.  
Organization, Basis of Presentation and Summary of Significant Accounting Policies (Tables) [Line Items]  
Schedule of Earnings Per Share, Basic and Diluted
The following table sets forth the reconciliation between basic and diluted earnings per unit for the Operating Partnership (in thousands, except unit data):
Year Ended December 31,
201920182017
Numerator:   
Net income$53,683  $47,141  $42,688  
Less earnings allocated to unvested shares(453) (401) (319) 
Net income available to unitholders, basic and diluted$53,230  $46,740  $42,369  
Denominator:   
Denominator for basic earnings per unit – weighted average common equivalent units125,511,936  124,271,802  121,460,958  
Performance-based restricted stock awards and LTIP Units206,100  183,683  153,807  
Stock options23,450  103,408  129,066  
Denominator for diluted earnings per unit – weighted average common equivalent units125,741,486  124,558,893  121,743,831  
v3.19.3.a.u2
Derivative and Hedging Activities
12 Months Ended
Dec. 31, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative and Hedging Activities Derivative and Hedging Activities
 
The Company’s objectives in using interest rate derivatives is to add stability to interest expense and to manage its exposure to interest rate movements.  To accomplish this objective, the Company uses interest rate swaps as part of its interest rate risk management strategy.  Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.
 
The following is a summary of the terms of the Company’s current interest rate swaps as of December 31, 2019 (in thousands):

Swap CounterpartyNotional AmountEffective DateMaturity Date
Interest Rate Swap Agreements:
Bank of Montreal$100,000  12/29/20178/31/2022
U.S. Bank$100,000  12/29/20178/31/2022
Regions Bank$50,000  1/31/20198/31/2022
Royal Bank of Canada$50,000  1/31/20198/31/2022

The changes in the fair value of derivatives that are designated as cash flow hedges are recorded in accumulated other comprehensive income (“AOCI”) and will be subsequently reclassified into earnings during the period in which the hedged forecasted transaction affects earnings. 

The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of the derivative.  This analysis reflects the contractual terms of the derivative, including
the period to maturity, and uses observable market-based inputs, including interest rate curves, and implied volatilities.  The fair value of interest rate swaps is determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts).  The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. 

The Company incorporated credit valuation adjustments to appropriately reflect both its own non-performance risk and the respective counterparties non-performance risk in the fair value measurements.  In adjusting the fair value of its derivative contract for the effect of non-performance risk, the Company considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.
 
Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties.  However, as of December 31, 2019, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative position and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives.  As a result, the Company has determined that its derivative valuation in its entirety is classified in Level 2 of the fair value hierarchy.
 
The table below presents the Company’s assets and liabilities measured at fair value on a recurring basis, aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands).
 
 Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)Total
December 31, 2019:    
Liabilities
Derivative financial instruments$—  $(3,865) $—  $(3,865) 
December 31, 2018:            
Assets            
Derivative financial instruments$—  $4,931  $—  $4,931  
Liabilities
Derivative financial instruments$—  $(580) $—  $(580) 

Amounts paid, or received, to cash settle interest rate derivatives prior to their maturity date are recorded in AOCI at the cash settlement amount, and will be reclassified to interest expense as interest expense is recognized on the hedged debt. During the next twelve months, the Company estimates that $1.5 million will be reclassified as an increase to interest expense related to the Company’s four outstanding swap arrangements and it’s previously cash-settled swap arrangements.
 
The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the balance sheet as of December 31, 2019 and 2018, respectively (in thousands):

Derivatives designed as hedging instrumentsBalance sheet locationDecember 31, 2019 Fair ValueDecember 31, 2018 Fair Value
Interest rate productsOther assets$—  $4,931  
Interest rate productsOther liabilities$(3,865) $(580) 
Derivatives in Cash Flow Hedging Relationships
 
