Document
false0001222840 0001222840 2020-05-05 2020-05-05


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):  May 5, 2020
RETAIL PROPERTIES OF AMERICA, INC.
(Exact name of registrant as specified in its charter)
Maryland
 
001-35481
 
42-1579325
(State or other jurisdiction of incorporation)
 
(Commission File Number)
 
(IRS Employer Identification No.)
2021 Spring Road, Suite 200, Oak Brook, Illinois 60523
(Address of principal executive offices and zip code)
Registrant’s telephone number, including area code:  (630) 634-4200
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
Class A Common Stock, $0.001 par value
 
RPAI
 
New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company    
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o





Item 2.02 Results of Operations and Financial Condition.
The information in this Item 2.02 – “Results of Operations and Financial Condition” is being furnished. Such information, including Exhibits 99.1 and 99.2 hereto, shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in this Item 2.02, including Exhibits 99.1 and 99.2, shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing.
On May 5, 2020, Retail Properties of America, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended March 31, 2020. A copy of this press release as well as a copy of the supplemental information referred to in the press release are made available on the Company’s website and are attached hereto as Exhibits 99.1 and 99.2, respectively, and are incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
(d)    Exhibits
The following Exhibits are included in this Report:
99.1 
99.2 
101.SCH 
Inline XBRL Taxonomy Extension Schema Document.
101.CAL 
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB 
Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE 
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF 
Inline XBRL Taxonomy Extension Definition Linkbase Document.
104 
Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*).

 Filed herewith.





SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
 
RETAIL PROPERTIES OF AMERICA, INC.
 
 
(Registrant)
 
 
 
 
 
By:
/s/ JULIE M. SWINEHART
 
 
 
 
 
 
 
Julie M. Swinehart
Date:
May 5, 2020
 
Executive Vice President,
 
 
 
Chief Financial Officer and Treasurer


Exhibit

Exhibit 99.1

 

RETAIL PROPERTIES OF AMERICA, INC.
REPORTS FIRST QUARTER 2020 RESULTS
Oak Brook, IL – May 5, 2020 – Retail Properties of America, Inc. (NYSE: RPAI) (the “Company”) today reported financial and operating results for the quarter ended March 31, 2020.
FINANCIAL RESULTS
For the quarter ended March 31, 2020, the Company reported:
Net income attributable to common shareholders of $22.4 million, or $0.10 per diluted share, compared to $23.2 million, or $0.11 per diluted share, for the same period in 2019;
Funds from operations (FFO) attributable to common shareholders of $62.5 million, or $0.29 per diluted share, compared to $57.7 million, or $0.27 per diluted share, for the same period in 2019, growth of 7.4% per diluted share; and
Operating funds from operations (Operating FFO) attributable to common shareholders of $57.5 million, or $0.27 per diluted share, compared to $58.4 million, or $0.27 per diluted share, for the same period in 2019.
OPERATING RESULTS
For the quarter ended March 31, 2020, the Company’s portfolio results were as follows:
1.2% increase in same store net operating income (NOI) over the comparable period in 2019;
Total same store portfolio percent leased, including leases signed but not commenced: 95.3% at March 31, 2020, down 90 basis points from 96.2% at December 31, 2019 and up 30 basis points from 95.0% at March 31, 2019;
Retail portfolio occupancy: 94.1% at March 31, 2020, down 110 basis points from 95.2% at December 31, 2019 and up 110 basis points from 93.0% at March 31, 2019;
Retail portfolio percent leased, including leases signed but not commenced: 95.3% at March 31, 2020, down 90 basis points from 96.2% at December 31, 2019 and up 20 basis points from 95.1% at March 31, 2019;
Retail anchor tenant occupancy: 96.8% at March 31, 2020, down 80 basis points from 97.6% at December 31, 2019 and up 190 basis points from 94.9% at March 31, 2019;
Retail anchor tenant percent leased, including leases signed but not commenced: 98.3% at March 31, 2020, down 50 basis points from 98.8% at December 31, 2019 and up 70 basis points from 97.6% at March 31, 2019;
Total same store portfolio annualized base rent (ABR) per occupied square foot of $19.58 at March 31, 2020, up 0.4% from $19.51 ABR per occupied square foot at December 31, 2019 and up 1.9% from $19.21 ABR per occupied square foot at March 31, 2019;
285,000 square feet of retail leasing transactions comprised of 82 new and renewal leases; and
Positive comparable cash leasing spreads of 4.8% on new leases and 4.9% on renewal leases for a blended re-leasing spread of 4.9%.

n Retail Properties of America, Inc.
T: 855.247.RPAI
www.rpai.com    2021 Spring Road, Suite 200
Oak Brook, IL 60523


“Our first quarter results illustrate the underlying strength of our business heading into the COVID-19 pandemic,” stated Steve Grimes, chief executive officer. “Our team now is focused on the joint goals of balancing fiscal prudence with social awareness, responsibility and the long-term viability of our tenants as we collectively navigate through these uncertain times.”
COVID-19 UPDATE
The Company did not incur significant disruptions to its lease income and occupancy during the three months ended March 31, 2020 from the novel coronavirus (COVID-19) pandemic. However, since the start of the second quarter, the pandemic has adversely impacted the Company’s business as many tenants, faced with reduced customer traffic and revenue as a result of governmental and social mandates related to the pandemic, have requested lease concessions from the Company. Other tenants, which operate businesses considered to be essential, remain open and continue to operate during this time. The Company’s portfolio ABR benefits from a composition of 37% from essential uses and office, including 8% from grocery/warehouse clubs and 6% from office tenants as detailed in the Company’s Quarterly Supplemental Information Package on page 16.
Regarding April rent charges, as of April 30, the Company has collected more than 52%. The rapid development and fluidity of this situation precludes any prediction as to the ultimate impact of COVID-19 on the Company’s leasing trends or financial or operating results. The Company is working to preserve profitability and cash flow while also working with tenants to address requests for lease concessions and simultaneously preserving its contractual rights under its lease agreements. While seeking to work toward a mutually agreeable outcome with tenants directly impacted by COVID-19, the Company believes that certain tenants, which remain open and hold an ability to pay, have elected to withhold April rent unnecessarily. Generally, the Company has not yet reached agreement with tenants regarding concession requests, as discussions are ongoing.
COVID-19 RESPONSE
In response to the COVID-19 pandemic, the Company has already taken several significant steps to further strengthen its financial position and balance sheet, enhance its liquidity, provide maximum financial flexibility and manage its financial leverage. These steps included:
Drawing nearly all of the remaining balance under its $850 million unsecured revolving line of credit in March 2020;
Depositing the proceeds from the revolver draw into accounts at FDIC-insured institutions;
Reducing expected 2020 development spend by approximately $75 to $100 million primarily as a result of halting vertical construction plans at its Carillon redevelopment;
Implementing plans to reduce 2020 capital expenditures, including tenant improvement outlays, and certain expenses, including overhead, from its original budget; and
Suspending the quarterly dividend as detailed later in this release.
INVESTMENT ACTIVITY
Expansions and Redevelopments
The Company continues to make progress on the execution of its active expansion and redevelopment projects.
Active Projects:
One Loudoun Downtown
During the quarter, the Company and KETTLER, its joint venture partner, advanced construction on the garages and foundation work for the mixed-use expansion of Pads G & H at its One Loudoun Downtown multi-tenant retail operating property located in the Washington, D.C. metropolitan statistical area (MSA). Additionally, the Company and KETTLER completed utility work for the new median and pocket park between Pads G & H, which will enhance the community experience of



the property and, subsequent to quarter end, began frame construction work for the multi-family component of the project. Also subsequent to quarter end, the Company signed a construction contract with general contractor L.F. Jennings for the office component of Pad G for which construction is anticipated to begin during the second quarter. This expansion project consists of up to 70,000 square feet of commercial space and 378 one- and two-bedroom multi-family rental units, which will become One Loudoun’s first apartment community, Vyne, and is anticipated to open in late spring 2021. The expansion project complements and enhances the Company’s approximately 469,000 square foot mixed-use community anchor asset, One Loudoun Downtown, which boasted retail occupancy of 96.4% and office occupancy of 98.9% as of March 31, 2020 and holds a five-mile population of more than 190,000, average household incomes of more than $175,000 and sits in the county with the highest median income per capita in the United States with a projected five-year population growth rate of more than 7%.
Circle East
During the quarter, as previously announced, the Company signed Ethan Allen to a 6,000 square foot lease at a prominent corner location at its Circle East mixed-use project located in Towson, Maryland within the Baltimore MSA. The Company also advanced lease negotiations for space with several leading national personal service providers for in-line space at the 80,000 square foot dual-sided street level retail portion of the project. In addition, AvalonBay has commenced tenant move-ins at the approximately 370 AvalonBay-owned multi-family rental units that also form a portion of the project.
The Shoppes at Quarterfield and Southlake Town Square
During the quarter, the Company initiated work at two recently added projects, the site and building reconfiguration at The Shoppes at Quarterfield and the single-tenant pad development at Southlake Town Square. These two 100% pre-leased projects at existing assets aggregate $11.0 to $12.5 million in projected net investment with projected returns of 11.5% to 15.5% and stabilization targeted in the first half of 2021.
Carillon:
As previously announced, the Company has halted plans for vertical construction at its Carillon redevelopment project located in the Washington, D.C. MSA. The Company remains aware of the significant demand for the medical office component of the project, which benefits from the needs of the adjacent University of Maryland Capital Region Medical Center, a non-cyclical, shadow anchor of this project. During the quarter, the Company terminated its agreement with Fore Property Company related to the multi-family component of the project. Subsequent to quarter end, the Company terminated its agreement with Trammell Crow Company related to the medical office building portion of the project. The Company will continue to evaluate the potential resumption date for vertical construction activities at Carillon and will maintain optionality for either the monetization or build-out of the medical office and other components of the project.
Dispositions
During the quarter, as previously reported, the Company completed the sale of one non-target, multi-tenant power center asset for $13.9 million.
Acquisitions
During the quarter, as previously reported, the Company acquired the fee interest in an existing multi-tenant, community center retail property for a gross purchase price of $55.0 million. In connection with this acquisition, the Company also assumed the lessor position in a ground lease with a shadow anchor.



BALANCE SHEET AND CAPITAL MARKETS ACTIVITY
As of March 31, 2020, the Company had $769.2 million in cash and cash equivalents and no debt maturities in 2020. In addition, the Company had $2.5 billion of gross consolidated indebtedness with a weighted average contractual interest rate of 3.25% and a weighted average maturity of 3.7 years. The Company’s $1.7 billion in net consolidated indebtedness resulted in a net debt to adjusted EBITDAre ratio of 5.7x as of quarter end.
DIVIDEND
In order to preserve and enhance liquidity and capital positioning, the Company’s board of directors has temporarily suspended future quarterly dividend payments on the Company’s outstanding Class A common stock. The Company’s board of directors will evaluate dividend declaration decisions quarterly and consider REIT taxable income distribution requirements in these deliberations. The timing and amount of dividend resumption depends largely on the Company’s operating cash flow performance as well as other factors. Year to date, including dividends paid in January 2020 and April 2020, the Company has paid $70.9 million in aggregate dividends.
WEBCAST AND CONFERENCE CALL INFORMATION
The Company’s management team will hold a webcast on Wednesday, May 6, 2020 at 11:00 AM (ET), to discuss its quarterly financial results and operating performance, as well as business highlights and outlook. In addition, the Company may discuss business and financial developments and trends and other matters affecting the Company, some of which may not have been previously disclosed.
A live webcast will be available online on the Company’s website at www.rpai.com in the INVEST section. A replay of the webcast will be available. To listen to the replay, please go to www.rpai.com in the INVEST section of the website and follow the instructions.
The conference call can be accessed by dialing (877) 705-6003 or (201) 493-6725 for international participants. Please dial in at least ten minutes prior to the start of the call to register. A replay of the call will be available from 2:00 PM (ET) on May 6, 2020 until midnight (ET) on May 20, 2020. The replay can be accessed by dialing (844) 512-2921 or (412) 317-6671 for international callers and entering pin number 13699877.
SUPPLEMENTAL INFORMATION
The Company has posted supplemental financial and operating information and other data in the INVEST section of its website.
ABOUT RPAI
Retail Properties of America, Inc. is a REIT that owns and operates high quality, strategically located open-air shopping centers, including properties with a mixed-use component. As of March 31, 2020, the Company owned 102 retail operating properties in the United States representing 20.0 million square feet. The Company is publicly traded on the New York Stock Exchange under the ticker symbol RPAI. Additional information about the Company is available at www.rpai.com.
SAFE HARBOR LANGUAGE
The statements and certain other information contained in this press release, which can be identified by the use of forward-looking terminology such as “believes,” “expects,” “may,” “should,” “intends,” “plans,” “estimates” or “anticipates” and variations of such words or similar expressions or the negative of such words, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbors created thereby. These forward-looking statements reflect the Company’s current views about its plans, intentions, expectations, strategies and prospects, which are based on the information currently available to the Company and on assumptions it has made. Although the Company believes that its plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, the Company can give no assurance that such plans, intentions, expectations or strategies will be attained or achieved. Furthermore, these forward-looking statements should be considered as subject to the



many risks and uncertainties that exist in the Company’s operations and business environment. Such risks and uncertainties could cause actual results to differ materially from those projected. These uncertainties include, but are not limited to, economic, business and financial conditions, and changes in the Company’s industry and changes in the real estate markets in particular, economic and other developments in markets where the Company has a high concentration of properties, the Company’s business strategy, the Company’s projected operating results, rental rates and/or vacancy rates, frequency and magnitude of defaults on, early terminations of or non-renewal of leases by tenants, bankruptcy, insolvency or general downturn in the business of a major tenant or a significant number of smaller tenants, adverse impact of e-commerce developments and shifting consumer retail behavior on tenants, interest rates or operating costs, the discontinuation of London Interbank Offered Rate (LIBOR), real estate and zoning laws and changes in real property tax rates, real estate valuations, the Company’s leverage, the Company’s ability to generate sufficient cash flows to service outstanding indebtedness and make distributions to shareholders, changes in the dividend policy for the Company’s Class A common stock and its ability to pay dividends at current levels, the Company’s ability to obtain necessary outside financing, the availability, terms and deployment of capital, general volatility of the capital and credit markets and the market price of the Company’s Class A common stock, risks generally associated with real estate acquisitions and dispositions, including the Company’s ability to identify and pursue acquisition and disposition opportunities, risks generally associated with redevelopment, including the impact of construction delays and cost overruns and the Company’s ability to lease redeveloped space and identify and pursue redevelopment opportunities, the Company’s ability to enter into new leases or renew leases on favorable terms, pandemics or other public health crises, such as the COVID-19 outbreak, and the related impact on (i) the Company’s ability to manage its properties, finance its operations and perform necessary administrative and reporting functions and (ii) the ability of the Company’s tenants to operate their businesses, generate sales and meet their financial obligations, including the obligation to pay rent and other charges as specified in their leases, the Company’s ability to create long-term shareholder value, regulatory changes and other risk factors, including those detailed in the sections of the Company’s most recent Forms 10-K and 10-Q filed with the SEC titled “Risk Factors,” which you should interpret as heightened as a result of the numerous and ongoing adverse impacts of COVID-19. The extent to which COVID-19 impacts the Company and its tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others. The Company assumes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
NON-GAAP FINANCIAL MEASURES
As defined by the National Association of Real Estate Investment Trusts (NAREIT), an industry trade group, Funds From Operations (FFO) means net income computed in accordance with generally accepted accounting principles (GAAP), excluding (i) depreciation and amortization related to real estate, (ii) gains from sales of real estate assets, (iii) gains and losses from change in control and (iv) impairment write-downs of real estate assets and investments in entities directly attributable to decreases in the value of real estate held by the entity. The Company has adopted the NAREIT definition in its computation of FFO attributable to common shareholders. The Company believes that, subject to the following limitations, FFO attributable to common shareholders provides a basis for comparing its performance and operations to those of other real estate investment trusts (REITs). The Company believes that FFO attributable to common shareholders, which is a supplemental non-GAAP financial measure, provides an additional and useful means to assess the operating performance of REITs. FFO attributable to common shareholders does not represent an alternative to (i) “Net income” or “Net income attributable to common shareholders” as an indicator of the Company’s financial performance, or (ii) “Cash flows from operating activities” in accordance with GAAP as a measure of the Company’s capacity to fund cash needs, including the payment of dividends.
The Company also reports Operating FFO attributable to common shareholders, which is defined as FFO attributable to common shareholders excluding the impact of discrete non-operating transactions and other events which the Company does not consider representative of the comparable operating results of its real estate operating portfolio, which is its core business platform. Specific examples of discrete non-operating transactions and other events include, but are not limited to, the impact on earnings from gains or losses associated with the early extinguishment of debt or other liabilities, litigation involving the Company, including gains recognized as a result of settlement and costs to engage outside counsel related to litigation with former tenants, the impact on earnings from executive separation and the excess of redemption value over carrying value of preferred stock redemption, which are not otherwise adjusted in the Company’s calculation of FFO attributable to common shareholders. The Company believes that Operating FFO attributable to common shareholders, which is a supplemental non-GAAP financial measure, provides an additional and useful means to assess the operating performance of REITs. Operating FFO attributable to common shareholders does not represent an alternative to (i) “Net income” or “Net income attributable to common shareholders” as an indicator of the Company’s financial performance, or (ii) “Cash flows from operating activities” in accordance with GAAP as a measure of the Company’s capacity to fund cash needs, including the payment of dividends. Comparison of the Company’s presentation of Operating FFO attributable to common shareholders to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.



