Retail Opportunity REIT Keeps Making Acquisitions

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Some real estate investment trusts specialize in certain types of properties, offering investors a play on certain industries. WithRetail Opportunity Investments ( ROIC ), that play is on shopping centers.

The San Diego-based REIT owns more than 50 shopping centers in the Western U.S. totaling some 5.5 million square feet.

Technically, Retail Opportunity does not conduct business itself, but is the parent company of a wholly owned subsidiary that conducts substantially all the business.


Acquisitions have been a key part of its story. Since it began operations in 2009, the company has spent about $1.2 billion on shopping centers, according to the company's filings with the SEC.

In August, it acquired Robinwood Shopping Center for $14.2 million. The shopping center, anchored by a Wal-Mart Neighborhood Market, is near Portland, Ore.

In September, the REIT bought the remaining 51% that it didn't already own of a Bellevue, Wash., shopping center for $87.1 million. That same month, it paid $52.4 million for a center in Huntington Beach, Calif., and $32.5 million for another one in Huntington Beach last month.

All four are completely or nearly fully leased out.

The company pays a quarterly dividend of 15 cents a share, which works out to an annualized dividend yield of more than 4%.

Funds from operations (FFO) have been erratic, which is not a good trait for income-type stocks. Yet Q3 results topped expectations, as FFO soared 153%.

Retail Opportunity forecast FFO for the full 2013 at a range of $1.03 to $1.05.

Revenue growth has ranged from 29% to 46% the past four quarters.

The stock historically has been steady despite irregular FFO results. It is forming a large cup with handle, with a potential buy point at 15.05.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Personal Finance , Investing Ideas

Referenced Stocks: ROIC

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