Retail Opportunity Investments
Annual Report 2019

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, DC 20549FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2019or ☐☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from to RETAIL OPPORTUNITY INVESTMENTS CORP.(Exact name of registrant as specified in its charter)Commission file number: 001-33749 RETAIL OPPORTUNITY INVESTMENTS PARTNERSHIP, LP(Exact name of registrant as specified in its charter)Commission file number: 333-189057-01Maryland(Retail Opportunity Investments Corp.)26-0500600(Retail Opportunity Investments Corp.)Delaware(Retail Opportunity Investments Partnership, LP)94-2969738(Retail Opportunity Investments Partnership, LP)(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)11250 El Camino RealSan Diego,California92130(Address of Principal Executive Offices)(Zip Code)(858) 677-0900(Registrant’s telephone number, including area code) Securities Registered Pursuant to Section 12(g) of the Act: Retail Opportunity Investments Corp. NoneRetail Opportunity Investments Partnership, LP None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Retail Opportunity Investments Corp.Yes☒No☐Retail Opportunity Investments Partnership, LPYes☒No☐ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Retail Opportunity Investments Corp.Yes☐No☒Retail Opportunity Investments Partnership, LPYes☐No☒ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Retail Opportunity Investments Corp.Yes☒No☐Retail Opportunity Investments Partnership, LPYes☒No☐Indicate by check mark whether the registrant has submitted electronically, if any, every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Retail Opportunity Investments Corp.Yes☒No☐Retail Opportunity Investments Partnership, LPYes☒No☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerginggrowth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2of the Exchange Act. (Check one): Retail Opportunity Investments Corp. Large accelerated filerAccelerated filer☐Non-accelerated filer☐Smaller reporting company☐Emerging growth companyIf an emerging growth company, indicate by check mark if the registrant has elected not to use the extendedtransition period for complying with any new or revised financial accounting standards provided pursuant to Section13(a) of the Exchange Act.☐ Retail Opportunity Investments Partnership, LP Large accelerated filerAccelerated filer☐Non-accelerated filer☒Smaller reportingcompany☐Emerging growthcompanyIf an emerging growth company, indicate by check mark if the registrant has electednot to use the extended transition period for complying with any new or revisedfinancial accounting standards provided pursuant to Section 13(a) of the ExchangeAct.☐Indicate by check mark whether the registrant is a Shell Company (as defined in rule 12b-2 of the Exchange Act). Retail Opportunity Investments Corp.Yes☐No☒Retail Opportunity Investments Partnership, LPYes☐No☒ Securities registered pursuant to Section 12(b) of the Act:Name of RegistrantTitle of each classTrading SymbolName of each exchange on whichregisteredRetail Opportunity Investments Corp.Common Stock, par value $0.0001per shareROICNASDAQRetail Opportunity Investments Partnership, LPNoneNoneNoneThe aggregate market value of the common equity held by non-affiliates of Retail Opportunity Investments Corp. as of June 30, 2019, the last businessday of its most recently completed second fiscal quarter, was $1.9 billion (based on the closing sale price of $17.13 per share of Retail Opportunity InvestmentsCorp. common stock on that date as reported on the NASDAQ Global Select Market). There is no public trading market for the operating partnership units of Retail Opportunity Investments Partnership, LP. As a result the aggregate market value ofcommon equity securities held by non-affiliates of this registrant cannot be determined. Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date: 116,455,432 shares of common stock,par value $0.0001 per share, of Retail Opportunity Investments Corp. outstanding as of February 14, 2020. DOCUMENTS INCORPORATED BY REFERENCE Portions of Retail Opportunity Investments Corp.’s definitive proxy statement for its 2020 Annual Meeting, to be filed within 120 days after its fiscal year, areincorporated by reference into Part III of this Annual Report on Form 10-K.1EXPLANATORY PARAGRAPH This report combines the annual reports on Form 10-K for the year ended December 31, 2019 of Retail Opportunity Investments Corp., a Maryland corporation(“ROIC”), and Retail Opportunity Investments Partnership, LP, a Delaware limited partnership (the “Operating Partnership”) of which Retail OpportunityInvestments Corp. is the parent company and through its wholly owned subsidiary, acts as general partner. Unless otherwise indicated or unless the contextrequires otherwise, all references in this report to “the Company,” “we,” “us,” “our,” or “our company” refer to ROIC together with its consolidated subsidiaries,including Retail Opportunity Investments Partnership, LP. Unless otherwise indicated or unless the context requires otherwise, all references in this report to theOperating Partnership refer to Retail Opportunity Investments Partnership, LP together with its consolidated subsidiaries. ROIC operates as a real estate investment trust and as of December 31, 2019, ROIC owned an approximate 91.3% partnership interest in the OperatingPartnership. Retail Opportunity Investments GP, LLC, ROIC’s wholly-owned subsidiary, is the sole general partner of the Operating Partnership. Through thissubsidiary, ROIC has full and complete authority and control over the Operating Partnership’s business. The Company believes that combining the annual reports on Form 10-K of ROIC and the Operating Partnership into a single report will result in the followingbenefits: •facilitate a better understanding by the investors of ROIC and the Operating Partnership by enabling them to view the business as a whole in the samemanner as management views and operates the business;•remove duplicative disclosures and provide a more straightforward presentation in light of the fact that a substantial portion of the disclosure applies toboth ROIC and the Operating Partnership; and•create time and cost efficiencies through the preparation of one combined report instead of two separate reports.Management operates ROIC and the Operating Partnership as one enterprise. The management of ROIC and the Operating Partnership are the same. There are few differences between ROIC and the Operating Partnership, which are reflected in the disclosures in this report. The Company believes it is importantto understand the differences between ROIC and the Operating Partnership in the context of how these entities operate as an interrelated consolidated company.ROIC is a real estate investment trust, whose only material assets are its direct or indirect partnership interests in the Operating Partnership and membershipinterest in Retail Opportunity Investments GP, LLC, which is the sole general partner of the Operating Partnership. As a result, ROIC does not conduct businessitself, other than acting as the parent company and through Retail Opportunity Investments Partnership GP, LLC as the sole general partner of the OperatingPartnership. The Operating Partnership holds substantially all the assets of the Company and directly or indirectly holds the ownership interests in the Company’sreal estate ventures. The Company conducts its business through the Operating Partnership, which is structured as a partnership with no publicly traded equity.Except for net proceeds from equity issuances by ROIC, which are contributed to the Operating Partnership, the Operating Partnership generates the capitalrequired by the Company’s business through the Operating Partnership’s operations, by the Operating Partnership’s incurrence of indebtedness (directly andthrough subsidiaries) or through the issuance of operating partnership units (“OP Units”) of the Operating Partnership. Non-controlling interests is the primary difference between the Consolidated Financial Statements for ROIC and the Operating Partnership. The OP Units in theOperating Partnership that are not owned by ROIC are accounted for as partners’ capital in the Operating Partnership’s financial statements and as non-controllinginterests in ROIC’s financial statements. Accordingly, this report presents the Consolidated Financial Statements for ROIC and the Operating Partnershipseparately, as required, as well as Earnings Per Share / Earnings Per Unit and Capital of the Partnership. This report also includes separate Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources,Item 9A. Controls and Procedures sections and separate Chief Executive Officer and Chief Financial Officer certifications for each of ROIC and the OperatingPartnership as reflected in Exhibits 31 and 32.3RETAIL OPPORTUNITY INVESTMENTS CORP. TABLE OF CONTENTS PagePART I5Item 1.Business6Item 1A.Risk Factors10Item 1B.Unresolved Staff Comments24Item 2.Properties24Item 3.Legal Proceedings28Item 4.Mine Safety Disclosures28PART II28Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities28Item 6.Selected Financial Data30Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations32Item 7A.Quantitative and Qualitative Disclosures About Market Risk48Item 8.Financial Statements and Supplementary Data49Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure88Item 9A.Controls and Procedures88Item 9B.Other Information89PART III89Item 10.Directors, Executive Officers and Corporate Governance89Item 11.Executive Compensation89Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters90Item 13.Certain Relationships and Related Transactions, and Director Independence90Item 14.Principal Accounting Fees and Services90PART IV90Item 15. Exhibits and Financial Statement Schedule90SIGNATURES944Statements Regarding Forward-Looking InformationWhen used in this discussion and elsewhere in this Annual Report on Form 10-K, the words “believes,” “anticipates,” “projects,” “should,” “estimates,”“expects,” and similar expressions are intended to identify forward-looking statements with the meaning of that term in Section 27A of the Securities Act of 1933,as amended (the “Securities Act”), and in Section 21F of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Actual results may differmaterially due to uncertainties including: •the Company’s ability to identify and acquire retail real estate that meet its investment standards in its markets;•the level of rental revenue the Company achieves from its assets;•the market value of the Company’s assets and the supply of, and demand for, the retail real estate in which it invests;•the state of the U.S. economy generally, or in specific geographic regions;•the impact of economic conditions on the Company’s business;•the conditions in the local markets in which the Company operates and its concentration in those markets, as well as changes in national economic andmarket conditions; •consumer spending and confidence trends;•the Company’s ability to enter into new leases or to renew leases with existing tenants at the properties it owns or acquires at favorable rates;•the Company’s ability to anticipate changes in consumer buying practices and the space needs of tenants;•the competitive landscape impacting the properties the Company owns or acquires and their tenants;•the Company’s relationships with its tenants and their financial condition and liquidity;•ROIC’s ability to continue to qualify as a real estate investment trust for U.S. federal income tax (a “REIT”);•the Company’s use of debt as part of its financing strategy and its ability to make payments or to comply with any covenants under its senior unsecurednotes, its unsecured credit facilities or other debt facilities it currently has or subsequently obtains;•the Company’s level of operating expenses, including amounts it is required to pay to its management team;•changes in interest rates that could impact the market price of ROIC’s common stock and the cost of the Company’s borrowings; and•legislative and regulatory changes (including changes to laws governing the taxation of REITs). Forward-looking statements are based on estimates as of the date of this Annual Report on Form 10-K. The Company disclaims any obligation to publicly releasethe results of any revisions to these forward-looking statements reflecting new estimates, events or circumstances after the date of this Annual Report on Form 10-K. The risks included here are not exhaustive. Other sections of this Annual Report on Form 10-K may include additional factors that could adversely affect theCompany’s business and financial performance. Moreover, the Company operates in a very competitive and rapidly changing environment. New risk factorsemerge from time to time and it is not possible for management to predict all such risk factors, nor can it assess the impact of all such risk factors on theCompany’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.5PART I In this Annual Report on Form 10-K, unless otherwise indicated or the context requires otherwise, all references to “the Company,” “we,” “us,” “our,”or “our company” refer to ROIC together with its consolidated subsidiaries, including the Operating Partnership. Item 1. Business Overview Retail Opportunity Investments Corp., a Maryland corporation (“ROIC”) commenced operations in October 2009 as a fully integrated, self-managed REIT, and asof December 31, 2019, ROIC owned an approximate 91.3% partnership interest and other limited partners owned the remaining 8.7% partnership interest in theOperating Partnership. The Company specializes in the acquisition, ownership and management of necessity-based community and neighborhood shoppingcenters on the west coast of the United States, anchored by supermarkets and drugstores. The Company is organized in a traditional umbrella partnership realestate investment trust (“UpREIT”) format pursuant to which Retail Opportunity Investments GP, LLC, its wholly-owned subsidiary, serves as the sole generalpartner of, and ROIC conducts substantially all of its business through, its operating partnership, Retail Opportunity Investments Partnership, LP, a Delawarelimited partnership (the “Operating Partnership”), together with its subsidiaries. As of December 31, 2019, the Company’s portfolio consisted of 89 properties (88retail and one office) totaling approximately 10.1 million square feet of gross leasable area (“GLA”). ROIC’s only material assets are its direct or indirect partnership interests in the Operating Partnership and membership interest in Retail Opportunity InvestmentsGP, LLC, which is the sole general partner of the Operating Partnership. As a result, ROIC does not conduct business itself, other than acting as the parentcompany and through this subsidiary, acts as the sole general partner of the Operating Partnership. The Operating Partnership holds substantially all the assets ofthe Company and directly or indirectly holds the ownership interests in the Company’s real estate ventures. The Operating Partnership conducts the operations ofthe Company’s business and is structured as a partnership with no publicly traded equity. Except for net proceeds from equity issuances by ROIC, which arecontributed to the Operating Partnership, the Operating Partnership generates the capital required by the Company’s business through the Operating Partnership’soperations, by the Operating Partnership’s incurrence of indebtedness (directly and through subsidiaries) or through the issuance of operating partnership units(“OP Units”) of the Operating Partnership. Investment Strategy The Company seeks to acquire shopping centers located in densely populated, supply-constrained metropolitan markets on the west coast of the United States,which exhibit income and population growth and high barriers to entry. The Company’s senior management team has operated in the Company’s markets for over30 years and has established an extensive network of relationships in these markets with key institutional and private property owners, brokers and financialinstitutions and other real estate operators. The Company’s in-depth local and regional market knowledge and expertise provides a distinct competitive advantagein identifying and accessing attractive acquisition opportunities, including properties that are not widely marketed. The Company seeks to acquire high quality necessity-based community and neighborhood shopping centers anchored by national and regional supermarkets anddrugstores that are well-leased, with stable cash flows. Additionally, the Company acquires shopping centers which it believes are candidates for attractive near-term re-tenanting or present other value-enhancement opportunities. Upon acquiring a shopping center, the Company normally commences leasing initiatives aimed at enhancing long-term value through re-leasing below marketspace and improving the tenant mix. The Company focuses on leasing to retailers that provide necessity-based, non-discretionary goods and services, catering tothe basic and daily needs of the surrounding community, a majority of which are destination-based and therefore more resistant to competition from e-commercethan other types of retailers. The Company believes necessity-based retailers draw consistent, regular traffic to its shopping centers, which results in stronger salesfor its tenants and a more consistent revenue base. Additionally, the Company seeks to maintain a strong and diverse tenant base with a balance of large, long-termleases to major national and regional retailers, including supermarkets, drugstores and discount stores, with small, shorter-term leases to a broad mix of national,regional and local retailers. The Company believes the long-term anchor tenants provide a reliable, stable base of rental revenue, while the shorter-term leasesafford the Company the opportunity to drive rental growth, as well as the ongoing flexibility to adapt to evolving consumer trends.6The Company believes that the current market environment continues to present opportunities for it to further build its portfolio and add additional necessity-basedcommunity and neighborhood shopping centers that meet its investment profile. The Company’s long-term objective is to prudently build and maintain a diverseportfolio of necessity-based community and neighborhood shopping centers aimed at providing stockholders with sustainable, long-term growth and value throughall economic cycles. In implementing its investment strategy and selecting an asset for acquisition, the Company analyzes the fundamental qualities of the asset, the inherent strengthsand weaknesses of its market, sub-market drivers and trends, and potential risks and risk mitigants facing the property. The Company believes that its acquisitionprocess and operational expertise provide it with the capability to identify and properly underwrite investment opportunities. The Company’s aim is to seek to provide diversification of assets, tenant exposures, lease terms and locations in its portfolio. In order to capitalize on the changingsets of investment opportunities that may be present in the various points of an economic cycle, the Company may expand or refocus its investment strategy. TheCompany’s investment strategy may be amended from time to time, if approved by its board of directors. The Company is not required to seek stockholderapproval when amending its investment strategy. Transactions During 2019 Investing Activity Property Asset Acquisitions On December 13, 2019, the Company acquired the property known as Summerwalk Village located in Lacey, Washington, within the Seattle metropolitan area,for an adjusted purchase price of approximately $11.6 million. Summerwalk Village is approximately 58,000 square feet and is anchored by WalmartNeighborhood Market. The property was acquired with borrowings under the credit facility.Property Asset DispositionsOn February 15, 2019, the Company sold Vancouver Market Center, a non-core shopping center located in Vancouver, Washington. The sales price of $17.0million, less costs to sell, resulted in net proceeds of approximately $16.0 million. The Company recorded a gain on sale of real estate of approximately $2.6million during the year ended December 31, 2019 related to this property disposition.On May 1, 2019, the Company sold Norwood Shopping Center, a non-core shopping center located in Sacramento, California for a sales price of $13.5 million. Inconnection with the sale of this property, the Company entered into a $13.3 million mortgage note with the buyer. The mortgage note is a four year interest onlynote whereby the interest rate increases 1% annually from 3% to 6%. The Company recorded a gain on sale of real estate of approximately $180,000 during theyear ended December 31, 2019 related to this property disposition.On August 1, 2019, the Company sold Morada Ranch, a non-core shopping center located in Stockton, California. The sales price of $30.0 million, less costs tosell, resulted in net proceeds of approximately $29.1 million. The Company recorded a gain on sale of real estate of approximately $10.4 million during year endedDecember 31, 2019 related to this property disposition.On December 12, 2019, the Company sold Mission Foothill Marketplace, located in Mission Viejo, California, as a redevelopment property. The Companyretained ownership of two retail pads that will be the gateway to the buyer's planned single-family and townhome community. The sales price of approximately$13.6 million, less costs to sell, resulted in net proceeds of approximately $13.5 million.The Company used the proceeds from the above property asset dispositions to pay down its credit facility. Financing Activities The Company employs prudent amounts of leverage and uses debt as a means of providing funds for the acquisition of its properties and the diversification of itsportfolio. The Company seeks to primarily utilize unsecured debt in order to maintain liquidity and flexibility in its capital structure. 7Term Loan and Credit Facility The Company has an unsecured term loan agreement with several banks under which the lenders agreed to provide a $300.0 million unsecured term loan facility.Effective December 20, 2019, the Company entered into the First Amendment to First Amended and Restated Term Loan Agreement (as amended, the “TermLoan Agreement”) pursuant to which the maturity date of the term loan was extended from September 8, 2022 to January 20, 2025, without further options forextension. The Term Loan Agreement also provides that the Company may from time to time request increased aggregate commitments of $200.0 million undercertain conditions set forth in the Term Loan Agreement, including the consent of the lenders for the additional commitments. Borrowings under the Term LoanAgreement accrue interest on the outstanding principal amount at a rate equal to an applicable rate based on the credit rating level of the Company, plus, asapplicable, (i) a LIBOR rate determined by reference to the cost of funds for U.S. dollar deposits for the relevant period (the “Eurodollar Rate”), or (ii) a base ratedetermined by reference to the highest of (a) the federal funds rate plus 0.50%, (b) the rate of interest announced by the Administrative Agent as its “prime rate,”and (c) the Eurodollar Rate plus 1.00%. The Operating Partnership has an unsecured revolving credit facility with several banks. Effective December 20, 2019, the Company entered into the FirstAmendment to Second Amended and Restated Credit Agreement (as amended, the “Credit Facility Agreement”) pursuant to which the borrowing capacity underthe credit facility is $600.0 million. The maturity date of the credit facility was extended from September 8, 2021 to February 20, 2024, with two six-monthextension options, which may be exercised by the Operating Partnership upon satisfaction of certain conditions including the payment of extension fees.Additionally, the credit facility contains an accordion feature, which allows the Operating Partnership to increase the borrowing capacity up to an aggregate of $1.2billion, subject to lender consents and other conditions. Borrowings under the credit facility accrue interest on the outstanding principal amount at a rate equal to anapplicable rate based on the credit rating level of the Company, plus, as applicable, (i) the Eurodollar Rate, or (ii) a base rate determined by reference to the highestof (a) the federal funds rate plus 0.50%, (b) the rate of interest announced by KeyBank, National Association as its “prime rate,” and (c) the Eurodollar Rate plus0.90%. Additionally, the Operating Partnership is obligated to pay a facility fee at a rate based on the credit rating level of the Company, currently 0.20%, and afronting fee at a rate of 0.125% per year with respect to each letter of credit issued under the credit facility. The Company has investment grade credit ratings fromMoody’s Investors Service (Baa2) and Standard & Poor’s Ratings Services (BBB-). Both the term loan and credit facility contain customary representations, financial and other covenants. The Operating Partnership’s ability to borrow under theterm loan and credit facility are subject to its compliance with financial covenants and other restrictions on an ongoing basis. The Operating Partnership was incompliance with such covenants at December 31, 2019. As of December 31, 2019, $300.0 million and $84.0 million were outstanding under the term loan and credit facility, respectively. The weighted average interestrates on the term loan and the credit facility during the year ended December 31, 2019 were 3.4% and 3.3%, respectively. As discussed in Note 11 of theaccompanying financial statements, the Company uses interest rate swaps to manage its interest rate risk and accordingly, the swapped interest rate on the termloan is 3.0%. The Company had no available borrowings under the term loan at December 31, 2019. The Company had $516.0 million available to borrow underthe credit facility at December 31, 2019.ATM Equity Offering On May 1, 2018, ROIC entered into five separate Sales Agreements (the “Sales Agreements”) with each of Capital One Securities, Inc., Jefferies LLC, KeyBancCapital Markets Inc., Raymond James & Associates, Inc., and Robert W. Baird & Co. Incorporated (each individually, an “Agent” and collectively, the “Agents”)pursuant to which ROIC may sell, from time to time, shares of ROIC’s common stock, par value $0.0001 per share, having an aggregate offering price of up to$250.0 million through the Agents either as agents or principals.During the year ended December 31, 2019, ROIC sold a total of 1,861,036 shares under the Sales Agreements, which resulted in gross proceeds of approximately$34.2 million and commissions of approximately $342,000 paid to the Agents. The Company plans to finance future acquisitions through a combination of operating cashflow, borrowings under the credit facility, the assumption of existingmortgage debt, the issuance of equity securities including OP Units, equity and debt offerings, and the potential sale of existing assets. 8Business Segments The Company’s primary business is the ownership, management, and redevelopment of retail real estate properties. The Company reviews operating and financialinformation for each property on an individual basis and therefore, each property represents an individual operating segment. The Company evaluates financialperformance using property operating income, defined as operating revenues (base rent and recoveries from tenants), less property and related expenses (propertyoperating expenses and property taxes). The Company has aggregated the properties into one reportable segment as the properties share similar long-termeconomic characteristics and have other similarities including the fact that they are operated using consistent business strategies, are typically located in majormetropolitan areas, and have similar tenant mixes. Regulation The following discussion describes certain material U.S. federal laws and regulations that may affect the Company’s operations and those of its tenants. However,the discussion does not address state laws and regulations, except as otherwise indicated. These state laws and regulations, like the U.S. federal laws andregulations, could affect the Company’s operations and those of its tenants. Generally, real estate properties are subject to various laws, ordinances and regulations. Changes in any of these laws or regulations, such as the ComprehensiveEnvironmental Response and Compensation, and Liability Act of 1980, as amended, increase the potential liability for environmental conditions or circumstancesexisting or created by tenants or others on the properties. In addition, laws affecting development, construction, operation, upkeep, safety and taxationrequirements may result in significant unanticipated expenditures, loss of real estate property sites or other impairments, which would adversely affect its cashflows from operating activities. Under the Americans with Disabilities Act of 1990 (the “Americans with Disabilities Act”) all places of public accommodation are required to meet certain U.S.federal requirements related to access and use by disabled persons. A number of additional U.S. federal, state and local laws also exist that may requiremodifications to properties, or restrict certain further renovations thereof, with respect to access thereto by disabled persons. Noncompliance with the Americanswith Disabilities Act could result in the imposition of fines or an award of damages to private litigants and also could result in an order to correct any non-complying feature and in substantial capital expenditures. To the extent the Company’s properties are not in compliance, the Company may incur additional coststo comply with the Americans with Disabilities Act. Property management activities are often subject to state real estate brokerage laws and regulations as determined by the particular real estate commission for eachstate. Environmental Matters Pursuant to U.S. federal, state and local environmental laws and regulations, a current or previous owner or operator of real property may be required toinvestigate, remove and/or remediate a release of hazardous substances or other regulated materials at or emanating from such property. Further, under certaincircumstances, such owners or operators of real property may be held liable for property damage, personal injury and/or natural resource damage resulting from orarising in connection with such releases. Certain of these laws have been interpreted to be joint and several unless the harm is divisible and there is a reasonablebasis for allocation of responsibility. The failure to properly remediate the property may also adversely affect the owner’s ability to lease, sell or rent the propertyor to borrow funds using the property as collateral. In connection with the ownership, operation and management of the Company’s current properties and any properties that it may acquire and/or manage in thefuture, the Company could be legally responsible for environmental liabilities or costs relating to a release of hazardous substances or other regulated materials ator emanating from such property. In order to assess the potential for such liability, the Company conducts an environmental assessment of each property prior toacquisition and manages its properties in accordance with environmental laws while it owns or operates them. All of its leases contain a comprehensiveenvironmental provision that requires tenants to conduct all activities in compliance with environmental laws and to indemnify the owner for any harm caused bythe failure to do so. In addition, the Company has engaged qualified, reputable and adequately insured environmental consulting firms to perform environmentalsite assessments of its properties and is not aware of any environmental issues that are expected to materially impact the financial condition of the Company. Competition The Company believes that competition for the acquisition, operation and development of retail properties is highly fragmented. The Company competes withnumerous owners, operators and developers for acquisitions and development of9retail properties, including institutional investors, other REITs and other owner-operators of necessity-based community and neighborhood shopping centers,primarily anchored by supermarkets and drugstores, some of which own or may in the future own properties similar to the Company’s in the same markets inwhich its properties are located. The Company also faces competition in leasing available space to prospective tenants at its properties. The actual competition fortenants varies depending upon the characteristics of each local market (including current economic conditions) in which the Company owns and managesproperty. The Company believes that the principal competitive factors in attracting tenants in its market areas are location, demographics, price, the presence ofanchor stores and the appearance of properties. Many of the Company’s competitors are substantially larger and have considerably greater financial, marketing and other resources than the Company. Otherentities may raise significant amounts of capital and may have investment objectives that overlap with those of the Company, which may create additionalcompetition for opportunities to acquire assets. In the future, competition from these entities may reduce the number of suitable investment opportunities offeredto the Company or increase the bargaining power of property owners seeking to sell. Further, as a result of their greater resources, such entities may have moreflexibility than the Company does in their ability to offer rental concessions to attract tenants. If the Company’s competitors offer space at rental rates belowcurrent market rates, or below the rental rates the Company currently charges its tenants, the Company may lose potential tenants and it may be pressured toreduce its rental rates below those it currently charges in order to retain tenants when its tenants’ leases expire. Employees As of December 31, 2019, the Company had 73 employees, including 20 maintenance employees at its shopping centers and three executive officers, one of whomis also a member of its board of directors. Available Information The Company files its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports with theSecurities and Exchange Commission (the “SEC”). The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements, andother information regarding issuers that file electronically with the SEC. The Company’s website is www.roireit.net. The Company’s reports on Forms 10-K, 10-Q and 8-K, and all amendments to those reports are available free of charge on its Website as soon as reasonably practicable after the reports and amendments areelectronically filed with or furnished to the SEC. The contents of the Company’s website are not incorporated by reference herein. Item 1A. Risk Factors Risks Related to the Company’s Business and Operations There are risks relating to investments in real estate. Real property investments are subject to varying degrees of risk. Real estate values are affected by a number of factors, including: changes in the generaleconomic climate, local conditions (such as an oversupply of space or a reduction in demand for real estate in an area), the quality and philosophy of management,competition from other available space, the ability of the owner to provide adequate maintenance and insurance and to control variable operating costs, adverseweather conditions, natural disasters, terrorist activities and other factors in the areas in which the properties are located. Shopping centers, in particular, may beaffected by changing perceptions of retailers or shoppers regarding the safety, convenience and attractiveness of the shopping center, increasing consumerpurchases through online retail websites and catalogs, the ongoing consolidation in the retail sector and by the overall climate for the retail industry generally. Realestate values are also affected by such factors as government regulations, interest rate levels, the availability of financing and potential liability under, and changesin, environmental, zoning, tax and other laws. A significant portion of the Company’s income is derived from rental income from real property. The Company’sincome, cash flow, results of operations, financial condition, liquidity and ability to service its debt obligations could be materially and adversely affected if asignificant number of its tenants were unable to meet their obligations, or if it were unable to lease on economically favorable terms a significant amount of spacein its properties. In the event of default by a tenant, the Company may experience delays in enforcing, and incur substantial costs to enforce, its rights as alandlord. In addition, certain significant expenditures associated with each equity investment (such as mortgage payments, real estate taxes and maintenance costs)are generally not reduced when circumstances cause a reduction in income from the investment. 