The Company also reports Net Operating Income (NOI), which it defines as all revenues other than (i) straight-line rental income (non-cash), (ii) amortization of lease inducements, (iii) amortization of acquired above and below market lease intangibles and (iv) lease termination fee income, less real estate taxes and all operating expenses other than lease termination fee expense and non-cash ground rent expense, which is comprised of amortization of right-of-use lease assets and amortization of lease liabilities. NOI consists of Same Store NOI and NOI from Other Investment Properties. Same Store NOI represents NOI from the Company’s same store portfolio consisting of 101 retail operating properties acquired or placed in service and stabilized prior to January 1, 2019. NOI from Other Investment Properties represents NOI primarily from (i) properties acquired or placed in service during 2019 and 2020, (ii) the multi-family rental units at Plaza del Lago, a redevelopment project that was placed in service during 2019, (iii) Circle East, which is in active redevelopment, (iv) One Loudoun Downtown – Pads G & H, which are in active development, (v) Carillon, a redevelopment project where the Company halted plans for vertical construction during the three months ended March 31, 2020 in response to current macroeconomic conditions due to the impact of the COVID-19 pandemic; however, the Company is actively completing site work preparation at the property in anticipation of potential future development at the site, (vi) properties that were sold or held for sale during 2019 and 2020, and (vii) the net income from the Company’s wholly-owned captive insurance company. The Company believes that NOI, Same Store NOI and NOI from Other Investment Properties, which are supplemental non-GAAP financial measures, provide an additional and useful operating perspective not immediately apparent from “Net income” or “Net income attributable to common shareholders” in accordance with GAAP. The Company uses these measures to evaluate its performance on a property-by-property basis because they allow management to evaluate the impact that factors such as lease structure, lease rates and tenant base have on the Company’s operating results. NOI, Same Store NOI and NOI from Other Investment Properties do not represent alternatives to “Net income” or “Net income attributable to common shareholders” in accordance with GAAP as indicators of the Company’s financial performance. Comparison of the Company’s presentation of NOI, Same Store NOI and NOI from Other Investment Properties to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.
As defined by NAREIT, EBITDA for real estate (EBITDAre) means net income (loss) computed in accordance with GAAP, plus (i) interest expense, (ii) income tax expense, (iii) depreciation and amortization, (iv) impairment charges on investment property and (v) impairment charges on investments in unconsolidated affiliates if caused by a decrease in the value of depreciable property in the affiliate, plus or minus (i) gains from sales of investment property, including gains (or losses) on change in control, and (ii) adjustments to reflect the entity’s share of EBITDAre of unconsolidated affiliates. The Company reports Adjusted EBITDAre, which excludes the impact of certain discrete non-operating transactions and other events such as the gain on litigation settlement. The Company believes that Adjusted EBITDAre is useful because it allows investors and management to evaluate and compare the Company’s performance from period to period in a meaningful and consistent manner in addition to standard financial measurements under GAAP. EBITDAre and Adjusted EBITDAre are supplemental non-GAAP financial measures and should not be considered alternatives to “Net income” or “Net income attributable to common shareholders” as indicators of the Company’s financial performance. Comparison of the Company’s presentation of EBITDAre and Adjusted EBITDAre to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.
Net Debt to Adjusted EBITDAre is a supplemental non-GAAP financial measure and represents (i) the Company’s total debt principal, which excludes unamortized discount and capitalized loan fees, less (ii) cash and cash equivalents divided by (iii) Adjusted EBITDAre for the prior three months, annualized (Annualized Adjusted EBITDAre). The Company believes that this ratio is useful because it provides investors with information regarding its total debt principal net of cash and cash equivalents, which could be used to repay debt, compared to its performance as measured using Annualized Adjusted EBITDAre. Comparison of the Company’s presentation of Net Debt to Adjusted EBITDAre to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.
CONTACT INFORMATION
Michael Gaiden
Vice President – Capital Markets and Investor Relations
Retail Properties of America, Inc.
(630) 634-4233




Retail Properties of America, Inc.
Condensed Consolidated Balance Sheets
(amounts in thousands, except par value amounts)
(unaudited)
 

 
March 31,
2020
 
December 31,
2019
Assets
 
 
 
Investment properties:
 
 
 
Land
$
1,075,577

 
$
1,021,829

Building and other improvements
3,548,769

 
3,544,582

Developments in progress
126,761

 
113,353

 
4,751,107

 
4,679,764

Less: accumulated depreciation
(1,416,981
)
 
(1,383,274
)
Net investment properties (includes $30,600 and $12,445 from consolidated
variable interest entities, respectively)
3,334,126

 
3,296,490

 
 
 
 
Cash and cash equivalents
769,241

 
9,989

Accounts and notes receivable, net
72,003

 
73,832

Acquired lease intangible assets, net
78,439

 
79,832

Right-of-use lease assets
44,157

 
50,241

Other assets, net (includes $344 and $164 from consolidated
variable interest entities, respectively)
71,627

 
75,978

Total assets
$
4,369,593

 
$
3,586,362

 
 
 
 
Liabilities and Equity
 
 
 
Liabilities:
 
 
 
Mortgages payable, net (includes unamortized discount of $(483) and $(493),
respectively, and unamortized capitalized loan fees of $(240) and $(256), respectively)
$
93,562

 
$
94,155

Unsecured notes payable, net (includes unamortized discount of $(586) and $(616),
respectively, and unamortized capitalized loan fees of $(2,994) and $(3,137), respectively)
796,420

 
796,247

Unsecured term loans, net (includes unamortized capitalized loan fees of $(3,208)
and $(3,477), respectively)
716,792

 
716,523

Unsecured revolving line of credit
849,704

 
18,000

Accounts payable and accrued expenses
50,622

 
78,902

Distributions payable
35,464

 
35,387

Acquired lease intangible liabilities, net
67,573

 
63,578

Lease liabilities
85,340

 
91,129

Other liabilities (includes $3,233 and $1,707 from consolidated
variable interest entities, respectively)
76,815

 
56,368

Total liabilities
2,772,292

 
1,950,289

 
 
 
 
Commitments and contingencies
 
 
 
 
 
 
 
Equity:
 
 
 
Preferred stock, $0.001 par value, 10,000 shares authorized, none issued or outstanding

 

Class A common stock, $0.001 par value, 475,000 shares authorized,
214,122 and 213,600 shares issued and outstanding as of March 31, 2020
and December 31, 2019, respectively
214

 
214

Additional paid-in capital
4,512,939

 
4,510,484

Accumulated distributions in excess of earnings
(2,879,040
)
 
(2,865,933
)
Accumulated other comprehensive loss
(39,870
)
 
(12,288
)
Total shareholders' equity
1,594,243

 
1,632,477

Noncontrolling interests
3,058

 
3,596

Total equity
1,597,301

 
1,636,073

Total liabilities and equity
$
4,369,593

 
$
3,586,362








Retail Properties of America, Inc.
Condensed Consolidated Statements of Operations
(amounts in thousands, except per share amounts)
(unaudited)


 
Three Months Ended March 31,
 
2020
 
2019
Revenues:
 

 
 

Lease income
$
118,695

 
$
122,703

 
 
 
 
Expenses:
 

 
 

Operating expenses
16,414

 
17,686

Real estate taxes
18,533

 
18,403

Depreciation and amortization
40,173

 
43,267

Provision for impairment of investment properties
346

 

General and administrative expenses
9,165

 
10,499

Total expenses
84,631

 
89,855

 
 
 
 
Other (expense) income:
 
 
 
Interest expense
(17,046
)
 
(17,430
)
Gain on sales of investment properties

 
8,449

Gain on litigation settlement
6,100

 

Other expense, net
(761
)
 
(659
)
Net income
22,357

 
23,208

Net income attributable to noncontrolling interests

 

Net income attributable to common shareholders
$
22,357

 
$
23,208

 
 
 
 
Earnings per common share – basic and diluted:
 

 
 

Net income per common share attributable to common shareholders
$
0.10

 
$
0.11

 
 
 
 
Weighted average number of common shares outstanding – basic
213,215

 
212,850

 
 
 
 
Weighted average number of common shares outstanding – diluted
213,215

 
213,223







Retail Properties of America, Inc.
Reconciliation of Non-GAAP Financial Measures
(amounts in thousands, except per share amounts)
(unaudited)


Funds From Operations (FFO) Attributable to Common Shareholders and
Operating FFO Attributable to Common Shareholders
 
Three Months Ended March 31,
 
2020
 
2019
 
 
 
 
Net income attributable to common shareholders
$
22,357

 
$
23,208

Depreciation and amortization of real estate
39,838

 
42,913

Provision for impairment of investment properties
346

 

Gain on sales of investment properties

 
(8,449
)
FFO attributable to common shareholders
$
62,541

 
$
57,672

 
 
 
 
FFO attributable to common shareholders per common share outstanding – diluted
$
0.29

 
$
0.27

 
 
 
 
FFO attributable to common shareholders
$
62,541

 
$
57,672

Gain on litigation settlement
(6,100
)
 

Other (a)
1,011

 
711

Operating FFO attributable to common shareholders
$
57,452

 
$
58,383

 
 
 
 
Operating FFO attributable to common shareholders per common share outstanding – diluted
$
0.27

 
$
0.27

 
 
 
 
Weighted average number of common shares outstanding – diluted
213,215

 
213,223



(a)
Primarily consists of the impact on earnings from litigation involving the Company, including costs to engage outside counsel related to litigation with former tenants, which is included within "Other expense, net" in the condensed consolidated statements of operations.





Retail Properties of America, Inc.
Reconciliation of Non-GAAP Financial Measures (continued)
(amounts in thousands)
(unaudited)


Reconciliation of Net Income Attributable to Common Shareholders to Same Store NOI
 
Three Months Ended March 31,
 
2020
 
2019
 
 
 
 
Net income attributable to common shareholders
$
22,357

 
$
23,208

Adjustments to reconcile to Same Store NOI:
 

 
 

Gain on sales of investment properties

 
(8,449
)
Gain on litigation settlement
(6,100
)
 

Depreciation and amortization
40,173

 
43,267

Provision for impairment of investment properties
346

 

General and administrative expenses
9,165

 
10,499

Interest expense
17,046

 
17,430

Straight-line rental income, net
(341
)
 
(1,500
)
Amortization of acquired above and below market lease intangibles, net
(976
)
 
(2,334
)
Amortization of lease inducements
419

 
296

Lease termination fees, net
(124
)
 
(1,188
)
Non-cash ground rent expense, net
333

 
358

Other expense, net
761

 
659

NOI
83,059

 
82,246

NOI from Other Investment Properties
(1,318
)
 
(1,484
)
Same Store NOI
$
81,741

 
$
80,762









Retail Properties of America, Inc.
Reconciliation of Non-GAAP Financial Measures (continued)
(amounts in thousands, except ratio)
(unaudited)


Reconciliation of Mortgages Payable, Net, Unsecured Notes Payable, Net,
Unsecured Term Loans, Net and Unsecured Revolving Line of Credit to Total Net Debt
 
 
March 31,
2020
 
December 31,
2019
 
 
 
 
 
Mortgages payable, net
 
$
93,562

 
$
94,155

Unsecured notes payable, net
 
796,420

 
796,247

Unsecured term loans, net
 
716,792

 
716,523

Unsecured revolving line of credit
 
849,704

 
18,000

Total
 
2,456,478

 
1,624,925

Mortgage discount, net of accumulated amortization
 
483

 
493

Unsecured notes payable discount, net of accumulated amortization
 
586

 
616

Capitalized loan fees, net of accumulated amortization
 
6,442

 
6,870

Total debt principal
 
2,463,989

 
1,632,904

Less: consolidated cash and cash equivalents
 
(769,241
)
 
(9,989
)
Total net debt
 
$
1,694,748

 
$
1,622,915

Net Debt to Adjusted EBITDAre (a)
 
5.7x

 
5.4x




Reconciliation of Net Income to Adjusted EBITDAre
 
 
 
Three Months Ended
 
 
March 31, 2020
 
December 31, 2019
 
 
 
 
 
Net income
 
$
22,357

 
$
16,172

Interest expense
 
17,046

 
16,694

Depreciation and amortization
 
40,173

 
40,964

Provision for impairment of investment properties
 
346

 
1,121

EBITDAre
 
$
79,922

 
$
74,951

Gain on litigation settlement
 
(6,100
)
 

Adjusted EBITDAre
 
$
73,822

 
$
74,951

Annualized Adjusted EBITDAre
 
$
295,288

 
$
299,804



(a)
For purposes of this ratio calculation, annualized three months ended figures were used.



Exhibit

Exhibit 99.2




T A B L E O F C O N T E N T S
 
 
 
 
 
 
1

 
 
E A R N I N G S R E L E A S E..........................................................................
 
 
 
 
 
 
2

 
 
 
 
 
 
 
F I N A N C I A L S U M M A R Y
 
 
 
 
Condensed Consolidated Balance Sheets.................................................
 
 
 
Condensed Consolidated Statements of Operations................................
 
 
 
Funds From Operations Attributable to Common Shareholders,
Operating FFO Attributable to Common Shareholders
and Additional Information.......................................................................
 
 
 
 
 
 
Supplemental Financial Statement Detail.................................................
 
 
 
Same Store Net Operating Income............................................................
 
 
 
Capitalization.............................................................................................
 
 
 
Covenants..................................................................................................
 
 
 
Summary of Indebtedness........................................................................
 
 
 
 
 
 
3

 
 
 
 
 
 
 
T R A N S A C T I O N S U M M A R Y
 
 
 
 
Development Projects...............................................................................
 
 
 
Acquisitions and Dispositions....................................................................
 
 
 
 
 
 
4

 
 
 
 
 
 
 
P O R T F O L I O S U M M A R Y
 
 
 
 
Retail Market Summary.............................................................................
 
 
 
Retail Operating Portfolio Occupancy.......................................................
 
 
 
Tenant Resiliency and April Rent Collections............................................
 
 
 
Top Retail Tenants.....................................................................................
 
 
 
Retail Leasing Activity Summary................................................................
 
 
 
Retail Lease Expirations.............................................................................
 
 
 
 
 
 
5

 
 
 
 
 
 
 
O T H E R I N F O R M A T I O N
 
 
 
 
Non-GAAP Financial Measures and Reconciliations..................................
 
