Fitch Ratings – New York – 09 Feb 2023: Fitch Ratings has affirmed the Long-Term Issuer Default Ratings for Retail Opportunity Investments Corp. (ROIC) and Retail Opportunity Investments Partnership, L.P. at ‘BBB’. The Rating Outlook is Stable. The affirmation reflects ROIC’s stable leverage metrics, transparent business model, and the high quality of its grocery-anchored shopping center assets. The company’s portfolio is near the high end of its shopping center REIT peer group with respect to key quality metrics, including household income and population demographics, rent per square foot, occupancy, and market implied cap rate. Consistent Credit Metrics: Fitch expects leverage (net debt/recurring operating EBITDA, excluding preferred stock) to sustain in the mid-to-high 6x range over the ratings horizon, consistent with company’s long-term leverage target at sub-7.0x. Fitch’s forecast of leverage and ROIC’s commitment to its target support ratings at the ‘BBB’ level. Fitch also estimates ROIC’s unencumbered assets/unsecured debt (UA/UD) ratio at 2.2x at a stressed 7.5% cap rate, which is appropriate for the rating. Strong Tenant Diversification: ROIC’s portfolio is well-diversified with its top 10 tenants comprising 19.7% of ABR at Sept. 30, 2022. Positively, the company only has four tenants accounting for 1.5% or more of total […]
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