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