The table below details the location in the financial statements of the gain or loss recognized on interest rate derivatives designated as cash flow hedges for the years ended December 31, 2019, 2018, and 2017, respectively (in thousands).  Amounts reclassified from other comprehensive income (“OCI”) due to ineffectiveness are recognized as interest expense.
Year Ended December 31,
 201920182017
Amount of (loss) gain recognized in OCI on derivatives$(7,348) $1,648  $3,665  
Amount of (gain) loss reclassified from AOCI into interest$(345) $57  $1,920  
v3.19.3.a.u2
Subsequent Events
12 Months Ended
Dec. 31, 2019
Subsequent Events [Abstract]  
Subsequent Events Subsequent EventsOn February 18, 2020, the Company’s board of directors declared a cash dividend on its common stock of $0.20 per share, payable on March 30, 2020 to holders of record on March 16, 2020.
v3.19.3.a.u2
Acquired Lease Intangibles (Details) - Intangible Assets and Liabilities - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Assets:    
Acquired lease intangible assets $ 59,701 $ 72,109
Acquired lease intangible assets, net 59,701 72,109
Liabilities:    
Below-market leases 198,272 217,212
Accumulated amortization (53,515) (51,066)
Acquired lease intangible liabilities, net 144,757 166,146
In-place leases    
Assets:    
Acquired lease intangible assets 77,910 92,354
Accumulated amortization (31,686) (36,835)
Above-market leases    
Assets:    
Acquired lease intangible assets 25,039 30,093
Accumulated amortization $ (11,562) $ (13,503)
v3.19.3.a.u2
Real Estate Investments (Acquisitions) (Details)
$ in Thousands
12 Months Ended
Dec. 13, 2019
USD ($)
ft²
Dec. 12, 2019
USD ($)
Aug. 01, 2019
USD ($)
May 01, 2019
USD ($)
Feb. 15, 2019
USD ($)
Sep. 27, 2018
USD ($)
Dec. 31, 2019
USD ($)
Dec. 31, 2018
USD ($)
ft²
property
Dec. 31, 2017
USD ($)
Note 2 - Real Estate Investments (Details) [Line Items]                  
Adjusted purchase price               $ 35,000  
Area of real estate property (in Square Feet) | ft²               112,000  
Number of properties acquired | property               2  
Proceeds from sale of real estate             $ 58,930 $ 26,880 $ 0
Gain on sale of real estate             13,175 5,890 $ 0
Mortgage note receivable             $ 13,000 $ 0  
Summerwalk Village, WA | Lacey, Washington                  
Note 2 - Real Estate Investments (Details) [Line Items]                  
Adjusted purchase price $ 11,600                
Area of real estate property (in Square Feet) | ft² 58,000                
Vancouver Market Center | Vancouver, Washington                  
Note 2 - Real Estate Investments (Details) [Line Items]                  
Sales Price of Property Sold         $ 17,000        
Proceeds from sale of real estate         16,000        
Gain on sale of real estate         $ 2,600        
Norwood Shopping Center | Sacramento, California                  
Note 2 - Real Estate Investments (Details) [Line Items]                  
Sales Price of Property Sold       $ 13,500          
Gain on sale of real estate       180          
Mortgage note receivable       $ 13,300          
Mortgage notes receivable, term       4 years          
Mortgage notes receivable, interest rate, increase (decrease)       1.00%          
Morada Ranch | Stockton, California                  
Note 2 - Real Estate Investments (Details) [Line Items]                  
Sales Price of Property Sold     $ 30,000            
Proceeds from sale of real estate     29,100            
Gain on sale of real estate     $ 10,400            
Mission Foothill Marketplace | Mission Viejo, California                  
Note 2 - Real Estate Investments (Details) [Line Items]                  
Sales Price of Property Sold   $ 13,600              
Proceeds from sale of real estate   $ 13,500              
Round Hill Square | Zephyr Cove, Nevada                  
Note 2 - Real Estate Investments (Details) [Line Items]                  
Sales Price of Property Sold           $ 28,000      
Proceeds from sale of real estate           26,900      
Gain on sale of real estate           $ 5,900      
Minimum | Norwood Shopping Center                  
Note 2 - Real Estate Investments (Details) [Line Items]                  
Mortgage notes receivable, interest rate, stated percentage       3.00%          
Maximum | Norwood Shopping Center                  