 
 
 
 
 
 
 
 
 
 


Retail Properties of America, Inc. | 2021 Spring Road, Suite 200 | Oak Brook, Illinois 60523 | 855.247.RPAI | www.rpai.com



RETAIL PROPERTIES OF AMERICA, INC.
REPORTS FIRST QUARTER 2020 RESULTS
Oak Brook, IL – May 5, 2020 – Retail Properties of America, Inc. (NYSE: RPAI) (the “Company”) today reported financial and operating results for the quarter ended March 31, 2020.
FINANCIAL RESULTS
For the quarter ended March 31, 2020, the Company reported:
Net income attributable to common shareholders of $22.4 million, or $0.10 per diluted share, compared to $23.2 million, or $0.11 per diluted share, for the same period in 2019;
Funds from operations (FFO) attributable to common shareholders of $62.5 million, or $0.29 per diluted share, compared to $57.7 million, or $0.27 per diluted share, for the same period in 2019, growth of 7.4% per diluted share; and
Operating funds from operations (Operating FFO) attributable to common shareholders of $57.5 million, or $0.27 per diluted share, compared to $58.4 million, or $0.27 per diluted share, for the same period in 2019.
OPERATING RESULTS
For the quarter ended March 31, 2020, the Company’s portfolio results were as follows:
1.2% increase in same store net operating income (NOI) over the comparable period in 2019;
Total same store portfolio percent leased, including leases signed but not commenced: 95.3% at March 31, 2020, down 90 basis points from 96.2% at December 31, 2019 and up 30 basis points from 95.0% at March 31, 2019;
Retail portfolio occupancy: 94.1% at March 31, 2020, down 110 basis points from 95.2% at December 31, 2019 and up 110 basis points from 93.0% at March 31, 2019;
Retail portfolio percent leased, including leases signed but not commenced: 95.3% at March 31, 2020, down 90 basis points from 96.2% at December 31, 2019 and up 20 basis points from 95.1% at March 31, 2019;
Retail anchor tenant occupancy: 96.8% at March 31, 2020, down 80 basis points from 97.6% at December 31, 2019 and up 190 basis points from 94.9% at March 31, 2019;
Retail anchor tenant percent leased, including leases signed but not commenced: 98.3% at March 31, 2020, down 50 basis points from 98.8% at December 31, 2019 and up 70 basis points from 97.6% at March 31, 2019;
Total same store portfolio annualized base rent (ABR) per occupied square foot of $19.58 at March 31, 2020, up 0.4% from $19.51 ABR per occupied square foot at December 31, 2019 and up 1.9% from $19.21 ABR per occupied square foot at March 31, 2019;
285,000 square feet of retail leasing transactions comprised of 82 new and renewal leases; and
Positive comparable cash leasing spreads of 4.8% on new leases and 4.9% on renewal leases for a blended re-leasing spread of 4.9%.

n Retail Properties of America, Inc.
T: 855.247.RPAI
www.rpai.com    2021 Spring Road, Suite 200
Oak Brook, IL 60523


“Our first quarter results illustrate the underlying strength of our business heading into the COVID-19 pandemic,” stated Steve Grimes, chief executive officer. “Our team now is focused on the joint goals of balancing fiscal prudence with social awareness, responsibility and the long-term viability of our tenants as we collectively navigate through these uncertain times.”
COVID-19 UPDATE
The Company did not incur significant disruptions to its lease income and occupancy during the three months ended March 31, 2020 from the novel coronavirus (COVID-19) pandemic. However, since the start of the second quarter, the pandemic has adversely impacted the Company’s business as many tenants, faced with reduced customer traffic and revenue as a result of governmental and social mandates related to the pandemic, have requested lease concessions from the Company. Other tenants, which operate businesses considered to be essential, remain open and continue to operate during this time. The Company’s portfolio ABR benefits from a composition of 37% from essential uses and office, including 8% from grocery/warehouse clubs and 6% from office tenants as detailed in the Company’s Quarterly Supplemental Information Package on page 16.
Regarding April rent charges, as of April 30, the Company has collected more than 52%. The rapid development and fluidity of this situation precludes any prediction as to the ultimate impact of COVID-19 on the Company’s leasing trends or financial or operating results. The Company is working to preserve profitability and cash flow while also working with tenants to address requests for lease concessions and simultaneously preserving its contractual rights under its lease agreements. While seeking to work toward a mutually agreeable outcome with tenants directly impacted by COVID-19, the Company believes that certain tenants, which remain open and hold an ability to pay, have elected to withhold April rent unnecessarily. Generally, the Company has not yet reached agreement with tenants regarding concession requests, as discussions are ongoing.
COVID-19 RESPONSE
In response to the COVID-19 pandemic, the Company has already taken several significant steps to further strengthen its financial position and balance sheet, enhance its liquidity, provide maximum financial flexibility and manage its financial leverage. These steps included:
Drawing nearly all of the remaining balance under its $850 million unsecured revolving line of credit in March 2020;
Depositing the proceeds from the revolver draw into accounts at FDIC-insured institutions;
Reducing expected 2020 development spend by approximately $75 to $100 million primarily as a result of halting vertical construction plans at its Carillon redevelopment;
Implementing plans to reduce 2020 capital expenditures, including tenant improvement outlays, and certain expenses, including overhead, from its original budget; and
Suspending the quarterly dividend as detailed later in this release.
INVESTMENT ACTIVITY
Expansions and Redevelopments
The Company continues to make progress on the execution of its active expansion and redevelopment projects.
Active Projects:
One Loudoun Downtown
During the quarter, the Company and KETTLER, its joint venture partner, advanced construction on the garages and foundation work for the mixed-use expansion of Pads G & H at its One Loudoun Downtown multi-tenant retail operating property located in the Washington, D.C. metropolitan statistical area (MSA). Additionally, the Company and KETTLER completed utility work for the new median and pocket park between Pads G & H, which will enhance the community experience of

ii


the property and, subsequent to quarter end, began frame construction work for the multi-family component of the project. Also subsequent to quarter end, the Company signed a construction contract with general contractor L.F. Jennings for the office component of Pad G for which construction is anticipated to begin during the second quarter. This expansion project consists of up to 70,000 square feet of commercial space and 378 one- and two-bedroom multi-family rental units, which will become One Loudoun’s first apartment community, Vyne, and is anticipated to open in late spring 2021. The expansion project complements and enhances the Company’s approximately 469,000 square foot mixed-use community anchor asset, One Loudoun Downtown, which boasted retail occupancy of 96.4% and office occupancy of 98.9% as of March 31, 2020 and holds a five-mile population of more than 190,000, average household incomes of more than $175,000 and sits in the county with the highest median income per capita in the United States with a projected five-year population growth rate of more than 7%.
Circle East
During the quarter, as previously announced, the Company signed Ethan Allen to a 6,000 square foot lease at a prominent corner location at its Circle East mixed-use project located in Towson, Maryland within the Baltimore MSA. The Company also advanced lease negotiations for space with several leading national personal service providers for in-line space at the 80,000 square foot dual-sided street level retail portion of the project. In addition, AvalonBay has commenced tenant move-ins at the approximately 370 AvalonBay-owned multi-family rental units that also form a portion of the project.
The Shoppes at Quarterfield and Southlake Town Square
During the quarter, the Company initiated work at two recently added projects, the site and building reconfiguration at The Shoppes at Quarterfield and the single-tenant pad development at Southlake Town Square. These two 100% pre-leased projects at existing assets aggregate $11.0 to $12.5 million in projected net investment with projected returns of 11.5% to 15.5% and stabilization targeted in the first half of 2021.
Carillon:
As previously announced, the Company has halted plans for vertical construction at its Carillon redevelopment project located in the Washington, D.C. MSA. The Company remains aware of the significant demand for the medical office component of the project, which benefits from the needs of the adjacent University of Maryland Capital Region Medical Center, a non-cyclical, shadow anchor of this project. During the quarter, the Company terminated its agreement with Fore Property Company related to the multi-family component of the project. Subsequent to quarter end, the Company terminated its agreement with Trammell Crow Company related to the medical office building portion of the project. The Company will continue to evaluate the potential resumption date for vertical construction activities at Carillon and will maintain optionality for either the monetization or build-out of the medical office and other components of the project.
Dispositions
During the quarter, as previously reported, the Company completed the sale of one non-target, multi-tenant power center asset for $13.9 million.
Acquisitions
During the quarter, as previously reported, the Company acquired the fee interest in an existing multi-tenant, community center retail property for a gross purchase price of $55.0 million. In connection with this acquisition, the Company also assumed the lessor position in a ground lease with a shadow anchor.

iii


BALANCE SHEET AND CAPITAL MARKETS ACTIVITY
As of March 31, 2020, the Company had $769.2 million in cash and cash equivalents and no debt maturities in 2020. In addition, the Company had $2.5 billion of gross consolidated indebtedness with a weighted average contractual interest rate of 3.25% and a weighted average maturity of 3.7 years. The Company’s $1.7 billion in net consolidated indebtedness resulted in a net debt to adjusted EBITDAre ratio of 5.7x as of quarter end.
DIVIDEND
In order to preserve and enhance liquidity and capital positioning, the Company’s board of directors has temporarily suspended future quarterly dividend payments on the Company’s outstanding Class A common stock. The Company’s board of directors will evaluate dividend declaration decisions quarterly and consider REIT taxable income distribution requirements in these deliberations. The timing and amount of dividend resumption depends largely on the Company’s operating cash flow performance as well as other factors. Year to date, including dividends paid in January 2020 and April 2020, the Company has paid $70.9 million in aggregate dividends.
WEBCAST AND CONFERENCE CALL INFORMATION
The Company’s management team will hold a webcast on Wednesday, May 6, 2020 at 11:00 AM (ET), to discuss its quarterly financial results and operating performance, as well as business highlights and outlook. In addition, the Company may discuss business and financial developments and trends and other matters affecting the Company, some of which may not have been previously disclosed.
A live webcast will be available online on the Company’s website at www.rpai.com in the INVEST section. A replay of the webcast will be available. To listen to the replay, please go to www.rpai.com in the INVEST section of the website and follow the instructions.
The conference call can be accessed by dialing (877) 705-6003 or (201) 493-6725 for international participants. Please dial in at least ten minutes prior to the start of the call to register. A replay of the call will be available from 2:00 PM (ET) on May 6, 2020 until midnight (ET) on May 20, 2020. The replay can be accessed by dialing (844) 512-2921 or (412) 317-6671 for international callers and entering pin number 13699877.
SUPPLEMENTAL INFORMATION
The Company has posted supplemental financial and operating information and other data in the INVEST section of its website.
ABOUT RPAI
Retail Properties of America, Inc. is a REIT that owns and operates high quality, strategically located open-air shopping centers, including properties with a mixed-use component. As of March 31, 2020, the Company owned 102 retail operating properties in the United States representing 20.0 million square feet. The Company is publicly traded on the New York Stock Exchange under the ticker symbol RPAI. Additional information about the Company is available at www.rpai.com.
SAFE HARBOR LANGUAGE
The statements and certain other information contained in this press release, which can be identified by the use of forward-looking terminology such as “believes,” “expects,” “may,” “should,” “intends,” “plans,” “estimates” or “anticipates” and variations of such words or similar expressions or the negative of such words, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbors created thereby. These forward-looking statements reflect the Company’s current views about its plans, intentions, expectations, strategies and prospects, which are based on the information currently available to the Company and on assumptions it has made. Although the Company believes that its plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, the Company can give no assurance that such plans, intentions, expectations or strategies will be attained or achieved. Furthermore, these forward-looking statements should be considered as subject to the

iv


many risks and uncertainties that exist in the Company’s operations and business environment. Such risks and uncertainties could cause actual results to differ materially from those projected. These uncertainties include, but are not limited to, economic, business and financial conditions, and changes in the Company’s industry and changes in the real estate markets in particular, economic and other developments in markets where the Company has a high concentration of properties, the Company’s business strategy, the Company’s projected operating results, rental rates and/or vacancy rates, frequency and magnitude of defaults on, early terminations of or non-renewal of leases by tenants, bankruptcy, insolvency or general downturn in the business of a major tenant or a significant number of smaller tenants, adverse impact of e-commerce developments and shifting consumer retail behavior on tenants, interest rates or operating costs, the discontinuation of London Interbank Offered Rate (LIBOR), real estate and zoning laws and changes in real property tax rates, real estate valuations, the Company’s leverage, the Company’s ability to generate sufficient cash flows to service outstanding indebtedness and make distributions to shareholders, changes in the dividend policy for the Company’s Class A common stock and its ability to pay dividends at current levels, the Company’s ability to obtain necessary outside financing, the availability, terms and deployment of capital, general volatility of the capital and credit markets and the market price of the Company’s Class A common stock, risks generally associated with real estate acquisitions and dispositions, including the Company’s ability to identify and pursue acquisition and disposition opportunities, risks generally associated with redevelopment, including the impact of construction delays and cost overruns and the Company’s ability to lease redeveloped space and identify and pursue redevelopment opportunities, the Company’s ability to enter into new leases or renew leases on favorable terms, pandemics or other public health crises, such as the COVID-19 outbreak, and the related impact on (i) the Company’s ability to manage its properties, finance its operations and perform necessary administrative and reporting functions and (ii) the ability of the Company’s tenants to operate their businesses, generate sales and meet their financial obligations, including the obligation to pay rent and other charges as specified in their leases, the Company’s ability to create long-term shareholder value, regulatory changes and other risk factors, including those detailed in the sections of the Company’s most recent Forms 10-K and 10-Q filed with the SEC titled “Risk Factors,” which you should interpret as heightened as a result of the numerous and ongoing adverse impacts of COVID-19. The extent to which COVID-19 impacts the Company and its tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others. The Company assumes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
NON-GAAP FINANCIAL MEASURES
As defined by the National Association of Real Estate Investment Trusts (NAREIT), an industry trade group, Funds From Operations (FFO) means net income computed in accordance with generally accepted accounting principles (GAAP), excluding (i) depreciation and amortization related to real estate, (ii) gains from sales of real estate assets, (iii) gains and losses from change in control and (iv) impairment write-downs of real estate assets and investments in entities directly attributable to decreases in the value of real estate held by the entity. The Company has adopted the NAREIT definition in its computation of FFO attributable to common shareholders. The Company believes that, subject to the following limitations, FFO attributable to common shareholders provides a basis for comparing its performance and operations to those of other real estate investment trusts (REITs). The Company believes that FFO attributable to common shareholders, which is a supplemental non-GAAP financial measure, provides an additional and useful means to assess the operating performance of REITs. FFO attributable to common shareholders does not represent an alternative to (i) “Net income” or “Net income attributable to common shareholders” as an indicator of the Company’s financial performance, or (ii) “Cash flows from operating activities” in accordance with GAAP as a measure of the Company’s capacity to fund cash needs, including the payment of dividends.
The Company also reports Operating FFO attributable to common shareholders, which is defined as FFO attributable to common shareholders excluding the impact of discrete non-operating transactions and other events which the Company does not consider representative of the comparable operating results of its real estate operating portfolio, which is its core business platform. Specific examples of discrete non-operating transactions and other events include, but are not limited to, the impact on earnings from gains or losses associated with the early extinguishment of debt or other liabilities, litigation involving the Company, including gains recognized as a result of settlement and costs to engage outside counsel related to litigation with former tenants, the impact on earnings from executive separation and the excess of redemption value over carrying value of preferred stock redemption, which are not otherwise adjusted in the Company’s calculation of FFO attributable to common shareholders. The Company believes that Operating FFO attributable to common shareholders, which is a supplemental non-GAAP financial measure, provides an additional and useful means to assess the operating performance of REITs. Operating FFO attributable to common shareholders does not represent an alternative to (i) “Net income” or “Net income attributable to common shareholders” as an indicator of the Company’s financial performance, or (ii) “Cash flows from operating activities” in accordance with GAAP as a measure of the Company’s capacity to fund cash needs, including the payment of dividends. Comparison of the Company’s presentation of Operating FFO attributable to common shareholders to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.