10The Company operates in a highly competitive market and competition may limit its ability to acquire desirable assets and to attract and retain tenants. The Company operates in a highly competitive market. The Company’s profitability depends, in large part, on its ability to acquire its assets at favorable pricesand on trends impacting the retail industry in general, national, regional and local economic conditions, financial condition and operating results of current andprospective tenants and customers, availability and cost of capital, construction and renovation costs, taxes, governmental regulations, legislation and populationtrends. Many of the Company’s competitors are substantially larger and have considerably greater financial, marketing and other resources than it does. Otherentities may raise significant amounts of capital and may have investment objectives that overlap with the Company’s. In addition, the properties that theCompany acquires may face competition from similar properties in the same market, as well as from e-commerce websites. The presence of competitivealternatives affects the Company’s ability to lease space and the level of rents it can obtain. New construction, renovations and expansions at competing sites couldalso negatively affect the Company’s properties. The Company may change any of its strategies, policies or procedures without stockholder consent, which could materially and adversely affect its business. The Company may change any of its strategies, policies or procedures with respect to acquisitions, asset allocation, growth, operations, indebtedness, financingstrategy and distributions, including those related to maintaining its REIT qualification, at any time without the consent of its stockholders, which could result inmaking acquisitions that are different from, and possibly riskier than, the types of acquisitions described in this Annual Report on Form 10-K. A change in theCompany’s strategy may increase its exposure to real estate market fluctuations, financing risk, default risk and interest rate risk. Furthermore, a change in theCompany’s asset allocation could result in the Company making acquisitions in asset categories different from those described in this Annual Report on Form 10-K. These changes could materially and adversely affect the Company’s income, cash flow, results of operations, financial condition, liquidity, the ability to serviceits debt obligations, the market price of its common stock and its ability to pay dividends and other distributions to its stockholders. The Company’s directors are subject to potential conflicts of interest. The Company’s executive officers and directors may face conflicts of interest. Except for Messrs. Tanz, Haines and Schoebel, none of the Company’s executiveofficers or directors are required to commit substantially all of their business time to the Company. Also, in the course of their other business activities, theCompany’s directors may become aware of investment and business opportunities that may be appropriate for presentation to the Company as well as the otherentities with which they are affiliated. They may have conflicts of interest in determining to which entity a particular business opportunity should be presented. As a result of multiple business affiliations, the Company’s non-management directors may have legal obligations relating to presenting opportunities to acquireone or more properties, portfolios or real estate-related debt investments to other entities. The Company’s non-management directors (including the Company’snon-executive Chairman) may present such opportunities to the other entities to which they owe pre-existing fiduciary duties before presenting such opportunitiesto the Company. In addition, conflicts of interest may arise when the Company’s board of directors evaluates a particular opportunity. Capital markets and economic conditions can materially affect the Company’s financial condition, its results of operations and the value of its assets. There are many factors that can affect the value of the Company’s assets, including the state of the capital markets and economy. Although there has beenimprovement in the credit and real estate markets since the great recession, any reduction in available financing may materially and adversely affect the Company’sability to achieve its financial objectives. Concern about the stability of the markets generally may limit the Company’s ability and the ability of its tenants totimely refinance maturing liabilities and access the capital markets to meet liquidity needs. Although the Company will factor in these conditions in acquiring itsassets, its long term success depends in part on general economic conditions and the stability and dependability of the financing market for retail real estate. If thenational economy or the local economies in which the Company operates were to experience uncertainty, or if general economic conditions were to worsen, theCompany’s income, cash flow, results of operations, financial condition, liquidity, the ability to service its debt obligations, the market price of its common stockand its ability to pay dividends and other distributions to its stockholders could be materially and adversely affected. 11Bankruptcy or insolvency of tenants may decrease the Company’s revenues and available cash. In the case of many retail properties, the bankruptcy or insolvency of a major tenant could cause the Company to suffer lower revenues and operational difficultiesand could allow other tenants to exercise so-called “kick-out” clauses in their leases and terminate their lease or reduce their rents prior to the normal expiration oftheir lease terms. As a result, the bankruptcy or insolvency of major tenants could materially and adversely affect the Company’s income, cash flow, results ofoperations, financial condition, liquidity, the ability to service its debt obligations, the market price of its common stock and its ability to pay dividends and otherdistributions to its stockholders. Inflation or deflation may materially and adversely affect the Company’s income, cash flow, results of operations, financial condition, liquidity, the ability toservice its debt obligations, the market price of its common stock and its ability to pay dividends and distributions to its stockholders. Increased inflation could have a pronounced negative impact on the Company’s property operating expenses and general and administrative expenses, as thesecosts could increase at a rate higher than the Company’s rents. Inflation could also have an adverse effect on consumer spending which could impact theCompany’s tenants’ sales and, in turn, the Company’s percentage rents, where applicable, and the willingness and ability of tenants to enter into or renew leasesand/or honor their obligations under existing leases. Conversely, deflation could lead to downward pressure on rents and other sources of income. Compliance or failure to comply with safety regulations and requirements could result in substantial costs. The Company’s properties are subject to various federal, state and local regulatory requirements, such as state and local fire and life safety requirements. If theCompany fails to comply with these requirements, it could incur fines or private damage awards. The Company does not know whether compliance with therequirements will require significant unanticipated expenditures that could affect its income, cash flow, results of operations, financial condition, liquidity,prospects and ability to service its debt obligations, the market price of its common stock and its ability to pay dividends and other distributions to its stockholders. The Company expects to acquire additional properties and this may create risks. The Company expects to acquire additional properties consistent with its investment strategies. The Company may not, however, succeed in consummatingdesired acquisitions on time, within budget or at all. In addition, the Company may face competition in pursuing acquisition opportunities, which could result inincreased acquisition costs. When the Company does pursue a project or acquisition, it may not succeed in leasing newly acquired properties at rents sufficient tocover its costs of acquisition. Difficulties in integrating acquisitions may prove costly or time-consuming and could result in poorer than anticipatedperformance. The Company may also abandon acquisition opportunities that it has begun pursuing and consequently fail to recover expenses alreadyincurred. Furthermore, acquisitions of new properties will expose the Company to the liabilities of those properties, including, for example, liabilities for clean-upof disclosed or undisclosed environmental contamination, claims by persons in respect of events transpiring or conditions existing before the Company’sacquisition and claims for indemnification by general partners, directors, officers and others indemnified by the former owners of properties.In the event we seek to redevelop existing properties, these projects could be subject to delays or other risks and might not yield the returns we anticipate,which would harm our financial condition and operating results.The Company may selectively engage in redevelopment projects at certain of our properties. To the extent the Company enters into redevelopment projects, it willbe subject to a number of risks that could negatively affect its return on investment, financial condition, results of operations and our ability to make distributionsto stockholders, including, among others:•higher than anticipated construction costs, including labor and material costs;•delayed ability or inability to reach projected occupancy, rental rates, profitability, and investment return;•timing delays due to weather, labor disruptions, zoning or other regulatory approvals, tenant decision delays, delays in anchor approvals of redevelopmentplans, where required, acts of God (such as fires, significant storms, earthquakes or floods) and other factors outside our control, which might make aproject less profitable or unprofitable, or delay profitability; and•expenditure of money and time on projects that might be significantly delayed before stabilization.12If a project is unsuccessful, either because it is not meeting its expectations when operational or was not completed according to the project planning, the Companycould lose its investment in the project or have to incur an impairment charge relating to the asset or development which could then adversely impact theCompany’s financial condition and operating results.Factors affecting the general retail environment could adversely affect the financial condition of the Company’s retail tenants and the willingness of retailersto lease space in its shopping centers, and in turn, materially and adversely affect the Company. The Company’s properties are focused on the retail real estate market. This means that the performance of the Company’s properties will be impacted by generalretail market conditions, including the level of consumer spending and consumer confidence, the threat of terrorism and increasing competition from online retailwebsites and catalog companies. In addition, the retail business is highly competitive and our tenants may fail to differentiate their shopping experiences, createan attractive value proposition or execute their business strategies. Furthermore, the Company believes that the increase in digital and mobile technology usage hasincreased the speed of the transition from shopping at physical locations to web-based purchases and that its tenants may be negatively affected by these changingconsumer spending habits. These conditions could adversely affect the financial condition of the Company’s retail tenants and the willingness and ability ofretailers to lease space, or renew existing leases, in the Company’s shopping centers and to honor their obligations under existing leases, and in turn, materially andadversely affect the Company.The Company’s growth depends on external sources of capital, which may not be available in the future. In order to maintain its qualification as a REIT, the Company is required under the Code to annually distribute at least 90% of its REIT taxable income,determined without regard to the dividends paid deduction and excluding any net capital gain. After the Company invests its cash on hand, it expects to dependprimarily on the credit facility and other external financing (including debt and equity financings) to fund the growth of its business. The Company’s access todebt or equity financing depends on the willingness of third parties to lend or make equity investments and on conditions in the capital markets generally. As aresult of changing economic conditions, the Company may be limited in its ability to obtain additional financing or to refinance existing debt maturities onfavorable terms or at all and there can be no assurances as to when financing conditions will improve. The Company does not have a formal policy limiting the amount of debt it may incur and its board of directors may change its leverage policy withoutstockholder consent, which could result in a different risk profile. Although the Company’s charter and bylaws do not limit the amount of indebtedness the Company can incur, the Company’s policy is to employ prudent amountsof leverage and use debt as a means of providing additional funds for the acquisition of its assets and the diversification of its portfolio. The amount of leveragethe Company will deploy for particular investments will depend upon its management team’s assessment of a variety of factors, which may include the anticipatedliquidity and price volatility of the assets in its portfolio, the potential for losses, the availability and cost of financing the assets, the Company’s opinion of thecreditworthiness of its financing counterparties, the health of the U.S. economy and commercial mortgage markets, the Company’s outlook for the level, slope andvolatility of interest rates, the credit quality of the tenants occupying space at the Company’s properties, and the need for the Company to comply with financialcovenants contained in the Company’s credit agreements. The Company’s board of directors may change its leverage policies at any time without the consent ofits stockholders, which could result in an investment portfolio with a different risk profile. The Company could be adversely affected if it or any of its subsidiaries are required to register as an investment company under the Investment Company Actof 1940 as amended (the “1940 Act”). The Company conducts its operations so that neither it, nor the Operating Partnership nor any of the Company’s other subsidiaries, is required to register asinvestment companies under the 1940 Act. If the Company, the Operating Partnership or the Company’s other subsidiaries are required to register as aninvestment company but fail to do so, the unregistered entity would be prohibited from engaging in certain business, and criminal and civil actions could bebrought against such entity. In addition, the contracts of such entity would be unenforceable unless a court required enforcement, and a court could appoint areceiver to take control of the entity and liquidate its business. Real estate investments’ value and income fluctuate due to conditions in the general economy and the real estate business, which may materially and adverselyaffect the Company’s ability to service its debt and expenses. The value of real estate fluctuates depending on conditions in the general and local economy and the real estate business. These conditions may also limit theCompany’s revenues and available cash. The rents the Company receives and the occupancy13levels at its properties may decline as a result of adverse changes in conditions in the general economy and the real estate business. If rental revenues and/oroccupancy levels decline, the Company generally would expect to have less cash available to pay indebtedness and for distribution to its stockholders. In addition,some of the Company’s major expenses, including mortgage payments, real estate taxes and maintenance costs, generally do not decline when the related rentsdecline. The lack of liquidity of the Company’s assets could materially and adversely affect the Company’s income, cash flow, results of operations, financialcondition, liquidity, the ability to service its debt obligations, the market price of its common stock and its ability to pay dividends and other distributions to itsstockholders, and could materially and adversely affect the Company’s ability to value and sell its assets. Real estate investments are relatively difficult to buy and sell quickly. As a result, the Company expects many of its investments will be illiquid and if it isrequired to liquidate all or a portion of its portfolio quickly, it may realize significantly less than the value at which it had previously recorded its investments. The Company depends on leasing space to tenants on economically favorable terms and collecting rent from tenants, some of whom may not be able to pay. The Company’s financial results depend significantly on leasing space in its properties to tenants on economically favorable terms. In addition, as a substantialmajority of the Company’s revenue comes from renting real property, the Company’s income, cash flow, results of operations, financial condition, liquidity, theability to service its debt obligations, the market price of its common stock and its ability to pay dividends and other distributions to its stockholders could bematerially and adversely affected if a significant number of its tenants cannot pay their rent or if the Company is not able to maintain occupancy levels onfavorable terms. If a tenant does not pay its rent, the Company may not be able to enforce its rights as landlord without delays and may incur substantial legalcosts.Some of the Company’s properties depend on anchor stores or major tenants to attract shoppers and could be materially and adversely affected by the loss ofor a store closure by one or more of these tenants. The Company’s shopping centers are primarily anchored by national and regional supermarkets and drug stores. The value of the retail properties the Companyacquires could be materially and adversely affected if these tenants fail to comply with their contractual obligations, seek concessions in order to continueoperations or cease their operations. Adverse economic conditions may result in the closure of existing stores by tenants which may result in increased vacanciesat the Company’s properties. Any periods of significant vacancies for the Company’s properties could materially and adversely impact the Company’s income,cash flow, results of operations, financial condition, liquidity, the ability to service its debt obligations, the market price of its common stock and its ability to paydividends and other distributions to its stockholders. Loss of revenues from major tenants could reduce the Company’s income, cash flow, results of operations, financial condition, liquidity, the ability to serviceits debt obligations, the market price of its common stock and its ability to pay dividends and other distributions to its stockholders. The Company derives significant revenues from anchor tenants such as Albertson’s/Safeway Supermarkets, Kroger Supermarkets and JP Morgan Chase. As ofDecember 31, 2019, these tenants are the Company’s three largest tenants and accounted for 5.5%, 3.4% and 1.4%, respectively, of its annualized base rent on apro-rata basis. The Company’s income, cash flow, results of operations, financial condition, liquidity, the ability to service its debt obligations, the market price ofits common stock and its ability to pay dividends and other distributions to its stockholders could be materially and adversely affected by the loss of revenues in theevent a major tenant becomes bankrupt or insolvent, experiences a downturn in its business, materially defaults on its leases, does not renew its leases as theyexpire, or renews at lower rental rates. The Company’s inability to receive reimbursements of Common Area Maintenance (“CAM”) costs from tenants could adversely affect the Company’s cashflow. CAM costs typically include allocable energy costs, repairs, maintenance and capital improvements to common areas, janitorial services, administrative, propertyand liability insurance costs and security costs. The Company may acquire properties with leases with variable CAM provisions that adjust to reflect inflationaryincreases or leases with a fixed CAM payment methodology which fixes its tenants’ CAM contributions. With respect to both variable and fixed paymentmethodologies, the amount of reimbursements for CAM costs that the Company is entitled to receive from its tenants pursuant to the terms of the respective leaseagreements may be less than the actual CAM costs at the Company’s properties. The Company’s inability to recover or pass on CAM costs to its tenants, whetherdue to the terms of the Company’s leases or vacancies at the Company’s properties, could adversely affect the Company’s cash flow.14 The Company may incur costs to comply with environmental laws. The Company’s operations and properties are subject to various federal, state and local laws and regulations concerning the protection of the environment,including air and water quality, hazardous or toxic substances and health and safety. Under some environmental laws, a current or previous owner or operator ofreal estate may be required to investigate and clean up hazardous or toxic substances released at a property. The owner or operator may also be held liable to agovernmental entity or to third parties for property damage or personal injuries and for investigation and clean-up costs incurred by those parties because of thecontamination. These laws often impose liability without regard to whether the owner or operator knew of the release of the substances or caused the release. Thepresence of contamination or the failure to remediate contamination may impair the Company’s ability to sell or lease real estate or to borrow using the real estateas collateral. Other laws and regulations govern indoor and outdoor air quality including those that can require the abatement or removal of asbestos-containingmaterials in the event of damage, demolition, renovation or remodeling and also govern emissions of and exposure to asbestos fibers in the air. The maintenanceand removal of lead paint and certain electrical equipment containing polychlorinated biphenyls (“PCBs”) and underground storage tanks are also regulated byfederal and state laws. The Company is also subject to risks associated with human exposure to chemical or biological contaminants such as molds, pollens,viruses and bacteria which, above certain levels, can be alleged to be connected to allergic or other health effects and symptoms in susceptible individuals. TheCompany could incur fines for environmental compliance and be held liable for the costs of remedial action with respect to the foregoing regulated substances ortanks or related claims arising out of environmental contamination or human exposure to contamination at or from its properties. Identification of complianceconcerns or undiscovered areas of contamination, changes in the extent or known scope of contamination, discovery of additional sites, human exposure to thecontamination or changes in cleanup or compliance requirements could result in significant costs to the Company. Moreover, compliance with new laws orregulations such as those related to climate change, including compliance with “green” building codes, or more stringent laws or regulations or stricterinterpretations of existing laws may require material expenditures by the Company. The Company faces risks associated with security breaches through cyber attacks, cyber intrusions or otherwise, as well as other significant disruptions of itsinformation technology (“IT”) networks and related systems. The Company faces risks associated with security breaches, whether through cyber attacks or cyber intrusions over the Internet, malware, computer viruses,attachments to e-mails, persons inside the Company or persons with access to systems inside the Company, and other significant disruptions of the Company’s ITnetworks and related systems. The risk of a security breach or disruption, particularly through cyber attack or cyber intrusion, including by computer hackers,foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around theworld have increased. The Company’s IT networks and related systems are essential to the operation of its business and its ability to perform day-to-day operations(including managing its building systems). There can be no assurance that the Company’s efforts to maintain the security and integrity of these types of ITnetworks and related systems will be effective or that attempted security breaches or disruptions would not be successful or damaging. A security breach or othersignificant disruption involving the Company’s IT networks and related systems could materially and adversely impact the Company’s income, cash flow, resultsof operations, financial condition, liquidity, the ability to service its debt obligations, the market price of its common stock and its ability to pay dividends andother distributions to its stockholders. The Company’s business and operations would suffer in the event of system failures. Despite system redundancy, the implementation of security measures and the existence of a disaster recovery plan for the Company’s internal informationtechnology systems, its systems are vulnerable to damage from any number of sources, including computer viruses, unauthorized access, energy blackouts, naturaldisasters, terrorism, war and telecommunication failures. Any system failure or accident that causes interruptions in the Company’s operations could result in amaterial disruption to its business. The Company may also incur additional costs to remedy damages caused by such disruptions.A prolonged economic slowdown, a lengthy or severe recession or declining real estate values could impair the Company’s assets and have a material andadverse effect on its income, cash flow, results of operations, financial condition, liquidity, the ability to service its debt obligations, the market price of itscommon stock and its ability to pay dividends and other distributions to its stockholders. The Company believes the risks associated with its business will be more severe during periods of economic slowdown or recession if these periods areaccompanied by declining real estate values. Declines in real estate values, among other factors, could result in a determination that the Company’s assets havebeen impaired. If the Company determines that an impairment has occurred, the Company would be required to make an adjustment to the net carrying value ofthe asset which could have an15adverse effect on its results of operations in the period in which the impairment charge is recorded. Although the Company will take current economic conditionsinto account in acquiring its assets, the Company’s long term success, and the value of its assets, depends in part on general economic conditions and other factorsbeyond the Company’s control. If the national economy or the local economies in which the Company operates experience uncertainty, or if general economicconditions were to worsen, the value of the Company’s properties could decline, and the Company’s income, cash flow, results of operations, financial condition,liquidity, the ability to service its debt obligations, the market price of its common stock and its ability to pay dividends and other distributions to its stockholders,could be materially and adversely affected. Loss of key personnel could harm the Company’s operations. The Company is dependent on the efforts of certain key personnel of its senior management team. While the Company has employment contracts with each ofMessrs. Tanz, Haines and Schoebel, the loss of the services of any of these individuals could harm the Company’s operations and have a material and adverseeffect on its income, cash flow, results of operations, financial condition, liquidity, the ability to service its debt obligations, the market price of its common stockand its ability to pay dividends and other distributions to its stockholders. Under their employment agreements, certain members of the Company’s senior management team will have certain rights to terminate their employment andreceive severance in connection with a change in control of the Company. The Company’s employment agreements with each of Messrs. Tanz, Haines and Schoebel, which provide that, upon termination of his employment (i) by theapplicable officer within 12 months following the occurrence of a change in control (as defined in the employment agreement), (ii) by the Company without cause(as defined in the employment agreement), (iii) by the applicable officer for good reason (as defined in the employment agreement), (iv) by non-renewal of theapplicable officer’s employment agreement or (v) by reason of the applicable officer’s death or disability (as defined in the employment agreement), such executiveofficers would be entitled to certain termination or severance payments made by the Company (which may include a lump sum payment equal to definedpercentages of annual salary and prior years’ average bonuses, paid in accordance with the terms and conditions of the respective agreement). In addition, thevesting of all his outstanding unvested equity-based incentives and awards would accelerate. These provisions make it costly to terminate their employment andcould delay or prevent a transaction or a change in control of the Company that might involve a premium paid for shares of its common stock or otherwise be inthe best interests of its stockholders. Joint venture investments could be materially and adversely affected by the Company’s lack of sole decision-making authority or reliance on a joint venturepartner’s financial condition. The Company may enter into joint venture arrangements in the future. Investments in joint ventures involve risks that are not otherwise present with propertieswhich the Company owns entirely. In a joint venture investment, the Company may not have exclusive control or sole decision-making authority over thedevelopment, financing, leasing, management and other aspects of these investments. As a result, the joint venture partner might have economic or businessinterests or goals that are inconsistent with the Company’s goals or interests, take action contrary to the Company’s interests or otherwise impede the Company’sobjectives. Joint venture investments involve risks and uncertainties, including the risk of the joint venture partner failing to provide capital and fulfill itsobligations, which may result in certain liabilities to the Company for guarantees and other commitments, the