Note 2 - Real Estate Investments (Details) [Line Items]                  
Mortgage notes receivable, interest rate, stated percentage       6.00%          
v3.19.3.a.u2
Mortgage Notes Payable, Credit Facilities and Senior Notes (Narrative) (Details)
12 Months Ended
Dec. 20, 2019
USD ($)
credit_facility_extension
Dec. 31, 2019
USD ($)
Dec. 31, 2018
USD ($)
Nov. 10, 2017
USD ($)
Jul. 26, 2016
USD ($)
Dec. 03, 2014
USD ($)
Dec. 09, 2013
USD ($)
Revolving Credit Facility              
Mortgage Notes Payable, Credit Facilities and Senior Notes [Line Items]              
Line of credit facility, maximum borrowing capacity $ 600,000,000.0            
Number of extension options | credit_facility_extension 2            
Extension term 6 months            
Line of credit facility, commitment fee (in percentage)   0.20%          
Line of credit, fronting fee (in percentage)   0.125%          
Credit facility   $ 84,000,000 $ 156,000,000        
Line of credit facility, interest rate during period (in percentage)   3.30%          
Remaining borrowing capacity   $ 516,000,000.0          
Revolving Credit Facility | Accordion Feature              
Mortgage Notes Payable, Credit Facilities and Senior Notes [Line Items]              
Line of credit facility, maximum borrowing capacity   $ 1,200,000,000          
Federal Funds Effective Swap Rate | Revolving Credit Facility              
Mortgage Notes Payable, Credit Facilities and Senior Notes [Line Items]              
Basis Spread on variable rate (in percentage)   0.50%          
Eurodollar | Revolving Credit Facility              
Mortgage Notes Payable, Credit Facilities and Senior Notes [Line Items]              
Basis Spread on variable rate (in percentage)   0.90%          
Senior Notes              
Mortgage Notes Payable, Credit Facilities and Senior Notes [Line Items]              
Principal amount   $ 950,000,000          
Term Loan Agreement              
Mortgage Notes Payable, Credit Facilities and Senior Notes [Line Items]              
Principal amount $ 300,000,000.0 300,000,000 300,000,000        
Additional borrowing capacity $ 200,000,000.0            
Long-term debt   $ 300,000,000.0          
Interest rate during period (in percentage)   3.40%          
Debt Instrument, Swapped Interest Rate   3.00%          
Term Loan Agreement | Federal Funds Effective Swap Rate              
Mortgage Notes Payable, Credit Facilities and Senior Notes [Line Items]              
Basis Spread on variable rate (in percentage)   0.50%          
Term Loan Agreement | Eurodollar              
Mortgage Notes Payable, Credit Facilities and Senior Notes [Line Items]              
Basis Spread on variable rate (in percentage)   1.00%          
Senior Notes Due 2027 | Senior Notes              
Mortgage Notes Payable, Credit Facilities and Senior Notes [Line Items]              
Principal amount   $ 250,000,000 250,000,000 $ 250,000,000.0      
Interest Rate (in percentage)       4.19%      
Senior Notes Due 2026 | Senior Notes              
Mortgage Notes Payable, Credit Facilities and Senior Notes [Line Items]              
Principal amount   200,000,000 200,000,000   $ 200,000,000.0    
Interest Rate (in percentage)         3.95%    
Senior Notes Due 2024 | Senior Notes              
Mortgage Notes Payable, Credit Facilities and Senior Notes [Line Items]              
Principal amount   250,000,000 250,000,000     $ 250,000,000.0  
Interest Rate (in percentage)           4.00%  
Senior Notes Due 2023 | Senior Notes              
Mortgage Notes Payable, Credit Facilities and Senior Notes [Line Items]              
Principal amount   $ 250,000,000 $ 250,000,000       $ 250,000,000.0
Interest Rate (in percentage)             5.00%
v3.19.3.a.u2
Derivative and Hedging Activities (Details) - Location of Gain or Loss on Interest Rate Derivatives Designated as Cash Flow Hedges - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract]      
Amount of (loss) gain recognized in OCI on derivatives $ (7,348) $ 1,648 $ 3,665
Amount of (gain) loss reclassified from AOCI into interest $ (345) $ 57 $ 1,920
v3.19.3.a.u2
Quarterly Results of Operations (Unaudited) (Details) - Quarterly Results of Operations for ROIC - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2019
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Quarterly Financial Information Disclosure [Abstract]                      