v


The Company also reports Net Operating Income (NOI), which it defines as all revenues other than (i) straight-line rental income (non-cash), (ii) amortization of lease inducements, (iii) amortization of acquired above and below market lease intangibles and (iv) lease termination fee income, less real estate taxes and all operating expenses other than lease termination fee expense and non-cash ground rent expense, which is comprised of amortization of right-of-use lease assets and amortization of lease liabilities. NOI consists of Same Store NOI and NOI from Other Investment Properties. Same Store NOI represents NOI from the Company’s same store portfolio consisting of 101 retail operating properties acquired or placed in service and stabilized prior to January 1, 2019. NOI from Other Investment Properties represents NOI primarily from (i) properties acquired or placed in service during 2019 and 2020, (ii) the multi-family rental units at Plaza del Lago, a redevelopment project that was placed in service during 2019, (iii) Circle East, which is in active redevelopment, (iv) One Loudoun Downtown – Pads G & H, which are in active development, (v) Carillon, a redevelopment project where the Company halted plans for vertical construction during the three months ended March 31, 2020 in response to current macroeconomic conditions due to the impact of the COVID-19 pandemic; however, the Company is actively completing site work preparation at the property in anticipation of potential future development at the site, (vi) properties that were sold or held for sale during 2019 and 2020, and (vii) the net income from the Company’s wholly-owned captive insurance company. The Company believes that NOI, Same Store NOI and NOI from Other Investment Properties, which are supplemental non-GAAP financial measures, provide an additional and useful operating perspective not immediately apparent from “Net income” or “Net income attributable to common shareholders” in accordance with GAAP. The Company uses these measures to evaluate its performance on a property-by-property basis because they allow management to evaluate the impact that factors such as lease structure, lease rates and tenant base have on the Company’s operating results. NOI, Same Store NOI and NOI from Other Investment Properties do not represent alternatives to “Net income” or “Net income attributable to common shareholders” in accordance with GAAP as indicators of the Company’s financial performance. Comparison of the Company’s presentation of NOI, Same Store NOI and NOI from Other Investment Properties to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.
As defined by NAREIT, EBITDA for real estate (EBITDAre) means net income (loss) computed in accordance with GAAP, plus (i) interest expense, (ii) income tax expense, (iii) depreciation and amortization, (iv) impairment charges on investment property and (v) impairment charges on investments in unconsolidated affiliates if caused by a decrease in the value of depreciable property in the affiliate, plus or minus (i) gains from sales of investment property, including gains (or losses) on change in control, and (ii) adjustments to reflect the entity’s share of EBITDAre of unconsolidated affiliates. The Company reports Adjusted EBITDAre, which excludes the impact of certain discrete non-operating transactions and other events such as the gain on litigation settlement. The Company believes that Adjusted EBITDAre is useful because it allows investors and management to evaluate and compare the Company’s performance from period to period in a meaningful and consistent manner in addition to standard financial measurements under GAAP. EBITDAre and Adjusted EBITDAre are supplemental non-GAAP financial measures and should not be considered alternatives to “Net income” or “Net income attributable to common shareholders” as indicators of the Company’s financial performance. Comparison of the Company’s presentation of EBITDAre and Adjusted EBITDAre to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.
Net Debt to Adjusted EBITDAre is a supplemental non-GAAP financial measure and represents (i) the Company’s total debt principal, which excludes unamortized discount and capitalized loan fees, less (ii) cash and cash equivalents divided by (iii) Adjusted EBITDAre for the prior three months, annualized (Annualized Adjusted EBITDAre). The Company believes that this ratio is useful because it provides investors with information regarding its total debt principal net of cash and cash equivalents, which could be used to repay debt, compared to its performance as measured using Annualized Adjusted EBITDAre. Comparison of the Company’s presentation of Net Debt to Adjusted EBITDAre to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.
CONTACT INFORMATION
Michael Gaiden
Vice President – Capital Markets and Investor Relations
Retail Properties of America, Inc.
(630) 634-4233

vi



Retail Properties of America, Inc.
Condensed Consolidated Balance Sheets
(amounts in thousands, except par value amounts)
(unaudited)
 

 
March 31,
2020
 
December 31,
2019
Assets
 

 
 

Investment properties:
 

 
 

Land
$
1,075,577

 
$
1,021,829

Building and other improvements
3,548,769

 
3,544,582

Developments in progress
126,761

 
113,353

 
4,751,107

 
4,679,764

Less: accumulated depreciation
(1,416,981
)
 
(1,383,274
)
Net investment properties (includes $30,600 and $12,445 from consolidated
variable interest entities, respectively)
3,334,126

 
3,296,490

 
 
 
 
Cash and cash equivalents
769,241

 
9,989

Accounts and notes receivable, net
72,003

 
73,832

Acquired lease intangible assets, net
78,439

 
79,832

Right-of-use lease assets
44,157

 
50,241

Other assets, net (includes $344 and $164 from consolidated
variable interest entities, respectively)
71,627

 
75,978

Total assets
$
4,369,593

 
$
3,586,362

 
 
 
 
Liabilities and Equity
 

 
 

Liabilities:
 

 
 

Mortgages payable, net (includes unamortized discount of $(483) and $(493),
respectively, and unamortized capitalized loan fees of $(240) and $(256), respectively)
$
93,562

 
$
94,155

Unsecured notes payable, net (includes unamortized discount of $(586) and $(616),
respectively, and unamortized capitalized loan fees of $(2,994) and $(3,137), respectively)
796,420

 
796,247

Unsecured term loans, net (includes unamortized capitalized loan fees of $(3,208)
and $(3,477), respectively)
716,792

 
716,523

Unsecured revolving line of credit
849,704

 
18,000

Accounts payable and accrued expenses
50,622

 
78,902

Distributions payable
35,464

 
35,387

Acquired lease intangible liabilities, net
67,573

 
63,578

Lease liabilities
85,340

 
91,129

Other liabilities (includes $3,233 and $1,707 from consolidated
variable interest entities, respectively)
76,815

 
56,368

Total liabilities
2,772,292

 
1,950,289

 
 
 
 
Commitments and contingencies
 

 
 

 
 
 
 
Equity:
 

 
 

Preferred stock, $0.001 par value, 10,000 shares authorized, none issued or outstanding

 

Class A common stock, $0.001 par value, 475,000 shares authorized,
214,122 and 213,600 shares issued and outstanding as of March 31, 2020
and December 31, 2019, respectively
214

 
214

Additional paid-in capital
4,512,939

 
4,510,484

Accumulated distributions in excess of earnings
(2,879,040
)
 
(2,865,933
)
Accumulated other comprehensive loss
(39,870
)
 
(12,288
)
Total shareholders' equity
1,594,243

 
1,632,477

Noncontrolling interests
3,058

 
3,596

Total equity
1,597,301

 
1,636,073

Total liabilities and equity
$
4,369,593

 
$
3,586,362



1st Quarter 2020 Supplemental Information
 
1



Retail Properties of America, Inc.
Condensed Consolidated Statements of Operations
(amounts in thousands, except per share amounts)
(unaudited)
 

 
Three Months Ended March 31,
 
2020
 
2019
Revenues:
 
 
 
Lease income
$
118,695

 
$
122,703

 
 
 
 
Expenses:
 
 
 
Operating expenses
16,414

 
17,686

Real estate taxes
18,533

 
18,403

Depreciation and amortization
40,173

 
43,267

Provision for impairment of investment properties
346

 

General and administrative expenses
9,165

 
10,499

Total expenses
84,631

 
89,855

 
 
 
 
Other (expense) income:
 
 
 
Interest expense
(17,046
)
 
(17,430
)
Gain on sales of investment properties

 
8,449

Gain on litigation settlement
6,100

 

Other expense, net
(761
)
 
(659
)
Net income
22,357

 
23,208

Net income attributable to noncontrolling interests

 

Net income attributable to common shareholders
$
22,357

 
$
23,208

 
 
 
 
Earnings per common share – basic and diluted:
 
 
 
Net income per common share attributable to common shareholders
$
0.10

 
$
0.11

 
 
 
 
Weighted average number of common shares outstanding – basic
213,215

 
212,850

 
 
 
 
Weighted average number of common shares outstanding – diluted
213,215

 
213,223



1st Quarter 2020 Supplemental Information
 
2




Retail Properties of America, Inc.
Funds From Operations (FFO) Attributable to Common Shareholders,
Operating FFO Attributable to Common Shareholders and Additional Information
(dollar amounts in thousands, except per share amounts)
(unaudited)

FFO attributable to common shareholders and Operating FFO attributable to common shareholders (a)
 
 
 
 
 
 
 
Three Months Ended March 31,
 
2020
 
2019
 
 
 
 
Net income attributable to common shareholders
$
22,357

 
$
23,208

Depreciation and amortization of real estate
39,838

 
42,913

Provision for impairment of investment properties
346

 

Gain on sales of investment properties

 
(8,449
)
FFO attributable to common shareholders
$
62,541

 
$
57,672

FFO attributable to common shareholders per common share outstanding – diluted
$
0.29

 
$
0.27

 
 
 
 
FFO attributable to common shareholders
$
62,541

 
$
57,672

Gain on litigation settlement
(6,100
)
 

Other (b)
1,011

 
711

Operating FFO attributable to common shareholders
$
57,452

 
$
58,383

Operating FFO attributable to common shareholders per common share outstanding – diluted
$
0.27

 
$
0.27

 
 
 
 
Weighted average number of common shares outstanding – diluted
213,215

 
213,223

Dividends declared per common share
$
0.165625

 
$
0.165625

 
 
 
 
Additional Information (c)
 
 
 
Lease-related expenditures (d)
 
 
 
Same store
$
11,186

 
$
8,966

Other investment properties
$
10

 
$
12

 
 
 
 
Capital expenditures (e)
 
 
 
Same store
$
5,118

 
$
9,765

Other investment properties
$
1,224

 
$
51

Predevelopment costs
$
303

 
$
2,691

 
 
 
 
Straight-line rental income, net
$
341

 
$
1,500

Amortization of above and below market lease intangibles and lease inducements
$
557

 
$
2,038

Non-cash ground rent expense, net
$
333

 
$
358

 
 
 
 
Adjusted EBITDAre (a)
$
73,822

 
$
75,456



(a)
Refer to pages 20 – 23 for definitions and reconciliations related to FFO attributable to common shareholders, Operating FFO attributable to common shareholders and Adjusted EBITDAre.
(b)
Primarily consists of the impact on earnings from litigation involving the Company, including costs to engage outside counsel related to litigation with former tenants, which is included within "Other expense, net" in the condensed consolidated statements of operations.
(c)
The same store portfolio consists of 101 retail operating properties. Refer to pages 20 – 23 for definitions and reconciliations of non-GAAP financial measures.
(d)
Consists of payments for tenant improvements, lease commissions and lease inducements and excludes active development projects which are included within "Developments in progress" in the condensed consolidated balance sheets.
(e)
Capital expenditures consist of payments for building, site and other improvements, net of anticipated recoveries, and exclude active development projects which are included within "Developments in progress" in the condensed consolidated balance sheets. Predevelopment costs consist of payments related to future redevelopment and expansion projects incurred before each project is considered active and are included within "Other assets, net" in the condensed consolidated balance sheets.

1st Quarter 2020 Supplemental Information
 
3



Retail Properties of America, Inc.
Supplemental Financial Statement Detail
(amounts in thousands)
(unaudited)

 
Supplemental Balance Sheet Detail
March 31,
2020
 
December 31,
2019
Developments in Progress
 
 
 
Active developments/redevelopments and Carillon (a)
$
101,311

 
$
87,903

Land held for future development
25,450

 
25,450

Total
$
126,761

 
$
113,353

 
 
 
 
Accounts and Notes Receivable, Net
 

 
 

Accounts and notes receivable, net
$
19,452

 
$
21,781

Straight-line receivables, net
52,551

 
52,051

Total
$
72,003

 
$
73,832

 
 
 
 
Other Assets, Net
 

 
 

Deferred costs, net
$
39,762

 
$
39,636

Restricted cash (b)
5,123

 
4,458

Other assets, net
26,742

 
31,884

Total
$
71,627

 
$
75,978

 
 
 
 
Other Liabilities
 

 
 

Unearned income
$
11,584

 
$
20,651

Fair value of derivatives
39,870

 
12,288

Other liabilities
25,361

 
23,429

Total
$
76,815

 
$
56,368


Supplemental Statements of Operations Detail
 
 
 
 
Three Months Ended March 31,
 
2020
 
2019
Lease Income
 

 
 

Base rent
$
90,806

 
$
88,934

Percentage and specialty rent
1,046

 
1,319

Tenant recoveries
25,820

 
26,827

Lease termination fee income
124

 
1,188

Other lease-related income
1,505

 
1,297

Bad debt, net
(1,504
)
 
(400
)
Straight-line rent
341

 
1,500

Amortization of above and below market lease intangibles and lease inducements
557

 
2,038

Total
$
118,695

 
$
122,703

 
 
 
 
Operating Expense Supplemental Information
 
 
 
Non-cash ground rent expense, net
$
333

 
$
358

 
 
 
 
General and Administrative Expense Supplemental Information
 
 
 
Non-cash amortization of stock-based compensation
$
2,233

 
$
1,966

 
 
 
 
Additional Supplemental Information
 
 
 
Capitalized compensation costs – development and capital projects
$
998

 
$
1,040

Capitalized internal leasing incentives
$
60

 
$
54

Capitalized interest
$
785

 
$
144



(a)
As of March 31, 2020, the Company has active redevelopments at Circle East, One Loudoun Downtown, The Shoppes at Quarterfield and Southlake Town Square. See page 9 for further details.
(b)
Consists of funds restricted through lender or other agreements.

1st Quarter 2020 Supplemental Information
 
4



Retail Properties of America, Inc.
Same Store Net Operating Income (NOI)
(dollar amounts in thousands)
(unaudited)


Same store portfolio (a)
 
 
 
 
 
 
 
 
Based on Same store portfolio
as of March 31, 2020
 
 
2020
 
2019
 
Change
 
 
 
 
 
 
 
Number of retail operating properties in same store portfolio
 
101

 
101

 

 
 
 
 
 
 
 
Occupancy
 
94.1
%
 
92.9
%
 
1.2
%
 
 
 
 
 
 
 
Percent leased (b)
 
95.3
%
 
95.0
%
 
0.3
%
 
 
 
 
 
 
 
Annualized base rent (ABR) per occupied square foot
 
$
19.58

 
$
19.21

 
1.9
%
 
 
 
 
 
 
 

Same Store NOI (c)
 
 
 
 
 
 
Three Months Ended March 31,
 
2020
 
2019
 
Change
 
 
 
 
 
 
Base rent
$
89,323

 
$
86,591

 
 
Percentage and specialty rent
1,035

 
1,280

 
 
Tenant recoveries
25,445

 
26,818

 
 
Other lease-related income
1,466

 
1,289

 
 
Bad debt, net
(1,505
)
 
(428
)
 
 
Property operating expenses (d)
(15,718
)
 
(16,365
)
 
 
Real estate taxes
(18,305
)
 
(18,423
)
 
 
Same Store NOI (c)
$
81,741

 
$
80,762

 
1.2
%


(a)
The Company's same store portfolio consists of 101 retail operating properties acquired or placed in service and stabilized prior to January 1, 2019 and excludes the following:
properties acquired or placed in service and stabilized during 2019 and 2020;
the multi-family rental units at Plaza del Lago, a redevelopment project that was placed in service during 2019;
Circle East, which is in active redevelopment;
One Loudoun Downtown – Pads G & H, which are in active development;
Carillon, a redevelopment project where the Company halted plans for vertical construction during the three months ended March 31, 2020 in response to current macroeconomic conditions due to the impact of the novel coronavirus (COVID-19) pandemic; however, the Company is actively completing site work preparation at the property in anticipation of potential future development at the site;
The Shoppes at Quarterfield, which is in active redevelopment; and
investment properties sold or classified as held for sale during 2019 and 2020.
(b)
Includes leases signed but not commenced.
(c)
Refer to pages 20 – 23 for definitions and reconciliations of non-GAAP financial measures. Comparison of the Company's presentation of Same Store NOI to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.
(d)
Consists of all property operating items included within "Operating expenses" in the condensed consolidated statements of operations, which includes all items other than (i) lease termination fee expense and (ii) non-cash ground rent expense, which is comprised of amortization of right-of-use lease assets and amortization of lease liabilities.

1st Quarter 2020 Supplemental Information
 
5



Retail Properties of America, Inc.
Capitalization
(dollar amounts in thousands, except share price and ratio)
 

Capitalization Data
 
 
 
 
 
 
March 31,
2020
 
December 31,
2019
Equity Capitalization
 
 

 
 

Common stock shares outstanding (a)
 
214,122

 
213,600

Common stock share price
 
$
5.17

 
$
13.40

Total equity capitalization
 
$
1,107,011

 
$
2,862,240

 
 
 
 
 
Debt Capitalization
 
 

 
 

Mortgages payable (b)
 
$
94,285

 
$
94,904

Unsecured notes payable (c)
 
800,000

 
800,000

Unsecured term loans (d)
 
720,000

 
720,000

Unsecured revolving line of credit
 
849,704

 
18,000

Total debt capitalization
 
$
2,463,989

 
$
1,632,904

 
 
 
 
 
Total capitalization at end of period
 
$
3,571,000

 
$
4,495,144

 

Calculation of Net Debt to Adjusted EBITDAre Ratio (e)
 
 
March 31,
2020
 
December 31,
2019
 
 
 
 
 
Total debt principal
 
$
2,463,989

 
$
1,632,904

Less: consolidated cash and cash equivalents
 
(769,241
)
 
(9,989
)
Total net debt
 
$
1,694,748

 
$
1,622,915

Annualized Adjusted EBITDAre
 
$
295,288

 
$
299,804

Net Debt to Adjusted EBITDAre (f)
 
5.7x

 
5.4x



(a)
Excludes performance restricted stock units and options outstanding, which could potentially convert into common stock in the future.
(b)
Mortgages payable excludes mortgage discount of $(483) and $(493) and capitalized loan fees of $(240) and $(256), net of accumulated amortization, as of March 31, 2020 and December 31, 2019, respectively.
(c)
Unsecured notes payable excludes discount of $(586) and $(616) and capitalized loan fees of $(2,994) and $(3,137), net of accumulated amortization, as of March 31, 2020 and December 31, 2019, respectively.
(d)
Unsecured term loans exclude capitalized loan fees of $(3,208) and $(3,477), net of accumulated amortization, as of March 31, 2020 and December 31, 2019, respectively.
(e)
Refer to pages 20 – 23 for definitions and reconciliations of non-GAAP financial measures.
(f)
For purposes of this ratio calculation, annualized three months ended figures were used.