risk of conflicts arising between the Company andits partners and the difficulty of managing and resolving such conflicts, and the difficulty of managing or otherwise monitoring such business arrangements. Thejoint venture partner also might become insolvent or bankrupt, which may result in significant losses to the Company. Further, although the Company may own acontrolling interest in a joint venture and may have authority over major decisions such as the sale or refinancing of investment properties, the Company may havefiduciary duties to the joint venture partners or the joint venture itself that may cause, or require, it to take or refrain from taking actions that it would otherwisetake if it owned the investment properties outright.Uninsured losses or a loss in excess of insured limits could materially and adversely affect the Company. The Company carries comprehensive general liability, fire, extended coverage, loss of rent insurance, and environmental liability where applicable on itsproperties, with policy specifications and insured limits customarily carried for similar properties. There are certain types of losses, such as losses resulting fromwars or acts of God that generally are not insured because they are either uninsurable or not economically insurable. Should an uninsured loss or a loss in excessof insured limits occur, the Company could lose capital invested in a property, as well as the anticipated future revenues from a property, while remainingobligated for any mortgage indebtedness, or other financial obligations or liabilities related to the property. Any loss of these types could materially and adverselyaffect the Company’s income, cash flow, results of operations, financial condition,16liquidity, prospects and ability to service its debt obligations, the market price of its common stock and its ability to pay dividends and other distributions to itsstockholders.The Company could be materially and adversely affected by poor market conditions where its properties are geographically concentrated. The Company’s performance depends on the economic conditions in markets in which its properties are concentrated. During the year ended December 31, 2019,the Company’s properties in California, Washington and Oregon accounted for 66%, 20% and 14%, respectively, of its consolidated property operatingincome. The Company’s income, cash flow, results of operations, financial condition, liquidity, the ability to service its debt obligations, the market price of itscommon stock and its ability to pay dividends and other distributions to its stockholders could be materially and adversely affected by this geographicconcentration if market conditions, such as an oversupply of space or a reduction in demand for real estate in an area, deteriorate in California, Washington andOregon. Moreover, due to the geographic concentration of its properties, the Company may be disproportionately affected by general risks such as naturaldisasters, including major fires, floods and earthquakes, severe or inclement weather, and acts of terrorism should such developments occur in or near the marketsin California, Washington and Oregon in which the Company’s properties are located. Should the Company decide at some point in the future to expand into new markets, it may not be successful, which could materially and adversely affect itsbusiness, financial condition, liquidity and results of operations. The Company’s properties are concentrated in California, Washington and Oregon. If the opportunity arises, the Company may explore acquisitions of propertiesin new markets inside or outside of these states. Each of the risks applicable to the Company’s ability to successfully acquire, integrate and operate properties in itscurrent markets may also apply to its ability to successfully acquire, integrate and operate properties in new markets. In addition to these risks, the Company’smanagement team may not possess the same level of knowledge with respect to market dynamics and conditions of any new market in which the Company mayattempt to expand, which could materially and adversely affect its ability to operate in any such markets. The Company may be unable to obtain the desired returnson its investments in these new markets, which could materially and adversely affect the Company’s income, cash flow, results of operations, financial condition,liquidity, prospects and ability to service its debt obligations, the market price of its common stock and its ability to pay dividends and other distributions to itsstockholders.Risks Related to Financing The Company’s term loan, credit facility and unsecured senior notes contain restrictive covenants relating to its operations, which could limit the Company’sability to respond to changing market conditions and its ability to pay dividends and other distributions to its stockholders. The Company’s term loan, credit facility and unsecured senior notes contain restrictive covenants. These or other limitations, including those that may apply tofuture Company borrowings, may materially and adversely affect the Company’s flexibility and its ability to achieve its operating plans and could result in theCompany being limited in the amount of dividends and distributions it would be permitted to pay to its stockholders. In addition, failure to comply with these covenants could cause a default under the applicable debt instrument, and the Company may then be required to repaysuch debt with capital from other sources. Under those circumstances, other sources of capital may not be available to the Company, or may be available only onunattractive terms. Certain of the Company’s mortgage financing arrangements and other indebtedness contain provisions that could limit the Company’s operating flexibility. The Company’s existing mortgage financing contains, and future mortgage financing may in the future contain, customary covenants and provisions that limit theCompany’s ability to pre-pay such mortgages before their scheduled maturity date or to transfer the underlying asset. Additionally, the Company’s ability to satisfyprospective mortgage lenders’ insurance requirements may be materially and adversely affected if lenders generally insist upon greater insurance coverage againstcertain risks than is available to the Company in the marketplace or on commercially reasonable terms. In addition, because a mortgage is secured by a lien on theunderlying real property, mortgage defaults subject the Company to the risk of losing the property through foreclosure. The Company’s access to financing may be limited and thus its ability to potentially enhance its returns may be materially and adversely affected.17 The Company intends, when appropriate, to employ prudent amounts of leverage and use debt as a means of providing additional funds for the acquisition of itsassets and the diversification of its portfolio. As of December 31, 2019, the Company’s outstanding principal mortgage indebtedness was approximately $86.2million, and the Company may incur significant additional debt to finance future acquisition and development activities. The credit facility consists of a $600.0million unsecured revolving credit facility and the Company has a $300.0 million term loan, of which $84.0 million and $300.0 million, respectively, wereoutstanding as of December 31, 2019. In addition, the Operating Partnership issued $250.0 million aggregate principal amount of unsecured senior notes in December 2017 (the “Senior Notes Due2027”), $200.0 million aggregate principal amount of unsecured senior notes in September 2016 (the “Senior Notes Due 2026”), $250.0 million aggregateprincipal amount of unsecured senior notes in December 2014 (the “Senior Notes Due 2024”) and $250.0 million aggregate principal amount of unsecured seniornotes in December 2013 (the “Senior Notes Due 2023” and collectively with the Senior Notes Due 2024, the Senior Notes Due 2026 and the Senior Notes Due2027, the “unsecured senior notes”), each of which were fully and unconditionally guaranteed by ROIC. The Company’s access to financing will depend upon a number of factors, over which it has little or no control, including: •general market conditions;•the market’s view of the quality of the Company’s assets;•the market’s perception of the Company’s growth potential;•the Company’s eligibility to participate in and access capital from programs established by the U.S. government;•the Company’s current and potential future earnings and cash distributions; and•the market price of the shares of the Company’s common stock. Although the credit markets and real estate have recovered from the great recession, any reduction in available financing may materially and adversely affect theCompany’s ability to achieve its financial objectives. Concern about the stability of the markets generally could adversely affect one or more private lenders andcould cause one or more private lenders to be unwilling or unable to provide the Company with financing or to increase the costs of that financing. In addition, ifregulatory capital requirements imposed on the Company’s private lenders change, they may be required to limit, or increase the cost of, financing they provide tothe Company. In general, this could potentially increase the Company’s financing costs and reduce its liquidity or require it to sell assets at an inopportune time orprice. During times when interest rates on mortgage loans are high or financing is otherwise unavailable on a timely basis, the Company may purchase certain propertiesfor cash or equity securities, including OP Units, or a combination thereof. Consequently, depending on market conditions at the relevant time, the Company mayhave to rely more heavily on additional equity issuances, which may be dilutive to its stockholders, or on less efficient forms of debt financing that require a largerportion of its cash flow from operations, thereby reducing funds available for its operations, future business opportunities, cash distributions to its stockholders andother purposes. The Company cannot assure you that it will have access to such equity or debt capital on favorable terms (including, without limitation, cost andterm) at the desired times, or at all, which may cause it to curtail its asset acquisition activities and/or dispose of assets, which could materially and adversely affectits income, cash flow, results of operations, financial condition, liquidity, the ability to service its debt obligations, the market price of its common stock and itsability to pay dividends and other distributions to its stockholders. Increases in interest rates could increase the amount of the Company’s debt payments and materially and adversely affect its business, financial condition,liquidity and results of operations. Interest the Company pays could reduce cash available for distributions. As of December 31, 2019, the Company had approximately $84.0 million and $300.0million outstanding under the Company’s $600.0 million unsecured revolving credit facility and $300.0 million term loan, respectively, that bear interest at avariable rate. In addition, the Company may incur variable rate debt in the future, including mortgage debt, borrowings under the credit facility or new creditfacilities. An increase in interest rates would increase the Company’s interest costs, which could adversely affect the Company’s cash flow, results of operations,ability to pay principal and interest on debt and pay dividends and other distributions to its stockholders, and reduce the Company’s access to capital markets. Inaddition, if the Company needs to repay existing debt during periods of rising interest rates, it may be required to incur additional indebtedness at higher rates.From time to time, the Company may18enter into interest rate swap agreements and other interest rate hedging contracts with the intention of lessening the impact of rising interest rates. However,increased interest rates may increase the risk that the counterparties to such agreements may not be able to fulfill their obligations under these agreements, andthere can be no assurance that these arrangements will be effective in reducing the Company’s exposure to interest rate changes. These risks could materially andadversely affect the Company’s cash flow, results of operations, financial condition, liquidity, the ability to service its debt obligations, the market price of itscommon stock and its ability to pay dividends and other distributions to its stockholders. The Company’s use of interest rate hedging arrangements to manage riskassociated with interest rate volatility may expose the Company to additional risks, including a risk that a counterparty to a hedging arrangement may fail to honorits obligations or that the Company could be required to fund the Company’s contractual payment obligations under such arrangements in relatively large amountsor on short notice. Developing an effective interest rate risk strategy is complex and no strategy can completely insulate the Company from risks associated withinterest rate fluctuations. There can be no assurance that our hedging activities will have the desired beneficial impact on the Company’s results of operations,liquidity and financial condition.Uncertainty regarding the London interbank offered rate (“LIBOR”) may adversely impact the Company’s borrowings.In July 2017, the U.K. Financial Conduct Authority (the “FCA”) announced that it intends to stop persuading or compelling banks to submit the London InterbankOffered Rate (“LIBOR”) after 2021. As of December 31, 2019, the Company had outstanding approximately $384.0 million of variable rate debt that was indexedLIBOR. The Alternative Reference Rates Committee, a steering committee comprised of large U.S. financial institutions convened by the U.S. Federal Reserve,has recommended the Secured Overnight Financing Rate (“SOFR”) as a more robust reference rate alternative to U.S. dollar LIBOR. SOFR is calculated based onovernight transactions under repurchase agreements, backed by Treasury securities. SOFR is observed and backward looking, which stands in contrast withLIBOR under the current methodology, which is an estimated forward-looking rate and relies, to some degree, on the expert judgment of submitting panelmembers. Given that SOFR is a secured rate backed by government securities, it will be a rate that does not take into account bank credit risk (as is the case withLIBOR). SOFR is therefore likely to be lower than LIBOR and is less likely to correlate with the funding costs of financial institutions. It is not possible to predictthe further effect of the rules of the FCA, any changes in the methods by which LIBOR is determined, whether or not SOFR will attain market traction as a LIBORreplacement tool, or any other reforms to LIBOR that may be enacted in the United Kingdom, the European Union or elsewhere. Any such developments maycause LIBOR to perform differently than in the past, be replaced or cease to exist or may result in, among other things, a sudden or prolonged increase or decreasein LIBOR, a delay in the publication of LIBOR, and changes in the rules or methodologies in LIBOR, which may discourage market participants from continuingto administer or to participate in LIBOR’s determination, and, in certain situations, could result in LIBOR no longer being determined and published. If a publishedLIBOR rate is unavailable after 2021, the interest rates on the Company’s debt which is indexed to LIBOR will be determined using various alternative methods,which may include SOFR, any of which may result in interest obligations which are more than or do not otherwise correlate over time with the payments thatwould have been made on such debt if LIBOR was available in its current form. Further, the same costs and risks that may lead to the discontinuation orunavailability of LIBOR may make one or more of the alternative methods impossible or impracticable to determine. Any of these proposals or consequencescould have a material adverse effect on the Company’s financing costs. Financing arrangements that the Company may use to finance its assets may require it to provide additional collateral or pay down debt. The Company, when appropriate, uses traditional forms of financing including secured debt. In the event the Company utilizes such financing arrangements, theywould involve the risk that the market value of its assets which are secured may decline in value, in which case the lender may, in connection with a refinancing,require it to provide additional collateral, provide additional equity, or to repay all or a portion of the funds advanced. The Company may not have the fundsavailable to repay its debt or provide additional equity at that time, which would likely result in defaults unless it is able to raise the funds from alternative sources,which it may not be able to achieve on favorable terms or at all. Providing additional collateral or equity would reduce the Company’s liquidity and limit itsability to leverage its assets. If the Company cannot meet these requirements, the lender could accelerate the Company’s indebtedness, increase the interest rate onadvanced funds and terminate its ability to borrow funds from them, which could materially and adversely affect the Company’s income, cash flow, results ofoperations, financial condition, liquidity, the ability to service its debt obligations, the market price of its common stock and its ability to pay dividends and otherdistributions to its stockholders. The providers of secured debt may also require the Company to maintain a certain amount of cash or set aside assets sufficient tomaintain a specified liquidity position. As a result, the Company may not be able to leverage its assets as fully as it would choose which could reduce its return onassets. There can be no assurance that the Company will be able to utilize such arrangements on favorable terms, or at all. 19A downgrade in the Company’s or the Operating Partnership’s credit ratings could materially adversely affect the Company’s business and financialcondition. The credit ratings assigned to the Company’s obligations or to the debt securities of the Operating Partnership could change based upon, among other things, theCompany’s and the Operating Partnership’s results of operations and financial condition. These ratings are subject to ongoing evaluation by credit rating agencies,and there can be no assurance that any rating will not be changed or withdrawn by a rating agency in the future if, in its judgment, circumstances warrant.Moreover, these credit ratings do not apply to the Company’s common stock and are not recommendations to buy, sell or hold any other securities. If any of thecredit rating agencies that have rated the obligations of the Company or the debt securities of the Operating Partnership downgrades or lowers its credit ratings, orif any credit rating agency indicates that it has placed any such rating on a so-called “watch list” for a possible downgrading or lowering or otherwise indicates thatits outlook for that rating is negative, it could have a material adverse effect on the Company’s costs and availability of capital, which could in turn materially andadversely impact the Company’s income, cash flow, results of operations, financial condition, liquidity, the ability to service its debt obligations, the market priceof its common stock and its ability to pay dividends and other distributions to its stockholders. Risks Related to the Company’s Organization and Structure The Company depends on dividends and distributions from its direct and indirect subsidiaries. The creditors and any preferred equity holders of thesesubsidiaries are entitled to amounts payable to them by the subsidiaries before the subsidiaries may pay any dividends or distributions to the Company. Substantially all of the Company’s assets are held through the Operating Partnership, which holds substantially all of the Company’s properties and assets throughsubsidiaries. The Operating Partnership’s cash flow is dependent on cash distributions to it by its subsidiaries, and in turn, substantially all of the Company’s cashflow is dependent on cash distributions to it by the Operating Partnership. The creditors and any preferred equity holders of the Company’s direct and indirectsubsidiaries are entitled to payment of that subsidiary’s obligations to them, when due and payable, before distributions may be made by that subsidiary to itscommon equity holders. Thus, the Operating Partnership’s ability to make distributions to the Company and therefore the Company’s ability to make distributionsto its stockholders will depend on its subsidiaries’ ability first to satisfy their obligations to creditors and any preferred equity holders and then to makedistributions to the Operating Partnership. In addition, the Company’s participation in any distribution of the assets of any of its direct or indirect subsidiaries upon the liquidation, reorganization orinsolvency, is only after the claims of the creditors, including the holders of the unsecured senior notes and trade creditors, and preferred equity holders aresatisfied. Certain provisions of Maryland law may limit the ability of a third party to acquire control of the Company. Certain provisions of the Maryland General Corporation Law (the “MGCL”) may have the effect of delaying, deferring or preventing a transaction or a change incontrol of the Company that might involve a premium price for holders of the Company’s common stock or otherwise be in their best interests, including: •“business combination” provisions that, subject to certain limitations, prohibit certain business combinations between the Company and an “interestedstockholder” (defined generally as any person who beneficially owns 10% or more of the voting power of the Company’s shares or an affiliate thereof) forfive years after the most recent date on which the stockholder becomes an interested stockholder, and thereafter impose special minimum price provisionsand special stockholder voting requirements on these combinations; and•“control share” provisions that provide that “control shares” of the Company (defined as shares which, when aggregated with other shares controlled by thestockholder, entitle the stockholder to exercise one of three increasing ranges of voting power in electing directors) acquired in a “control share acquisition”(defined as the direct or indirect acquisition of ownership or control of “control shares”) have no voting rights except to the extent approved by theCompany’s stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares.However, the provisions of the MGCL relating to business combinations do not apply to business combinations that are approved or exempted by the Company’sboard of directors prior to the time that the interested stockholder becomes an interested stockholder. In addition, the Company’s bylaws contain a provisionexempting from the control share acquisition20statute any and all acquisitions by any person of shares of the Company’s common stock. There can be no assurance that such exemption will not be amended oreliminated at any time in the future. Additionally, Title 3, Subtitle 8 of the MGCL permits the Company’s board of directors, without stockholder approval and regardless of what is currently providedin the Company’s charter or bylaws, to take certain actions that may have the effect of delaying, deferring or preventing a transaction or a change in control of theCompany that might involve a premium to the market price of its common stock or otherwise be in the stockholders’ best interests. These provisions of the MGCLpermit the Company, by provision in its charter or bylaws or a resolution of its board of directors and notwithstanding any contrary provision in the charter orbylaws, to adopt: •a classified board;•a two-thirds vote requirement for removing a director;•a requirement that the number of directors be fixed only by vote of the board of directors;•a requirement that a vacancy on the board be filled only by the remaining directors in office and (if the board is classified) for the remainder of the full termof the class of directors in which the vacancy occurred; and•a majority requirement for the calling of a stockholder-requested special meeting of stockholders.The authorized but unissued shares of preferred stock and the ownership limitations contained in the Company’s Charter may prevent a change in control. The Company’s charter authorizes the Company to issue authorized but unissued shares of preferred stock. In addition, the Company’s charter provides that theCompany’s board of directors has the power, without stockholder approval, to authorize the Company to issue any authorized but unissued shares of stock, toclassify any unissued shares of preferred stock and to reclassify any unissued shares of common stock or previously-classified shares of preferred stock into otherclasses or series of stock. As a result, the Company’s board of directors may establish a series of shares of preferred stock or use such preferred stock to create astockholder’s rights plan or so-called “poison pill” that could delay or prevent a transaction or a change in control that might involve a premium price for shares ofthe Company’s common stock or otherwise be in the best interests of the Company’s stockholders. In addition, the Company’s charter contains restrictions limiting the ownership and transfer of shares of the Company’s common stock and other outstandingshares of capital stock. The relevant sections of the Company’s charter provide that, subject to certain exceptions, ownership of shares of the Company’s commonstock by any person is limited to 9.8% by value or by number of shares, whichever is more restrictive, of the outstanding shares of common stock (the commonshare ownership limit), and no more than 9.8% by value or number of shares, whichever is more restrictive, of the outstanding capital stock (the aggregate shareownership limit). The common share ownership limit and the aggregate share ownership limit are collectively referred to herein as the “ownership limits.” Theseprovisions will restrict the ability of persons to purchase shares in excess of the relevant ownership limits. The Company’s board of directors has establishedexemptions from this ownership limit which permit certain institutional investors to hold additional shares of the Company’s common stock. The Company’sboard of directors may in the future, in its sole discretion, establish additional exemptions from this ownership limit. The Company’s failure to qualify as a REIT would subject it to U.S. federal income tax and potentially increased state and local taxes, which would reduce theamount of cash available for distribution to its stockholders. The Company intends to operate in a manner that will enable it to continue to qualify as a REIT for U.S. federal income tax purposes. The Company has notrequested and does not intend to request a ruling from the U.S. Internal Revenue Service that it will continue to qualify as a REIT. The U.S. federal income taxlaws governing REITs are complex. The complexity of these provisions and of the applicable U.S. Treasury Department regulations that have been promulgatedunder the Code (“Treasury Regulations”) is greater in the case of a REIT that holds assets through a partnership, such as the Company, and judicial andadministrative interpretations of the U.S. federal income tax laws governing REIT qualification are limited. To qualify as a REIT, the Company must meet, on anongoing basis, various tests regarding the nature of its assets and its income, the ownership of its outstanding shares, and the amount of itsdistributions. Moreover, new legislation, court decisions or administrative guidance, in each case possibly with retroactive effect, may make it more difficult orimpossible for the Company to qualify as a REIT. Thus, while the Company believes that it has operated and intends to continue to operate so that it will qualify asa REIT, given the highly complex nature of the rules governing REITs, the ongoing importance of factual21determinations, and the possibility of future changes in the Company’s circumstances, no assurance can be given that it has qualified or will continue to so qualifyfor any particular year. If the Company fails to qualify as a REIT in any taxable year, and does not qualify for certain statutory relief provisions, it would be required to pay U.S. federalincome tax on its taxable income, and distributions to its stockholders would not be deductible by it in determining its taxable income. In such a case, theCompany might need to borrow money or sell assets in order to pay its taxes. The Company’s payment of income tax would decrease the amount of its incomeavailable for distribution to its stockholders. Furthermore, if the Company fails to maintain its qualification as a REIT, it would no longer be required to distributesubstantially all of its net taxable income to its stockholders. In addition, unless the Company were eligible for certain statutory relief provisions, it would not beeligible to re-elect to qualify as a REIT for four taxable years following the year in which it failed to qualify as a REIT. Failure to make required distributions would subject the Company to tax, which would reduce the cash available for distribution to its stockholders.In order to qualify as a REIT, the Company must distribute to its stockholders each calendar year at least 90% of its REIT taxable income, determined withoutregard to the deduction for dividends paid and excluding net capital gain. To the extent that the Company satisfies the 90% distribution requirement, but distributesless than 100% of its taxable income, it is subject to U.S. federal corporate income tax on its undistributed income. In addition, the Company will incur a 4% non-deductible excise tax on the amount, if any, by which its distributions in any calendar year are less than a minimum amount specified under U.S. federal income taxlaws. The Company intends to distribute its net income to its stockholders in a manner intended to satisfy the REIT 90% distribution requirement and to avoid the4% non-deductible excise tax.The Company’s taxable income may exceed its net income as determined by the U.S. generally accepted accounting principles (“GAAP”) because, for example,realized capital losses will be deducted in determining its GAAP net income, but may not be deductible in computing its taxable income. In addition, the Companymay invest in assets that generate taxable income in excess of economic income or in advance of the corresponding cash flow from the assets. For example, theCompany may be required to accrue interest income on mortgage loans or other types of debt securities or interests in debt securities before it receives anypayments of interest or principal on such assets. Similarly, some of the debt securities that the Company acquires may have been issued with original issuediscount. The Company will generally be required to include such original issue discount in income based on a constant yield to maturity method. As a result of theforegoing, the Company may generate less cash flow than taxable income in a particular year. To the extent that the Company generates such non-cash taxableincome in a taxable year, it may incur corporate income tax and the 4% non-deductible excise tax on that income if it does not distribute such income tostockholders in that year. In that event, the Company may be required to use cash reserves, incur debt or liquidate assets at rates or times that it regards asunfavorable or make a taxable distribution of its shares in order to satisfy the REIT 90% distribution requirement and to avoid U.S. federal corporate income taxand the 4% non-deductible excise tax in that year.In order to qualify as a REIT, prior to the end of each taxable year, the Company is required to distribute any earnings and profits of any corporation acquired bythe Company in certain tax-deferred transactions to the extent that such earnings accrued at a time when such corporation did not qualify as a REIT. The Companyhas entered into certain transactions involving the tax-deferred acquisition of target corporations. The Company believes that it did not inherit any earnings andprofits of such target corporations attributable to any period that such corporations did not qualify as a REIT. However, no assurance can be provided in this regard,and if the Company were determined to have inherited and retained any such earnings and profits, the Company’s qualification as a REIT could be adverselyimpacted. To maintain its REIT qualification, the Company may be forced to borrow funds during unfavorable market conditions. In order to qualify as a REIT and avoid the payment of income and excise taxes, the Company may need to borrow funds on a short-term basis, or possibly on along-term basis, to meet the REIT distribution requirements even if the then prevailing market conditions are not favorable for these borrowings. These borrowingneeds could result from, among other things, a difference in timing between the actual receipt of cash and inclusion of income for U.S. federal income taxpurposes, the effect of non-deductible capital expenditures, the creation of reserves or required debt amortization payments. Even if the Company qualifies as a REIT, it may be required to pay certain taxes. Even if the Company qualifies for taxation as a REIT, it may be subject to certain U.S. federal, state and local taxes on its income and assets, including taxes onany undistributed income, taxes on income from some activities conducted as a result of a foreclosure and state or local income, franchise, property and transfertaxes, including mortgage recording taxes. In addition,22the Company may hold some of its assets through taxable REIT subsidiary (“TRS”) corporations. Any TRSs or other taxable corporations in which the Companyowns an interest will be subject to U.S. federal, state and local corporate taxes. Furthermore, the Company has entered into certain transactions in which theCompany has acquired target entities in tax-deferred transactions. To the extent that such entities had outstanding U.S. federal income tax or other tax liabilities,the Company would succeed to such liabilities. Payment of these taxes generally would decrease the cash available for distribution to the Company’s stockholders. Legislative, regulatory or administrative changes could adversely affect the Company.The U.S. federal income tax laws and regulations governing REITs and their stockholders, as well as the administrative interpretations of those laws andregulations, are constantly under review and may be changed at any time, possibly with retroactive effect. No assurance can be given as to whether, when, or inwhat form, the U.S. federal income tax laws applicable to the Company and its stockholders may be enacted. Changes to the U.S. federal income tax laws andinterpretations of U.S. federal tax laws could adversely affect an investment in the Company’s common stock.The Tax Cuts and Jobs Act of 2017 (“TCJA”), which was signed into law on December 22, 2017, significantly changes U.S. federal income tax laws applicable tobusinesses and their owners, including REITs and their stockholders, and may lessen the relative competitive advantage of operating as a REIT rather than as a Ccorporation. For additional discussion, see “Recent U.S. Federal Income Tax Legislation”. In certain circumstances, the Company may be liable for certain tax obligations of certain limited partners. In certain circumstances, the Company may be liable for certain tax obligations of certain limited partners. The Company has entered into tax protectionagreements under which it has agreed to minimize the tax consequences to certain limited partners resulting from the sale or other disposition of certain of theCompany’s assets. The obligation to indemnify such limited partners against adverse tax consequences is expected to continue until 2027. The Company may enterinto additional tax protection agreements in the future, which could extend the period of time during which the Company may be liable for tax obligations ofcertain limited partners. During the period of these obligations, the Company’s flexibility to dispose of the related assets will be limited. In addition, the amount ofany indemnification obligations may be significant. The Company cannot assure you of its ability to pay distributions in the future. The Company intends to pay quarterly distributions and to make distributions to its stockholders in an amount such that it distributes all or substantially all of itsREIT taxable income in each year, subject to certain adjustments. The Company’s ability to pay distributions may be materially and adversely affected by anumber of factors, including the risk factors described in this Annual Report on Form 10-K. All distributions will be made, subject to Maryland law (or Delawarelaw, in the case of distributions by the Operating Partnership), at the discretion of the Company’s board of directors and will depend on the Company’s earnings,its financial condition, any debt covenants, maintenance of its REIT qualification and other factors as its board of directors may deem relevant from time totime. The Company believes that a change in any one of the following factors could materially and adversely affect its income, cash flow, results of operations,financial condition, liquidity, the ability to service its debt obligations, the market price of its common stock and its ability to pay distributions to its stockholders: •the profitability of the assets acquired;•the Company’s ability to make profitable acquisitions;•unforeseen expenses that reduce the Company’s cash flow;•defaults in the Company’s asset portfolio or decreases in the value of its portfolio; and•the fact that anticipated operating expense levels may not prove accurate, as actual results may vary from estimates.The Company cannot assure you that it will achieve results that will allow it to make a specified level of cash distributions or year-to-year increases in cashdistributions in the future. In addition, some of the Company’s distributions may include a return of capital. 