Total revenues $ 73,619 $ 72,438 $ 72,930 $ 76,053 $ 75,158 $ 73,904 $ 72,341 $ 74,395 $ 295,040 $ 295,798 $ 273,260
Net income 11,126 19,628 8,346 14,583 11,568 15,647 8,102 11,824 53,683 47,141 42,688
Net income attributable to ROIC $ 10,151 $ 17,858 $ 7,585 $ 13,250 $ 10,501 $ 14,194 $ 7,339 $ 10,702 $ 48,844 $ 42,736 $ 38,477
Earnings per share - basic and diluted (in usd per share) $ 0.09 $ 0.16 $ 0.07 $ 0.12 $ 0.09 $ 0.12 $ 0.06 $ 0.09 $ 0.42 $ 0.38 $ 0.35
v3.19.3.a.u2
Stock Compensation and Other Benefit Plans for ROIC (Details) - Status of Non-vested Restricted Stock Awards - Restricted Stock
12 Months Ended
Dec. 31, 2019
$ / shares
shares
Shares  
Beginning balance ( in shares) | shares 1,002,835
Granted (in shares) | shares 354,161
Vested (in shares) | shares (364,913)
Forfeited (in shares) | shares (37,286)
Ending balance (in shares) | shares 954,797
Weighted Average Grant Date Fair Value  
Beginning balance (in dollars per share) | $ / shares $ 16.88
Granted (in dollars per share) | $ / shares 17.20
Vested (in dollars per share) | $ / shares 19.06
Forfeited (in dollars per share) | $ / shares 12.97
Ending balance (in dollars per share) | $ / shares $ 16.55
v3.19.3.a.u2
Mortgage Notes Payable, Credit Facilities and Senior Notes - Mortgage Notes Payable (Details) - Notes Payable - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Mortgage Notes Payable, Credit Facilities and Senior Notes [Line Items]    
Long-term debt $ 86,157 $ 86,708
Mortgage premiums 1,594 2,074
Net unamortized deferred financing costs (228) (271)
Total mortgage notes payable $ 87,523 88,511
Casitas Plaza Shopping Center    
Mortgage Notes Payable, Credit Facilities and Senior Notes [Line Items]    
Interest Rate (in percentage) 5.32%  
Long-term debt $ 7,001 7,158
Riverstone Marketplace    
Mortgage Notes Payable, Credit Facilities and Senior Notes [Line Items]    
Interest Rate (in percentage) 4.96%  
Long-term debt $ 17,656 18,050
Fullerton Crossroads    
Mortgage Notes Payable, Credit Facilities and Senior Notes [Line Items]    
Interest Rate (in percentage) 4.728%  
Long-term debt $ 26,000 26,000
Diamond Hills Plaza    
Mortgage Notes Payable, Credit Facilities and Senior Notes [Line Items]    
Interest Rate (in percentage) 3.55%  
Long-term debt $ 35,500 $ 35,500
v3.19.3.a.u2
Mortgage Notes Payable, Credit Facilities and Senior Notes - Amortization of Financing Costs (Details) - Total Debt [Member]
$ in Thousands
Dec. 31, 2019
USD ($)
Debt Instrument [Line Items]  
2020 $ 1,799
2021 1,799
2022 1,796
2023 1,781
2024 836
Thereafter 467
Deferred charges, net $ 8,478
v3.19.3.a.u2
Consolidated Statements of Equity (Parentheticals) - $ / shares
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Statement of Stockholders' Equity [Abstract]      
Dividends per share (in dollars per share) $ 0.7880 $ 0.7800 $ 0.7500
v3.19.3.a.u2
Schedule IV - Mortgage Loans on Real Estate (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
SEC Schedule, 12-29, Real Estate Companies, Investment in Movement in Mortgage Loans on Real Estate [Roll Forward]      
Balance at beginning of period $ 0 $ 0 $ 0
Mortgage loans acquired during the current period 13,250 0 0
Repayments on mortgage note receivable (250) 0 0
Balance at end of period $ 13,000 $ 0 $ 0
v3.19.3.a.u2
Consolidated Statements of Equity - USD ($)
$ in Thousands
Total
Officer
Common Stock
Additional paid-in capital
Accumulated dividends in excess of earnings
Accumulated dividends in excess of earnings
Officer
Accumulated other comprehensive (loss) income
Non- controlling interests
Non- controlling interests
Officer
Increase (Decrease) in Stockholders' Equity [Roll Forward]                  
Total (in shares)     109,301,762            
Balance at Dec. 31, 2016 $ 1,315,565   $ 11 $ 1,357,910 $ (165,951)   $ (3,729) $ 127,324  
Balance (in shares) at Dec. 31, 2016     109,301,762            
Increase (Decrease) in Stockholders' Equity [Roll Forward]                  
Shares issued under the Equity Incentive Plan (in shares)     353,261            
Shares issued under the Equity Incentive Plan 44     44          
Shares withheld for employee taxes (in shares)     (74,331)            
Shares withheld for employee taxes (1,571)     (1,571)          
Cancellation of restricted stock (in shares)     (1,999)            
Stock based compensation expense 6,190     6,190          
Issuance of OP Units to non-controlling interests 49,599             49,599  