1st Quarter 2020 Supplemental Information
 
6





Retail Properties of America, Inc.
Covenants
Unsecured Credit Facility, Term Loans Due 2023, 2024 and 2026 and Notes Due 2021, 2024, 2026, 2028 and 2029 (a)
 
 
 
 
 
 
 
Covenant
 
March 31, 2020
 
 
 
 
 

Leverage ratio (b) (c)
Unsecured Credit Facility, Term Loans Due 2023,
2024 and 2026 and Notes Due 2026, 2028 and 2029:
Notes Due 2021 and 2024:
≤ 60.0%
≤ 60.0%
 
41.2%
42.6%

 
 
 
 
 
Secured leverage ratio (b) (c)
Unsecured Credit Facility and
Term Loans Due 2023, 2024 and 2026:
Notes Due 2021, 2024, 2026, 2028 and 2029:

≤ 45.0%
≤ 40.0%
 

1.6%

 
 
 
 
 
Fixed charge coverage ratio (b) (d)
 
≥ 1.50x
 
4.0x

 
 
 
 
 

Interest coverage ratio (b) (e)
 
≥ 1.50x
 
4.1x

 
 
 
 
 
Unencumbered leverage ratio (b) (c)
 
≤ 60.0%
 
47.8
%
 
 
 
 
 

Unencumbered interest coverage ratio (f)
Calculation based on most recent fiscal quarter:
Calculation based on most recent four fiscal quarters:
≥ 1.75x
≥ 1.75x
 
4.6x
4.8x



Notes Due 2025 (g)
 
 
 
 
Covenant
 
March 31, 2020
 
 
 
 

Leverage ratio (h)
≤ 60.0%
 
44.6
%
 
 
 
 

Secured leverage ratio (h)
≤ 40.0%
 
1.6
%
 
 
 
 
Debt service coverage ratio (b) (i)
≥ 1.50x
 
4.2x

 
 
 
 
Unencumbered assets to unsecured debt ratio
≥ 150%
 
232
%

(a)
For a complete listing of all covenants related to the Company's Unsecured Credit Facility (comprised of the unsecured term loan due 2021 and the unsecured revolving line of credit) as well as covenant definitions, refer to the Fifth Amended and Restated Credit Agreement filed as Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, filed on May 2, 2018. For a complete listing of all covenants as well as covenant definitions related to the Company's Term Loan Due 2023, refer to the credit agreement filed as Exhibit 10.1 to the Company's Current Report on Form 8-K, dated November 29, 2016, the First Amendment to the Term Loan Agreement filed as Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2018, filed on August 1, 2018, and the Second Amendment to the Term Loan Agreement filed as Exhibit 10.10 to the Company's Annual Report on Form 10-K for the year ended December 31, 2018, filed on February 13, 2019. For a complete listing of all covenants as well as covenant definitions related to the Company's Term Loan Due 2024 and Term Loan Due 2026, refer to the Term Loan Agreement filed as Exhibit 10.1 to the Company's Current Report on Form 8-K, dated July 23, 2019. For a complete listing of all covenants related to the Company's 4.12% senior unsecured notes due 2021 and 4.58% senior unsecured notes due 2024 (Notes Due 2021 and 2024) as well as covenant definitions, refer to the Note Purchase Agreement filed as Exhibit 10.1 to the Company's Current Report on Form 8-K, dated May 22, 2014. For a complete listing of all covenants related to the Company's 4.08% senior unsecured notes due 2026 and 4.24% senior unsecured notes due 2028 (Notes Due 2026 and 2028) as well as covenant definitions, refer to the Note Purchase Agreement filed as Exhibit 10.1 to the Company's Current Report on Form 8-K, dated October 5, 2016. For a complete listing of all covenants related to the Company's 4.82% senior unsecured notes due 2029 (Notes Due 2029) as well as covenant definitions, refer to the Note Purchase Agreement filed as Exhibit 10.1 to the Company's Current Report on Form 8-K, dated April 9, 2019.
(b)
Covenant calculation includes operating results, or a derivation thereof, based on the most recent four fiscal quarters of activity.
(c)
Based upon a capitalization rate of 6.50% as specified in the Company's debt agreements.
(d)
Applies only to the Company's Unsecured Credit Facility, Term Loan Due 2023, Term Loan Due 2024, Term Loan Due 2026, Notes Due 2026 and 2028 and Notes Due 2029. This ratio is based upon consolidated debt service, including interest expense and principal amortization, excluding interest expense related to defeasance costs and prepayment premiums.
(e)
Applies only to the Notes Due 2021 and 2024, Notes Due 2026 and 2028 and Notes Due 2029.
(f)
Subsequent to March 31, 2020, the Company executed amendments to certain of its unsecured debt agreements that changed the calculation for this covenant to include operating results from the most recent four fiscal quarters. Prior to these amendments, the calculation only included operating results from the most recent fiscal quarter. As a result, the updated calculation applies to all unsecured debt instruments to which this covenant relates as described in footnote (a) above. For a complete description of the amendment related to the Company's Unsecured Credit Facility, refer to the First Amendment to the Fifth Amended and Restated Credit Agreement which will be filed as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, to be filed on May 6, 2020. For a complete description of the amendment related to the Company's Term Loan Due 2023, refer to the Third Amendment to the Term Loan Agreement which will be filed as Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, to be filed on May 6, 2020. For a complete description of the amendment to the Company's Term Loan Due 2024 and Term Loan Due 2026, refer to the First Amendment to the Term Loan Agreement which will be filed as Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, to be filed on May 6, 2020.
(g)
For a complete listing of all covenants related to the Company's 4.00% senior unsecured notes due 2025 (Notes Due 2025) as well as covenant definitions, refer to the First Supplemental Indenture filed as Exhibit 4.2 to the Company's Current Report on Form 8-K, dated March 12, 2015.
(h)
Based upon the book value of Total Assets as defined in the First Supplemental Indenture referenced in footnote (g) above.
(i)
Based upon interest expense and excludes principal amortization. This ratio is calculated on a pro forma basis with the assumption that debt and property transactions occurred on the first day of the preceding four-quarter period.

1st Quarter 2020 Supplemental Information
 
7



Retail Properties of America, Inc.
Summary of Indebtedness as of March 31, 2020
(dollar amounts in thousands)
Description
 
Balance
 
Interest
Rate (a)
 
Maturity
Date
 
WA Years to
Maturity
 
Type
Consolidated Indebtedness
 
 
 
 
 
 
 
 
 
 
Ashland & Roosevelt (bank pad)
 
$
390

 
7.48
%
 
02/25/22
 
1.9 years
 
Fixed/Secured
Peoria Crossings
 
24,131

 
4.82
%
 
04/01/22
 
2.0 years
 
Fixed/Secured
Gateway Village
 
32,490

 
4.14
%
 
01/01/23
 
2.8 years
 
Fixed/Secured
Northgate North
 
24,654

 
4.50
%
 
06/01/27
 
7.2 years
 
Fixed/Secured
The Shoppes at Union Hill
 
12,620

 
3.75
%
 
06/01/31
 
11.2 years
 
Fixed/Secured
Mortgages payable (b)
 
94,285

 
4.37
%
 
 
 
4.8 years
 
 
 
 
 
 
 
 
 
 
 
 
 
Senior notes – 4.12% due 2021
 
100,000

 
4.12
%
 
06/30/21
 
1.2 years
 
Fixed/Unsecured
Senior notes – 4.58% due 2024
 
150,000

 
4.58
%
 
06/30/24
 
4.3 years
 
Fixed/Unsecured
Senior notes – 4.00% due 2025
 
250,000

 
4.00
%
 
03/15/25
 
5.0 years
 
Fixed/Unsecured
Senior notes – 4.08% due 2026
 
100,000

 
4.08
%
 
09/30/26
 
6.5 years
 
Fixed/Unsecured
Senior notes – 4.24% due 2028
 
100,000

 
4.24
%
 
12/28/28
 
8.8 years
 
Fixed/Unsecured
Senior notes – 4.82% due 2029
 
100,000

 
4.82
%
 
06/28/29
 
9.2 years
 
Fixed/Unsecured
Unsecured notes payable (b)
 
800,000

 
4.27
%
 
 
 
5.6 years
 
 
 
 
 
 
 
 
 
 
 
 
 
Term loan due 2021 (b)
 
250,000

 
3.20
%
(c)
01/05/21
 
0.8 years
 
Fixed/Unsecured
Revolving line of credit (d)
 
849,704

 
2.04
%
(e)
04/22/22
 
2.1 years
 
Variable/Unsecured
Unsecured credit facility
 
1,099,704

 
2.30
%
 
 
 
1.8 years
 
 
 
 
 
 
 
 
 
 
 
 
 
Term Loan Due 2023
 
200,000

 
4.05
%
(f)
11/22/23
 
3.6 years
 
Fixed/Unsecured
Term Loan Due 2024
 
120,000

 
2.88
%
(g)
07/17/24
 
4.3 years
 
Fixed/Unsecured
Term Loan Due 2026
 
150,000

 
3.27
%
(h)
07/17/26
 
6.3 years
 
Fixed/Unsecured
Unsecured term loans (b)
 
470,000

 
3.50
%
 
 
 
4.7 years
 
 
 
 
 
 
 
 
 
 
 
 
 
Total consolidated indebtedness
 
$
2,463,989

 
3.25
%
 
 
 
3.7 years
 
 

Consolidated Debt Maturity Schedule as of March 31, 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year
 
Fixed
Rate (b)
 
WA Rates on
Fixed Debt
 
Variable
Rate
 
WA Rates on
Variable Debt (d)
 
Total
 
% of Total
 
WA Rates on
Total Debt (a)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2020
 
$
1,875

 
4.39
%
 
$

 

 
$
1,875

 
0.1
%
 
4.39
%
2021
 
352,626

 
3.47
%
 

 

 
352,626

 
14.3
%
 
3.47
%
2022
 
26,678

 
4.81
%
 
849,704

 
2.04
%
 
876,382

 
35.6
%
 
2.12
%
2023
 
231,758

 
4.06
%
 

 

 
231,758

 
9.4
%
 
4.06
%
2024
 
271,737

 
3.83
%
 

 

 
271,737

 
11.0
%
 
3.83
%
2025
 
251,809

 
4.00
%
 

 

 
251,809

 
10.2
%
 
4.00
%
2026
 
251,884

 
3.60
%
 

 

 
251,884

 
10.2
%
 
3.60
%
2027
 
21,410

 
4.46
%
 

 

 
21,410

 
0.9
%
 
4.46
%
2028
 
101,228

 
4.23
%
 

 

 
101,228

 
4.1
%
 
4.23
%
2029
 
101,275

 
4.81
%
 

 

 
101,275

 
4.1
%
 
4.81
%
Thereafter
 
2,005

 
3.75
%
 

 

 
2,005

 
0.1
%
 
3.75
%
Total
 
$
1,614,285

 
3.89
%
 
$
849,704

 
2.04
%
 
$
2,463,989

 
100.0
%
 
3.25
%

(a)
Interest rates presented exclude the impact of the discount and capitalized loan fee amortization. As of March 31, 2020, the Company's overall weighted average interest rate for consolidated debt including the impact of the discount and capitalized loan fee amortization was 3.40%.
(b)
Mortgages payable excludes mortgage discount of $(483) and capitalized loan fees of $(240), net of accumulated amortization, as of March 31, 2020. Unsecured notes payable excludes discount of $(586) and capitalized loan fees of $(2,994), net of accumulated amortization, as of March 31, 2020. Unsecured term loans exclude capitalized loan fees of $(3,208), net of accumulated amortization, as of March 31, 2020. In the consolidated debt maturity schedule, maturity amounts for each year include scheduled principal amortization payments.
(c)
Reflects $250,000 of LIBOR-based variable rate debt that has been swapped to a fixed rate of 2.00% plus a credit spread based on a leverage grid ranging from 1.20% to 1.70% through January 5, 2021. The applicable credit spread was 1.20% as of March 31, 2020.
(d)
During the three months ended March 31, 2020, the Company elected to increase its borrowings under its unsecured revolving line of credit to enhance its liquidity and provide maximum financial flexibility as the effects of the COVID-19 pandemic continue to evolve and impact the global financial markets.
(e)
Represents interest rate as of March 31, 2020.
(f)
Reflects $200,000 of LIBOR-based variable rate debt that has been swapped to a fixed rate of 2.85% plus a credit spread based on a leverage grid ranging from 1.20% to 1.85% through November 22, 2023. The applicable credit spread was 1.20% as of March 31, 2020.
(g)
Reflects $120,000 of LIBOR-based variable rate debt that has been swapped to a fixed rate of 1.68% plus a credit spread based on a leverage grid ranging from 1.20% to 1.70% through July 17, 2024. The applicable credit spread was 1.20% as of March 31, 2020.
(h)
Reflects $150,000 of LIBOR-based variable rate debt that has been swapped to a fixed rate of 1.77% plus a credit spread based on a leverage grid ranging from 1.50% to 2.20% through July 17, 2026. The applicable credit spread was 1.50% as of March 31, 2020.

1st Quarter 2020 Supplemental Information
 
8



Retail Properties of America, Inc.
Development Projects as of March 31, 2020
(dollar amounts in thousands)
Property Name and
Metropolitan
Statistical Area (MSA)
 
Estimated
Project
Commercial
GLA
 
Estimated
Project
Multi-Family
Rental Units (MFR)
 
JV / Air Rights
 
Estimated
Net RPAI
Project
Investment (a)
 
Net RPAI Project Investment
Inception
to Date
 
Estimated
Incremental
Return on
Investment (b)
 
Anticipated
Commencement
 
Targeted
Stabilization
(c)
 
Property
Included in
Same Store
Portfolio (d)
 
Project Description
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Active Projects
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Circle East (e)
(Baltimore MSA)
 
82,000
 
370
 
MFR: Air rights sale
 
$42,000–$44,000
 
$
22,804

(f)
7.0%–8.0%
 
Active
 
Q2 2021
 
No (e)
 
Mixed-use redevelopment that will include dual-sided street level retail with approx. 370 third-party-owned MFR above. Project is 11% pre-leased
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One Loudoun Downtown – Pads G & H
(Washington, D.C. MSA)
 
67,000–70,000
 
378
 
MFR: 90%/10% JV
 
$125,000–$135,000 (g)
 
$
21,542

(g)
6.0%–7.0%
 
Active
 
Q2–Q3 2022
 
No (h)
 
Vacant pad development; Groundbreaking held June 13, 2019. See site plan on page 12
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The Shoppes at Quarterfield
(Baltimore MSA)
 
58,000
 
 
n/a
 
$9,000–$10,000
 
$
524

 
11.5%–12.5%
 
Active
 
Q1–Q2 2021
 
No
 
Reconfiguration of site and building, which represents 94% of the property's GLA. Project is 100% pre-leased
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Southlake Town Square–Pad
(Dallas MSA)
 
4,000
 
 
n/a
 
$2,000–$2,500
 
$
259

 
14.5%–15.5%
 
Active
 
Q1–Q2 2021
 
Yes
 
Vacant pad development. Project is 100% pre-leased


(a)
Net project investment represents the Company's estimated share of the project costs, net of proceeds from land sales, sales of air rights, reimbursement from third parties and excludes contributions from project partners, as applicable.
(b)
Estimated Incremental Return on Investment (ROI) generally reflects only the unleveraged incremental NOI generated by the project upon stabilization and is calculated as incremental NOI divided by net project investment. Incremental NOI is the difference between NOI expected to be generated by the stabilized project and the NOI generated prior to the commencement of active redevelopment, development or expansion of the space. ROI does not include peripheral impacts, such as the impact on future lease rollover at the property or the impact on the long-term value of the property.
(c)
Targeted stabilization represents the projected date of the redevelopment reaching 90% occupancy, but generally no later than one year from the completion of major construction activity.
(d)
The Company's same store portfolio consists of retail operating properties acquired or placed in service and stabilized prior to January 1, 2019. A property is removed from the Company's same store portfolio if the project is considered to significantly impact the existing property's NOI and activities have begun in anticipation of the project. Expansions and pad developments are generally not considered to significantly impact the existing property's NOI, and therefore, the existing properties have not been removed from the Company's same store portfolio if they otherwise met the criteria to be included in the Company's same store portfolio as of March 31, 2020.
(e)
Circle East is the Company's rebranded redevelopment at Towson Circle (which has been excluded from the Company's same store portfolio due to the ongoing redevelopment).
(f)
Net project investment inception to date is net of proceeds of $11,820 received in the first quarter of 2018 from the sale of air rights to a third party to develop the MFR.
(g)
Project investment includes an allocation of infrastructure costs.
(h)
The property is comprised of the redevelopment project (which has been excluded from the Company's same store portfolio due to the ongoing redevelopment) and the remaining retail operating portion of the property (which is included in the Company's same store portfolio as of March 31, 2020).