23Item 1B. Unresolved Staff CommentsNone.Item 2. Properties The Company maintains its executive office at 11250 El Camino Real, Suite 200, San Diego, CA 92130. As of December 31, 2019, the Company’s portfolio consisted of 89 properties (88 retail and one office) totaling approximately 10.1 million square feet of grossleasable area. As of December 31, 2019, the Company’s retail portfolio was approximately 97.9% leased. During the year ended December 31, 2019, theCompany leased or renewed a total of approximately 1.4 million square feet in its portfolio. The Company has committed approximately $27.5 million, or $59.40per square foot, in tenant improvements, including building and site improvements, for new leases that occurred during the year ended December 31, 2019. TheCompany has committed approximately $1.4 million, or $3.11 per square foot, in leasing commissions, for the new leases that occurred during the year endedDecember 31, 2019. Additionally, the Company has committed approximately $1.7 million, or $1.89 per square foot, in tenant improvements for renewed leasesthat occurred during the year ended December 31, 2019. Leasing commission commitments for renewed leases were not material for the year ended December 31,2019. The following table provides information regarding the Company’s retail properties as of December 31, 2019. PropertyYearCompleted/RenovatedYearAcquiredGrossLeasableSq. FeetNumberofTenants% LeasedPrincipal TenantsSouthern California Los Angeles metro areaParamount Plaza1966/2010200995,062 14 98.0 %Grocery Outlet Supermarket, 99¢ Only Stores,Rite Aid PharmacyClaremont Promenade1982/2011201092,297 27 100.0 %Super King SupermarketGateway Village2003/2005201096,959 29 98.5 %Sprouts MarketSeabridge Marketplace2006201298,348 22 97.4 %Safeway (Vons) SupermarketGlendora Shopping Center1992/20122012106,535 19 94.2 %Albertson’s SupermarketRedondo Beach Plaza1993/20042012110,509 16 100.0 %Safeway (Vons) Supermarket, PetcoDiamond Bar Town Center19812013100,342 22 96.4 %Walmart Neighborhood Market, Crunch FitnessDiamond Hills Plaza1973/20082013139,505 38 98.9 %H-Mart Supermarket, Planet FitnessPlaza de la Canada1968/20102013100,425 13 100.0 %Gelson’s Supermarket, TJ Maxx, Rite AidPharmacyFallbrook Shopping Center1966/1986/2003/20152014755,299 49 100.0 %Sprouts Market, Trader Joe’s, Kroger (Ralph’s)Supermarket (1), TJ MaxxMoorpark Town Center1984/20142014133,547 23 95.4 %Kroger (Ralph’s) Supermarket, CVS PharmacyOntario Plaza1997-19992015150,149 24 94.4 %El Super Supermarket, Rite Aid PharmacyPark Oaks Shopping Center1959/20052015110,092 24 88.4 %Safeway (Vons) Supermarket, Dollar TreeWarner Plaza1973-1974/ 2016-20172015110,918 65 97.5 %Sprouts Market, Kroger (Ralph’s) Supermarket (1),Rite Aid Pharmacy (1)Magnolia Shopping Center1962/1972/1987/20162016116,360 22 85.9 %Kroger (Ralph’s) SupermarketCasitas Plaza Shopping Center1972/19822016105,118 25 96.9 %Albertson’s Supermarket, CVS PharmacyBouquet Center19852016148,903 27 95.5 %Safeway (Vons) Supermarket, CVS Pharmacy,Ross Dress For LessNorth Ranch Shopping Center1977-19902016146,448 34 93.7 %Kroger (Ralph’s) Supermarket, Trader Joe’s, RiteAid Pharmacy, PetcoThe Knolls2000/2016201652,021 6 95.2 %Trader Joe’s, Pet Food ExpressThe Terraces1958/1970/ 19892017172,922 28 94.7 %Trader Joe’s, Marshall’s, LA FitnessOrange County metro areaSanta Ana Downtown Plaza1987/20102010105,536 29 100.0 %Kroger (Food 4 Less) Supermarket, Marshall’s24PropertyYearCompleted/RenovatedYearAcquiredGrossLeasableSq. FeetNumberofTenants% LeasedPrincipal TenantsSycamore Creek2008201074,198 18 100.0 %Safeway (Vons) Supermarket, CVS Pharmacy (1)Desert Springs Marketplace1993-94 / 20132011113,718 20 97.7 %Kroger (Ralph’s) Supermarket, Rite AidPharmacyCypress Center West1970/1978 / 20142012109,046 32 95.5 %Kroger (Ralph’s) Supermarket, Rite AidPharmacyHarbor Place Center19942012119,821 11 100.0 %AA Supermarket, Ross Dress For Less5 Points Plaza1961-62 / 2012 /20152013160,536 36 92.5 %Trader Joe’s, Pier 1Peninsula Marketplace2000201395,416 13 98.9 %Kroger (Ralph’s) Supermarket, Planet FitnessFullerton Crossroads1977/1997/ 2010-20112017219,785 23 97.6 %Kroger (Ralph’s) Supermarket, Kohl’s, Jo-AnnFabrics and CraftsThe Village at Nellie Gail Ranch1897 / 2014-2015201789,041 24 98.7 %Smart & Final Extra SupermarketSan Diego metro areaMarketplace Del Rio1990/20042011183,787 43 96.6 %Stater Brothers Supermarket, WalgreensRenaissance Towne Centre1991/2011201153,272 31 100.0 %CVS PharmacyEuclid Plaza1982/2012201277,044 9 100.0 %Vallarta Supermarket, WalgreensBay Plaza1986/2013201273,324 29 100.0 %Seafood City SupermarketBernardo Heights Plaza1983/2006201337,729 5 100.0 %Sprouts MarketHawthorne Crossings1993/19992013141,288 16 92.3 %Mitsuwa Supermarket, Ross Dress For Less,StaplesCreekside Plaza1993/20052014131,252 24 96.4 %Stater Brothers Supermarket, AMC TheatresNorthern California San Francisco metro area Pleasant Hill Marketplace1980201069,715 3 100.0 %Total Wine and More, Buy Buy Baby, BassetFurniturePinole Vista Shopping Center1981/20122011/2018135,962 28 99.3 %SaveMart (Lucky) Supermarket, Planet FitnessCountry Club Gate Center1974/20122011109,331 32 97.9 %SaveMart (Lucky) Supermarket, Rite AidPharmacyMarlin Cove Shopping Center1972/2001201273,943 26 100.0 %99 Ranch MarketThe Village at Novato2006201220,081 4 100.0 %Trader Joe’s, Pharmaca PharmacySanta Teresa Village1974-79 / 20132012124,306 35 92.1 %Grocery Outlet Supermarket, Dollar TreeGranada Shopping Center1962/1994201369,325 15 100.0 %SaveMart (Lucky) SupermarketCountry Club Village19952013111,093 24 98.8 %Walmart Neighborhood Market, CVS PharmacyNorth Park Plaza1997201476,697 17 99.1 %H-Mart SupermarketWinston Manor1977/1988/2011/2015201549,852 16 100.0 %Grocery Outlet SupermarketJackson Square1972/19972015114,220 16 100.0 %Safeway Supermarket, CVS Pharmacy, 24 HourFitnessGateway Centre19962015112,553 26 100.0 %SaveMart (Lucky) Supermarket, WalgreensIron Horse Plaza1998-1999201561,915 11 100.0 %Lunardi’s MarketMonterey Center2007201625,626 9 93.7 %Trader Joe’s, Pharmaca PharmacySanta Rosa Southside Shopping Center1983-1984201788,535 8 95.9 %REI, Cost Plus World Market, DSWMonta Loma Plaza1973/ 2009-2010201748,078 11 100.0 %Safeway SupermarketSacramento metro areaMills Shopping Center1959/19962011235,514 31 88.0 %Viva Supermarket, Ross Dress For Less (dd’sDiscounts), Dollar TreeGreen Valley Station2006/2007201252,245 20 90.9 %CVS Pharmacy25PropertyYearCompleted/RenovatedYearAcquiredGrossLeasableSq. FeetNumberofTenants% LeasedPrincipal TenantsPacific Northwest Seattle Metropolitan Meridian Valley Plaza1978/2011201051,597 16 100.0 %Kroger (QFC) SupermarketThe Market at Lake Stevens2000201074,130 9 100.0 %Albertson’s (Haggen) SupermarketCanyon Park Shopping Center1980/20122011123,592 24 100.0 %PCC Community Markets, Rite Aid Pharmacy,PetcoHawks Prairie Shopping Center1988/20122011157,529 24 100.0 %Safeway Supermarket, Dollar Tree, Big LotsThe Kress Building1924/2005201174,616 8 100.0 %IGA Supermarket, TJMaxxGateway Shopping Center20072012104,298 20 96.1 %WinCo Foods (1), Rite Aid Pharmacy, Ross DressFor LessAurora Square1980/19872012/2014108,558 16 100.0 %Central Supermarket, Marshall’sCanyon Crossing2008-20092013120,398 28 100.0 %Safeway SupermarketCrossroads Shopping Center1962/2004/ 20152010/2013475,413 95 99.5 %Kroger (QFC) Supermarket, Bed Bath & Beyond,Dick’s Sporting GoodsBellevue Marketplace1971/1982/ 20172015113,758 20 100.0 %Asian Family MarketFour Corner Square1983/20152015119,531 29 100.0 %Grocery Outlet Supermarket, Walgreens,Johnsons Home & GardenBridle Trails Shopping Center1980/1984/ 19872016109,800 32 100.0 %Grocery Outlet Supermarket, Bartell Drugs,Dollar TreePCC Community Markets Plaza1981/2007201734,459 1 100.0 %PCC Community MarketsHighland Hill Shopping Center1956/1989/ 20062017163,926 20 100.0 %Safeway Supermarket, LA Fitness, Dollar Tree,PetcoNorth Lynnwood Shopping Center1963/1965/ 2003201763,606 10 95.8 %Grocery Outlet SupermarketStadium Center1926/2016201848,888 7 100.0 %Thriftway SupermarketSummerwalk Village2014-2015201958,484 9 97.9 %Walmart Neighborhood MarketPortland metro areaHappy Valley Town Center20072010138,397 37 100.0 %New Seasons SupermarketWilsonville Old Town Square20112010/201249,937 19 100.0 %Kroger (Fred Meyer) Supermarket (1)Cascade Summit Town Square2000201094,934 31 100.0 %Safeway SupermarketHeritage Market Center20002010107,468 19 100.0 %Safeway Supermarket, Dollar TreeDivision Crossing19922010103,561 20 100.0 %Rite Aid Pharmacy, Ross Dress For Less, AceHardwareHalsey Crossing1992201099,428 19 100.0 %24 Hour Fitness, Dollar TreeHillsboro Market Center2001-20022011156,021 23 100.0 %Albertson’s Supermarket, Dollar Tree, AceHardwareRobinwood Shopping Center1980/2012201370,831 16 100.0 %Walmart Neighborhood MarketTigard Marketplace1988/20052014136,889 18 99.3 %H-Mart Supermarket, Bi-MartWilsonville Town Center1991/19962014167,829 39 98.9 %Safeway Supermarket, Rite Aid Pharmacy,Dollar TreeTigard Promenade1996201588,043 16 100.0 %Safeway SupermarketSunnyside Village Square1996-1997201592,278 14 100.0 %Grocery Outlet Supermarket, 24 Hour Fitness,Ace HardwareJohnson Creek Center2003/20092015108,588 15 100.0 %Trader Joe’s, Walgreens, Sportsman’s WarehouseRose City Center1993/2012201660,680 3 100.0 %Safeway SupermarketDivision Center1986-1987/ 2013-20142017116,420 23 100.0 %Grocery Outlet Supermarket, Rite Aid Pharmacy,PetcoRiverstone Marketplace2002-2004201795,774 24 100.0 %Kroger (QFC) SupermarketKing City Plaza1970/1980/ 1990201862,676 18 95.1 %Grocery Outlet SupermarketTotal Properties10,057,880 1,944 97.9 %_______________ (1)Retailer is not a tenant of the Company.26As illustrated by the following tables, the Company’s shopping centers are substantially diversified by both tenant mix and by the staggering of its major tenantlease expirations. For the year ended December 31, 2019, no single tenant comprised more than 5.5% of the total annual base rent of the Company’s portfolio. The following table sets forth a summary schedule of the Company’s ten largest tenants by percent of total annual base rent, as of December 31, 2019. TenantNumber of Leases% of Total AnnualBase Rent (1)Albertson’s / Safeway Supermarkets19 5.5 %Kroger Supermarkets11 3.4 %JP Morgan Chase21 1.4 %Rite Aid Pharmacy12 1.4 %SaveMart Supermarkets4 1.4 %Marshall’s / TJMaxx6 1.3 %Trader Joe’s8 1.3 %Sprouts Markets4 1.3 %Grocery Outlet Supermarkets9 1.2 %Ross Dress For Less / dd’s Discounts7 1.2 % 101 19.4 %___________________ (1)Annual base rent (“ABR”) is equal to the annualized cash rent for all leases in place as of December 31, 2019 (including initial cash rent for new leases).The following table sets forth a summary schedule of the annual lease expirations for leases in place across the Company’s total retail portfolio at December 31,2019 (dollars in thousands). Year of ExpirationNumber ofLeasesExpiring (1)Leased SquareFootageAnnual BaseRent (2)Percent of TotalABR2020221 594,884 $13,929 6.6 %2021308 1,026,868 23,297 10.9 %2022297 1,146,907 25,969 12.1 %2023301 1,476,227 33,108 15.5 %2024272 1,203,051 28,409 13.3 %2025175 1,050,000 20,301 9.5 %202676 544,173 10,876 5.1 %202770 351,079 8,104 3.8 %202873 702,596 15,955 7.5 %202958 503,228 11,193 5.2 %Thereafter93 1,241,615 22,715 10.5 %Total1,944 9,840,628 $213,856 100 %___________________ (1)Assumes no tenants exercise renewal options or cancellation options.(2)Annual base rent is equal to the annualized cash rent for all leases in place as of December 31, 2019 (including initial cash rent for new leases). 27The following table sets forth a summary schedule of the annual lease expirations for leases in place with the Company’s retail anchor tenants at December 31,2019 (dollars in thousands). Anchor tenants are tenants with leases occupying at least 15,000 square feet or more. Year of ExpirationNumber ofLeasesExpiring (1)Leased SquareFootageAnnual BaseRent (2)Percent of TotalABR20205 173,902 $1,837 0.9 %202114 425,104 5,095 2.4 %202218 530,799 7,055 3.3 %202326 836,758 13,312 6.2 %202416 595,384 9,669 4.5 %202517 603,882 8,045 3.8 %20269 336,444 4,707 2.2 %20277 144,682 2,084 1.0 %202814 514,446 9,360 4.4 %202911 354,143 6,394 3.0 %Thereafter26 948,458 14,105 6.6 %Total163 5,464,002 $81,663 38.3 %____________________ (1)Assumes no tenants exercise renewal or cancellation options.(2)Annual base rent is equal to the annualized cash rent for all leases in place as of December 31, 2019 (including initial cash rent for new leases). Item 3. Legal Proceedings In the normal course of business, from time to time, the Company is involved in routine legal actions incidental to its business of the ownership and operations ofits properties. In management’s opinion, the liabilities, if any, that ultimately may result from such legal actions are not expected to have a material adverse effecton the consolidated financial position, results of operations or liquidity of the Company. Item 4. Mine Safety Disclosures Not applicable.PART IIItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ROIC Market Information ROIC’s common stock trades on the NASDAQ Global Select Market (“NASDAQ”) under the symbol “ROIC”. Holders As of February 14, 2020, ROIC had 74 registered holders. Such information was obtained through the registrar and transfer agent. Operating Partnership As of December 31, 2019, the Operating Partnership had 49 registered holders, including Retail Opportunity Investments GP, LLC. 28Stockholder Return Performance The above graph compares the cumulative total return on the Company’s common stock with that of the Standard and Poor’s 500 Stock Index (“S&P 500”) and theNational Association of Real Estate Investment Trusts Equity Index (“FTSE NAREIT Equity REITs”) from December 31, 2014 through December 31, 2019. Thestock price performance graph assumes that an investor invested $100 in each of ROIC and the indices, and the reinvestment of any dividends. The comparisons inthe graph are provided in accordance with the SEC disclosure requirements and are not intended to forecast or be indicative of the future performance of ROIC’sshares of common stock. Period EndingIndex12/31/201412/31/201512/31/201612/31/201712/31/201812/31/2019Retail Opportunity Investments Corp.$100.00 $111.07 $135.76 $133.08 $110.53 $128.62 S&P500$100.00 $101.38 $113.51 $138.29 $132.23 $173.86 FTSE NAREIT Equity REITs$100.00 $102.83 $111.70 $121.39 $116.48 $149.86 Except to the extent that the Company specifically incorporates this information by reference, the foregoing Stockholder Return Performance information shall notbe deemed incorporated by reference by any general statement incorporating by reference this Annual Report on Form 10-K into any filing under the Securities Actor under the Exchange Act. This information shall not otherwise be deemed filed under such Acts. 29Item 6. Selected Financial Data The following tables set forth selected financial and operating information on a historical basis for ROIC and the Operating Partnership, and should be read inconjunction with Item 7, “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” and the Company’s financial statements,including the notes, included elsewhere herein. RETAIL OPPORTUNITY INVESTMENTS CORP.CONSOLIDATED HISTORICAL FINANCIAL INFORMATION(in thousands, except share data) Year Ended December 31,Retail Opportunity Investments Corp.20192018201720162015Statement of Operations Data: Total revenues$295,040 $295,798 $273,260 $237,189 $192,699 Operating expenses192,845 192,434 179,595 160,018 133,364 Gain on sale of real estate13,175 5,890 — — — Operating income115,370 109,254 93,665 77,171 59,335 Interest expense and other finance expenses61,687 62,113 50,977 40,741 34,243 Net income53,683 47,141 42,688 36,430 25,092 Net Income Attributable to Retail Opportunity InvestmentsCorp.48,844 42,736 38,477 32,754 23,864 Weighted average shares outstanding – Basic:114,177,528 112,645,490 109,400,123 104,072,222 95,651,780 Weighted average shares outstanding – Diluted:125,741,486 124,558,893 121,743,831 116,039,940 100,017,781 Income per share – Basic and Diluted Net Income Attributable to Retail Opportunity InvestmentsCorp.$0.42 $0.38 $0.35 $0.31 $0.25 Dividends per common share$0.7880 $0.7800 $0.7500 $0.7200 $0.6800 Balance Sheet Data: Real Estate Investments, net$2,753,925 $2,831,265 $2,849,282 $2,493,997 $2,162,306 Cash and cash equivalents3,800 6,076 11,553 13,125 8,844 Total assets2,913,757 3,003,071 3,039,198 2,662,969 2,301,448 Total liabilities1,621,929 1,694,643 1,709,557 1,347,404 1,136,432 Non-controlling interests – redeemable OP Units— — — — 33,674 Total equity1,291,828 1,308,428 1,329,641 1,315,565 1,131,342 30RETAIL OPPORTUNITY INVESTMENTS PARTNERSHIP, LPCONSOLIDATED HISTORICAL FINANCIAL INFORMATION(in thousands, except share data) Retail Opportunity Investments Partnership, LPYear Ended December 31,20192018201720162015Statement of Operations Data: Total revenues$295,040 $295,798 $273,260 $237,189 $192,699 Operating expenses192,845 192,434 179,595 160,018 133,364 Gain on sale of real estate13,175 5,890 — — — Operating income115,370 109,254 93,665 77,171 59,335 Interest expense and other finance expenses61,687 62,113 50,977 40,741 34,243 Net Income Attributable to Retail Opportunity InvestmentsPartnership, LP53,683 47,141 42,688 36,430 25,092 Weighted average units outstanding – Basic:125,511,936 124,271,802 121,460,958 115,819,731 99,738,504 Weighted average units outstanding – Diluted:125,741,486 124,558,893 121,743,831 116,039,940 100,017,781 Income per unit – Basic and Diluted Net Income Attributable to Retail Opportunity InvestmentsPartnership, LP$0.42 $0.38 $0.35 $0.31 $0.25 Distributions per unit$0.7880 $0.7800 $0.7500 $0.7200 $0.6800 Balance Sheet Data: Real Estate Investments, net$2,753,925 $2,831,265 $2,849,282 $2,493,997 $2,162,306 Cash and cash equivalents3,800 6,076 11,553 13,125 8,844 Total assets2,913,757 3,003,071 3,039,198 2,662,969 2,301,448 Total liabilities1,621,929 1,694,643 1,709,557 1,347,404 1,136,432 Redeemable limited partners— — — — 33,674 Total capital1,291,828 1,308,428 1,329,641 1,315,565 1,131,342 31Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with the Retail Opportunity Investments Corp. Consolidated Financial Statements and Notes theretoappearing elsewhere in this Annual Report on Form 10-K. The Company makes statements in this section that are forward-looking statements within the meaningof the federal securities laws. For a complete discussion of forward-looking statements, see the section in this Annual Report on Form 10-K entitled “StatementsRegarding Forward-Looking Information.” Certain risk factors may cause actual results, performance or achievements to differ materially from those expressedor implied by the following discussion. For a discussion of such risk factors, see the section in this Annual Report on Form 10-K entitled “Risk Factors.” Overview The Company is organized in an UpREIT format pursuant to which Retail Opportunity Investments GP, LLC, its wholly-owned subsidiary, serves as the generalpartner of, and ROIC conducts substantially all of its business through, its Operating Partnership, Retail Opportunity Investments Partnership, LP, a Delawarelimited partnership, together with its subsidiaries. ROIC commenced operations in October 2009 as a fully integrated and self-managed REIT, and as of December 31, 2019, ROIC owned an approximate 91.3%partnership interest and other limited partners owned the remaining 8.7% partnership interest in the Operating Partnership. ROIC specializes in the acquisition,ownership and management of necessity-based community and neighborhood shopping centers on the west coast of the United States, anchored by supermarketsand drugstores. As of December 31, 2019, the Company’s portfolio consisted of 89 properties (88 retail and one office) totaling approximately 10.1 million square feet of GLA. Asof December 31, 2019, the Company’s retail portfolio was approximately 97.9% leased. During the year ended December 31, 2019, the Company leased andrenewed approximately 463,000 and 920,000 square feet, respectively, in its portfolio. The table below provides a reconciliation of beginning of year vacant space to end of year vacant space for its retail portfolio as of December 31, 2019. Vacant Space Square FootageVacant space at December 31, 2018236,752 Square footage vacated163,015 Vacant space in acquired properties5,275 Vacant space in sold properties(10,685) Square footage leased(181,448) Vacant space at December 31, 2019212,909 The Company has committed approximately $27.5 million, or $59.40 per square foot, in tenant improvements, including building and site improvements, for newleases that occurred during the year ended December 31, 2019. The Company has committed approximately $1.4 million, or $3.11 per square foot, in leasingcommissions for the new leases that occurred during the year ended December 31, 2019. Additionally, the Company has committed approximately $1.7 million, or$1.89 per square foot, in tenant improvements for renewed leases that occurred during the year ended December 31, 2019. Leasing commission commitments forrenewed leases were not material for the year ended December 31, 2019.Results of Operations At December 31, 2019, the Company had 89 properties (88 retail and one office), all of which are consolidated in the accompanying financial statements. TheCompany believes, because of the location of the properties in densely populated areas, the nature of its investments provides for relatively stable revenue flowseven during difficult economic times. The Company has a strong capital structure with manageable debt as of December 31, 2019. The Company expects tocontinue to actively explore acquisition opportunities consistent with its business strategy. Property operating income is a non-GAAP financial measure of performance. The Company defines property operating income as operating revenues (base rent,recoveries from tenants and other income), less property and related expenses (property32operating expenses and property taxes). Property operating income excludes general and administrative expenses, mortgage interest income, depreciation andamortization, acquisition transaction costs, other expense, interest expense, gains and losses from property acquisitions and dispositions, equity in earnings fromunconsolidated joint ventures, extraordinary items, and amortization of tenant improvements and leasing commissions. Other REITs may use differentmethodologies for calculating property operating income, and accordingly, the Company’s property operating income may not be comparable to other REITs. Property operating income is used by management to evaluate and compare the operating performance of the Company’s properties, to determine trends inearnings and to compute the fair value of the Company’s properties as this measure is not affected by the cost of our funding, the impact of depreciation andamortization expenses, gains or losses from the acquisition and sale of operating real estate assets, general and administrative expenses or other gains and lossesthat relate to our ownership of our properties. The Company believes the exclusion of these items from net income is useful because the resulting measure capturesthe actual revenue generated and actual expenses incurred in operating the Company’s properties as well as trends in occupancy rates, rental rates and operatingcosts. Property operating income is a measure of the operating performance of the Company’s properties but does not measure the Company’s performance as a whole.Property operating income is therefore not a substitute for net income or operating income as computed in accordance with GAAP. Results of Operations for the year ended December 31, 2019 compared to the year ended December 31, 2018. Property Operating Income The table below provides a reconciliation of consolidated operating income in accordance with GAAP to consolidated property operating income for the yearsended December 31, 2019 and 2018 (in thousands). Year Ended December 31, 20192018Operating income per GAAP$115,370 $109,254 Plus:Depreciation and amortization97,559 100,838 General and administrative expenses17,831 14,918 Other expense1,405 478 Less:Gain on sale of real estate(13,175) (5,890) Property operating income$218,990 $219,598 The following comparison for the year ended December 31, 2019 compared to the year ended December 31, 2018, makes reference to the effect of the same-centerproperties. Same-center properties, which totaled 85 of the Company’s 89 properties as of December 31, 2019, represent all operating properties owned by theCompany during the entirety of both periods presented and consolidated into the Company’s financial statements during such periods, except for the Company’scorporate office headquarters. 33The table below provides a reconciliation of consolidated operating income in accordance with GAAP to property operating income for the year endedDecember 31, 2019 related to the 85 same-center properties owned by the Company during the entirety of both the years ended December 31, 2019 and 2018 andconsolidated into the Company’s financial statements during such periods (in thousands). Year Ended December 31, 2019 Same-CenterNon Same-CenterTotalOperating income (loss) per GAAP$119,065 $(3,695) $115,370 Plus:Depreciation and amortization93,953 3,606 97,559 General and administrative expenses (1)— 17,831 17,831 Other expense (1)— 1,405 1,405 Less:Gain on sale of real estate— (13,175) (13,175) Property operating income$213,018 $5,972 $218,990 ______________________ (1)For illustration purposes, general and administrative expenses and other expenses are included in non same-center because the Company does not allocatethese types of expenses between same-center and non same-center properties.The table below provides a reconciliation of consolidated operating income in accordance with GAAP to property operating income for the year endedDecember 31, 2018 related to the 85 same-center properties owned by the Company during the entirety of both the years ended December 31, 2019 and 2018 andconsolidated into the Company’s financial statements during such periods (in thousands). Year Ended December 31, 2018 Same-CenterNon Same-CenterTotalOperating income (loss) per GAAP$111,189 $(1,935) $109,254 Plus:Depreciation and amortization96,292 4,546 100,838 General and administrative expenses (1)— 14,918 14,918 Other expense (1)— 478 478 Less:Gain on sale of real estate— (5,890) (5,890) Property operating income$207,481 $12,117 $219,598 ______________________ (1)For illustration purposes, general and administrative expenses and other expenses are included in non same-center because the Company does not allocatethese types of expenses between same-center and non same-center properties.During the year ended December 31, 2019, the Company generated property operating income of approximately $219.0 million compared to property operatingincome of $219.6 million generated during the year ended December 31, 2018, a decrease of approximately $608,000. The property operating income for the 85same-center properties increased approximately $5.5 million primarily due to a $3.1 million increase due to the accelerated recognition of a below-market leaseintangible liability resulting from a lease termination in the year ended December 31, 2019 and an increase in rental revenues, offset by a decrease in straight-linerent. The non same-center properties decreased property operating income in the year ended December 31, 2019 by approximately $6.1 million compared to theyear ended December 31, 2018 primarily due to $2.2 million in lease settlement income received during the year ended December 31, 2018 for which there wasnone received during 2019 and property sales that occurred during the year ended December 31, 2019.Depreciation and amortization The Company incurred depreciation and amortization expenses during the year ended December 31, 2019 of approximately $97.6 million compared to $100.8million incurred during the year ended December 31, 2018. 