Equity Redemption of OP Units (in shares)     2,555,933            
Equity redemption of OP Units 50,155     50,155       (50,155)  
Cash redemption for non-controlling interests (150)             (150)  
Adjustment to non-controlling interests ownership in Operating Partnership       (3,574)       3,574  
Proceeds from the issuance of common stock (in shares)     212,825            
Proceeds from the issuance of common stock 4,481   $ 0 4,481          
Registration expenditures (1,045)     (1,045)          
Cash dividends (91,510) $ (235)     (82,781) $ (235)   (8,729)  
Net income attributable to Retail Opportunity Investments Corp. 38,477       38,477        
Net income attributable to non-controlling interests 4,211             4,211  
Other comprehensive income (loss) 5,585           5,585    
Total (in shares)     112,347,451            
Balance (in shares) at Dec. 31, 2017     112,347,451            
Balance at Dec. 31, 2017 1,329,641   $ 11 1,412,590 (210,490)   1,856 125,674  
Increase (Decrease) in Stockholders' Equity [Roll Forward]                  
Total (in shares)     112,347,451            
Shares issued under the Equity Incentive Plan (in shares)     397,861            
Shares issued under the Equity Incentive Plan 269     269          
Shares withheld for employee taxes (in shares)     (70,168)            
Shares withheld for employee taxes (1,400)     (1,400)          
Cancellation of restricted stock (in shares)     (8,997)            
Stock based compensation expense 7,392     7,392          
Equity redemption of OP Units 0                
Cash redemption for non-controlling interests (3,713)             (3,713)  
Adjustment to non-controlling interests ownership in Operating Partnership       (2,904)       2,904  
Proceeds from the issuance of common stock (in shares)     1,326,690            
Proceeds from the issuance of common stock 25,703   $ 0 25,703          
Registration expenditures (570)     (570)          
Cash dividends (97,473) (267)     (88,417) (267)   (9,056)  
Net income attributable to Retail Opportunity Investments Corp. 42,736       42,736        
Net income attributable to non-controlling interests 4,405             4,405  
Other comprehensive income (loss) $ 1,705           1,705    
Total (in shares) 113,992,837   113,992,837            
Balance (in shares) at Dec. 31, 2018 113,992,837   113,992,837            
Balance at Dec. 31, 2018 $ 1,308,428   $ 11 1,441,080 (256,438)   3,561 120,214  
Increase (Decrease) in Stockholders' Equity [Roll Forward]                  
Total (in shares) 113,992,837   113,992,837            
Shares issued under the Equity Incentive Plan (in shares)     631,022            
Shares issued under the Equity Incentive Plan $ 1,942     1,942          
Shares withheld for employee taxes (in shares)     (125,072)            
Shares withheld for employee taxes (1,986)     (1,986)          
Cancellation of restricted stock (in shares)     (6,997)            
Stock based compensation expense $ 8,567     7,352       1,215  
Equity Redemption of OP Units (in shares) 143,190   143,190            
Equity redemption of OP Units $ 2,632     2,632       (2,632)  
Cash redemption for non-controlling interests (5,043)             (5,043)  
Adjustment to non-controlling interests ownership in Operating Partnership       (2,983)       2,983  
Proceeds from the issuance of common stock (in shares)     1,861,036            
Proceeds from the issuance of common stock 34,162   $ 1 34,161          
Registration expenditures (732)     (732)          
Cash dividends (99,470) $ (30)     (90,549) $ 145   (8,921) $ (175)
Net income attributable to Retail Opportunity Investments Corp. 48,844       48,844        
Net income attributable to non-controlling interests 4,839             4,839  
Other comprehensive income (loss) $ (7,693)           (7,693)    
Total (in shares) 113,992,837   116,496,016            
Balance (in shares) at Dec. 31, 2019 116,496,016   116,496,016            
Balance at Dec. 31, 2019 $ 1,291,828   $ 12 $ 1,481,466 $ (297,998)   $ (4,132) $ 112,480  
Increase (Decrease) in Stockholders' Equity [Roll Forward]                  
Total (in shares) 116,496,016   116,496,016            
v3.19.3.a.u2
Acquired Lease Intangibles
12 Months Ended
Dec. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]  
Acquired Lease Intangibles Acquired Lease Intangibles
 