The Company cannot guarantee that (i) ROI will be generated at the percentage listed or at all, (ii) total actual net investment associated with these projects will be equal to the total estimated net project investment, (iii) project commencement or stabilization will occur when anticipated or (iv) that the Company will ultimately complete any or all of these projects. The ROI and total estimated net project investment reflect the Company's best estimate based upon current information, may change over time and are subject to certain conditions which are beyond the Company's control, including, without limitation, general economic conditions, market conditions and other business factors.

1st Quarter 2020 Supplemental Information
 
9



Retail Properties of America, Inc.
Development Projects as of March 31, 2020 (continued)
(dollar amounts in thousands)


The Company has identified the following potential development, redevelopment, expansion and pad development opportunities to develop or redevelop significant portions of the property, add stand-alone buildings, convert previously under-utilized space or develop additional commercial GLA at existing properties. Executing on these opportunities may be subject to certain conditions which are beyond the Company's control, including, without limitation, government approvals, tenant consents as well as general economic, market and other conditions and, therefore, the Company can provide no assurances that any of the development, redevelopment, expansion and pad development opportunities (i) will be executed on, (ii) will commence when anticipated or (iii) will ultimately be realized.
Property Name
 
MSA
 
Included in
Same store
portfolio (a)
 
Entitled
Commercial GLA (b)
 
Entitled MFR (b)
 
Developable
Acreage
 
 
 
 
 
 
 
 
 
 
 
Future Projects – Entitled (b)
 
 
 
 
 
 
 
 
 
 
One Loudoun Uptown – land held for future development
 
Washington, D.C.
 
No
 
2,800,000
 
 
 
32
Carillon (c)
 
Washington, D.C.
 
No
 
1,200,000
 
3,000
 
50
One Loudoun Downtown – Pad T
 
Washington, D.C.
 
Yes
 
40,000
 
 
 
 
One Loudoun Downtown – future phases (d)
 
Washington, D.C.
 
Yes
 
62,000 – 95,000
 
 
 
 
Main Street Promenade
 
Chicago
 
Yes
 
62,000
 
 
 
 
Downtown Crown
 
Washington, D.C.
 
Yes
 
42,000
 
 
 
 
Reisterstown Road Plaza
 
Baltimore
 
Yes
 
8,000 – 12,000
 
 
 
 
Gateway Plaza
 
Dallas
 
Yes
 
8,000
 
 
 
 
Edwards Multiplex – Ontario, CA
 
Riverside-San Bernadino
 
Yes
 
3,000
 
 
 
 
Property Name
 
MSA
 
Included in
Same store
portfolio (a)
 
Estimated Project
Commercial GLA
 
Estimated
Project MFR
 
 
 
 
 
 
 
 
 
Development, Redevelopment, Expansion and Pad Development Opportunities
 
 
 
 
 
 
Southlake Town Square
 
Dallas
 
Yes
 
271,000
 
 
Merrifield Town Center II (e)
 
Washington, D.C.
 
Yes
 
80,000 – 100,000
 
350 – 400
Tysons Corner (e)
 
Washington, D.C.
 
Yes
 
50,000 – 75,000
 
350 – 450
Plaza del Lago – future phase
 
Chicago
 
Yes
 
20,600
 
 
Lakewood Towne Center
 
Seattle
 
Yes
 
10,500
 
 
Humblewood Shopping Center
 
Houston
 
Yes
 
5,000
 
 
Watauga Pavilion
 
Dallas
 
Yes
 
5,000
 
 


(a)
See footnote (d) on page 9 regarding the Company's same store portfolio.
(b)
Project may require additional discretionary design or other approvals in certain jurisdictions.
(c)
During the three months ended March 31, 2020, in response to current macroeconomic conditions due to the impact of the COVID-19 pandemic, the Company halted plans for vertical construction at Carillon and terminated the joint venture related to the multi-family rental portion of phase one of the redevelopment. As of March 31, 2020, the Company was actively completing site work preparation at the property in anticipation of potential future development at the site. The Company expects to complete the site work preparation during 2020 for an expected additional capital investment of approximately $4,500. Subsequent to March 31, 2020, the Company terminated the joint venture related to the medical office building portion of phase one of the redevelopment.
(d)
One Loudoun Downtown – future phases includes three vacant parcels that have been identified as future pad development opportunities of up to 95,000 square feet of commercial GLA.
(e)
Project may require demolition of a portion of the property's existing GLA.

1st Quarter 2020 Supplemental Information
 
10



Retail Properties of America, Inc.
Development Projects as of March 31, 2020 (continued)
(dollar amounts in thousands)


Property Name and MSA
 
Project
Commercial
GLA
 
Project
MFR
 
Estimated
Net RPAI Project
Investment (a)
 
Net RPAI
Project
Investment
Inception to Date
 
Estimated
Incremental
Return on
Investment (a)
 
Stabilization
(a)
 
Property
Included in
Same Store
Portfolio (a)
 
Project Description
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Completed Redevelopment Projects
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reisterstown Road Plaza
(Baltimore MSA)
 
40,500
 
 
$
10,500

 
$
9,938

 
10.5%–11.0%
 
Q4 2018
 
Yes
 
Reconfigured existing space and facade renovation; redevelopment GLA is 100% leased and 100% occupied
Plaza del Lago – MFR
(Chicago MSA)
 
 
18
 
$1,350–$1,400

 
$
1,394

 
8.5%–9.0%
 
Q2 2020
 
No (b)
 
Reconfiguration of 18 MFR, which are 83% leased; major construction was completed in Q2 2019


Property Name and MSA
 
Project
Commercial
GLA
 
Net RPAI
Investment (a)
 
Incremental
Return on
Investment (a)
 
Completion
 
Property
Included in
Same Store
Portfolio (a)
 
Project Description
 
 
 
 
 
 
 
 
 
 
 
 
 
Completed Expansions and Pad Developments
 
 
 
 
 
 
 
 
 
 
 
 
Lake Worth Towne Crossing – Parcel
(Dallas MSA)
 
15,030
 
$
2,872

 
11.3%
 
Q4 2015
 
Yes
 
15,030 sq. ft. multi-tenant retail
Parkway Towne Crossing
(Dallas MSA)
 
21,000
 
$
3,468

 
9.9%
 
Q3 2016
 
Yes
 
21,000 sq. ft. multi-tenant retail
Heritage Square
(Seattle MSA)
 
4,200
 
$
1,507

 
11.2%
 
Q3 2016
 
Yes
 
4,200 sq. ft. redevelopment of outparcel for new tenant, Corner Bakery
Pavilion at King's Grant
(Charlotte MSA)
 
32,500
 
$
2,470

 
14.7%
 
Q2 2017
 
Yes
 
32,500 sq. ft. multi-tenant retail
Shops at Park Place
(Dallas MSA)
 
25,040
 
$
3,956

 
9.1%
 
Q2 2017
 
Yes
 
25,040 sq. ft. pad development
Lakewood Towne Center
(Seattle MSA)
 
4,500
 
$
1,900

 
7.3%
 
Q3 2017
 
Yes
 
4,500 sq. ft. pad development


(a)
See footnote (a), (b), (c) and (d) on page 9 regarding the net RPAI project investment, incremental return on investment, stabilization and same store portfolio, respectively.
(b)
The property is comprised of the multi-family rental units, which were placed in service during the three months ended September 30, 2019 and are excluded from the Company's same store portfolio, and the remaining retail operating portion of the property, which is included in the Company's same store portfolio as of March 31, 2020.

1st Quarter 2020 Supplemental Information
 
11



Retail Properties of America, Inc.
Development Projects as of March 31, 2020 (continued)
One Loudoun Downtown Site Plan

1st Quarter 2020 Supplemental Information
 
12



Retail Properties of America, Inc.
Acquisitions and Dispositions for the Three Months Ended March 31, 2020
(amounts in thousands, except square footage amounts)


Acquisitions
Property Name
 
Acquisition Date
 
MSA
 
Property Type
 
GLA
 
Purchase Price
 
 
 
 
 
 
 
 
 
 
 
Fullerton Metrocenter
 
February 6, 2020
 
Los Angeles
 
Fee interest (a)
 
154,700

 
$
55,000

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total 2020 acquisitions (through March 31, 2020)
 
154,700

 
$
55,000



(a)
The Company acquired the fee interest in an existing multi-tenant retail operating property. In connection with this acquisition, the Company also assumed the lessor position in a ground lease with a shadow anchor. The total number of properties in the Company's portfolio was not affected by this transaction.



Property Dispositions
Property Name
 
Disposition Date
 
Property Type
 
GLA
 
Consideration
 
Debt Repaid
 
Prepayment
Premium
 
 
 
 
 
 
 
 
 
 
 
 
 
King Philip's Crossing
 
February 13, 2020
 
Multi-tenant retail
 
105,900

 
$
13,900

 
$

 
$

 
 
 
 
 
 
 
 
 
 
 
 
 
Total 2020 property dispositions (through March 31, 2020)
 
105,900

 
$
13,900

 
$

 
$





There have been no acquisitions or dispositions subsequent to March 31, 2020.

1st Quarter 2020 Supplemental Information
 
13



Retail Properties of America, Inc.
Retail Market Summary as of March 31, 2020


Property Type/Market
 
Number of
Properties
 
ABR (a)
(in thousands)
 
% of Total
Multi-Tenant
Retail
ABR (a)
 
ABR per
Occupied
Sq. Ft.
 
GLA (a)
(in thousands)
 
% of Total
Multi-Tenant
Retail
GLA (a)
 
Occupancy
 
% Leased
Including
Signed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Multi-Tenant Retail:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Top 25 MSAs
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dallas
 
19

 
$
83,234

 
23.1
%
 
$
22.88

 
3,943

 
20.0
%
 
92.2
%
 
92.9
%
Washington, D.C.
 
8

 
39,300

 
10.9
%
 
29.32

 
1,388

 
7.0
%
 
96.5
%
 
96.8
%
New York
 
9

 
36,638

 
10.1
%
 
29.77

 
1,292

 
6.6
%
 
95.2
%
 
95.2
%
Chicago
 
8

 
29,603

 
8.2
%
 
24.08

 
1,358

 
6.9
%
 
90.5
%
 
90.5
%
Seattle
 
9

 
24,450

 
6.8
%
 
16.69

 
1,548

 
7.9
%
 
94.6
%
 
97.6
%
Baltimore
 
4

 
21,963

 
6.1
%
 
16.02

 
1,543

 
7.8
%
 
88.9
%
 
93.8
%
Atlanta
 
9

 
20,874

 
5.8
%
 
14.00

 
1,513

 
7.7
%
 
98.6
%
 
98.6
%
Houston
 
9

 
16,199

 
4.5
%
 
14.97

 
1,141

 
5.8
%
 
94.9
%
 
96.1
%
San Antonio
 
3

 
12,729

 
3.5
%
 
17.95

 
721

 
3.7
%
 
98.3
%
 
98.4
%
Phoenix
 
3

 
11,019

 
3.0
%
 
18.02

 
632

 
3.2
%
 
96.8
%
 
98.1
%
Los Angeles
 
1

 
6,742

 
1.9
%
 
18.06

 
396

 
2.0
%
 
94.3
%
 
96.2
%
Riverside
 
1

 
4,584

 
1.3
%
 
15.99

 
292

 
1.5
%
 
98.1
%
 
98.1
%
St. Louis
 
1

 
4,275

 
1.2
%
 
9.60

 
453

 
2.3
%
 
98.3
%
 
98.3
%
Charlotte
 
1

 
3,691

 
1.0
%
 
14.06

 
320

 
1.6
%
 
82.1
%
 
96.2
%
Tampa
 
1

 
2,401

 
0.7
%
 
19.69

 
126

 
0.6
%
 
97.0
%
 
97.0
%
Subtotal
 
86

 
317,702

 
88.1
%
 
20.29

 
16,666

 
84.6
%
 
93.9
%
 
95.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-Top 25 MSAs by State
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Texas
 
7

 
13,950

 
3.9
%
 
14.80

 
1,002

 
5.1
%
 
94.0
%
 
94.5
%
Michigan
 
1

 
7,164

 
2.0
%
 
23.95

 
333

 
1.7
%
 
89.9
%
 
92.2
%
Massachusetts
 
1

 
5,836

 
1.6
%
 
11.02

 
536

 
2.7
%
 
98.8
%
 
98.8
%
Virginia
 
1

 
4,854

 
1.3
%
 
18.07

 
308

 
1.6
%
 
87.3
%
 
87.3
%
Washington
 
1

 
4,593

 
1.3
%
 
12.49

 
378

 
1.9
%
 
97.3
%
 
98.4
%
Tennessee
 
2

 
4,195

 
1.2
%
 
11.73

 
364

 
1.8
%
 
98.1
%
 
98.1
%
Maryland
 
1

 
2,127

 
0.6
%
 
20.90

 
113

 
0.6
%
 
90.1
%
 
90.1
%
Subtotal
 
14

 
42,719

 
11.9
%
 
14.90

 
3,034

 
15.4
%
 
94.5
%
 
95.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Multi-Tenant Retail
 
100

 
360,421

 
100.0
%
 
19.46

 
19,700

 
100.0
%
 
94.0
%
 
95.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Single-User Retail
 
2

 
5,864

 
 
 
22.49

 
261

 
 
 
100.0
%
 
100.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Retail
Operating Portfolio (b)
 
102

 
$
366,285

 
 
 
$
19.50

 
19,961

 
 
 
94.1
%
 
95.3
%


(a)
Excludes $2,025 of multi-tenant retail ABR and 167 square feet of multi-tenant retail GLA attributable to Circle East and The Shoppes at Quarterfield, located in the Baltimore MSA, and Carillon, located in the Washington, D.C. MSA, all three of which are in redevelopment. Including these amounts, 88.2% of the Company's multi-tenant retail ABR and 84.7% of the Company's multi-tenant retail GLA is located in the top 25 MSAs.
(b)
Excludes the 18 multi-family rental units at Plaza del Lago, which were placed in service during 2019. As of March 31, 2020, 16 multi-family rental units were leased at an average monthly rental rate per unit of $1,339.