34General and administrative expenses The Company incurred general and administrative expenses during the year ended December 31, 2019 of approximately $17.8 million compared to $14.9 millionincurred during the year ended December 31, 2018. General and administrative expenses increased approximately $2.9 million primarily as a result of theadoption, effective January 1, 2019, of ASU No. 2016-2 which requires that leasing payroll-related costs that are incurred regardless of whether leases are obtainedare no longer capitalized as initial direct costs and instead are expensed as incurred, an overall increase in compensation-related expenses and an increase in legalfees related to a legal settlement that occurred during the year ended December 31, 2019. Other expense The Company incurred other expenses of approximately $1.4 million during the year ended December 31, 2019 compared to $478,000 during the year endedDecember 31, 2018. During the year ended December 31, 2019, the Company settled an ongoing lawsuit for approximately $1.4 million and accordingly, recordeda $950,000 charge to Other expense in the consolidated statements of operations and comprehensive income during the year ended December 31, 2019.Gain on sale of real estateOn February 15, 2019, the Company sold Vancouver Market Center, a non-core shopping center located in Vancouver, Washington. The sales price of $17.0million, less costs to sell, resulted in net proceeds of approximately $16.0 million. The Company recorded a gain on sale of real estate of approximately $2.6million during the year ended December 31, 2019 related to this property disposition. On May 1, 2019, the Company sold Norwood Shopping Center, a non-coreshopping center located in Sacramento, California for a sales price of $13.5 million. The Company recorded a gain on sale of real estate of approximately $180,000during the year ended December 31, 2019 related to this property disposition. On August 1, 2019, the Company sold Morada Ranch, a non-core shopping centerlocated in Stockton, California. The sales price of $30.0 million, less costs to sell, resulted in net proceeds of approximately $29.1 million. The Company recordeda gain on sale of real estate of approximately $10.4 million during the year ended December 31, 2019 related to this property disposition. On September 27, 2018,the Company sold Round Hill Square, a non-core shopping center located in Zephyr Cove, Nevada. The sales price of $28.0 million, less costs to sell, resulted innet proceeds of approximately $26.9 million. The Company recorded a gain on sale of real estate of approximately $5.9 million for the year ended December 31,2018 related to this property disposition.Interest expense and other finance expenses During the year ended December 31, 2019, the Company incurred approximately $61.7 million of interest expense compared to approximately $62.1 millionduring the year ended December 31, 2018.Results of Operations for the year ended December 31, 2018 compared to the year ended December 31, 2017. Property Operating Income The table below provides a reconciliation of consolidated operating income in accordance with GAAP to consolidated property operating income for the yearsended December 31, 2018 and 2017 (in thousands). Year Ended December 31, 20182017Operating income per GAAP$109,254 $93,665 Plus:Depreciation and amortization100,838 96,256 General and administrative expenses14,918 14,103 Acquisition transaction costs— 4 Other expense478 418 Less:Gain on sale of real estate(5,890) — Property operating income$219,598 $204,446 The following comparison for the year ended December 31, 2018 compared to the year ended December 31, 2017, makes reference to the effect of the same-centerproperties. Same-center properties, which totaled 78 of the Company’s 92 properties as of December 31, 2018, represent all operating properties owned by theCompany during the entirety of both periods35presented and consolidated into the Company’s financial statements during such periods, except for one shopping center that was under contract to be sold andslated for new multi-family development and was no longer being managed as a retail asset and the Company’s corporate office headquarters.The table below provides a reconciliation of consolidated operating income in accordance with GAAP to property operating income for the year endedDecember 31, 2018 related to the 78 same-center properties owned by the Company during the entirety of both the years ended December 31, 2018 and 2017 andconsolidated into the Company’s financial statements during such periods (in thousands). Year Ended December 31, 2018 Same-CenterNon Same-CenterTotalOperating income per GAAP$101,121 $8,133 $109,254 Plus:Depreciation and amortization86,317 14,521 100,838 General and administrative expenses (1)— 14,918 14,918 Other expense (1)— 478 478 Less:Gain on sale of real estate— (5,890) (5,890) Property operating income$187,438 $32,160 $219,598 ______________________(1)For illustration purposes, general and administrative expenses and other expenses are included in non same-center because the Company does not allocatethese types of expenses between same-center and non same-center properties.The table below provides a reconciliation of consolidated operating income in accordance with GAAP to property operating income for the year endedDecember 31, 2017 related to the 78 same-center properties owned by the Company during the entirety of both the years ended December 31, 2018 and 2017 andconsolidated into the Company’s financial statements during such periods (in thousands). Year Ended December 31, 2017 Same-CenterNon Same-CenterTotalOperating income (loss) per GAAP$101,072 $(7,407) $93,665 Plus:Depreciation and amortization87,978 8,278 96,256 General and administrative expenses (1)— 14,103 14,103 Acquisition transaction costs— 4 4 Other expense (1)— 418 418 Property operating income$189,050 $15,396 $204,446 ______________________ (1)For illustration purposes, general and administrative expenses and other expenses are included in non same-center because the Company does not allocatethese types of expenses between same-center and non same-center properties.During the year ended December 31, 2018, the Company generated property operating income of approximately $219.6 million compared to property operatingincome of $204.4 million generated during the year ended December 31, 2017. Property operating income increased by approximately $15.2 million during theyear ended December 31, 2018 primarily as a result of an increase in the number of properties owned by the Company in 2018 compared to 2017 as well as $2.2million of lease settlement income received in 2018 in connection with a property that was under contract to be sold and was slated for new multi-familydevelopment as of December 31, 2018. As of December 31, 2018, the Company owned 92 properties as compared to 91 properties at December 31, 2017. Theproperties acquired during 2018 and 2017 increased property operating income in the year ended December 31, 2018 by approximately $16.8 million compared tothe year ended December 31, 2017. The property operating income for the 78 same-center properties decreased approximately $1.6 million primarily due to a $2.7million accelerated recognition of a below-market lease intangible liability resulting from a lease termination during the year ended December 31, 2017, offset byan increase in rental revenue during the year ended December 31, 2018. 36Depreciation and amortization The Company incurred depreciation and amortization expenses during the year ended December 31, 2018 of approximately $100.8 million compared to $96.3million incurred during the year ended December 31, 2017. Depreciation and amortization expenses were higher in 2018 as a result of an increase in the number ofproperties owned by the Company in 2018 compared to 2017. General and administrative expenses The Company incurred general and administrative expenses during the year ended December 31, 2018 of approximately $14.9 million compared to $14.1 millionincurred during the year ended December 31, 2017. General and administrative expenses increased approximately $815,000 primarily as a result of an increase incompensation-related expenses.Gain on sale of real estateOn September 27, 2018, the Company sold Round Hill Square, a non-core shopping center located in Zephyr Cove, Nevada. The sales price of $28.0 million, lesscosts to sell, resulted in net proceeds of approximately $26.9 million. The Company recorded a gain on sale of real estate of approximately $5.9 million for the yearended December 31, 2018 related to this property disposition. There were no property sales in the year ended December 31, 2017.Interest expense and other finance expenses During the year ended December 31, 2018, the Company incurred approximately $62.1 million of interest expense compared to approximately $51.0 millionduring the year ended December 31, 2017. Interest expense increased approximately $11.1 million primarily due to the incremental increase in interest expenserecognized on the Senior Notes Due 2027 issued in December 2017 and increased interest rates payable on the credit facility.Funds From Operations Funds from operations (“FFO”), is a widely-recognized non-GAAP financial measure for REITs that the Company believes when considered with financialstatements presented in accordance with GAAP, provides additional and useful means to assess its financial performance. FFO is frequently used by securitiesanalysts, investors and other interested parties to evaluate the performance of REITs, most of which present FFO along with net income as calculated inaccordance with GAAP. The Company computes FFO in accordance with the “White Paper” on FFO published by the National Association of Real Estate Investment Trusts (“NAREIT”),which defines FFO as net income attributable to common stockholders (determined in accordance with GAAP) excluding gains or losses from debt restructuring,sales of depreciable property, and impairments, plus real estate related depreciation and amortization, and after adjustments for partnerships and unconsolidatedjoint ventures.However, FFO: •does not represent cash flows from operating activities in accordance with GAAP (which, unlike FFO, generally reflects all cash effects of transactionsand other events in the determination of net income); and•should not be considered an alternative to net income as an indication of our performance.FFO as defined by the Company may not be comparable to similarly titled items reported by other REITs due to possible differences in the application of theNAREIT definition used by such REITs. 37The table below provides a reconciliation of net income applicable to stockholders in accordance with GAAP to FFO for the years ended December 31, 2019, 2018and 2017 (in thousands). Year Ended December 31, 201920182017Net income attributable to ROIC$48,844 $42,736 $38,477 Plus: Depreciation and amortization97,559 100,838 96,256 Less: Gain on sale of real estate(13,175) (5,890) — Funds from operations – basic133,228 137,684 134,733 Net income attributable to non-controlling interests4,839 4,405 4,211 Funds from operations – diluted$138,067 $142,089 $138,944 Cash Net Operating Income (“NOI”) Cash NOI is a non-GAAP financial measure of the Company’s performance. The most directly comparable GAAP financial measure is operating income. TheCompany defines cash NOI as operating revenues (base rent and recoveries from tenants), less property and related expenses (property operating expenses andproperty taxes), adjusted for non-cash revenue and operating expense items such as straight-line rent and amortization of lease intangibles, debt-related expenses,and other adjustments. Cash NOI also excludes general and administrative expenses, depreciation and amortization, acquisition transaction costs, other expense,interest expense, gains and losses from property acquisitions and dispositions, extraordinary items, tenant improvements and leasing commissions. Other REITsmay use different methodologies for calculating cash NOI, and accordingly, the Company’s cash NOI may not be comparable to other REITs. Cash NOI is used by management internally to evaluate and compare the operating performance of the Company’s properties. The Company believes cash NOIprovides useful information to investors regarding the Company’s financial condition and results of operations because it reflects only those cash income andexpense items that are incurred at the property level, and when compared across periods, can be used to determine trends in earnings of the Company’s propertiesas this measure is not affected by non-cash revenue and expense recognition items, the cost of the Company’s funding, the impact of depreciation and amortizationexpenses, gains or losses from the acquisition and sale of operating real estate assets, general and administrative expenses or other gains and losses that relate to theCompany’s ownership of properties. The Company believes the exclusion of these items from operating income is useful because the resulting measure capturesthe actual revenue generated and actual expenses incurred in operating the Company’s properties as well as trends in occupancy rates, rental rates and operatingcosts.Cash NOI is a measure of the operating performance of the Company’s properties but does not measure the Company’s performance as a whole and is thereforenot a substitute for net income or operating income as computed in accordance with GAAP.38Same-Center Cash NOI The table below provides a reconciliation of same-center cash NOI to consolidated operating income in accordance with GAAP for the years ended December 31,2019 and 2018. The table makes reference to the effect of the same-center properties. Same-center properties, which totaled 85 of the Company’s 89 properties asof December 31, 2019, represent all operating properties owned by the Company during the entirety of both periods presented and consolidated into theCompany’s financial statements during such periods, except for the Company’s corporate office headquarters (in thousands). Year Ended December 31, 20192018GAAP operating income$115,370 $109,254 Depreciation and amortization97,559 100,838 General and administrative expenses17,831 14,918 Other expense1,405 478 Gain on sale of real estate(13,175) (5,890) Straight-line rent(3,083) (5,380) Amortization of above- and below-market rent(15,618) (13,965) Property revenues and other expenses (1)(269) (711) Total Company cash NOI200,020 199,542 Non same-center cash NOI(5,611) (11,889) Same-center cash NOI$194,409 $187,653 ______________________ (1)Includes anchor lease termination fees, net of contractual amounts, if any, expense and recovery adjustments related to prior periods and othermiscellaneous adjustments. During the year ended December 31, 2019, the Company generated same-center cash NOI of approximately $194.4 million compared to same-center cash NOI ofapproximately $187.7 million generated during the year ended December 31, 2018, representing a 3.6% increase. This increase is primarily due to an increase inbase rents and recoveries from tenants. 39The table below provides a reconciliation of same-center cash NOI to consolidated operating income in accordance with GAAP for the years ended December 31,2018 and 2017. The table makes reference to the effect of the same-center properties. Same-center properties, which totaled 78 of the Company’s 92 properties asof December 31, 2018, represent all operating properties owned by the Company during the entirety of both periods presented and consolidated into theCompany’s financial statements during such periods except for one shopping center that was under contract to be sold and slated for new multi-familydevelopment and was no longer being managed as a retail asset and the Company’s corporate office headquarters (in thousands). Year Ended December 31, 20182017GAAP operating income$109,254 $93,665 Depreciation and amortization100,838 96,256 General and administrative expenses14,918 14,103 Acquisition transaction costs— 4 Other expense478 418 Gain on sale of real estate(5,890) — Straight-line rent(5,380) (6,176) Amortization of above- and below-market rent(13,965) (17,078) Property revenues and other expenses (1)438 762 Total Company cash NOI200,691 181,954 Non same-center cash NOI(28,163) (13,642) Same-center cash NOI$172,528 $168,312 ______________________ (1)Includes anchor lease termination fees, net of contractual amounts, if any, expense and recovery adjustments related to prior periods and othermiscellaneous adjustments. During the year ended December 31, 2018, the Company generated same-center cash NOI of approximately $172.5 million compared to same-center cash NOI ofapproximately $168.3 million generated during the year ended December 31, 2017, representing a 2.5% increase. This increase is primarily due to an increase inbase rents and recoveries from tenants.Critical Accounting Estimates Critical accounting estimates are those that are both important to the presentation of the Company’s financial condition and results of operations and requiremanagement’s most difficult, complex or subjective judgments. Set forth below is a summary of the accounting estimates that management believes are critical tothe preparation of the consolidated financial statements. This summary should be read in conjunction with the more complete discussion of the Company’saccounting policies included in Note 1 to the Company’s consolidated financial statements.Revenue Recognition The Company records base rents on a straight-line basis over the term of each lease. The excess of rents recognized over amounts contractually due pursuant to theunderlying leases is included in Tenant and other receivables in the accompanying consolidated balance sheets. Most leases contain provisions that require tenantsto reimburse a pro-rata share of real estate taxes and certain common area expenses. Adjustments are also made throughout the year to tenant and otherreceivables and the related cost recovery income based upon the Company’s best estimate of the final amounts to be billed and collected. In addition, theCompany also provides an allowance for future credit losses in connection with the deferred straight-line rent receivable. Allowance for Doubtful Accounts The allowance for doubtful accounts is established based on a quarterly analysis of the risk of loss on specific accounts. The analysis places particular emphasis onpast-due accounts and considers information such as the nature and age of the receivables, the payment history of the tenants or other debtors, the financialcondition of the tenants and any guarantors and management’s assessment of their ability to meet their lease obligations, the basis for any disputes and the status ofrelated40negotiations, among other things. Management’s estimates of the required allowance is subject to revision as these factors change and is sensitive to the effects ofeconomic and market conditions on tenants, particularly those at retail properties. Estimates are used to establish reimbursements from tenants for common areamaintenance, real estate tax and insurance costs. The Company analyzes the balance of its estimated accounts receivable for real estate taxes, common areamaintenance and insurance for each of its properties by comparing actual recoveries versus actual expenses and any actual write-offs. Based on its analysis, theCompany may record an additional amount in its allowance for doubtful accounts related to these items. In addition, the Company also provides an allowance forfuture credit losses in connection with the deferred straight-line rent receivable. Real Estate Investments Land, buildings, property improvements, furniture/fixtures and tenant improvements are recorded at cost. Expenditures for maintenance and repairs are charged tooperations as incurred. Renovations and/or replacements, which improve or extend the life of the asset, are capitalized and depreciated over their estimated usefullives. The Company recognizes the acquisition of real estate properties, including acquired tangible (consisting of land, buildings and improvements), and acquiredintangible assets and liabilities (consisting of above-market and below-market leases and acquired in-place leases) at their fair value (for acquisitions meeting thedefinition of a business) and relative fair value (for acquisitions not meeting the definition of a business). Acquired lease intangible assets include above-marketleases and acquired in-place leases, and Acquired lease intangible liabilities represent below-market leases in the accompanying consolidated balance sheets. Thefair value of the tangible assets of an acquired property is determined by valuing the property as if it were vacant, which value is then allocated to land, buildingsand improvements based on management’s determination of the relative fair values of these assets. In valuing an acquired property’s intangibles, factorsconsidered by management include an estimate of carrying costs during the expected lease-up periods, and estimates of lost rental revenue during the expectedlease-up periods based on its evaluation of current market demand. Management also estimates costs to execute similar leases, including leasing commissions,tenant improvements, legal and other related costs. The value of in-place leases is measured by the excess of (i) the purchase price paid for a property after adjusting existing in-place leases to market rental rates,over (ii) the estimated fair value of the property as if vacant. Above-market and below-market lease values are recorded based on the present value (using adiscount rate which reflects the risks associated with the leases acquired) of the difference between the contractual amounts to be received and management’sestimate of market lease rates, measured over the terms of the respective leases that management deemed appropriate at the time of acquisition. Such valuationsinclude a consideration of the non-cancellable terms of the respective leases as well as any applicable renewal periods. The fair values associated with below-market rental renewal options are determined based on the Company’s experience and the relevant facts and circumstances that existed at the time of theacquisitions. The value of the above-market and below-market leases associated with the original lease term is amortized to rental income, over the terms of therespective leases. The value of in-place leases are amortized to expense over the remaining non-cancellable terms of the respective leases. If a lease were to beterminated prior to its stated expiration, all unamortized amounts relating to that lease would be recognized in operations at that time. The Company is required to make subjective assessments as to the useful life of its properties for purposes of determining the amount of depreciation. Theseassessments have a direct impact on its net income.Properties are depreciated using the straight-line method over the estimated useful lives of the assets. The estimated useful lives are as follows:Buildings39-40 yearsProperty Improvements10-20 yearsFurniture/Fixtures3-10 yearsTenant ImprovementsShorter of lease term or their useful life Asset Impairment The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not berecoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the asset to aggregate future net cash flows(undiscounted and without interest) expected to be generated by41the asset. If such assets are considered impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceed thefair value. REIT Qualification Requirements The Company elected to be taxed as a REIT under the Code, and believes that it has been organized and has operated in a manner that will allow it to continue toqualify for taxation as a REIT under the Code. The Company is subject to a number of operational and organizational requirements to qualify and then maintain qualification as a REIT. If the Company doesnot qualify as a REIT, its income would become subject to U.S. federal, state and local income taxes at regular corporate rates that would be substantial and theCompany may not be permitted to re-elect to qualify as a REIT for four taxable years following the year that it failed to qualify as a REIT. The Company’s resultsof operations, liquidity and amounts distributable to stockholders would be significantly reduced. Recent U.S. Federal Income Tax LegislationOn December 22, 2017, Congress enacted H.R. 1, also known as the TCJA. The TCJA made major changes to the Internal Revenue Code, including the reductionof the tax rates applicable to individuals and subchapter C corporations, a reduction or elimination of certain deductions (including new limitations on thedeductibility of interest expense), permitting immediate expensing of capital expenditures and significant changes in the taxation of earnings from non-U.S.sources. The effect of the significant changes made by the TCJA is highly uncertain, and additional administrative guidance is still required in order to fullyevaluate the effect of many provisions. Technical corrections or other amendments to the new rules, and additional administrative guidance interpreting these newrules, may be forthcoming at any time but may also be significantly delayed. While we do not currently expect this reform to have a significant impact to theCompany’s consolidated financial statements, stockholders are urged to consult with their tax advisors regarding the effects of the TCJA or other legislative,regulatory or administrative developments on an investment in the Company’s common stock.Liquidity and Capital Resources of the Company In this “Liquidity and Capital Resources of the Company” section and in the “Liquidity and Capital Resources of the Operating Partnership” section, the term “theCompany” refers to Retail Opportunity Investments Corp. on an unconsolidated basis, excluding the Operating Partnership. The Company’s business is operated primarily through the Operating Partnership, of which the Company is the parent company, and which it consolidates forfinancial reporting purposes. Because the Company operates on a consolidated basis with the Operating Partnership, the section entitled “Liquidity and CapitalResources of the Operating Partnership” should be read in conjunction with this section to understand the liquidity and capital resources of the Company on aconsolidated basis and how the Company is operated as a whole. The Company issues public equity from time to time, but does not otherwise generate any capital itself or conduct any business itself, other than incurring certainexpenses in operating as a public company. The Company itself does not hold any indebtedness other than guarantees of indebtedness of the Operating Partnership,and its only material assets are its ownership of direct or indirect partnership interests in the Operating Partnership and membership interest in Retail OpportunityInvestments GP, LLC, the sole general partner of the Operating Partnership. Therefore, the consolidated assets and liabilities and the consolidated revenues andexpenses of the Company and the Operating Partnership are the same on their respective financial statements. However, all debt is held directly or indirectly by theOperating Partnership. The Company’s principal funding requirement is the payment of dividends on its common stock. The Company’s principal source offunding for its dividend payments is distributions it receives from the Operating Partnership. As the parent company of the Operating Partnership, the Company, indirectly, has the full, exclusive and complete responsibility for the Operating Partnership’sday-to-day management and control. The Company causes the Operating Partnership to distribute such portion of its available cash as the Company may in itsdiscretion determine, in the manner provided in the Operating Partnership’s partnership agreement. The Company is a well-known seasoned issuer with an effective shelf registration statement filed in April 2019 that allows the Company to register unspecifiedvarious classes of debt and equity securities. As circumstances warrant, the Company may issue equity from time to time on an opportunistic basis, dependentupon market conditions and available pricing. Any proceeds from such equity issuances would be contributed to the Operating Partnership. The OperatingPartnership may use the proceeds to acquire additional properties, pay down debt, and for general working capital purposes.42 Liquidity is a measure of the Company’s ability to meet potential cash requirements, including ongoing commitments to repay borrowings, fund and maintain itsassets and operations, make distributions to its stockholders and meet other general business needs. The liquidity of the Company is dependent on the OperatingPartnership’s ability to make sufficient distributions to the Company. The primary cash requirement of the Company is its payment of dividends to its stockholders. During the year ended December 31, 2019, the Company’s primary sources of cash were distributions from the Operating Partnership and proceeds from theissuance of common stock. As of December 31, 2019, the Company has determined that it has adequate working capital to meet its dividend funding obligationsfor the next twelve months.On May 1, 2018, ROIC entered into five separate Sales Agreements (the “Sales Agreements”) with each of Capital One Securities, Inc., Jefferies LLC, KeyBancCapital Markets Inc., Raymond James & Associates, Inc., and Robert W. Baird & Co. Incorporated (each individually, an “Agent” and collectively, the “Agents”)pursuant to which ROIC may sell, from time to time, shares of ROIC’s common stock, par value $0.0001 per share, having an aggregate offering price of up to$250.0 million through the Agents either as agents or principals.During the year ended December 31, 2019, ROIC sold a total of 1,861,036 shares under the Sales Agreements, which resulted in gross proceeds of approximately$34.2 million and commissions of approximately $342,000 paid to the Agents. During the year ended December 31, 2018, ROIC sold a total of 1,251,376 sharesunder the Sales Agreements, which resulted in gross proceeds of approximately $24.2 million and commissions of approximately $242,000 paid to the Agents. For the year ended December 31, 2019, dividends paid to stockholders totaled approximately $90.8 million. Additionally, for the year ended December 31, 2019,the Operating Partnership made distributions of approximately $8.9 million to the non-controlling interest OP Unitholders. On a consolidated basis, cash flowsfrom operations for the same period totaled approximately $132.0 million. For the year ended December 31, 2018, dividends paid to stockholders totaledapproximately $88.5 million. Additionally, for the year ended December 31, 2018, the Operating Partnership made distributions of approximately $9.1 million tothe non-controlling interest OP Unitholders. On a consolidated basis, cash flows from operations for the same period totaled approximately $130.9 million. Potential future sources of capital include equity issuances and distributions from the Operating Partnership. Liquidity and Capital Resources of the Operating Partnership In this “Liquidity and Capital Resources of the Operating Partnership” section, the terms the “Operating Partnership,” “we”, “our” and “us” refer to the OperatingPartnership together with its consolidated subsidiaries or the Operating Partnership and the Company together with their respective consolidated subsidiaries, asthe context requires. During the year ended December 31, 2019, the Operating Partnership’s primary sources of cash were (i) cash flow from operations, (ii) proceeds from the sale ofreal estate, and (iii) cash contributed by ROIC from the issuance of common stock. As of December 31, 2019, the Operating Partnership has determined that it hasadequate working capital to meet its debt obligations and operating expenses for the next twelve months. The Company has an unsecured term loan agreement with several banks under which the lenders agreed to provide a $300.0 million unsecured term loan facility.Effective December 20, 2019, the Company entered into the First Amendment to First Amended and Restated Term Loan Agreement (as amended, the “TermLoan Agreement”) pursuant to which the maturity date of the term loan was extended from September 8, 2022 to January 20, 2025, without further options forextension. The Term Loan Agreement also provides that the Company may from time to time request increased aggregate commitments of $200.0 million undercertain conditions set forth in the Term Loan Agreement, including the consent of the lenders for the additional commitments. Borrowings under the Term LoanAgreement accrue interest on the outstanding principal amount at a rate equal to an applicable rate based on the credit rating level of the Company, plus, asapplicable, (i) a LIBOR rate determined by reference to the cost of funds for U.S. dollar deposits for the relevant period (the “Eurodollar Rate”), or (ii) a base ratedetermined by reference to the highest of (a) the federal funds rate plus 0.50%, (b) the rate of interest announced by the Administrative Agent as its “prime rate,”and (c) the Eurodollar Rate plus 1.00%. The Operating Partnership has an unsecured revolving credit facility with several banks. Effective December 20, 2019, the Company entered into the FirstAmendment to Second Amended and Restated Credit Agreement (as amended, the “Credit Facility Agreement”) pursuant to which the borrowing capacity underthe credit facility is $600.0 million. The maturity date of the credit facility was extended from September 8, 2021 to February 20, 2024, with two six-monthextension options, which may be exercised by the Operating Partnership upon satisfaction of certain conditions including the payment of extension fees.43Additionally, the credit facility contains an accordion feature, which allows the Operating Partnership to increase the borrowing capacity under the credit facilityup to an aggregate of $1.2 billion, subject to lender consents and other conditions. Borrowings under the credit facility accrue interest on the outstanding principalamount at a rate equal to an applicable rate based on the credit rating level of the Company, plus, as applicable, (i) the Eurodollar Rate, or (ii) a base ratedetermined by reference to the highest of (a) the federal funds rate plus 0.50%, (b) the rate of interest announced by KeyBank, National Association as its “primerate,” and (c) the Eurodollar Rate plus 0.90%. Additionally, the Operating Partnership is obligated to pay a facility fee at a rate based on the credit rating level ofthe Company, currently 0.20%, and a fronting fee at a rate of 0.125% per year with respect to each letter of credit issued under the credit facility. Both the term loan and credit facility contain customary representations, financial and other covenants. The Operating Partnership’s ability to borrow under thecredit facility and term loan is subject to its compliance with financial covenants and other restrictions on an ongoing basis. The Operating Partnership was incompliance with such covenants at December 31, 2019. As of December 31, 2019, $300.0 million and $84.0 million were outstanding under the term loan and credit facility, respectively. The weighted average interestrates on the term loan and the credit facility during the year ended December 31, 2019 were 3.4% and 3.3%, respectively. As discussed in Note 11 of theaccompanying financial statements, the Company uses interest rate swaps to manage its interest rate risk and accordingly, the swapped interest rate on the termloan is 3.0%. The Company had no available borrowings under the term loan at December 31, 2019. The Company had $516.0 million available to borrow underthe credit facility at December 31, 2019. Further, the Operating Partnership issued $250.0 million aggregate principal amount of unsecured senior notes in December 2017, $200.0 million aggregateprincipal amount of unsecured senior notes in September 2016, $250.0 million aggregate principal amount of unsecured senior notes in December 2014 and $250.0million aggregate principal amount of unsecured senior notes in December 2013, each of which were fully and unconditionally guaranteed by ROIC. While the Operating Partnership generally intends to hold its assets as long term investments, certain of its investments may be sold in order to manage theOperating Partnership’s interest rate risk and liquidity needs, meet other operating objectives and adapt to market conditions. The timing and impact of future salesof its investments, if any, cannot be predicted with any certainty. Cash Flows The following table summarizes, for the periods indicated, selected items in our consolidated statements of cash flows (in thousands): Year Ended December 31, 201920182017Net Cash Provided by (Used in): Operating activities$132,039 $130,918 $128,938 Investing activities$12,402 $(56,055) $(317,963) Financing activities$(146,432) $(84,379) $192,740 Net Cash Flows from: Operating Activities Increase in cash flows provided by operating activities from 2018 to 2019: Net cash flows provided by operating activities amounted to $132.0 million during the year ended December 31, 2019, which is materially consistent with $130.9million during the year ended December 31, 2018. Increase in cash flows provided by operating activities from 2017 to 2018: Net cash flows provided by operating activities amounted to $130.9 million during the year ended December 31, 2018, compared to $128.9 million during the yearended December 31, 2017. During the year ended December 31, 2018, cash flows provided by operating activities increased by approximately $2.0 millionprimarily due to an increase in property operating44income of approximately $15.2 million, offset by an increase in interest expense of approximately $11.1 million due to interest incurred related to the Senior NotesDue 2027 issued in December 2017 and increased interest rates payable on the credit facility and term loan and the timing of collections and payments of workingcapital accounts.Investing Activities Increase in cash flows provided by investing activities from 2018 to 2019: Net cash flows provided by investing activities amounted to $12.4 million during the year ended December 31, 2019, compared to net cash flows used in investingactivities of $56.1 million during the year ended December 31, 2018. During the year ended December 31, 2019, cash flows provided by investing activitiesincreased approximately $68.5 million, primarily due to the decrease in investments in real estate of approximately $32.6 million, an increase in proceeds from thesale of real estate of approximately $32.1 million and a decrease in improvements to properties of approximately $4.1 million. Decrease in cash flows used in investing activities from 2017 to 2018: Net cash flows used in investing activities amounted to $56.1 million during the year ended December 31, 2018, compared to $318.0 million during the year endedDecember 31, 2017. During the year ended December 31, 2018, cash flows used in investing activities decreased approximately $261.9 million, primarily due tothe decrease in investments in real estate of approximately $219.2 million, an increase in proceeds from the sale of real estate of approximately $26.9 million and adecrease in improvements to properties of approximately $14.9 million. Financing Activities Increase in cash flows used in financing activities from 2018 to 2019: Net cash flows used in financing activities amounted to $146.4 million during the year ended December 31, 2019, compared to $84.4 million during the year endedDecember 31, 2018. This increase of approximately $62.1 million for the year ended December 31, 2019 is primarily due to the net increase in payments on thecredit facility of $84.5 million, offset by the decrease in repayments on mortgages of approximately $19.1 million.Decrease in cash flows provided by financing activities from 2017 to 2018: Net cash flows used in financing activities amounted to $84.4 million during the year ended December 31, 2018, compared to net cash flows provided by financingactivities of $192.7 million during the year ended December 31, 2017. This decrease of approximately $277.1 million for the year ended December 31, 2018 isprimarily due to proceeds received during the year ended December 31, 2017 of $250.0 million related to the issuance of the Senior Notes Due 2027, the netdecrease in proceeds from draws on the credit facility of $33.0 million, the increase in repayments on mortgages of approximately $10.8 million and the increase individend and distribution payments of approximately $5.9 million. These decreases were offset by the increase in proceeds from the sale of common stock ofapproximately $21.2 million. 