Intangible assets and liabilities as of December 31, 2019 and 2018 consisted of the following (in thousands):
 
December 31,
 20192018
Assets:  
In-place leases$77,910  $92,354  
Accumulated amortization(31,686) (36,835) 
Above-market leases25,039  30,093  
Accumulated amortization(11,562) (13,503) 
Acquired lease intangible assets, net$59,701  $72,109  
Liabilities:  
Below-market leases$198,272  $217,212  
Accumulated amortization(53,515) (51,066) 
Acquired lease intangible liabilities, net$144,757  $166,146  
 
For the years ended December 31, 2019, 2018 and 2017, the net amortization of acquired lease intangible assets and acquired lease intangible liabilities for above and below market leases was $15.6 million, $14.0 million and $17.1 million, respectively, which amounts are included in Rental revenue in the accompanying consolidated statements of operations and comprehensive income.  For the years ended December 31, 2019, 2018 and 2017, the amortization of in-place leases was $8.1 million, $11.4 million and $14.4 million, respectively, which amounts are included in Depreciation and amortization in the accompanying consolidated statements of operations and comprehensive income.

The scheduled future amortization of acquired lease intangible assets as of December 31, 2019 is as follows (in thousands):

Year Ending December 31: 
2020$5,179  
20214,138  
20223,440  
20232,862  
20242,458  
Thereafter41,624  
Total future amortization of acquired lease intangible assets$59,701  
 
The scheduled future amortization of acquired lease intangible liabilities as of December 31, 2019 is as follows (in thousands):

Year Ending December 31: 
2020$12,289  
202111,123  
202210,229  
20239,485  
20249,324  
Thereafter92,307  
Total future amortization of acquired lease intangible liabilities$144,757  
v3.19.3.a.u2
Common Stock of ROIC
12 Months Ended
Dec. 31, 2019
Stockholders' Equity Note [Abstract]  
Common Stock of ROIC Common Stock of ROIC
 
ATM
 
On May 1, 2018, ROIC entered into five separate Sales Agreements (the “Sales Agreements”) with each of Capital One Securities, Inc., Jefferies LLC, KeyBanc Capital Markets Inc., Raymond James & Associates, Inc., and Robert W. Baird & Co. Incorporated (each individually, an “Agent” and collectively, the “Agents”) pursuant to which ROIC may sell, from time to time, shares of ROIC’s common stock, par value $0.0001 per share, having an aggregate offering price of up to $250.0 million through the Agents either as agents or principals. In addition, on April 30, 2018, the Company terminated sales agreements with Jefferies, KeyBanc and Raymond James, dated as of September 19, 2014 and with Baird, dated as of May 23, 2016 (the “Prior Sales Agreements”), which the Company entered into in connection with its prior “at the market” offering.

During the year ended December 31, 2019, ROIC sold a total of 1,861,036 shares under the Sales Agreements, which resulted in gross proceeds of approximately $34.2 million and commissions of approximately $342,000 paid to the Agents. During the year ended December 31, 2018, ROIC sold a total of 1,251,376 shares under the Sales Agreements, which resulted in gross proceeds of approximately $24.2 million and commissions of approximately $242,000 paid to the Agents.
 