1st Quarter 2020 Supplemental Information
 
14




Retail Properties of America, Inc.
Retail Operating Portfolio Occupancy Breakdown as of March 31, 2020
(square footage in thousands)


Total Retail Operating Portfolio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Top 25 MSAs
 
Non-Top 25 MSAs
 
Total Multi-Tenant Retail
 
Single-User Retail
 
Total Retail
Number of Properties
86
 
14
 
100
 
2
 
102
 
GLA
 
Occupancy
 
GLA
 
Occupancy
 
GLA
 
Occupancy
 
GLA
 
Occupancy
 
GLA
 
Occupancy
 
% Leased
Including Signed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
25,000+ sq ft
7,687

 
97.0
%
 
1,424

 
100.0
%
 
9,111

 
97.4
%
 
261

 
100.0
%
 
9,372

 
97.5
%
 
99.0
%
10,000-24,999 sq ft
3,326

 
95.5
%
 
568

 
92.6
%
 
3,894

 
95.0
%
 

 
%
 
3,894

 
95.0
%
 
96.5
%
Anchor
11,013

 
96.5
%
 
1,992

 
97.9
%
 
13,005

 
96.7
%
 
261

 
100.0
%
 
13,266

 
96.8
%
 
98.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,000-9,999 sq ft
2,259

 
89.0
%
 
382

 
90.7
%
 
2,641

 
89.3
%
 

 

 
2,641

 
89.3
%
 
90.2
%
0-4,999 sq ft
3,394

 
88.9
%
 
660

 
86.4
%
 
4,054

 
88.5
%
 

 

 
4,054

 
88.5
%
 
89.0
%
Non-Anchor
5,653

 
88.9
%
 
1,042

 
88.0
%
 
6,695

 
88.8
%
 

 

 
6,695

 
88.8
%
 
89.5
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
16,666

 
93.9
%
 
3,034

 
94.5
%
 
19,700

 
94.0
%
 
261

 
100.0
%
 
19,961

 
94.1
%
 
95.3
%




1st Quarter 2020 Supplemental Information
 
15




Retail Properties of America, Inc.
Tenant Resiliency and April Rent Collections as of April 30, 2020
(dollar amounts in thousands)


The following table, based on ABR of leases in effect as of March 31, 2020, sets forth information regarding the percent of April rent collected by tenant type as of April 30, 2020. This information is being provided to assist with analysis of the potential impact of COVID-19. April rental receipts may not be indicative of collections in future periods. The classification of tenant type, including the classification between essential and non-essential, is based on management's understanding of the tenant operations and may not be comparative to similarly titled classifications by other companies. Dollars are presented in thousands.
Resiliency Category/Tenant Type
 
ABR
 
% of Total ABR
 
% of April
Rent Collected
 
 
 
 
 
 
 
Essential
 
 
 
 
 
 
Grocery/Warehouse Clubs
 
$
30,333

 
8.3
%
 
99.9
%
Financial Services/Banks
 
13,673

 
3.7
%
 
99.6
%
Medical
 
12,211

 
3.3
%
 
67.2
%
Electronics
 
10,241

 
2.8
%
 
72.7
%
Hardware
 
10,136

 
2.8
%
 
95.6
%
Auto and Other Essentials
 
9,936

 
2.7
%
 
96.2
%
Pet/Animal Supplies
 
9,832

 
2.7
%
 
71.9
%
Office Supplies
 
6,396

 
1.7
%
 
100.0
%
Wireless Communications
 
6,308

 
1.7
%
 
87.6
%
Drug Stores
 
3,190

 
0.9
%
 
99.0
%
Total Essential
 
112,256

 
30.6
%
 
90.1
%
 
 
 
 


 
 
Non-Essential
 
 
 
 
 
 
Apparel
 
36,856

 
10.1
%
 
9.8
%
Housewares
 
28,172

 
7.7
%
 
31.2
%
Soft Goods/Discount Stores
 
25,619

 
7.0
%
 
57.8
%
Services
 
22,600

 
6.2
%
 
32.3
%
Sporting Goods/Hobby
 
14,218

 
3.9
%
 
41.6
%
Movie Theaters
 
10,294

 
2.8
%
 
0.0
%
Specialty
 
10,205

 
2.8
%
 
39.6
%
Health Clubs
 
10,035

 
2.7
%
 
27.9
%
Other
 
7,763

 
2.1
%
 
13.9
%
Book Stores
 
4,621

 
1.2
%
 
8.1
%
Amusement/Play Centers
 
2,116

 
0.6
%
 
18.8
%
Total Non-Essential
 
172,499

 
47.1
%
 
28.5
%
 
 
 
 
 
 
 
Restaurants
 
 
 
 
 
 
Restaurants – Full Service
 
31,908

 
8.8
%
 
31.4
%
Restaurants – Quick Service
 
26,543

 
7.2
%
 
50.8
%
Total Restaurants
 
58,451

 
16.0
%
 
40.6
%
 
 
 
 
 
 
 
Office
 
23,079

 
6.3
%
 
75.7
%
 
 
 
 
 
 
 
Total Retail Operating Portfolio
 
$
366,285

 
100.0
%
 
52.4
%


1st Quarter 2020 Supplemental Information
 
16



Retail Properties of America, Inc.
Top Retail Tenants as of March 31, 2020
(dollar amounts and square footage in thousands)


The following table sets forth information regarding the 20 largest tenants in the Company's retail operating portfolio based on ABR as of March 31, 2020. Dollars (other than per square foot information) and square feet of GLA are presented in thousands.
Tenant
 
Primary DBA/Number of Stores
 
Number
of Stores
 
ABR
 
% of Total
ABR
 
ABR per
Occupied
Sq. Ft.
 
Occupied
GLA
 
% of
Occupied
GLA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Best Buy Co., Inc.
 
Best Buy (11), Pacific Sales (1)
 
12

 
$
8,873

 
2.4
%
 
$
18.07

 
491

 
2.6
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The TJX Companies, Inc.
 
T.J. Maxx (11), Marshalls (7), HomeGoods (6), Homesense (1)
 
25

 
7,982

 
2.2
%
 
10.85

 
736

 
3.9
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
AB Acquisition LLC
 
Safeway (4), Jewel-Osco (3), Tom Thumb (2)
 
9

 
6,674

 
1.8
%
 
13.73

 
486

 
2.6
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Bed Bath & Beyond Inc.
 
Bed Bath & Beyond (12), Cost Plus World Market (3), buybuy BABY (2)
 
17

 
6,247

 
1.7
%
 
13.82

 
452

 
2.4
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ross Stores, Inc.
 
Ross Dress for Less
 
18

 
6,172

 
1.7
%
 
11.69

 
528

 
2.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PetSmart, Inc.
 
 
 
17

 
5,764

 
1.6
%
 
16.66

 
346

 
1.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gap Inc.
 
Old Navy (13), The Gap (4), Banana Republic (3), Janie &
Jack (2), Athleta (1), Gap Factory Store (1)
 
24

 
5,539

 
1.5
%
 
20.75

 
267

 
1.4
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ahold U.S.A. Inc.
 
Stop & Shop (3), Giant Eagle (1)
 
4

 
5,468

 
1.5
%
 
22.60

 
242

 
1.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
BJ's Wholesale Club, Inc.
 
 
 
2

 
4,939

 
1.3
%
 
20.16

 
245

 
1.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Michaels Stores, Inc.
 
Michaels
 
16

 
4,754

 
1.3
%
 
12.85

 
370

 
2.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Lowe's Companies, Inc.
 
 
 
4

 
3,944

 
1.1
%
 
6.47

 
610

 
3.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Regal Entertainment Group
 
Edwards Cinema
 
1

 
3,882

 
1.1
%
 
31.06

 
125

 
0.7
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The Kroger Co.
 
Kroger (5), Harris Teeter (1),
QFC (1)
 
7

 
3,639

 
1.0
%
 
10.43

 
349

 
1.9
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Barnes & Noble, Inc.
 
 
 
7

 
3,592

 
1.0
%
 
20.88

 
172

 
0.9
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The Home Depot, Inc.
 
 
 
3

 
3,404

 
0.9
%
 
9.38

 
363

 
1.9
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Office Depot, Inc.
 
Office Depot (8), OfficeMax (2)
 
10

 
3,397

 
0.9
%
 
14.71

 
231

 
1.2
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ascena Retail Group, Inc.
 
Lane Bryant (9), Catherine's (5), Justice (5), LOFT (5), Ann
Taylor (4)
 
28

 
3,334

 
0.9
%
 
24.70

 
135

 
0.7
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Party City Holdings Inc.
 
 
 
15

 
3,328

 
0.9
%
 
14.60

 
228

 
1.2
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Petco Animal Supplies, Inc.
 
 
 
13

 
3,223

 
0.9
%
 
18.01

 
179

 
1.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ulta Beauty, Inc.
 
 
 
14

 
3,206

 
0.9
%
 
21.52

 
149

 
0.8
%
Total Top Retail Tenants
 
 
 
246

 
$
97,361

 
26.6
%
 
$
14.52

 
6,704

 
35.7
%


1st Quarter 2020 Supplemental Information
 
17




Retail Properties of America, Inc.
Retail Leasing Activity Summary
(square footage amounts in thousands)


The following table summarizes the leasing activity in the Company's retail operating portfolio as of March 31, 2020 and for the preceding four quarters. Leases of less than 12 months have been excluded.
Total Leases
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of
Leases Signed
 
GLA Signed
 
New Contractual
Rent per Square
Foot (PSF) (a)
 
Prior
Contractual
Rent PSF (a)
 
% Change
over Prior
ABR (a)
 
WA Lease
Term
 
Tenant
Allowances
PSF
Q1 2020 (b)
 
82

 
285

 
$
22.39

 
$
21.35

 
4.9
%
 
6.2

 
$
18.51

Q4 2019 (b)
 
132

 
773

 
$
20.28

 
$
18.97

 
6.9
%
 
6.8

 
$
20.01

Q3 2019
 
129

 
1,108

 
$
19.05

 
$
17.20

 
10.8
%
 
6.1

 
$
15.31

Q2 2019
 
120

 
519

 
$
24.34

 
$
22.49

 
8.2
%
 
6.0

 
$
13.78

Total – 12 months (b)
 
463

 
2,685

 
$
20.81

 
$
19.19

 
8.4
%
 
6.3

 
$
16.62

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Comparable Renewal Leases
 
 
 
 

 
 

 
 

 
 

 
 

 
 
Number of
Leases Signed
 
GLA Signed
 
New
Contractual
Rent PSF
 
Prior
Contractual
Rent PSF
 
% Change
over Prior
ABR
 
WA Lease
Term
 
Tenant
Allowances
PSF
Q1 2020 (b)
 
62

 
195

 
$
22.29

 
$
21.25

 
4.9
%
 
4.8

 
$
8.73

Q4 2019
 
80

 
388

 
$
20.53

 
$
19.70

 
4.2
%
 
4.3

 
$
1.89

Q3 2019
 
84

 
749

 
$
18.34

 
$
17.42

 
5.3
%
 
4.6

 
$
0.87

Q2 2019
 
72

 
351

 
$
22.71

 
$
21.24

 
6.9
%
 
5.3

 
$
2.13

Total – 12 months (b)
 
298

 
1,683

 
$
20.22

 
$
19.18

 
5.4
%
 
4.7

 
$
2.22

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Comparable New Leases
 
 
 
 

 
 

 
 

 
 

 
 

 
 
Number of
Leases Signed
 
GLA Signed
 
New
Contractual
Rent PSF
 
Prior
Contractual
Rent PSF
 
% Change
over Prior
ABR
 
WA Lease
Term
 
Tenant
Allowances
PSF
Q1 2020 (b)
 
5

 
33

 
$
23.01

 
$
21.95

 
4.8
%
 
9.4

 
$
41.30

Q4 2019 (b)
 
17

 
168

 
$
19.71

 
$
17.27

 
14.1
%
 
10.6

 
$
50.34

Q3 2019
 
16

 
125

 
$
23.27

 
$
15.90

 
46.4
%
 
10.4

 
$
75.11

Q2 2019
 
27

 
67

 
$
32.89

 
$
29.05

 
13.2
%
 
7.7

 
$
39.52

Total – 12 months (b)
 
65

 
393

 
$
23.36

 
$
19.23

 
21.5
%
 
9.8

 
$
57.09

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-Comparable New and Renewal Leases (c)
 
 

 
 

 
 

 
 

 
 

 
 
Number of
Leases Signed
 
GLA Signed
 
New
Contractual
Rent PSF
 
Prior
Contractual
Rent PSF
 
% Change
over Prior
ABR
 
WA Lease
Term
 
Tenant
Allowances
PSF
Q1 2020 (b)
 
15

 
57

 
$
26.62

 
n/a
 
n/a
 
8.7

 
$
47.57

Q4 2019 (b)
 
35

 
217

 
$
14.96

 
n/a
 
n/a
 
9.1

 
$
34.51

Q3 2019
 
29

 
234

 
$
15.68

 
n/a
 
n/a
 
8.1

 
$
29.54

Q2 2019
 
21

 
101

 
$
32.71

 
n/a
 
n/a
 
6.6

 
$
37.24

Total – 12 months (b)
 
100

 
609

 
$
19.28

 
n/a
 
n/a
 
8.0

 
$
34.14

 

(a)
Excludes the impact of Non-Comparable New and Renewal Leases.
(b)
All columns include leasing activity and related information pertaining to the Company's active and near-term expansion and redevelopment projects except the "Tenant Allowances PSF" column, which excludes tenant allowances and related square foot amounts related to leasing activity at these projects. Such tenant allowances, if any, are included in the estimated net RPAI project investment amounts shown on page 9.
(c)
Includes (i) leases signed on units that were vacant for over 12 months, (ii) leases signed without fixed rental payments and (iii) leases signed where the previous and current lease do not have a consistent lease structure.

1st Quarter 2020 Supplemental Information
 
18



Retail Properties of America, Inc.
Retail Lease Expirations as of March 31, 2020
(dollar amounts and square footage in thousands)


The following tables set forth a summary, as of March 31, 2020, of lease expirations scheduled to occur during the remainder of 2020 and each of the nine calendar years from 2021 to 2029 and thereafter, assuming no exercise of renewal options or early termination rights for all leases in the Company's retail operating portfolio. The following tables are based on leases commenced as of March 31, 2020. Dollars (other than per square foot information) and square feet of GLA are presented in thousands in the table.
Lease Expiration Year
 
Lease
Count
 
ABR
 
% of Total
ABR
 
ABR per
Occupied
Sq. Ft.
 
ABR at
Exp. (a)
 
ABR per
Occupied Sq.
Ft. at Exp.
 
GLA
 
% of
Occupied
GLA
 
% of Total
GLA
2020
 
197

 
$
16,272

 
4.4
%
 
$
25.15

 
$
15,756

 
$
24.35

 
647

 
3.4
%
 
3.2
%
2021
 
315

 
45,434

 
12.4
%
 
19.88

 
45,733

 
20.01

 
2,285

 
12.2
%
 
11.5
%
2022
 
364

 
52,700

 
14.4
%
 
17.07

 
53,685

 
17.39

 
3,087

 
16.4
%
 
15.5
%
2023
 
362

 
51,282

 
14.1
%
 
19.77

 
52,576

 
20.27

 
2,594

 
13.9
%
 
13.0
%
2024
 
422

 
61,401

 
16.8
%
 
20.25

 
63,574

 
20.97

 
3,032

 
16.1
%
 
15.2
%
2025
 
213

 
36,495

 
9.9
%
 
18.03

 
38,643

 
19.09

 
2,024

 
10.8
%
 
10.2
%
2026
 
97

 
20,147

 
5.5
%
 
19.13

 
22,498

 
21.37

 
1,053

 
5.5
%
 
5.3
%
2027
 
81

 
13,055

 
3.5
%
 
15.96

 
14,599

 
17.85

 
818

 
4.3
%
 
4.0
%
2028
 
79

 
18,238

 
4.9
%
 
23.12

 
20,714

 
26.25

 
789

 
4.2
%
 
3.9
%
2029
 
98

 
21,709

 
6.0
%
 
21.20

 
24,405

 
23.83

 
1,024

 
5.5
%
 
5.1
%
Thereafter
 
103

 
28,326

 
7.8
%
 
20.51

 
34,514

 
24.99

 
1,381

 
7.4
%
 
6.9
%
Month to month
 
24

 
1,226

 
0.3
%
 
24.04

 
1,226

 
24.04

 
51

 
0.3
%
 
0.3
%
Leased Total
 
2,355

 
$
366,285

 
100.0
%
 
$
19.50

 
$
387,923

 
$
20.65

 
18,785

 
100.0
%
 
94.1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Leases signed but not commenced
 
21

 
$
4,545

 

 
$
18.55

 
$
5,172

 
$
21.11

 
245

 

 
1.2
%
Available
 
 

 
 

 
 

 
 

 
 

 
 

 
931

 

 
4.7
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following tables break down the above information into anchor (10,000 sf and above) and non-anchor (under 10,000 sf) details for the Company's retail operating portfolio. Dollars (other than per square foot information) and square feet of GLA are presented in thousands in the tables.
Anchor
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Lease Expiration Year
 
Lease
Count
 
ABR
 
% of Total
ABR
 
ABR per
Occupied
Sq. Ft.
 
ABR at
Exp. (a)
 
ABR per
Occupied Sq.
Ft. at Exp.
 