45Contractual Obligations The following table presents the Company’s operating lease obligations and the principal and interest amounts of the Company’s long-term debt maturing eachyear, including amortization of principal based on debt outstanding, at December 31, 2019 (in thousands): 20202021202220232024ThereafterTotalContractual obligations: Mortgage Notes Payable Principal (1)$577 $717 $24,132 $686 $26,708 $33,337 $86,157 Mortgage Notes Payable Interest3,774 3,737 3,170 2,482 1,627 991 15,781 Term loan (2)— — — — — 300,000 300,000 Credit facility (3)— — — — 84,000 — 84,000 Senior Notes Due 2027 (4)10,475 10,475 10,475 10,475 10,475 281,425 333,800 Senior Notes Due 2026 (4)7,900 7,900 7,900 7,900 7,900 215,800 255,300 Senior Notes Due 2024 (5)10,000 10,000 10,000 10,000 260,000 — 300,000 Senior Notes Due 2023 (6)12,500 12,500 12,500 262,500 — — 300,000 Operating lease obligations1,287 1,282 1,304 1,330 1,335 32,604 39,142 Total$46,513 $46,611 $69,481 $295,373 $392,045 $864,157 $1,714,180 __________________ (1)Does not include unamortized mortgage premium of approximately $1.6 million as of December 31, 2019.(2)For the purpose of the above table, the Company has assumed that borrowings under the term loan accrue interest at the interest rate on the term loan as ofDecember 31, 2019 which was 3.0%, inclusive of the swap agreements the Company has entered into.(3)For the purpose of the above table, the Company has assumed that borrowings under the credit facility accrue interest at the interest rate on the credit facilityas of December 31, 2019 which was 2.7%.(4)Represents payments of interest only in years 2020 through 2024 and payments of both principal and interest thereafter.(5)Represents payments of interest only in years 2020 through 2023 and payments of both principal and interest thereafter.(6)Represents payments of interest only in years 2020 through 2022 and payments of both principal and interest thereafter.The Company has committed approximately $29.2 million and $1.5 million in tenant improvements (including building and site improvements) and leasingcommissions, respectively, for the new leases and renewals that occurred during the year ended December 31, 2019. As of December 31, 2019, the Company didnot have any capital lease obligations. The Company has entered into several lease agreements with an officer of the Company. Pursuant to the lease agreements, the Company is provided the use ofstorage space.Off-Balance Sheet Arrangements As of December 31, 2019, the Company does not have any off-balance sheet arrangements.Real Estate Taxes The Company’s leases generally require the tenants to be responsible for a pro-rata portion of the real estate taxes.Inflation The Company’s long-term leases contain provisions to mitigate the adverse impact of inflation on its operating results. Such provisions include clauses entitlingthe Company to receive (a) scheduled base rent increases and (b) percentage rents based upon tenants’ gross sales which generally increase as prices rise. Inaddition, many of the Company’s non-anchor leases are for terms of less than ten years, which permits the Company to seek increases in rents upon renewal atthen-current market rates if rents provided in the expiring leases are below then-existing market rates. Most of the Company’s leases require tenants to pay a shareof operating expenses, including common area maintenance, real estate taxes, insurance and utilities, thereby reducing the Company’s exposure to increases incosts and operating expenses resulting from inflation.46Leverage Policies The Company employs prudent amounts of leverage and uses debt as a means of providing additional funds for the acquisition of its properties and thediversification of its portfolio. The Company seeks to primarily utilize unsecured debt in order to maintain liquidity and flexibility in its capital structure. The Company has an unsecured term loan agreement with several banks under which the lenders agreed to provide a $300.0 million unsecured term loan facility.Effective December 20, 2019, the Company entered into the First Amendment to First Amended and Restated Term Loan Agreement (as amended, the “TermLoan Agreement”) pursuant to which the maturity date of the term loan was extended from September 8, 2022 to January 20, 2025, without further options forextension. The Term Loan Agreement also provides that the Company may from time to time request increased aggregate commitments of $200.0 million undercertain conditions set forth in the Term Loan Agreement, including the consent of the lenders for the additional commitments. The Operating Partnership has anunsecured revolving credit facility with several banks. Effective December 20, 2019, the Company entered into the First Amendment to Second Amended andRestated Credit Agreement (as amended, the “Credit Facility Agreement”) pursuant to which the borrowing capacity under the credit facility is $600.0 million. Thematurity date of the credit facility was extended from September 8, 2021 to February 20, 2024, with two six-month extension options, which may be exercised bythe Operating Partnership upon satisfaction of certain conditions including the payment of extension fees. Additionally, the credit facility contains an accordionfeature, which allows the Operating Partnership to increase the borrowing capacity under the credit facility up to an aggregate of $1.2 billion, subject to lenderconsents and other conditions. Further, the Operating Partnership issued $250.0 million aggregate principal amount of unsecured senior notes in December 2017, $200.0 million aggregateprincipal amount of unsecured senior notes in September 2016, $250.0 million aggregate principal amount of unsecured senior notes in December 2014 and $250.0million aggregate principal amount of unsecured senior notes in December 2013, all of which were fully and unconditionally guaranteed by ROIC. The Company may borrow on a non-recourse basis at the corporate level or Operating Partnership level. Non-recourse indebtedness means the indebtedness of theborrower or its subsidiaries is secured only by specific assets without recourse to other assets of the borrower or any of its subsidiaries. Even with non-recourseindebtedness, however, a borrower or its subsidiaries will likely be required to guarantee against certain breaches of representations and warranties such as thoserelating to the absence of fraud, misappropriation, misapplication of funds, environmental conditions and material misrepresentations. Because non-recoursefinancing generally restricts the lender’s claim on the assets of the borrower, the lender generally may only proceed against the asset securing the debt. This mayprotect the Company’s other assets. The Company plans to evaluate each investment opportunity and determine the appropriate leverage on a case-by-case basis and also on a Company-wide basis.The Company may seek to refinance indebtedness, such as when a decline in interest rates makes it beneficial to prepay an existing mortgage, when an existingmortgage matures or if an attractive investment becomes available and the proceeds from the refinancing can be used to purchase the investment. The Company plans to finance future acquisitions through a combination of operating cashflow, borrowings under the credit facility, the assumption of existingmortgage debt, the issuance of OP Units, equity and debt offerings, and the potential sale of existing assets. In addition, the Company may acquire retail propertiesindirectly through joint ventures with third parties as a means of increasing the funds available for the acquisition of properties.Distributions The Operating Partnership and ROIC intend to make regular quarterly distributions to holders of their OP Units and common stock, respectively. The OperatingPartnership pays distributions to ROIC directly as a holder of units of the Operating Partnership, and indirectly to ROIC through distributions to Retail OpportunityInvestments GP, LLC, a wholly owned subsidiary of ROIC. U.S. federal income tax law generally requires that a REIT distribute annually at least 90% of itsREIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains, and that it pay U.S. federal income tax at regularcorporate rates to the extent that it annually distributes less than 100% of its net taxable income. ROIC intends to pay regular quarterly dividends to itsstockholders in an amount not less than its net taxable income, if and to the extent authorized by its board of directors. If ROIC’s cash available for distribution isless than its net taxable income, ROIC could be required to sell assets or borrow funds to make cash distributions or the Company may make a portion of therequired distribution in the form of a taxable stock distribution or distribution of debt securities.47Item 7A. Quantitative and Qualitative Disclosures About Market Risk The Company’s primary market risk exposure is to changes in interest rates related to its debt. There is inherent rollover risk for borrowings as they mature and arerenewed at current market rates. The extent of this risk is not quantifiable or predictable because of the variability of future interest rates and the Company’s futurefinancing requirements. As of December 31, 2019, the Company had $384.0 million of variable rate debt outstanding. The Company has primarily used fixed-rate debt and forwardstarting interest rate swaps to manage its interest rate risk. See the discussion under Note 11, “Derivative and Hedging Activities,” to the accompanyingconsolidated financial statements for certain quantitative details related to the interest rate swaps. The Company entered into interest rate swaps in order to economically hedge against the risk of rising interest rates that would affect the Company’s interestexpense related to its future anticipated debt issuances as part of its overall borrowing program. The sensitivity analysis table presented below shows the estimatedinstantaneous parallel shift in the yield curve up and down by 50 and 100 basis points, respectively, on the clean market value of its interest rate derivatives as ofDecember 31, 2019, exclusive of non-performance risk (in thousands).Swap NotionalLess 100 basis pointsLess 50 basis pointsDecember 31, 2019ValueIncrease 50 basispointsIncrease 100 basispoints$100,000 $(3,098) $(1,812) $(550) $696 $1,919 $100,000 $(3,098) $(1,812) $(550) $696 $1,919 $50,000 $(2,677) $(2,026) $(1,388) $(757) $(139) $50,000 $(2,682) $(2,031) $(1,393) $(762) $(143) See Note 11 of the accompanying consolidated financial statements for a discussion on how the Company values derivative financial instruments. The Companycalculates the value of its interest rate swaps based upon the present value of the future cash flows expected to be paid and received on each leg of the swap. Thecash flows on the fixed leg of the swap are agreed to at inception and the cash flows on the floating leg of a swap change over time as interest rates change. Toestimate the floating cash flows at each valuation date, the Company utilizes a forward curve which is constructed using LIBOR fixings, Eurodollar futures, andswap rates, which are observable in the market. Both the fixed and floating legs’ cash flows are discounted at market discount factors. For purposes of adjustingits derivative valuations, the Company incorporates the nonperformance risk for both itself and its counterparties to these contracts based upon management’sestimates of credit spreads, credit default swap spreads (if available) or IHS Markit ratings in order to derive a curve that considers the term structure of credit. As a corporation that has elected to qualify as a REIT for U.S. federal income tax purposes, commencing with its taxable year ended December 31, 2010, ROIC’sfuture income, cash flows and fair values relevant to financial instruments are dependent upon prevailing market interest rates. Market risk refers to the risk of lossfrom adverse changes in market prices and interest rates. The Company will be exposed to interest rate changes primarily as a result of long-term debt used toacquire properties. The Company’s interest rate risk management objectives will be to limit the impact of interest rate changes on earnings and cash flows and tolower overall borrowing costs. To achieve these objectives, the Company expects to borrow primarily at fixed rates or variable rates with the lowest marginsavailable and, in some cases, with the ability to convert variable rates to fixed rates. In addition, the Company can use derivative financial instruments to manageinterest rate risk. The Company will not use derivatives for trading or speculative purposes and will only enter into contracts with major financial institutionsbased on their credit rating and other factors. Currently, the Company uses interest rate swaps to manage its interest rate risk. See Note 11 of the accompanyingconsolidated financial statements.48Item 8. Financial Statements and Supplementary Data Index to Consolidated Financial Statements and Financial Statement Schedule PageReports of Independent Registered Public Accounting Firm50 Consolidated Financial Statements of Retail Opportunity Investments Corp.: Consolidated Balance Sheets55Consolidated Statements of Operations and Comprehensive Income56Consolidated Statements of Equity57Consolidated Statements of Cash Flows58 Consolidated Financial Statements of Retail Opportunity Investments Partnership, LP: Consolidated Balance Sheets59Consolidated Statements of Operations and Comprehensive Income60Consolidated Statements of Partners’ Capital61Consolidated Statements of Cash Flows62 Notes to Consolidated Financial Statements63 Schedules III Real Estate and Accumulated Depreciation84IV Mortgage Loans on Real Estate88 All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under therelated instructions or are inapplicable and therefore have been omitted.49REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors and Stockholders of Retail Opportunity Investments Corp. Opinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Retail Opportunity Investments Corp. (the Company) as of December 31, 2019 and 2018, therelated consolidated statements of operations and comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2019,and the related notes and financial statement schedule listed in the Index at Item 8 (collectively referred to as the “consolidated financial statements”). In ouropinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2019 and 2018, andthe results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with U.S. generally acceptedaccounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internalcontrol over financial reporting as of December 31, 2019, based on criteria established in Internal Control – Integrated Framework issued by the Committee ofSponsoring Organizations of the Treadway Commission (2013 Framework) and our report dated February 19, 2020 expressed an unqualified opinion thereon.Basis for OpinionThese financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financialstatements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company inaccordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures toassess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Suchprocedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating theaccounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believethat our audits provide a reasonable basis for our opinion.Critical Audit MatterThe critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to becommunicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especiallychallenging, subjective, or complex judgments. The communication of this critical audit matter does not alter in any way our opinion on the financial statements,taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts ordisclosures to which it relates.50Impairment of real estate investmentsDescription of the MatterAt December 31, 2019, the Company’s real estate investments totaled $2.7 billion. As discussed in Note 1 of theconsolidated financial statements, the Company reviews long-lived assets for impairment whenever events or changes incircumstances indicate that the real estate investments are not expected to be recovered through future undiscounted cashflows. The Company did not identify any assets that were impaired at December 31, 2019.Auditing management’s assessment of impairment is challenging due to the high degree of subjective auditor judgmentnecessary in evaluating management’s identification of indicators of potential impairment and the related assessment of theseverity of such indicators in determining whether a triggering event has occurred that requires the Company to evaluate therecoverability of the asset. The significant inputs used in the assessment included capitalization rates, current and estimatedfuture cash flows associated with each property, which were based on market information including, where applicable,market rental rates, leasing trends, occupancy trends, expense ratios, and other quantitative and qualitative factors.How We Addressed the Matter inOur AuditWe obtained an understanding of management’s process to identify indicators of impairment, including the qualitative andquantitative analysis and related inputs and assumptions used in performing the analyses. We evaluated the design and testedthe operating effectiveness of the controls that address the identification of indicators of impairment, in addition to controlsaround the quantitative assessment of impairment. For example, we tested controls over the Company’s process to estimatethe fair value of its real estate assets and to assess the recoverability of each investment, including controls overmanagement’s development and review of the significant inputs and assumptions described above used in the quantitativeassessment.Our testing of the Company’s impairment assessment included, among other procedures, evaluating significant judgmentsapplied in determining whether indicators of impairment were present at any given property by obtaining evidence tocorroborate such judgments and searching for evidence contrary to such judgments. For example, we reviewed the bad debtreserves analysis and rent rolls for any tenants with large reserved balances or upcoming lease expirations, in addition toreviewing various industry market surveys that indicate potential tenants with deteriorating credit quality to determine if theyoccupied a substantial portion of any particular property./s/ Ernst & Young LLPWe have served as the Company’s auditor since 2010San Diego, CaliforniaFebruary 19, 2020 51REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors and Stockholders of Retail Opportunity Investments Corp. Opinion on Internal Control over Financial ReportingWe have audited Retail Opportunity Investments Corp.’s internal control over financial reporting as of December 31, 2019, based on criteria established in InternalControl—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) (the COSO criteria). Inour opinion, Retail Opportunity Investments Corp. (the Company) maintained, in all material respects, effective internal control over financial reporting as ofDecember 31, 2019, based on the COSO criteria.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balancesheets of Retail Opportunity Investments Corp. as of December 31, 2019 and 2018, the related consolidated statements of operations and comprehensive income,equity, and cash flows for each of the three years in the period ended December 31, 2019 and the related notes and financial statement schedule listed in the Indexat Item 8 and our report dated February 19, 2020 expressed an unqualified opinion thereon.Basis for OpinionThe Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internalcontrol over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting (Retail Opportunity InvestmentsCorp). Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firmregistered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicablerules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in thecircumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial ReportingA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financialreporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance withthe policies or procedures may deteriorate. /s/ Ernst & Young LLPSan Diego, CaliforniaFebruary 19, 2020 52REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Partners of Retail Opportunity Investments Partnership, LP Opinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Retail Opportunity Investments Partnership, LP (the “Operating Partnership”) as ofDecember 31, 2019 and 2018, the related consolidated statements of operations and comprehensive income, Partners’ capital, and cash flows for each of the threeyears in the period ended December 31, 2019 and the related notes and financial statement schedule listed in the Index at Item 8 (collectively referred to as the“consolidated financial statements”). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financialposition of the Operating Partnership at December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the periodended December 31, 2019, in conformity with U.S. generally accepted accounting principles.Basis for OpinionThese financial statements are the responsibility of the Operating Partnership’s management. Our responsibility is to express an opinion on the OperatingPartnership’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent withrespect to the Operating Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and ExchangeCommission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Operating Partnership is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding ofinternal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Operating Partnership’s internal control overfinancial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performingprocedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financialstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overallpresentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.Critical Audit MatterThe critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to becommunicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especiallychallenging, subjective, or complex judgments. The communication of this critical audit matter does not alter in any way our opinion on the financial statements,taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts ordisclosures to which it relates.53Impairment of real estate investmentsDescription of the MatterAt December 31, 2019, the Company’s real estate investments totaled $2.7 billion. As discussed in Note 1 of theconsolidated financial statements, the Company reviews long-lived assets for impairment whenever events or changes incircumstances indicate that the real estate investments are not expected to be recovered through future undiscounted cashflows. The Company did not identify any assets that were impaired at December 31, 2019.Auditing management’s assessment of impairment is challenging due to the high degree of subjective auditor judgmentnecessary in evaluating management’s identification of indicators of potential impairment and the related assessment of theseverity of such indicators in determining whether a triggering event has occurred that requires the Company to evaluate therecoverability of the asset. The significant inputs used in the assessment included capitalization rates, current and estimatedfuture cash flows associated with each property, which were based on market information including, where applicable,market rental rates, leasing trends, occupancy trends, expense ratios, and other quantitative and qualitative factors.How We Addressed the Matter inOur AuditWe obtained an understanding of management’s process to identify indicators of impairment, including the qualitative andquantitative analysis and related inputs and assumptions used in performing the analyses. We evaluated the design and testedthe operating effectiveness of the controls that address the identification of indicators of impairment, in addition to controlsaround the quantitative assessment of impairment. For example, we tested controls over the Company’s process to estimatethe fair value of its real estate assets and to assess the recoverability of each investment, including controls overmanagement’s development and review of the significant inputs and assumptions described above used in the quantitativeassessment.Our testing of the Company’s impairment assessment included, among other procedures, evaluating significant judgmentsapplied in determining whether indicators of impairment were present at any given property by obtaining evidence tocorroborate such judgments and searching for evidence contrary to such judgments. For example, we reviewed the bad debtreserves analysis and rent rolls for any tenants with large reserved balances or upcoming lease expirations, in addition toreviewing various industry market surveys that indicate potential tenants with deteriorating credit quality to determine if theyoccupied a substantial portion of any particular property. /s/ Ernst & Young LLPWe have served as the Operating Partnership’s auditor since 2013San Diego, CaliforniaFebruary 19, 202054RETAIL OPPORTUNITY INVESTMENTS CORP.Consolidated Balance Sheets(In thousands, except share data)December 31, 20192018ASSETS Real Estate Investments: Land$879,540 $894,240 Building and improvements2,252,301 2,266,232 3,131,841 3,160,472 Less: accumulated depreciation390,916 329,207 2,740,925 2,831,265 Mortgage note receivable13,000 — Real Estate Investments, net2,753,925 2,831,265 Cash and cash equivalents3,800 6,076 Restricted cash1,658 1,373 Tenant and other receivables, net45,821 46,832 Acquired lease intangible assets, net59,701 72,109 Prepaid expenses3,169 4,194 Deferred charges, net27,652 33,857 Other assets18,031 7,365 Total assets$2,913,757 $3,003,071 LIABILITIES AND EQUITY Liabilities: Term loan$298,330 $299,076 Credit facility80,743 153,689 Senior Notes942,850 941,449 Mortgage notes payable87,523 88,511 Acquired lease intangible liabilities, net144,757 166,146 Accounts payable and accrued expenses17,562 15,488 Tenants’ security deposits7,177 7,065 Other liabilities42,987 23,219 Total liabilities1,621,929 1,694,643 Commitments and contingenciesEquity: Preferred stock, $0.0001 par value 50,000,000 shares authorized; none issued and outstanding— — Common stock, $0.0001 par value, 500,000,000 shares authorized; 116,496,016 and 113,992,837 shares issued andoutstanding at December 31, 2019 and 2018, respectively12 11 Additional paid-in capital1,481,466 1,441,080 Dividends in excess of earnings(297,998) (256,438) Accumulated other comprehensive (loss) income(4,132) 3,561 Total Retail Opportunity Investments Corp. stockholders’ equity1,179,348 1,188,214 Non-controlling interests112,480 120,214 Total equity1,291,828 1,308,428 Total liabilities and equity$2,913,757 $3,003,071 See accompanying notes to consolidated financial statements.55RETAIL OPPORTUNITY INVESTMENTS CORP.Consolidated Statements of Operations and Comprehensive Income(In thousands, except per share data) Year Ended December 31, 201920182017Revenues Rental revenue$291,263 $289,601 $269,382 Other income3,777 6,197 3,878 Total revenues295,040 295,798 273,260 Operating expenses Property operating43,662 43,851 39,151 Property taxes32,388 32,349 29,663 Depreciation and amortization97,559 100,838 96,256 General and administrative expenses17,831 14,918 14,103 Acquisition transaction costs— — 4 Other expense1,405 478 418 Total operating expenses192,845 192,434 179,595 Gain on sale of real estate13,175 5,890 — Operating income115,370 109,254 93,665 Non-operating expenses Interest expense and other finance expenses(61,687) (62,113) (50,977) Net income53,683 47,141 42,688 Net income attributable to non-controlling interests(4,839) (4,405) (4,211) Net Income Attributable to Retail Opportunity Investments Corp.$48,844 $42,736 $38,477 Earnings per share – basic and diluted$0.42 $0.38 $0.35 Dividends per common share$0.7880 $0.7800 $0.7500 Comprehensive income: Net income$53,683 $47,141 $42,688 Other comprehensive (loss) income: Unrealized swap derivative (loss) gain arising during the period(7,348) 1,648 3,665 Reclassification adjustment for amortization of interest expense included in net income(345) 57 1,920 Other comprehensive (loss) income(7,693) 1,705 5,585 Comprehensive income45,990 48,846 48,273 Comprehensive income attributable to non-controlling interests(4,839) (4,405) (4,211) Comprehensive income attributable to Retail Opportunity Investments Corp.$41,151 $44,441 $44,062 See accompanying notes to consolidated financial statements. 