An Opportunity in Retail

Real estate investment trust (REIT) Retail Opportunity Investments focuses on buying and revitalizing necessity-based retail properties in mid- to high-income areas. This means its properties are most often anchored by large grocery chains, ensuring a steady flow of traffic and stable tenants, which will keep rents growing and lease rates high. As of last quarter, the company was on track to post its third straight year of portfolio lease rates above 97 percent, while same-space comparable base rents climbed 39.9 percent and 8.4 percent year over year on new and renewed leases, respectively. Investors can expect the size of the company’s portfolio to continue growing, thanks to the deal-making savvy of CEO Stuart Tanz, who previously guided Pan Pacific Retail from its $146 million IPO in 1997 to its $4.1 billion acquisition by Kimco Realty nine years later. The company has already spent $314 million in shopping-center acquisitions so far in 2017, bringing its total portfolio to more than 10 million square feet of retail real estate that should prove resilient even as online shopping keeps growing its share of retail sales. Retail Opportunity Investments’ stock recently yielded about 3.8 percent. Shares seem roughly fairly valued at recent levels, and the stock is worth consideration for long-term investors who like steady, growing dividends. (The Motley Fool owns shares of and has recommended Retail Opportunity Investments.)