GLA
 
% of
Occupied
GLA
 
% of Total
GLA
2020
 
8

 
$
2,363

 
0.6
%
 
$
17.12

 
$
1,837

 
$
13.31

 
138

 
0.7
%
 
0.7
%
2021
 
52

 
24,058

 
6.6
%
 
15.72

 
24,129

 
15.77

 
1,530

 
8.2
%
 
7.7
%
2022
 
64

 
27,752

 
7.6
%
 
12.43

 
28,016

 
12.55

 
2,233

 
11.9
%
 
11.2
%
2023
 
60

 
23,300

 
6.4
%
 
14.02

 
23,403

 
14.08

 
1,662

 
8.9
%
 
8.3
%
2024
 
67

 
27,523

 
7.5
%
 
13.94

 
27,696

 
14.02

 
1,975

 
10.5
%
 
9.9
%
2025
 
46

 
19,583

 
5.3
%
 
13.53

 
20,176

 
13.94

 
1,447

 
7.7
%
 
7.3
%
2026
 
29

 
11,255

 
3.1
%
 
14.49

 
12,235

 
15.75

 
777

 
4.1
%
 
3.9
%
2027
 
15

 
6,037

 
1.6
%
 
10.30

 
6,557

 
11.19

 
586

 
3.1
%
 
2.9
%
2028
 
19

 
10,410

 
2.8
%
 
18.42

 
11,319

 
20.03

 
565

 
3.0
%
 
2.8
%
2029
 
28

 
14,947

 
4.1
%
 
18.18

 
16,046

 
19.52

 
822

 
4.4
%
 
4.1
%
Thereafter
 
35

 
20,120

 
5.5
%
 
18.21

 
24,467

 
22.14

 
1,105

 
5.9
%
 
5.5
%
Month to month
 

 

 
%
 

 

 

 

 
%
 
%
Leased Total
 
423

 
$
187,348

 
51.1
%
 
$
14.59

 
$
195,881

 
$
15.26

 
12,840

 
68.4
%
 
64.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Leases signed but not commenced
 
6

 
$
2,966

 

 
$
15.06

 
$
3,269

 
$
16.59

 
197

 

 
1.0
%
Available
 
 
 
 
 
 
 
 
 
 
 
 
 
229

 

 
1.2
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-Anchor
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Lease Expiration Year
 
Lease
Count
 
ABR
 
% of Total
ABR
 
ABR per
Occupied
Sq. Ft.
 
ABR at
Exp. (a)
 
ABR per
Occupied Sq.
Ft. at Exp.
 
GLA
 
% of
Occupied
GLA
 
% of Total
GLA
2020
 
189

 
$
13,909

 
3.8
%
 
$
27.33

 
$
13,919

 
$
27.35

 
509

 
2.7
%
 
2.5
%
2021
 
263

 
21,376

 
5.8
%
 
28.31

 
21,604

 
28.61

 
755

 
4.0
%
 
3.8
%
2022
 
300

 
24,948

 
6.8
%
 
29.21

 
25,669

 
30.06

 
854

 
4.5
%
 
4.3
%
2023
 
302

 
27,982

 
7.7
%
 
30.02

 
29,173

 
31.30

 
932

 
5.0
%
 
4.7
%
2024
 
355

 
33,878

 
9.3
%
 
32.05

 
35,878

 
33.94

 
1,057

 
5.6
%
 
5.3
%
2025
 
167

 
16,912

 
4.6
%
 
29.31

 
18,467

 
32.01

 
577

 
3.1
%
 
2.9
%
2026
 
68

 
8,892

 
2.4
%
 
32.22

 
10,263

 
37.18

 
276

 
1.4
%
 
1.4
%
2027
 
66

 
7,018

 
1.9
%
 
30.25

 
8,042

 
34.66

 
232

 
1.2
%
 
1.1
%
2028
 
60

 
7,828

 
2.1
%
 
34.95

 
9,395

 
41.94

 
224

 
1.2
%
 
1.1
%
2029
 
70

 
6,762

 
1.9
%
 
33.48

 
8,359

 
41.38

 
202

 
1.1
%
 
1.0
%
Thereafter
 
68

 
8,206

 
2.3
%
 
29.73

 
10,047

 
36.40

 
276

 
1.5
%
 
1.4
%
Month to month
 
24

 
1,226

 
0.3
%
 
24.04

 
1,226

 
24.04

 
51

 
0.3
%
 
0.3
%
Leased Total
 
1,932

 
$
178,937

 
48.9
%
 
$
30.10

 
$
192,042

 
$
32.30

 
5,945

 
31.6
%
 
29.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Leases signed but not commenced
 
15

 
$
1,579

 

 
$
32.90

 
$
1,903

 
$
39.65

 
48

 

 
0.2
%
Available
 
 
 
 
 
 
 
 
 
 
 
 
 
702

 

 
3.5
%

(a)
Represents annualized base rent at the scheduled expiration of the lease giving effect to fixed contractual increases in base rent.

1st Quarter 2020 Supplemental Information
 
19



Retail Properties of America, Inc.
Non-GAAP Financial Measures and Other Definitions


Gross Leasable Area (GLA)
Gross Leasable Area (GLA) is defined as the aggregate number of square feet available for lease. GLA excludes square footage attributable to third-party managed storage units and multi-family rental units, of which the Company owned 62,000 square feet of managed storage space and 18 multi-family rental units as of March 31, 2020.
Occupancy
Occupancy is defined, for a property or group of properties, as the ratio, expressed as a percentage, of (a) the number of square feet of such property economically occupied by tenants under leases with an initial term of greater than one year, to (b) the aggregate number of square feet for such property.
Percent Leased Including Signed
Percent Leased Including Signed is defined, for a property or group of properties, as the ratio, expressed as a percentage, of (a) the sum of occupied square feet (pursuant to the definition above) of such property and vacant square feet for which a lease with an initial term of greater than one year has been signed, but rent has not yet commenced, to (b) the aggregate number of square feet for such property.
Metropolitan Statistical Area (MSA)
Metropolitan Statistical Area (MSA) information is sourced from the United States Census Bureau and rank is determined based on the most recently available population estimates.
Funds From Operations (FFO) Attributable to Common Shareholders
As defined by the National Association of Real Estate Investment Trusts (NAREIT), an industry trade group, Funds From Operations (FFO) means net income computed in accordance with generally accepted accounting principles (GAAP), excluding (i) depreciation and amortization related to real estate, (ii) gains from sales of real estate assets, (iii) gains and losses from change in control and (iv) impairment write-downs of real estate assets and investments in entities directly attributable to decreases in the value of real estate held by the entity. The Company has adopted the NAREIT definition in its computation of FFO attributable to common shareholders. The Company believes that, subject to the following limitations, FFO attributable to common shareholders provides a basis for comparing its performance and operations to those of other real estate investment trusts (REITs). The Company believes that FFO attributable to common shareholders, which is a supplemental non-GAAP financial measure, provides an additional and useful means to assess the operating performance of REITs. FFO attributable to common shareholders does not represent an alternative to (i) "Net income" or "Net income attributable to common shareholders" as an indicator of the Company's financial performance, or (ii) "Cash flows from operating activities" in accordance with GAAP as a measure of the Company's capacity to fund cash needs, including the payment of dividends.
Operating FFO Attributable to Common Shareholders
Operating FFO attributable to common shareholders is defined as FFO attributable to common shareholders excluding the impact of discrete non-operating transactions and other events which the Company does not consider representative of the comparable operating results of its real estate operating portfolio, which is its core business platform. Specific examples of discrete non-operating transactions and other events include, but are not limited to, the impact on earnings from gains or losses associated with the early extinguishment of debt or other liabilities, litigation involving the Company, including gains recognized as a result of settlement and costs to engage outside counsel related to litigation with former tenants, the impact on earnings from executive separation and the excess of redemption value over carrying value of preferred stock redemption, which are not otherwise adjusted in the Company's calculation of FFO attributable to common shareholders. The Company believes that Operating FFO attributable to common shareholders, which is a supplemental non-GAAP financial measure, provides an additional and useful means to assess the operating performance of REITs. Operating FFO attributable to common shareholders does not represent an alternative to (i) "Net income" or "Net income attributable to common shareholders" as an indicator of the Company's financial performance, or (ii) "Cash flows from operating activities" in accordance with GAAP as a measure of the Company's capacity to fund cash needs, including the payment of dividends. Comparison of the Company's presentation of Operating FFO attributable to common shareholders to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.
Net Operating Income (NOI)
The Company defines Net Operating Income (NOI) as all revenues other than (i) straight-line rental income (non-cash), (ii) amortization of lease inducements, (iii) amortization of acquired above and below market lease intangibles and (iv) lease termination fee income, less real estate taxes and all operating expenses other than lease termination fee expense and non-cash ground rent expense, which is comprised of amortization of right-of-use lease assets and amortization of lease liabilities. NOI consists of Same Store NOI and NOI from Other Investment Properties. The Company believes that NOI, which is a supplemental non-GAAP financial measure, provides an additional and useful operating perspective not immediately apparent from "Net income" or "Net income attributable to common shareholders" in accordance with GAAP. The Company uses NOI to evaluate its performance on a property-by-property basis because this measure allows management to evaluate the impact that factors such as lease structure, lease rates and tenant base have on the Company's operating results. NOI does not represent an alternative to "Net income" or "Net income attributable to common shareholders" in accordance with GAAP as an indicator of the Company's financial performance. Comparison of the Company's presentation of NOI to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.

1st Quarter 2020 Supplemental Information
 
20



Retail Properties of America, Inc.
Non-GAAP Financial Measures and Other Definitions (continued)


Same Store NOI and NOI from Other Investment Properties
Same Store NOI represents NOI from the Company's same store portfolio consisting of 101 retail operating properties acquired or placed in service and stabilized prior to January 1, 2019. NOI from Other Investment Properties represents NOI primarily from (i) properties acquired or placed in service during 2019 and 2020, (ii) the multi-family rental units at Plaza del Lago, a redevelopment project that was placed in service during 2019, (iii) Circle East, which is in active redevelopment, (iv) One Loudoun Downtown – Pads G & H, which are in active development, (v) Carillon, a redevelopment project where the Company halted plans for vertical construction during the three months ended March 31, 2020 in response to current macroeconomic conditions due to the impact of the COVID-19 pandemic; however, the Company is actively completing site work preparation at the property in anticipation of potential future development at the site, (vi) The Shoppes at Quarterfield, which is in active redevelopment, (vii) investment properties that were sold or classified as held for sale during 2019 and 2020, and (viii) the net income from the Company's wholly owned captive insurance company.
The Company believes that Same Store NOI and NOI from Other Investment Properties, which are supplemental non-GAAP financial measures, provide an additional and useful operating perspective not immediately apparent from "Net income" or "Net income attributable to common shareholders" in accordance with GAAP. The Company uses these measures to evaluate its performance on a property-by-property basis because they allow management to evaluate the impact that factors such as lease structure, lease rates and tenant base have on the Company's operating results. Same Store NOI and NOI from Other Investment Properties do not represent alternatives to "Net income" or "Net income attributable to common shareholders" in accordance with GAAP as indicators of the Company's financial performance. Comparison of the Company's presentation of Same Store NOI and NOI from Other Investment Properties to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.
EBITDAre and Adjusted EBITDAre
As defined by NAREIT, EBITDA for real estate (EBITDAre) means net income (loss) computed in accordance with GAAP, plus (i) interest expense, (ii) income tax expense, (iii) depreciation and amortization, (iv) impairment charges on investment property and (v) impairment charges on investments in unconsolidated affiliates if caused by a decrease in the value of depreciable property in the affiliate, plus or minus (i) gains from sales of investment property, including gains (or losses) on change in control, and (ii) adjustments to reflect the entity's share of EBITDAre of unconsolidated affiliates. The Company has adopted the NAREIT definition in its computation of EBITDAre as it believes it provides a basis for comparing the Company's performance to that of other REITs. The Company also reports Adjusted EBITDAre, which excludes the impact of certain discrete non-operating transactions and other events such as gain on litigation settlement. The Company believes that Adjusted EBITDAre is useful because it allows investors and management to evaluate and compare the Company's performance from period to period in a meaningful and consistent manner in addition to standard financial measurements under GAAP. EBITDAre and Adjusted EBITDAre are supplemental non-GAAP financial measures and should not be considered alternatives to "Net income" or "Net income attributable to common shareholders" as indicators of the Company's financial performance. Comparison of the Company's presentation of EBITDAre and Adjusted EBITDAre to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.
Net Debt to Adjusted EBITDAre
Net Debt to Adjusted EBITDAre is a supplemental non-GAAP financial measure and represents (i) the Company's total debt principal, which excludes unamortized discount and capitalized loan fees, less (ii) cash and cash equivalents divided by (iii) Adjusted EBITDAre for the prior three months, annualized (Annualized Adjusted EBITDAre). The Company believes that this ratio is useful because it provides investors with information regarding its total debt principal net of cash and cash equivalents, which could be used to repay debt, compared to its performance as measured using Annualized Adjusted EBITDAre. Comparison of the Company's presentation of Net Debt to Adjusted EBITDAre to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.

1st Quarter 2020 Supplemental Information
 
21



Retail Properties of America, Inc.
Reconciliation of Non-GAAP Financial Measures
(amounts in thousands)
(unaudited)


Reconciliation of Net Income Attributable to Common Shareholders to Same Store NOI
 
Three Months Ended March 31,
 
2020
 
2019
 
 

 
 

Net income attributable to common shareholders
$
22,357

 
$
23,208

Adjustments to reconcile to Same Store NOI:
 

 
 

Gain on sales of investment properties

 
(8,449
)
Gain on litigation settlement
(6,100
)
 

Depreciation and amortization
40,173

 
43,267

Provision for impairment of investment properties
346

 

General and administrative expenses
9,165

 
10,499

Interest expense
17,046

 
17,430

Straight-line rental income, net
(341
)
 
(1,500
)
Amortization of acquired above and below market lease intangibles, net
(976
)
 
(2,334
)
Amortization of lease inducements
419

 
296

Lease termination fees, net
(124
)
 
(1,188
)
Non-cash ground rent expense, net
333

 
358

Other expense, net
761

 
659

NOI
83,059

 
82,246

NOI from Other Investment Properties
(1,318
)
 
(1,484
)
Same Store NOI
$
81,741

 
$
80,762



1st Quarter 2020 Supplemental Information
 
22



Retail Properties of America, Inc.
Reconciliation of Non-GAAP Financial Measures (continued)
(amounts in thousands)
(unaudited)


Reconciliation of Mortgages Payable, Net, Unsecured Notes Payable, Net,
Unsecured Term Loans, Net and Unsecured Revolving Line of Credit to Total Net Debt
 
 
March 31,
2020
 
December 31,
2019
 
 
 
 
 
Mortgages payable, net
 
$
93,562

 
$
94,155

Unsecured notes payable, net
 
796,420

 
796,247

Unsecured term loans, net
 
716,792

 
716,523

Unsecured revolving line of credit
 
849,704

 
18,000

Total
 
2,456,478

 
1,624,925

Mortgage discount, net of accumulated amortization
 
483

 
493

Unsecured notes payable discount, net of accumulated amortization
 
586

 
616

Capitalized loan fees, net of accumulated amortization
 
6,442

 
6,870

Total debt principal
 
2,463,989

 
1,632,904

Less: consolidated cash and cash equivalents
 
(769,241
)
 
(9,989
)
Total net debt
 
$
1,694,748

 
$
1,622,915




Reconciliation of Net Income to Adjusted EBITDAre
 
Three Months Ended
 
March 31, 2020
 
March 31, 2019
 
December 31, 2019
 
 
 
 
 
 
Net income
$
22,357

 
$
23,208

 
$
16,172

Interest expense
17,046

 
17,430

 
16,694

Depreciation and amortization
40,173

 
43,267

 
40,964

Gain on sales of investment properties

 
(8,449
)
 

Provision for impairment of investment properties
346

 

 
1,121

EBITDAre
$
79,922

 
$
75,456

 
$
74,951

Gain on litigation settlement
(6,100
)
 

 

Adjusted EBITDAre
$
73,822

 
$
75,456

 
$
74,951

Annualized Adjusted EBITDAre
$
295,288

 
$
301,824

 
$
299,804




1st Quarter 2020 Supplemental Information
 
23
v3.20.1
Cover Page
May 05, 2020
Entity Information [Line Items]  
Document Type 8-K
Document Period End Date May 05, 2020
Entity Registrant Name RETAIL PROPERTIES OF AMERICA, INC.
Entity Incorporation, State or Country Code MD
Entity File Number 001-35481
Entity Tax Identification Number 42-1579325
Entity Address, Address Line One 2021 Spring Road
Entity Address, Address Line Two Suite 200
Entity Address, City or Town Oak Brook
Entity Address, State or Province IL
Entity Address, Postal Zip Code 60523
City Area Code 630
Local Phone Number 634-4200
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Class A Common Stock, $0.001 par value
Trading Symbol RPAI
Security Exchange Name NYSE
Entity Emerging Growth Company false
Entity Central Index Key 0001222840
Amendment Flag false