56RETAIL OPPORTUNITY INVESTMENTS CORP.Consolidated Statements of Equity(In thousands, except share data) Common StockAdditionalpaid-in capitalAccumulateddividends inexcess ofearningsAccumulatedothercomprehensive(loss) incomeNon-controllinginterestsEquity SharesAmountBalance at December 31, 2016109,301,762 $11 $1,357,910 $(165,951) $(3,729) $127,324 $1,315,565 Shares issued under the 2009 Equity Incentive Plan353,261 — 44 — — — 44 Shares withheld for employee taxes(74,331) — (1,571) — — — (1,571) Cancellation of restricted stock(1,999) — — — — — — Stock based compensation expense— — 6,190 — — — 6,190 Issuance of OP Units to non-controlling interests— — — — — 49,599 49,599 Redemption / Exchange of OP Units2,555,933 — 50,155 — — (50,155) — Cash redemption for non-controlling interests— — — — — (150) (150) Adjustment to non-controlling interests ownership inOperating Partnership— — (3,574) — — 3,574 — Proceeds from the issuance of common stock212,825 — 4,481 — — — 4,481 Registration expenditures— — (1,045) — — — (1,045) Cash dividends ($0.7500 per share)— — — (82,781) — (8,729) (91,510) Dividends payable to officers— — — (235) — — (235) Net income attributable to Retail OpportunityInvestments Corp.— — — 38,477 — — 38,477 Net income attributable to non-controlling interests— — — — — 4,211 4,211 Other comprehensive income— — — — 5,585 — 5,585 Balance at December 31, 2017112,347,451 $11 $1,412,590 $(210,490) $1,856 $125,674 $1,329,641 Shares issued under the 2009 Equity Incentive Plan397,861 — 269 — — — 269 Shares withheld for employee taxes(70,168) — (1,400) — — — (1,400) Cancellation of restricted stock(8,997) — — — — — — Stock based compensation expense— — 7,392 — — — 7,392 Cash redemption for non-controlling interests— — — — — (3,713) (3,713) Adjustment to non-controlling interests ownership inOperating Partnership— — (2,904) — — 2,904 — Proceeds from the issuance of common stock1,326,690 — 25,703 — — — 25,703 Registration expenditures— — (570) — — — (570) Cash dividends ($0.7800 per share)— — — (88,417) — (9,056) (97,473) Dividends payable to officers— — — (267) — — (267) Net income attributable to Retail OpportunityInvestments Corp.— — — 42,736 — — 42,736 Net income attributable to non-controlling interests— — — — — 4,405 4,405 Other comprehensive income— — — — 1,705 — 1,705 Balance at December 31, 2018113,992,837 $11 $1,441,080 $(256,438) $3,561 $120,214 $1,308,428 Shares issued under the Equity Incentive Plan631,022 — 1,942 — — — 1,942 Shares withheld for employee taxes(125,072) — (1,986) — — — (1,986) Cancellation of restricted stock(6,997) — — — — — — Stock based compensation expense— — 7,352 — — 1,215 8,567 Redemption of OP Units143,190 — 2,632 — — (2,632) — Cash redemption for non-controlling interests— — — — — (5,043) (5,043) Adjustment to non-controlling interests ownership inOperating Partnership— — (2,983) — — 2,983 — Proceeds from the issuance of common stock1,861,036 1 34,161 — — — 34,162 Registration expenditures— — (732) — — — (732) Cash dividends ($0.7880 per share)— — — (90,549) — (8,921) (99,470) Dividends payable to officers— — — 145 — (175) (30) Net income attributable to Retail OpportunityInvestments Corp.— — — 48,844 — — 48,844 Net income attributable to non-controlling interests— — — — — 4,839 4,839 Other comprehensive loss— — — — (7,693) — (7,693) Balance at December 31, 2019116,496,016 $12 $1,481,466 $(297,998) $(4,132) $112,480 $1,291,828 See accompanying notes to consolidated financial statements.57RETAIL OPPORTUNITY INVESTMENTS CORP.Consolidated Statements of Cash Flows(In thousands) Year Ended December 31, 201920182017CASH FLOWS FROM OPERATING ACTIVITIES Net income$53,683 $47,141 $42,688 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization97,559 100,838 96,256 Amortization of deferred financing costs and mortgage premiums, net2,076 1,899 2,026 Straight-line rent adjustment(3,083) (5,380) (6,176) Amortization of above and below market rent(15,618) (13,965) (17,078) Amortization relating to stock based compensation8,567 7,392 6,190 Provisions for tenant credit losses1,969 1,729 1,191 Other noncash interest expense524 1,674 2,139 Gain on sale of real estate(13,175) (5,890) — Change in operating assets and liabilities: Tenant and other receivables543 (57) (2,452) Prepaid expenses962 (1,344) 464 Accounts payable and accrued expenses303 (1,622) 456 Other assets and liabilities, net(2,271) (1,497) 3,234 Net cash provided by operating activities132,039 130,918 128,938 CASH FLOWS FROM INVESTING ACTIVITIES Investments in real estate(11,601) (44,195) (263,366) Proceeds from sale of real estate58,930 26,880 — Improvements to properties(35,177) (39,240) (54,097) Deposits on real estate acquisitions, net— 500 (500) Proceeds on repayment of mortgage note receivable250 — — Net cash provided by (used in) investing activities12,402 (56,055) (317,963) CASH FLOWS FROM FINANCING ACTIVITIES Principal repayments on mortgages(551) (19,612) (8,848) Proceeds from draws on credit facility101,000 177,000 327,500 Payments on credit facility(173,000) (164,500) (282,000) Proceeds from issuance of Senior Notes— — 250,000 Redemption of OP Units(5,043) (3,713) (150) Distributions to OP Unitholders(8,921) (9,056) (8,729) Deferred financing and other costs(2,804) — (3,845) Proceeds from the sale of common stock34,162 25,703 4,481 Registration expenditures(478) (570) (1,225) Dividends paid to common shareholders(90,753) (88,500) (82,917) Common shares issued under the Equity Incentive Plan1,942 269 44 Shares withheld for employee taxes(1,986) (1,400) (1,571) Net cash (used in) provided by financing activities(146,432) (84,379) 192,740 Net (decrease) increase in cash, cash equivalents and restricted cash(1,991) (9,516) 3,715 Cash, cash equivalents and restricted cash at beginning of period7,449 16,965 13,250 Cash, cash equivalents and restricted cash at end of period$5,458 $7,449 $16,965 The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total ofthe same amounts shown in the consolidated statements of cash flows:Year Ended December 31,201920182017Cash and cash equivalents$3,800 $6,076 $11,553 Restricted cash1,658 1,373 5,412 Total cash, cash equivalents and restricted cash shown in Statements of Cash Flows$5,458 $7,449 $16,965 See accompanying notes to consolidated financial statements. 5858RETAIL OPPORTUNITY INVESTMENTS PARTNERSHIP, LPConsolidated Balance Sheets(In thousands) December 31,20192018ASSETS Real Estate Investments: Land$879,540 $894,240 Building and improvements2,252,301 2,266,232 3,131,841 3,160,472 Less: accumulated depreciation390,916 329,207 2,740,925 2,831,265 Mortgage note receivable13,000 — Real Estate Investments, net2,753,925 2,831,265 Cash and cash equivalents3,800 6,076 Restricted cash1,658 1,373 Tenant and other receivables, net45,821 46,832 Acquired lease intangible assets, net59,701 72,109 Prepaid expenses3,169 4,194 Deferred charges, net27,652 33,857 Other assets18,031 7,365 Total assets$2,913,757 $3,003,071 LIABILITIES AND CAPITAL Liabilities: Term loan$298,330 $299,076 Credit facility80,743 153,689 Senior Notes942,850 941,449 Mortgage notes payable87,523 88,511 Acquired lease intangible liabilities, net144,757 166,146 Accounts payable and accrued expenses17,562 15,488 Tenants’ security deposits7,177 7,065 Other liabilities42,987 23,219 Total liabilities1,621,929 1,694,643 Commitments and contingenciesCapital: Partners’ capital, unlimited partnership units authorized: ROIC capital1,183,480 1,184,653 Limited partners’ capital112,480 120,214 Accumulated other comprehensive (loss) income(4,132) 3,561 Total capital1,291,828 1,308,428 Total liabilities and capital$2,913,757 $3,003,071 See accompanying notes to consolidated financial statements.59RETAIL OPPORTUNITY INVESTMENTS PARTNERSHIP, LPConsolidated Statements of Operations and Comprehensive Income(In thousands) Year Ended December 31,201920182017Revenues Rental revenue $291,263 $289,601 $269,382 Other income 3,777 6,197 3,878 Total revenues 295,040 295,798 273,260 Operating expenses Property operating 43,662 43,851 39,151 Property taxes 32,388 32,349 29,663 Depreciation and amortization 97,559 100,838 96,256 General and administrative expenses 17,831 14,918 14,103 Acquisition transaction costs — — 4 Other expense 1,405 478 418 Total operating expenses 192,845 192,434 179,595 Gain on sale of real estate 13,175 5,890 — Operating income 115,370 109,254 93,665 Non-operating expenses Interest expense and other finance expenses (61,687) (62,113) (50,977) Net Income Attributable to Retail Opportunity Investments Partnership, LP $53,683 $47,141 $42,688 Earnings per unit - basic and diluted $0.42 $0.38 $0.35 Distributions per unit $0.7880 $0.7800 $0.7500 Comprehensive income: Net income attributable to Retail Opportunity Investments Partnership, LP $53,683 $47,141 $42,688 Other comprehensive (loss) income: Unrealized swap derivative (loss) gain arising during the period (7,348) 1,648 3,665 Reclassification adjustment for amortization of interest expense included in net income (345) 57 1,920 Other comprehensive (loss) income (7,693) 1,705 5,585 Comprehensive income attributable to Retail Opportunity Investments Partnership, LP $45,990 $48,846 $48,273 See accompanying notes to consolidated financial statements.60RETAIL OPPORTUNITY INVESTMENTS PARTNERSHIP, LPConsolidated Statements of Partners’ Capital(In thousands, except unit data) Limited Partner’s Capital (1)ROIC Capital (2) Accumulatedothercomprehensive (loss)income UnitsAmountUnitsAmountCapitalBalance at December 31, 201611,668,061 $127,324 109,301,762 $1,191,970 $(3,729) $1,315,565 OP Units issued under the 2009 Equity Incentive Plan— — 353,261 44 — 44 OP Units withheld for employee taxes— — (74,331) (1,571) — (1,571) Cancellation of OP Units— — (1,999) — — — Stock based compensation expense— — — 6,190 — 6,190 Issuance of OP Units in connection with acquisitions2,573,927 49,599 — — — 49,599 Equity redemption of OP Units(2,555,933) (50,155) 2,555,933 50,155 — — Cash redemption of OP Units(7,064) (150) — — (150) Adjustment to non-controlling interests ownership inOperating Partnership— 3,574 — (3,574) — — Issuance of OP Units in connection with sale of commonstock— — 212,825 4,481 — 4,481 Registration expenditures— — — (1,045) — (1,045) Cash distributions ($0.7500 per unit)— (8,729) — (82,781) — (91,510) Distributions payable to officers— — — (235) — (235) Net income attributable to Retail Opportunity InvestmentsPartnership, LP— 4,211 — 38,477 — 42,688 Other comprehensive income— — — — 5,585 5,585 Balance at December 31, 201711,678,991 $125,674 112,347,451 $1,202,111 $1,856 $1,329,641 OP units issued under the 2009 Equity Incentive Plan— — 397,861 269 — 269 OP Units withheld for employee taxes— — (70,168) (1,400) — (1,400) Cancellation of OP Units— — (8,997) — — — Stock based compensation expense— — — 7,392 — 7,392 Cash redemption of OP Units(201,950) (3,713) — — — (3,713) Adjustment to non-controlling interests ownership inOperating Partnership— 2,904 — (2,904) — — Issuance of OP Units in connection with sale of commonstock— — 1,326,690 25,703 — 25,703 Registration expenditures— — — (570) — (570) Cash distributions ($0.7800 per unit)— (9,056) — (88,417) — (97,473) Distributions payable to officers— — — (267) — (267) Net income attributable to Retail Opportunity InvestmentsPartnership, LP— 4,405 — 42,736 — 47,141 Other comprehensive income— — — — 1,705 1,705 Balance at December 31, 201811,477,041 $120,214 113,992,837 $1,184,653 $3,561 $1,308,428 OP units issued under the Equity Incentive Plan — — 631,022 1,942 — 1,942 OP Units withheld for employee taxes — — (125,072) (1,986) — (1,986) Cancellation of OP Units — — (6,997) — — — Stock based compensation expense — 1,215 — 7,352 — 8,567 Equity redemption of OP Units (143,190) (2,632) 143,190 2,632 — — Cash redemption of OP Units (282,761) (5,043) — — — (5,043) Adjustment to non-controlling interests ownership inOperating Partnership — 2,983 — (2,983) — — Issuance of OP Units in connection with sale of commonstock — — 1,861,036 34,162 — 34,162 Registration expenditures — — — (732) — (732) Cash distributions ($0.7880 per unit)— (8,921) — (90,549) — (99,470) Distributions payable to officers — (175) — 145 — (30) Net income attributable to Retail Opportunity InvestmentsPartnership, LP — 4,839 — 48,844 — 53,683 Other comprehensive loss — — — — (7,693) (7,693) Balance at December 31, 201911,051,090 $112,480 116,496,016 $1,183,480 $(4,132) $1,291,828 (1)Consists of limited partnership interests held by third parties.(2)Consists of general and limited partnership interests held by ROIC.See accompanying notes to consolidated financial statements. 61RETAIL OPPORTUNITY INVESTMENTS PARTNERSHIP, LPConsolidated Statements of Cash Flows(In thousands) Year Ended December 31, 201920182017CASH FLOWS FROM OPERATING ACTIVITIES Net income$53,683 $47,141 $42,688 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization97,559 100,838 96,256 Amortization of deferred financing costs and mortgage premiums, net2,076 1,899 2,026 Straight-line rent adjustment(3,083) (5,380) (6,176) Amortization of above and below market rent(15,618) (13,965) (17,078) Amortization relating to stock based compensation8,567 7,392 6,190 Provisions for tenant credit losses1,969 1,729 1,191 Other noncash interest expense524 1,674 2,139 Gain on sale of real estate(13,175) (5,890) — Change in operating assets and liabilities: Tenant and other receivables543 (57) (2,452) Prepaid expenses962 (1,344) 464 Accounts payable and accrued expenses303 (1,622) 456 Other assets and liabilities, net(2,271) (1,497) 3,234 Net cash provided by operating activities 132,039 130,918 128,938 CASH FLOWS FROM INVESTING ACTIVITIES Investments in real estate(11,601) (44,195) (263,366) Proceeds from sale of real estate58,930 26,880 — Improvements to properties(35,177) (39,240) (54,097) Deposits on real estate acquisitions, net— 500 (500) Proceeds on repayment of mortgage note receivable250 — — Net cash provided by (used in) investing activities 12,402 (56,055) (317,963) CASH FLOWS FROM FINANCING ACTIVITIES Principal repayments on mortgages(551) (19,612) (8,848) Proceeds from draws on credit facility101,000 177,000 327,500 Payments on credit facility(173,000) (164,500) (282,000) Proceeds from issuance of Senior Notes— — 250,000 Redemption of OP Units(5,043) (3,713) (150) Deferred financing and other costs(2,804) — (3,845) Proceeds from the issuance of OP Units in connection with issuance of common stock34,162 25,703 4,481 Registration expenditures(478) (570) (1,225) Distributions to OP Unitholders(99,674) (97,556) (91,646) Issuance of OP Units under the Equity Incentive Plan1,942 269 44 OP Units withheld for employee taxes(1,986) (1,400) (1,571) Net cash (used in) provided by financing activities (146,432) (84,379) 192,740 Net (decrease) increase in cash, cash equivalents and restricted cash (1,991) (9,516) 3,715 Cash, cash equivalents and restricted cash at beginning of period 7,449 16,965 13,250 Cash, cash equivalents and restricted cash at end of period $5,458 $7,449 $16,965 The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total ofthe same amounts shown in the consolidated statements of cash flows:Year Ended December 31,201920182017Cash and cash equivalents$3,800 $6,076 $11,553 Restricted cash1,658 1,373 5,412 Total cash, cash equivalents and restricted cash shown in Statements of Cash Flows$5,458 $7,449 $16,965 See accompanying notes to consolidated financial statements.62NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Organization, Basis of Presentation and Summary of Significant Accounting Policies Business Retail Opportunity Investments Corp., a Maryland corporation (“ROIC”), is a fully integrated and self-managed real estate investment trust (“REIT”). ROICspecializes in the acquisition, ownership and management of necessity-based community and neighborhood shopping centers on the west coast of the United Statesanchored by supermarkets and drugstores. ROIC is organized in a traditional umbrella partnership real estate investment trust (“UpREIT”) format pursuant to which Retail Opportunity Investments GP,LLC, its wholly-owned subsidiary, serves as the general partner of, and ROIC conducts substantially all of its business through, its operating partnershipsubsidiary, Retail Opportunity Investments Partnership, LP, a Delaware limited partnership (the “Operating Partnership”), together with its subsidiaries. Unlessotherwise indicated or unless the context requires otherwise, all references to the “Company”, “we,” “us,” “our,” or “our company” refer to ROIC together with itsconsolidated subsidiaries, including the Operating Partnership. ROIC’s only material asset is its ownership of direct or indirect partnership interests in the Operating Partnership and membership interest in Retail OpportunityInvestments GP, LLC, which is the sole general partner of the Operating Partnership. As a result, ROIC does not conduct business itself, other than acting as theparent company and issuing equity from time to time. The Operating Partnership holds substantially all the assets of the Company and directly or indirectly holdsthe ownership interests in the Company’s real estate ventures. The Operating Partnership conducts the operations of the Company’s business and is structured as apartnership with no publicly traded equity. Except for net proceeds from equity issuances by ROIC, which are contributed to the Operating Partnership, theOperating Partnership generates the capital required by the Company’s business through the Operating Partnership’s operations, by the Operating Partnership’sincurrence of indebtedness (directly and through subsidiaries) or through the issuance of operating partnership units (“OP Units”) of the Operating Partnership. Recent Accounting Pronouncements In February 2016, the FASB issued Accounting Standard Update (“ASU”) No. 2016-2, “Leases.” ASU No. 2016-2 resulted in the recognition of a right-to-useasset and related liability to account for future obligations under ground lease agreements for which the Company is the lessee. In addition, this ASU requires thatlessees and lessors capitalize, as initial direct costs, only those costs that are incurred due to the execution of a lease. Allocated payroll costs and other costs that areincurred regardless of whether the lease is obtained are no longer capitalized as initial direct costs and instead are expensed as incurred.Under ASU No. 2016-2, each lease agreement will be evaluated to identify the lease components and nonlease components at lease inception. The totalconsideration in the lease agreement will be allocated to the lease and nonlease components based on their relative standalone selling prices. Lessors will continueto recognize the lease revenue component using an approach that is substantially equivalent to existing guidance for operating leases (straight-line basis). In July2018, the FASB issued an amendment to ASU No. 2016-2 that allows lessors to elect, as a practical expedient, not to allocate the total consideration to lease andnonlease components based on their relative standalone selling prices. This practical expedient allows lessors to elect a combined single lease componentpresentation if (i) the timing and pattern of the revenue recognition of the combined single lease component is the same, and (ii) the related lease component and,the combined single lease component would be classified as an operating lease. The amendment also provides a transition option that permits the application of thenew guidance as of the adoption date rather than to all periods presented. The pronouncement is effective for fiscal years, and for interim periods within thosefiscal years, beginning after December 15, 2018, with early adoption permitted.The Company adopted the provisions of ASU No. 2016-2 effective January 1, 2019 using the modified retrospective approach and accordingly, recognized a leaseliability of approximately $18.0 million, which is included in Other liabilities in the accompanying balance sheet, and a related right-to-use asset of approximately$17.0 million, which is included in Other assets in the accompanying balance sheet, for all operating leases in which the Company is a lessee based on the presentvalue of the minimum rental payments remaining as of the initial application date. The present value of the remaining lease payments was calculated for eachoperating lease using each respective remaining lease term and a corresponding estimated incremental borrowing rate, which is the interest rate that the Companyestimates it would have to pay to borrow on a collateralized basis over a similar term.Based on its election of the package of practical expedients, the Company was not required to reassess whether any expired or existing contracts are or containleases, reassess the lease classification for any expired or existing leases, or reassess initial direct costs for any existing leases. Accordingly, the Company’s groundlease agreements for which the Company is the lessee63will continue to be accounted for as operating leases under the new standard. Further, the Company elected the practical expedient to account for both its lease andnon-lease components as a combined single lease component and elected the optional transition method permitting January 1, 2019 to be its initial application date.Additionally, leasing payroll-related costs that are incurred regardless of whether leases are obtained are no longer capitalized as initial direct costs and instead areexpensed as incurred. These costs amounted to approximately $1.3 million and $1.2 million during the years ended December 31, 2018 and 2017, respectively.Further, bad debt, which has previously been recorded in Property operating, has now been classified as a contra-revenue account in Rental revenue in theCompany’s consolidated statements of operations and comprehensive income. In June 2016, the FASB issued ASU No. 2016-13 “Financial Instruments - Credit Topics.” ASU No. 2016-13 requires companies to adopt a new approach toestimating credit losses on certain types of financial instruments, such as trade and other receivables and loans. The standard requires entities to estimate a lifetimeexpected credit loss for most financial instruments, including trade receivables. ASU No. 2016-13 will be effective for the Company beginning on January 1, 2020,with early adoption permitted. The Company does not expect that the adoption of this pronouncement will have a material impact on the consolidated financialstatements. Principles of Consolidation The accompanying consolidated financial statements are prepared on the accrual basis in accordance with GAAP. In the opinion of management, the consolidatedfinancial statements include all adjustments necessary, which are of a normal and recurring nature, for the fair presentation of the Company’s financial position andthe results of operations and cash flows for the periods presented.The consolidated financial statements include the accounts of the Company and those of its subsidiaries, which are wholly-owned or controlled by theCompany. Entities which the Company does not control through its voting interest and entities which are variable interest entities (“VIEs”), but where it is not theprimary beneficiary, are accounted for under the equity method. All significant intercompany balances and transactions have been eliminated. The Company follows the FASB guidance for determining whether an entity is a VIE and requires the performance of a qualitative rather than a quantitativeanalysis to determine the primary beneficiary of a VIE. Under this guidance, an entity would be required to consolidate a VIE if it has (i) the power to direct theactivities that most significantly impact the entity’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits fromthe VIE that could be significant to the VIE. The Company has concluded that the Operating Partnership is a VIE, and because they have both the power and therights to control the Operating Partnership, they are the primary beneficiary and are required to continue to consolidate the Operating Partnership. A non-controlling interest in a consolidated subsidiary is defined as the portion of the equity (net assets) in a subsidiary not attributable, directly or indirectly, to aparent. Non-controlling interests are required to be presented as a separate component of equity in the consolidated balance sheet and modify the presentation ofnet income by requiring earnings and other comprehensive income to be attributed to controlling and non-controlling interests. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the disclosure of contingentassets and liabilities, the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses duringthe periods covered by the financial statements. The most significant assumptions and estimates relate to the recoverability of assets to be held and used, purchaseprice allocations, depreciable lives, revenue recognition and the collectability of tenant receivables, other receivables, notes receivables, the valuation ofperformance-based restricted stock, LTIPs, and derivatives. Actual results could differ from these estimates. Federal Income Taxes The Company has elected to qualify as a REIT under Sections 856-860 of the Internal Revenue Code (the “Code”). Under those sections, a REIT that, amongother things, distributes at least 90% of its REIT taxable income (determined without regard to the dividends paid deduction and excluding net capital gains) andmeets certain other qualifications prescribed by the Code, will not be taxed on that portion of its taxable income that is distributed. Although it may qualify as a REIT for U.S. federal income tax purposes, the Company is subject to state income or franchise taxes in certain states in which someof its properties are located. For all periods from inception through September 26, 2013 the Operating Partnership had been an entity disregarded from its soleowner, ROIC, for U.S. federal income tax purposes and64as such had not been subject to U.S. federal income taxes. Effective September 27, 2013, the Operating Partnership issued OP Units in connection with theacquisitions of two shopping centers. Accordingly, the Operating Partnership ceased being a disregarded entity and instead is being treated as a partnership for U.S.federal income tax purposes. The Company follows the FASB guidance that defines a recognition threshold and measurement attribute for the financial statement recognition and measurementof a tax position taken or expected to be taken in a tax return. The FASB also provides guidance on de-recognition, classification, interest and penalties, accountingin interim periods, disclosure, and transition. The Company records interest and penalties relating to unrecognized tax benefits, if any, as interest expense. As ofDecember 31, 2019, the statute of limitations for tax years 2016 through and including 2018 remain open for examination by the Internal Revenue Service (“IRS”)and state taxing authorities. ROIC intends to make regular quarterly distributions to holders of its common stock. U.S. federal income tax law generally requires that a REIT distributeannually at least 90% of its REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains, and that it pay U.S. federalincome tax at regular corporate rates to the extent that it annually distributes less than 100% of its net taxable income. ROIC intends to pay regular quarterlydividends to stockholders in an amount not less than its net taxable income, if and to the extent authorized by its board of directors. Before ROIC pays anydividend, whether for U.S. federal income tax purposes or otherwise, it must first meet both its operating requirements and its debt service on debt. If ROIC’s cashavailable for distribution is less than its net taxable income, it could be required to sell assets or borrow funds to make cash distributions or it may make a portionof the required distribution in the form of a taxable stock distribution or distribution of debt securities. Real Estate Investments All costs related to the improvement or replacement of real estate properties are capitalized. Additions, renovations and improvements that enhance and/or extendthe useful life of a property are also capitalized. Expenditures for ordinary maintenance, repairs and improvements that do not materially prolong the normaluseful life of an asset are charged to operations as incurred. During the years ended December 31, 2019 and 2018, capitalized costs related to the improvement orreplacement of real estate properties were approximately $38.0 million and $40.3 million, respectively.The Company evaluates each acquisition of real estate to determine if the acquired property meets the definition of a business and needs to be accounted for as abusiness combination. Under ASU No. 2017-1, the Company first determines whether substantially all of the fair value of the gross assets acquired is concentratedin a single identifiable asset or group of similar identifiable assets. If this threshold is met, the acquired property does not meet the definition of a business and isaccounted for as an asset acquisition. The Company expects that acquisitions of real estate properties will not meet the revised definition of a business becausesubstantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets (i.e. land, buildings, and related intangibleassets). The Company recognizes the acquisition of real estate properties, including acquired tangible assets (consisting of land, buildings and improvements), andacquired intangible assets and liabilities (consisting of above-market and below-market leases and acquired in-place leases) at their fair value (for acquisitionsmeeting the definition of a business) and relative fair value (for acquisitions not meeting the definition of a business). The relative fair values used to allocate thecost of an asset acquisition are determined using the same methodologies and assumptions the Company utilizes to determine fair value in a business combination.Acquired lease intangible assets include above-market leases and acquired in-place leases, and acquired lease intangible liabilities represent below-market leases,in the accompanying consolidated balance sheets. The fair value of the tangible assets of an acquired property is determined by valuing the property as if it werevacant, which value is then allocated to land, buildings and improvements based on management’s determination of the relative fair values of these assets. Invaluing an acquired property’s intangibles, factors considered by management include an estimate of carrying costs during the expected lease-up periods, andestimates of lost rental revenue during the expected lease-up periods based on management’s evaluation of current market demand. Management also estimatescosts to execute similar leases, including leasing commissions, tenant improvements, legal and other related costs. Leasing commissions, legal and other relatedcosts (“lease origination costs”) are classified as Deferred charges in the accompanying consolidated balance sheets.The value of in-place leases is measured by the excess of (i) the purchase price paid for a property after adjusting existing in-place leases to market rental rates,over (ii) the estimated fair value of the property as if vacant. Above-market and below-market lease values are recorded based on the present value (using adiscount rate which reflects the risks associated with the leases acquired) of the difference between the contractual amounts to be received and management’sestimate of market lease rates, measured over the terms of the respective leases that management deemed appropriate at the time of acquisition. Such65valuations include a consideration of the non-cancellable terms of the respective leases as well as any applicable renewal periods. The fair values associated withbelow-market rental renewal options are determined based on the Company’s experience and the relevant facts and circumstances that existed at the time of theacquisitions. The value of the above-market and below-market leases is amortized to base rental income, over the terms of the respective leases including optionperiods, if applicable. The value of in-place leases is amortized to expense over the remaining non-cancellable terms of the respective leases. If a lease were to beterminated prior to its stated expiration, all unamortized amounts relating to that lease would be recognized in operations at that time.The Company expenses transaction costs associated with business combinations and unsuccessful property asset acquisitions in the period incurred and capitalizestransaction costs associated with successful property asset acquisitions. In conjunction with the Company’s pursuit and acquisition of real estate investments, theCompany did not expense any acquisition transaction costs during the years ended December 31, 2019 or 2018. The Company expensed acquisition transactioncosts during the year ended December 31, 2017 of $4,000.Sales of real estate are recognized only when it is determined that the Company will collect substantially all of the consideration to which it is entitled, possessionand other attributes of ownership have been transferred to the buyer and the Company has no controlling financial interest. The application of these criteria can becomplex and requires the Company to make assumptions. Management has determined that all of these criteria were met for all real estate sold during the periodspresented. Asset Impairment The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not berecoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the asset to aggregate future net cash flows(undiscounted and without interest) expected to be generated by the asset. If such assets are considered impaired, the impairment to be recognized is measured bythe amount by which the carrying amount of the assets exceed the fair value. Management does not believe that the value of any of the Company’s real estateinvestments was impaired at December 31, 2019 or December 31, 2018. