Retail Properties of America, Inc. reported financial and operating results for the quarter ended March 31, 2021.
FINANCIAL RESULTS
For the quarter ended March 31, 2021, the Company reported:
OPERATING RESULTS
For the quarter ended March 31, 2021, the Company’s portfolio results were as follows:
“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.
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:
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:
WEBCAST AND CONFERENCE CALL INFORMATION
The Company’s management team will hold a webcast on Wednesday, May 5, 2021 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 callers. 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 5, 2021, until midnight (ET) on May 19, 2021. The replay can be accessed by dialing (844) 512-2921 or (412) 317-6671 for international callers and entering pin number 13717240.
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, 2021, the Company owned 102 retail operating properties in the United States representing 19.9 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.