Stock Repurchase Program
 
On July 31, 2013, ROIC’s board of directors authorized a stock repurchase program to repurchase up to a maximum of $50.0 million of the Company’s common stock. Through the year ended December 31, 2019, the Company has not repurchased any shares of common stock under this program.
v3.19.3.a.u2
Commitments and Contingencies (Tables)
12 Months Ended
Dec. 31, 2019
Commitments and Contingencies Disclosure [Abstract]  
Schedule of Future Minimum Rental Payments for Operating Leases
The following table represents a reconciliation of the Company’s undiscounted future minimum annual lease payments under operating leases to the lease liability as of December 31, 2019 (in thousands):
 Operating Leases
2020$1,287  
20211,282  
20221,304  
20231,330  
20241,335  
Thereafter32,604  
Total undiscounted future minimum lease payments39,142  
Future minimum lease payments, discount(21,467) 
Lease liability$17,675  
v3.19.3.a.u2
Tenant Leases (Tables)
12 Months Ended
Dec. 31, 2019
Leases [Abstract]  
Schedule of Future Minimum Base Rentals on NonCancellable Operating Leases
Future minimum rents to be received under non-cancellable leases as of December 31, 2019 are summarized as follows (in thousands):
Year Ending December 31: 
2020$201,202  
2021183,897  
2022159,296  
2023130,882  
202499,572  
Thereafter415,762  
Total minimum lease payments$1,190,611  
v3.19.3.a.u2
Organization, Basis of Presentation and Summary of Significant Accounting Policies (Details) - Reconciliation Between Basic and Diluted EPS - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2019
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Numerator:                      
Net income $ 11,126 $ 19,628 $ 8,346 $ 14,583 $ 11,568 $ 15,647 $ 8,102 $ 11,824 $ 53,683 $ 47,141 $ 42,688
Less income attributable to non-controlling interests                 (4,839) (4,405) (4,211)
Less earnings allocated to unvested shares, basic                 (453) (401) (319)
Net income available to common stockholders, basic                 48,391 42,335 38,158
Less earnings allocated to unvested shares, diluted                 (453) (401) (319)
Net income available to common stockholders, diluted                 $ 53,230 $ 46,740 $ 42,369
Denominator:                      
Denominator for basic EPS – weighted average common equivalent shares (in shares)                 114,177,528 112,645,490 109,400,123
Denominator for diluted EPS – weighted average common equivalent shares (in shares)                 125,741,486 124,558,893 121,743,831
Retail Opportunity Investments Partnership L.P.                      
Numerator:                      
Net income $ 11,126 $ 19,628 $ 8,346 $ 14,583 $ 11,568 $ 15,647 $ 8,102 $ 11,824 $ 53,683 $ 47,141 $ 42,688
Less earnings allocated to unvested shares, basic                 (453) (401) (319)
Net income available to unitholders, basic and diluted                 $ 53,230 $ 46,740 $ 42,369
Denominator:                      
Denominator for basic EPS – weighted average common equivalent shares (in shares)                 125,511,936 124,271,802 121,460,958
Denominator for diluted EPS – weighted average common equivalent shares (in shares)                 125,741,486 124,558,893 121,743,831
OP Units                      
Denominator:                      
OP Units (in shares)                 11,334,408 11,626,312 12,060,835
Performance-based restricted stock awards and LTIP Units                      
Denominator:                      
Incremental common shares attributable to dilutive effect of share-based payment arrangements (in shares)                 206,100 183,683 153,807
Performance-based restricted stock awards and LTIP Units | Retail Opportunity Investments Partnership L.P.                      
Denominator:                      
Incremental common shares attributable to dilutive effect of share-based payment arrangements (in shares)                 206,100 183,683 153,807
Stock options                      
Denominator:                      
Incremental common shares attributable to dilutive effect of share-based payment arrangements (in shares)                 23,450 103,408 129,066
Stock options | Retail Opportunity Investments Partnership L.P.                      
Denominator:                      
Incremental common shares attributable to dilutive effect of share-based payment arrangements (in shares)                 23,450 103,408 129,066