RETAIL PROPERTIES OF

RPAI
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Retail Properties of America : Quarterly Supplemental Information - First Quarter 2021

05/04/2021 | 05:57pm

RPAI.com | NYSE: RPAI

Q1 2021

SUPPLEMENTAL INFORM ATION

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TABLE OF CONTENTS

EARNINGS RELEASE..........................................................................

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FINANCIAL SUMMARY

Condensed Consolidated Balance Sheets.................................................

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Condensed Consolidated Statements of Operations................................

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Funds From Operations Attributable to Common Shareholders,

Operating FFO Attributable to Common Shareholders

and Additional Information.......................................................................

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Supplemental Financial Statement Detail.................................................

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Same Store Net Operating Income............................................................

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Capitalization.............................................................................................

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Covenants..................................................................................................

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Summary of Indebtedness........................................................................

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TRANSACTION SUMMARY

Development Projects...............................................................................

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Acquisitions and Dispositions....................................................................

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PORTFOLIO SUMMARY

Retail Market Summary.............................................................................

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Retail Operating Portfolio Occupancy.......................................................

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Top Retail Tenants.....................................................................................

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Retail Leasing Activity Summary................................................................

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Retail Lease Expirations.............................................................................

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OTHER INFORMATION

COVID-19 Disclosure - Tenant Resiliency and Rent Collections................

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COVID-19 Disclosure - Supplemental Base Rent and Uncollectible

Lease Income Information.........................................................................

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Non-GAAP Financial Measures and Reconciliations..................................

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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 2021 RESULTS

Oak Brook, IL - May 4, 2021 - Retail Properties of America, Inc. (NYSE: RPAI) (the "Company") today reported financial and operating results for the quarter ended March 31, 2021.

FINANCIAL RESULTS

For the quarter ended March 31, 2021, the Company reported:

  • Net income attributable to common shareholders of $4.7 million, or $0.02 per diluted share, compared to $22.4 million, or $0.10 per diluted share, for the same period in 2020;
  • Funds from operations (FFO) attributable to common shareholders of $52.3 million, or $0.24 per diluted share, compared to $62.5 million, or $0.29 per diluted share, for the same period in 2020;
  • Operating funds from operations (Operating FFO) attributable to common shareholders of $52.3 million, or $0.24 per diluted share, compared to $57.5 million, or $0.27 per diluted share, for the same period in 2020;
  • Approximately $6 million recorded within lease income, equating to $0.03 per diluted share, due to reversals of uncollectible lease income, primarily consisting of prior period amounts received during the first quarter of 2021 from cash-basis and vacated tenants;
  • Cash collections as of April 26, 2021 of 96% of billed first quarter 2021 base rent, up from 94% of billed fourth quarter 2020 base rent as previously reported; and
  • Cash collections as of March 31, 2021 of 93% of previously deferred base rent that was due during the first quarter of 2021.

OPERATING RESULTS

For the quarter ended March 31, 2021, the Company's portfolio results were as follows:

  • 2.3% decrease in same store net operating income (NOI) over the comparable period in 2020, in large part due to the impact from year-over-year occupancy declines, partially offset by the approximate $6 million lease income benefit described above, nearly all of which relates to same store properties;
  • Retail portfolio occupancy: 91.5% at March 31, 2021, down 20 basis points from 91.7% at December 31, 2020 and down 260 basis points from 94.1% at March 31, 2020;
  • Retail portfolio percent leased, including leases signed but not commenced: 92.7% at March 31, 2021, down 40 basis points from 93.1% at December 31, 2020 and down 260 basis points from 95.3% at March 31, 2020;
  • Total retail portfolio annualized base rent (ABR) per occupied square foot of $19.28 at March 31, 2021, down 0.4% from $19.36 ABR per occupied square foot at December 31, 2020 and down 1.1% from $19.50 ABR per occupied square foot at March 31, 2020;
  • 687,000 square feet of retail leasing transactions comprised of 113 new and renewal leases;
  • A blended re-leasing spread of positive 5.8%, comprised of comparable cash leasing spreads of positive 21.3% on new leases and positive 3.0% on renewal leases;

n Retail Properties of America, Inc. T: 855.247.RPAI

www.rpai.com 2021 Spring Road, Suite 200 Oak Brook, IL 60523

  • Signed leases at One Loudoun Downtown for 21 of Pad G's 99 multi-family rental units, branded Vyne, which formally opens later this spring; and
  • Signed a lease representing 74% of Pad G's 33,000 square feet of office space, branded One Endicott.

"Helped by an accelerating macroeconomic backdrop, our team delivered solid outperformance in the first quarter, with notable fundamental gains for the third consecutive quarter. Leasing activity continues to accelerate with Q1 volumes more than double prior-year levels, 21.3% spreads on new leases, and earlier-than-forecast leasing progress at our One Loudoun expansion," stated Steve Grimes, chief executive officer. "Given our momentum, we are increasing our full-year 2021 Operating FFO guidance."

INVESTMENT ACTIVITY

Expansions and Redevelopments

The Company continues to make progress on the execution of its active expansion and redevelopment projects and invested $15.4 million during the first quarter of 2021 primarily at Circle East, One Loudoun Downtown, The Shoppes at Quarterfield and Southlake Town Square, with the vast majority of this investment related to the One Loudoun Downtown Pads G & H expansion project.

Active Projects

One Loudoun Downtown

During the quarter, the Company and KETTLER, its joint venture partner for the multi-family component of the mixed-use expansion of Pads G & H at One Loudoun Downtown located in the Washington, D.C. metropolitan statistical area (MSA), signed leases for 21 of Pad G's 99 multi-family rental units, branded Vyne, which formally opens later this spring. The Company also signed a lease representing 74% of Pad G's 33,000 square feet of office space, branded One Endicott.

At Pad H, which includes 279 multi-family rental units, construction continues to progress, including in-unit installation of cabinet and tile as well as work on the main exterior courtyard in preparation for hardscape and pool installation.

The aggregate One Loudoun Downtown Pads G & H expansion project, which includes 378 multi-family rental units as well as 67,000 square feet of commercial gross leasable area, remains on track to stabilize in Q2 - Q3 2022.

Circle East

During the quarter, the Company signed Urban Outfitters for in-line space at its 80,000 square foot Circle East mixed-use project located in Towson, MD within the Baltimore MSA, bringing the project to 27% leased. Ethan Allen and Shake Shack, the two anchor tenants for the project, opened during the first quarter, and Madison Reed, an in-line tenant, opened subsequent to quarter end.

Other Projects

Construction continues at the single-tenant pad development at Southlake Town Square with targeted stabilization in Q1 - Q2 2021 as well as The Shoppes at Quarterfield reconfiguration with targeted stabilization in Q1 - Q2 2022, both of which are 100% leased.

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BALANCE SHEET

As of March 31, 2021, the Company had no currently outstanding unsecured debt principal due until November 2023, a fully undrawn $850.0 million unsecured revolving line of credit and approximately $888.0 million in total available liquidity, compared to $891.5 million as of December 31, 2020 and $769.2 million as of March 31, 2020.

Additionally, as of March 31, 2021, the Company had $1.8 billion of gross consolidated indebtedness with a weighted average contractual interest rate of 4.19% and a weighted average maturity of 5.6 years, up from 3.7 years as of March 31, 2020. The Company continues to benefit from substantial headroom relative to its debt covenants, including a debt service coverage ratio of 3.4x, well in excess of the 1.5x requirement under its debt agreements.

DIVIDEND

As previously announced on March 15, 2021, the Company's board of directors declared a first quarter dividend for its outstanding Class A common stock of $0.07 per common share, up from the $0.06 per common share declared for the fourth quarter of 2020 and the $0.05 per common share declared for the third quarter of 2020. The first quarter dividend of $0.07 per common share, which totaled $15.0 million, was paid on April 9, 2021, to Class A common stockholders of record on March 26, 2021.

The Company's board of directors will continue to monitor the Company's financial performance and evaluate the dividend declaration quarterly, considering tax requirements, as well as other factors, and aiming to grow the quarterly dividend amount over time.

2021 GUIDANCE

Given ongoing consideration for the current macroeconomic and public health outlook, among other factors and variables, as well as first quarter results, the Company currently expects to generate net income attributable to common shareholders of $0.06 to $0.10 per diluted share in 2021, compared to the prior range of $0.02 to $0.10 per diluted share. The Company is updating its 2021 Operating FFO attributable to common shareholders guidance range to $0.83 to $0.87 per diluted share, up from the prior range of $0.76 to $0.84 per diluted share based, in part, on the following assumptions:

  • General and administrative expenses of $41 to $43 million; and
  • Acquisitions, property dispositions and capital markets transactions evaluated and executed opportunistically.

Additional factors influencing the 2021 guidance ranges include actual first quarter 2021 results, which included approximately $6 million recorded within lease income, equating to $0.03 per diluted share, primarily consisting of prior period amounts received during the first quarter of

2021 from cash-basis and vacated tenants, as well as expectations for:

  • Occupancy;
  • Collectibility of lease income amounts deferred from 2020 that are due in 2021;
  • Collection of 2021 lease income amounts due from tenants accounted for on the cash basis of accounting, which aggregated 11% of ABR as of March 31, 2021, the population of which is subject to evaluation and adjustment each reporting period, and the impact of any such adjustment could be significant; and
  • Variability in non-cash items, including straight-line rent, which is largely dependent on changes to the aforementioned population of cash-basis tenants.

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Disclaimer

Retail Properties of America Inc. published this content on 04 May 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 May 2021 21:56:08 UTC.

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