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Cash and cashequivalents are maintained at financial institutions and, at times, balances may exceed the federally insured limit by the Federal Deposit InsuranceCorporation. The Company has not experienced any losses related to these balances. Restricted Cash The terms of the Company’s mortgage loans payable may require the Company to deposit certain replacement and other reserves with its lenders. Such “restrictedcash” is generally available only for property-level requirements for which the reserves have been established and is not available to fund other property level orCompany level obligations. Revenue Recognition Management has determined that all of the Company’s leases with its various tenants are operating leases. Rental income is generally recognized based on theterms of leases entered into with tenants. In those instances in which the Company funds tenant improvements and the improvements are deemed to be owned bythe Company, revenue recognition will commence when the improvements are substantially completed and possession or control of the space is turned over to thetenant. When the Company determines that the tenant allowances are lease incentives, the Company commences revenue recognition and lease incentiveamortization when possession or control of the space is turned over to the tenant for tenant work to begin. Minimum rental income from leases with scheduled rentincreases is recognized on a straight-line basis over the lease term. Percentage rent is recognized when a specific tenant’s sales breakpoint is achieved. Prior toJanuary 1, 2019, the Company considered property operating expense recoveries from tenants of common area maintenance, real estate taxes and otherrecoverable costs as lease components. Effective January 1, 2019, each lease agreement is evaluated to identify the lease and nonlease components at leaseinception. The Company elected the single component practical expedient, which allows lessors to elect a combined single lease component presentation if (i) thetiming and pattern of the revenue recognition of the combined single lease component is the same, and (ii) the related lease component and, the combined singlelease component would be classified as an operating lease. As a result of this assessment, rental revenues and tenant recoveries from the lease of real estate assetsare accounted for as a single component. Lease incentives are amortized as a reduction of rental revenue over the respective tenant lease terms.66Termination fees (included in Other income in the consolidated statements of operations and comprehensive income) are fees that the Company has agreed toaccept in consideration for permitting certain tenants to terminate their lease prior to the contractual expiration date. The Company recognizes termination feeswhen the following conditions are met: (a) the termination agreement is executed; (b) the termination fee is determinable; (c) all landlord services pursuant to theterminated lease have been rendered; and (d) collectability of the termination fee is assured. Interest income is recognized as it is earned. Gains or losses ondisposition of properties are recorded when the criteria for recognizing such gains or losses have been met. The Company must make estimates as to the collectability of its accounts receivable related to base rent, straight-line rent, expense reimbursements and otherrevenues. Management analyzes accounts receivable by considering tenant creditworthiness, current economic trends, and changes in tenants’ payment patternswhen evaluating the adequacy of the allowance for doubtful accounts receivable. The Company also provides an allowance for future credit losses of the deferredstraight-line rents receivable. The provision for doubtful accounts at December 31, 2019 and December 31, 2018 was approximately $8.2 million and $6.9 million,respectively. Depreciation and Amortization The Company uses the straight-line method for depreciation and amortization. Buildings are depreciated over estimated useful lives which the Company estimatesto be 39-40 years. Property improvements are depreciated over estimated useful lives that range from 10 to 20 years. Furniture and fixtures are depreciated overthe estimated useful lives that range from 3 to 10 years. Tenant improvements are amortized over the shorter of the life of the related leases or their useful life. Deferred Leasing and Financing Costs Costs incurred in obtaining tenant leases (principally leasing commissions and acquired lease origination costs) are amortized ratably over the life of the tenantleases. Costs incurred in obtaining long-term financing are amortized ratably over the related debt agreement. The amortization of deferred leasing and financingcosts is included in Depreciation and amortization and Interest expense and other finance expenses, respectively, in the consolidated statements of operations andcomprehensive income. The unamortized balances of deferred leasing costs included in deferred charges in the Consolidated Balance Sheets as of December 31, 2019 that will be chargedto future operations are as follows (in thousands): Lease Origination Costs2020$5,804 20214,922 20224,115 20233,261 20242,523 Thereafter7,027 $27,652 Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and tenantreceivables. The Company places its cash and cash equivalents in excess of insured amounts with high quality financial institutions. The Company performsongoing credit evaluations of its tenants and requires tenants to provide security deposits.Earnings Per Share Basic earnings per share (“EPS”) excludes the impact of dilutive shares and is computed by dividing net income by the weighted average number of shares ofcommon stock outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue shares of commonstock were exercised or converted into shares of common stock and then shared in the earnings of the Company. For the years ended December 31, 2019, 2018 and 2017, basic EPS was determined by dividing net income allocable to common stockholders for the applicableperiod by the weighted average number of shares of common stock outstanding during67such period. Net income during the applicable period is also allocated to the time-based unvested restricted stock as these grants are entitled to receive dividendsand are therefore considered a participating security. Time-based unvested restricted stock is not allocated net losses and/or any excess of dividends declared overnet income; such amounts are allocated entirely to the common stockholders other than the holders of time-based unvested restricted stock. The performance-basedrestricted stock awards and LTIP Units outstanding under the Equity Incentive Plan described in Note 8 are excluded from the basic EPS calculation, as these unitsare not participating securities until they vest. The following table sets forth the reconciliation between basic and diluted EPS for ROIC (in thousands, except share data): Year Ended December 31, 201920182017Numerator: Net income$53,683 $47,141 $42,688 Less income attributable to non-controlling interests(4,839) (4,405) (4,211) Less earnings allocated to unvested shares(453) (401) (319) Net income available for common stockholders, basic$48,391 $42,335 $38,158 Numerator: Net income$53,683 $47,141 $42,688 Less earnings allocated to unvested shares(453) (401) (319) Net income available for common stockholders, diluted$53,230 $46,740 $42,369 Denominator: Denominator for basic EPS – weighted average common equivalent shares114,177,528 112,645,490 109,400,123 OP units11,334,408 11,626,312 12,060,835 Performance-based restricted stock awards and LTIP Units206,100 183,683 153,807 Stock options23,450 103,408 129,066 Denominator for diluted EPS – weighted average common equivalent shares125,741,486 124,558,893 121,743,831 Earnings Per Unit The following table sets forth the reconciliation between basic and diluted earnings per unit for the Operating Partnership (in thousands, except unit data):Year Ended December 31,201920182017Numerator: Net income$53,683 $47,141 $42,688 Less earnings allocated to unvested shares(453) (401) (319) Net income available to unitholders, basic and diluted$53,230 $46,740 $42,369 Denominator: Denominator for basic earnings per unit – weighted average common equivalent units125,511,936 124,271,802 121,460,958 Performance-based restricted stock awards and LTIP Units206,100 183,683 153,807 Stock options23,450 103,408 129,066 Denominator for diluted earnings per unit – weighted average common equivalent units125,741,486 124,558,893 121,743,831 Stock-Based Compensation The Company has a stock-based employee compensation plan, which is more fully described in Note 8. The Company accounts for its stock-based compensation plan based on the FASB guidance which requires that compensation expense be recognized based on thefair value of the stock awards less forfeitures. Restricted stock grants vest based upon the68completion of a service period (“time-based restricted stock grants”) and/or the Company meeting certain established market-indexed financial performancecriteria (“performance-based restricted stock grants”). Time-based grants are valued according to the market price for the Company’s common stock at the date ofgrant. For performance-based restricted stock grants, a Monte Carlo valuation model is used, taking into account the underlying contingency risks associated withthe performance criteria. It is the Company’s policy to grant options with an exercise price equal to the quoted closing market price of stock on the grant date. The Company has made certain separate awards in the form of units of limited partnership interests in its Operating Partnership called LTIP Units. The LTIP Unitsare subject to such conditions and restrictions as the compensation committee may determine, including continued employment or service, achievement of pre-established operational performance goals and market-indexed performance criteria. For the LTIP Units subject to market-indexed performance criteria (the“marked-indexed LTIP Units”), a Monte Carlo valuation model is used, taking into account the underlying contingency risks associated with the performancecriteria. All other LTIP Units (the “operational LTIP Units”) are valued according to the market price of the Company’s common stock at the date of grant.Awards of stock options, time-based restricted stock grants and operational LTIP Units are expensed as compensation on a straight-line basis over the requisiteservice period. Awards of performance-based restricted stock and market-indexed LTIP Units are expensed as compensation under the accelerated attributionmethod and are recognized in income regardless of the results of the performance criteria. Derivatives The Company records all derivatives on the balance sheets at fair value. The accounting for changes in the fair value of derivatives depends on the intended use ofthe derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedgingrelationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fairvalue of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designatedand qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flowhedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of thechanges in the fair value of the hedged asset or liability that are attributable to the hedged forecasted transactions in a cash flow hedge. When the Companyterminates a derivative for which cash flow hedging was being applied, the balance, which was recorded in Other comprehensive income, is amortized to interestexpense over the remaining contractual term of the derivative as long as the hedged forecasted transactions continue to be probable of occurring. The Companyincludes cash payments made to terminate interest rate derivatives as an operating activity on the statement of cash flows, given the nature of the underlying cashflows that the derivative was hedging. Segment Reporting The Company’s primary business is the ownership, management, and redevelopment of retail real estate properties. The Company reviews operating and financialinformation for each property on an individual basis and therefore, each property represents an individual operating segment. The Company evaluates financialperformance using property operating income, defined as operating revenues (base rent and recoveries from tenants), less property and related expenses (propertyoperating expenses and property taxes). The Company has aggregated the properties into one reportable segment as the properties share similar long-termeconomic characteristics and have other similarities including the fact that they are operated using consistent business strategies, are typically located in majormetropolitan areas, and have similar tenant mixes.69Consolidated Statements of Cash Flows - Supplemental DisclosuresThe following tables provides supplemental disclosures related to the consolidated statements of cash flows (in thousands):Year Ended December 31,201920182017Supplemental disclosure of cash activities: Cash paid on gross receipts and income for federal and state purposes$275 $291 $253 Interest paid$60,319 $60,494 $46,271 Other non-cash investing and financing activities increase (decrease): Issuance of OP Units in connection with acquisitions$— $— $49,599 Fair value of assumed mortgages upon acquisition$— $— $46,801 Intangible lease liabilities$— $1,680 $48,684 Interest rate swap asset$(4,931) $610 $3,446 Interest rate swap liabilities$3,285 $580 $— Accrued real estate improvement costs$3,222 $2,200 $3,568 Equity redemption of OP Units$2,632 $— $50,155 Disposition of real estate through issuance of mortgage note$13,250 $— $— ReclassificationsCertain reclassifications have been made to the prior period consolidated financial statements and notes to conform to the current year presentation. In connectionwith the adoption of ASU No. 2016-2 and the Company’s practical expedient election to have a combined single lease component presentation, the Companycombined Base rents and Recoveries from tenants into a single line item, Rental revenues, in its consolidated statements of operations and comprehensive income.2. Real Estate Investments The following real estate investment transactions occurred during the years ended December 31, 2019 and 2018. The Company evaluated the following acquisitions and determined that substantially all of the fair value related to each acquisition was concentrated in a singleidentifiable asset. The Company allocated the total consideration for each acquisition to the individual assets and liabilities acquired on a relative fair value basis.All transaction costs incurred in these acquisitions were capitalized.Property Asset Acquisitions in 2019On December 13, 2019, the Company acquired the property known as Summerwalk Village located in Lacey, Washington, within the Seattle metropolitan area,for an adjusted purchase price of approximately $11.6 million. Summerwalk Village is approximately 58,000 square feet and is anchored by WalmartNeighborhood Market. The property was acquired with borrowings under the credit facility.Property Asset Acquisitions in 2018 During the year ended December 31, 2018, the Company acquired two properties with a total of approximately 112,000 square feet for an adjusted purchase priceof approximately $35.0 million.70The financial information set forth below summarizes the Company’s purchase price allocation for the properties acquired during the years ended December 31,2019 and 2018 (in thousands). December 31, 20192018Assets Land$2,320 $7,666 Building and improvements9,281 35,629 Acquired lease intangible asset— 1,763 Deferred charges— 818 Assets acquired$11,601 $45,876 Liabilities Acquired lease intangible liability— 1,680 Liabilities assumed$— $1,680 The following table summarizes the operating results included in the Company’s historical consolidated statement of operations for the year ended December 31,2018 for the properties acquired during the year ended December 31, 2018 (in thousands). Year Ended December 31,2018Statement of operations: Revenues$2,343 Net income attributable to Retail Opportunity Investments Corp.$753 Property Dispositions in 2019On February 15, 2019, the Company sold Vancouver Market Center, a non-core shopping center located in Vancouver, Washington. The sales price of $17.0million, less costs to sell, resulted in net proceeds of approximately $16.0 million. The Company recorded a gain on sale of real estate of approximately $2.6million during the year ended December 31, 2019 related to this property disposition.On May 1, 2019, the Company sold Norwood Shopping Center, a non-core shopping center located in Sacramento, California for a sales price of $13.5 million. Inconnection with the sale of this property, the Company entered into a $13.3 million mortgage note with the buyer. The mortgage note is a four year interest onlynote whereby the interest rate increases 1% annually from 3% to 6%. The Company recorded a gain on sale of real estate of approximately $180,000 during theyear ended December 31, 2019 related to this property disposition.On August 1, 2019, the Company sold Morada Ranch, a non-core shopping center located in Stockton, California. The sales price of $30.0 million, less costs tosell, resulted in net proceeds of approximately $29.1 million. The Company recorded a gain on sale of real estate of approximately $10.4 million during the yearended December 31, 2019 related to this property disposition.On December 12, 2019, the Company sold Mission Foothill Marketplace, located in Mission Viejo, California, as a redevelopment property. The Companyretained ownership of two retail pads that will be the gateway to the buyer's planned single-family and townhome community. The sales price of approximately$13.6 million, less costs to sell, resulted in net proceeds of approximately $13.5 million.Property Dispositions in 2018On September 27, 2018, the Company sold Round Hill Square, a non-core shopping center located in Zephyr Cove, Nevada. The sales price of $28.0 million, lesscosts to sell, resulted in net proceeds of approximately $26.9 million. The Company recorded a gain on sale of real estate of approximately $5.9 million during theyear ended December 31, 2018 related to this property disposition. 71Any reference to square footage or occupancy is unaudited and outside the scope of our independent registered public accounting firm’s audit of the Company’sfinancial statements in accordance with the standards of the United States Public Company Accounting Oversight Board. 3. Acquired Lease Intangibles Intangible assets and liabilities as of December 31, 2019 and 2018 consisted of the following (in thousands): December 31, 20192018Assets: In-place leases$77,910 $92,354 Accumulated amortization(31,686) (36,835) Above-market leases25,039 30,093 Accumulated amortization(11,562) (13,503) Acquired lease intangible assets, net$59,701 $72,109 Liabilities: Below-market leases$198,272 $217,212 Accumulated amortization(53,515) (51,066) Acquired lease intangible liabilities, net$144,757 $166,146 For the years ended December 31, 2019, 2018 and 2017, the net amortization of acquired lease intangible assets and acquired lease intangible liabilities for aboveand below market leases was $15.6 million, $14.0 million and $17.1 million, respectively, which amounts are included in Rental revenue in the accompanyingconsolidated statements of operations and comprehensive income. For the years ended December 31, 2019, 2018 and 2017, the amortization of in-place leases was$8.1 million, $11.4 million and $14.4 million, respectively, which amounts are included in Depreciation and amortization in the accompanying consolidatedstatements of operations and comprehensive income.The scheduled future amortization of acquired lease intangible assets as of December 31, 2019 is as follows (in thousands):Year Ending December 31: 2020$5,179 20214,138 20223,440 20232,862 20242,458 Thereafter41,624 Total future amortization of acquired lease intangible assets$59,701 The scheduled future amortization of acquired lease intangible liabilities as of December 31, 2019 is as follows (in thousands):Year Ending December 31: 2020$12,289 202111,123 202210,229 20239,485 20249,324 Thereafter92,307 Total future amortization of acquired lease intangible liabilities$144,757 724. Tenant Leases Space in the Company’s shopping centers is leased to various tenants under operating leases that usually grant tenants renewal options and generally provide foradditional rents based on certain operating expenses as well as tenants’ sales volume.Future minimum rents to be received under non-cancellable leases as of December 31, 2019 are summarized as follows (in thousands):Year Ending December 31: 2020$201,202 2021183,897 2022159,296 2023130,882 202499,572 Thereafter415,762 Total minimum lease payments$1,190,611 5. Mortgage Notes Payable, Credit Facilities and Senior Notes ROIC does not hold any indebtedness. All debt is held directly or indirectly by the Operating Partnership; however, ROIC has guaranteed the OperatingPartnership’s term loan, unsecured revolving credit facility, carve-out guarantees on property-level debt, and the Senior Notes. Costs incurred in obtaining long-term financing are amortized ratably over the related debt agreement. The amortization of deferred financing costs is included in Interest expense and other financeexpenses in the consolidated statements of operations and comprehensive income.Mortgage Notes Payable The mortgage notes payable collateralized by respective properties and assignment of leases at December 31, 2019 and December 31, 2018, respectively, were asfollows (in thousands, except interest rates):Maturity DateInterest RateDecember 31,Property20192018Casitas Plaza Shopping CenterJune 20225.320 %$7,001 $7,158 Riverstone MarketplaceJuly 20224.960 %17,656 18,050 Fullerton CrossroadsApril 20244.728 %26,000 26,000 Diamond Hills PlazaOctober 20253.550 %35,500 35,500 86,157 86,708 Mortgage premiums 1,594 2,074 Net unamortized deferred financing costs (228) (271) Total mortgage notes payable $87,523 $88,511 The combined aggregate principal maturities of mortgage notes payable during the next five years and thereafter are as follows (in thousands): PrincipalRepaymentsScheduledAmortizationMortgagePremiumTotal2020$— $577 $481 $1,058 2021— 717 481 1,198 202223,129 1,003 344 24,476 2023— 686 216 902 202426,000 708 72 26,780 Thereafter32,787 550 — 33,337 Total$81,916 $4,241 $1,594 $87,751 73Term Loan and Credit Facility The carrying values of the Company’s unsecured term loan (the “term loan”) were as follows (in thousands):December 31, 20192018Term loan$300,000 $300,000 Net unamortized deferred financing costs(1,670) (924) Term loan$298,330 $299,076 The Company has an unsecured term loan agreement with several banks under which the lenders agreed to provide a $300.0 million unsecured term loan facility.Effective December 20, 2019, the Company entered into the First Amendment to First Amended and Restated Term Loan Agreement (as amended, the “TermLoan Agreement”) pursuant to which the maturity date of the term loan was extended from September 8, 2022 to January 20, 2025, without further options forextension. The Term Loan Agreement also provides that the Company may from time to time request increased aggregate commitments of $200.0 million undercertain conditions set forth in the Term Loan Agreement, including the consent of the lenders for the additional commitments. Borrowings under the Term LoanAgreement accrue interest on the outstanding principal amount at a rate equal to an applicable rate based on the credit rating level of the Company, plus, asapplicable, (i) a LIBOR rate determined by reference to the cost of funds for U.S. dollar deposits for the relevant period (the “Eurodollar Rate”), or (ii) a base ratedetermined by reference to the highest of (a) the federal funds rate plus 0.50%, (b) the rate of interest announced by the Administrative Agent as its “prime rate,”and (c) the Eurodollar Rate plus 1.00%.The carrying values of the Company’s unsecured revolving credit facility were as follows (in thousands):December 31, 20192018Credit facility$84,000 $156,000 Net unamortized deferred financing costs(3,257) (2,311) Credit facility$80,743 $153,689 The Operating Partnership has an unsecured revolving credit facility with several banks. Effective December 20, 2019, the Company entered into the FirstAmendment to Second Amended and Restated Credit Agreement (as amended, the “Credit Facility Agreement”) pursuant to which the borrowing capacity underthe credit facility is $600.0 million. The maturity date of the credit facility was extended from September 8, 2021 to February 20, 2024, with two six-monthextension options, which may be exercised by the Operating Partnership upon satisfaction of certain conditions including the payment of extension fees.Additionally, the credit facility contains an accordion feature, which allows the Operating Partnership to increase the borrowing capacity under the credit facilityup to an aggregate of $1.2 billion, subject to lender consents and other conditions. Borrowings under the credit facility accrue interest on the outstanding principalamount at a rate equal to an applicable rate based on the credit rating level of the Company, plus, as applicable, (i) the Eurodollar Rate, or (ii) a base ratedetermined by reference to the highest of (a) the federal funds rate plus 0.50%, (b) the rate of interest announced by KeyBank, National Association as its “primerate,” and (c) the Eurodollar Rate plus 0.90%. Additionally, the Operating Partnership is obligated to pay a facility fee at a rate based on the credit rating level ofthe Company, currently 0.20%, and a fronting fee at a rate of 0.125% per year with respect to each letter of credit issued under the credit facility. The Companyhas investment grade credit ratings from Moody’s Investors Service (Baa2) and Standard & Poor’s Ratings Services (BBB-).Both the term loan and credit facility contain customary representations, financial and other covenants. The Operating Partnership’s ability to borrow under theterm loan and credit facility are subject to its compliance with financial covenants and other restrictions on an ongoing basis. The Operating Partnership was incompliance with such covenants at December 31, 2019.As of December 31, 2019, $300.0 million and $84.0 million were outstanding under the term loan and credit facility, respectively. The weighted average interestrates on the term loan and the credit facility during the year ended December 31, 2019 were 3.4% and 3.3%, respectively. As discussed in Note 11 of theaccompanying financial statements, the Company uses interest rate swaps to manage its interest rate risk and accordingly, the swapped interest rate on the termloan is 3.0%. The74Company had no available borrowings under the term loan at December 31, 2019. The Company had $516.0 million available to borrow under the credit facility atDecember 31, 2019.Senior Notes Due 2027The carrying value of the Company’s unsecured Senior Notes Due 2027 is as follows (in thousands): December 31, 20192018Principal amount$250,000 $250,000 Net unamortized deferred financing costs(998) (1,123) Senior Notes Due 2027$249,002 $248,877 On November 10, 2017, the Operating Partnership entered into a Note Purchase Agreement which provided for the issuance of $250.0 million principal amount of4.19% Senior Notes Due 2027 (the “Senior Notes Due 2027”) in a private placement effective December 15, 2017. The Senior Notes Due 2027 pay interest onJune 15 and December 15 of each year, commencing on June 15, 2018, and mature on December 15, 2027, unless prepaid earlier by the Operating Partnership.The Operating Partnership’s performance of the obligations under the Note Purchase Agreement, including the payment of any outstanding indebtednessthereunder, are guaranteed, jointly and severally, by ROIC. The net proceeds were used to reduce borrowings under the credit facility.Senior Notes Due 2026The carrying value of the Company’s unsecured Senior Notes Due 2026 is as follows (in thousands): December 31, 20192018Principal amount$200,000 $200,000 Net unamortized deferred financing costs(191) (219) Senior Notes Due 2026$199,809 $199,781 On July 26, 2016, the Operating Partnership entered into a Note Purchase Agreement, as amended, which provided for the issuance of $200.0 million principalamount of 3.95% Senior Notes Due 2026 (the “Senior Notes Due 2026”) in a private placement effective September 22, 2016. The Senior Notes Due 2026 payinterest on March 22 and September 22 of each year, commencing on March 22, 2017, and mature on September 22, 2026, unless prepaid earlier by the OperatingPartnership. The Operating Partnership’s performance of the obligations under the Note Purchase Agreement, including the payment of any outstandingindebtedness thereunder, are guaranteed, jointly and severally, by ROIC. The net proceeds were used to reduce borrowings under the credit facility.Senior Notes Due 2024The carrying value of the Company’s unsecured Senior Notes Due 2024 is as follows (in thousands):December 31, 20192018Principal amount$250,000 $250,000 Unamortized debt discount(1,912) (2,252) Net unamortized deferred financing costs(1,094) (1,314) Senior Notes Due 2024$246,994 $246,434 On December 3, 2014, the Operating Partnership completed a registered underwritten public offering of $250.0 million aggregate principal amount of 4.000%Senior Notes due 2024 (the “Senior Notes Due 2024”), fully and unconditionally guaranteed by ROIC. The Senior Notes Due 2024 pay interest semi-annually onJune 15 and December 15, commencing on June 15, 2015, and mature on December 15, 2024, unless redeemed earlier by the Operating Partnership. The SeniorNotes Due752024 are the Operating Partnership’s senior unsecured obligations that rank equally in right of payment with the Operating Partnership’s other unsecuredindebtedness, and effectively junior to (i) all of the indebtedness and other liabilities, whether secured or unsecured, and any preferred equity of the OperatingPartnership’s subsidiaries, and (ii) all of the Operating Partnership’s indebtedness that is secured by its assets, to the extent of the value of the collateral securingsuch indebtedness outstanding. ROIC fully and unconditionally guaranteed the Operating Partnership’s obligations under the Senior Notes Due 2024 on a seniorunsecured basis, including the due and punctual payment of principal of, and premium, if any, and interest on, the notes, whether at stated maturity, uponacceleration, notice of redemption or otherwise. The guarantee is a senior unsecured obligation of ROIC and ranks equally in right of payment with all other seniorunsecured indebtedness of ROIC. ROIC’s guarantee of the Senior Notes Due 2024 is effectively subordinated in right of payment to all liabilities, whether securedor unsecured, and any preferred equity of its subsidiaries (including the Operating Partnership and any entity ROIC accounts for under the equity method ofaccounting). Senior Notes Due 2023 The carrying value of the Company’s unsecured Senior Notes Due 2023 is as follows (in thousands):December 31, 20192018Principal amount$250,000 $250,000 Unamortized debt discount(1,915) (2,339) Net unamortized deferred financing costs(1,040) (1,304) Senior Notes Due 2023$247,045 $246,357 On December 9, 2013, the Operating Partnership completed a registered underwritten public offering of $250.0 million aggregate principal amount of 5.000%Senior Notes due 2023 (the “Senior Notes Due 2023”), fully and unconditionally guaranteed by ROIC. The Senior Notes Due 2023 pay interest semi-annually onJune 15 and December 15, commencing on June 15, 2014, and mature on December 15, 2023, unless redeemed earlier by the Operating Partnership. The SeniorNotes Due 2023 are the Operating Partnership’s senior unsecured obligations that rank equally in right of payment with the Operating Partnership’s otherunsecured indebtedness, and effectively junior to (i) all of the indebtedness and other liabilities, whether secured or unsecured, and any preferred equity of theOperating Partnership’s subsidiaries, and (ii) all of the Operating Partnership’s indebtedness that is secured by its assets, to the extent of the value of the collateralsecuring such indebtedness outstanding. ROIC fully and unconditionally guaranteed the Operating Partnership’s obligations under the Senior Notes Due 2023 on asenior unsecured basis, including the due and punctual payment of principal of, and premium, if any, and interest on, the notes, whether at stated maturity, uponacceleration, notice of redemption or otherwise. The guarantee is a senior unsecured obligation of ROIC and will rank equally in right of payment with all othersenior unsecured indebtedness of ROIC. ROIC’s guarantee of the Senior Notes Due 2023 is effectively subordinated in right of payment to all liabilities, whethersecured or unsecured, and any preferred equity of its subsidiaries (including the Operating Partnership and any entity ROIC accounts for under the equity methodof accounting).The combined aggregate principal maturities of the Company’s unsecured senior notes payable during the next five years and thereafter are as follows (inthousands):Principal Repayments2020$— 2021— 2022— 2023250,000 2024250,000 Thereafter450,000 Total$950,000 76Deferred Financing CostsThe unamortized balances of deferred financing costs associated with the Company’s term loan, unsecured revolving credit facility, Senior Notes Due 2027, SeniorNotes Due 2026, Senior Notes Due 2024, Senior Notes Due 2023, and mortgage notes payable included as a direct reduction from the carrying amount of therelated debt instrument in the consolidated balance sheets as of December 31, 2019 that will be charged to future operations during the next five years andthereafter are as follows (in thousands): Financing Costs2020$1,799 20211,799 20221,796 20231,781 2024836 Thereafter467 $8,478 6. Preferred Stock of ROIC The Company is authorized to issue 50,000,000 shares of preferred stock with such designations, voting and other rights and preferences as may be determinedfrom time to time by the board of directors. As of December 31, 2019 and 2018, there were no shares of preferred stock outstanding.7. Common Stock of ROIC ATM On May 1, 2018, ROIC entered into five separate Sales Agreements (the “Sales Agreements”) with each of Capital One Securities, Inc., Jefferies LLC, KeyBancCapital Markets Inc., Raymond James & Associates, Inc., and Robert W. Baird & Co. Incorporated (each individually, an “Agent” and collectively, the “Agents”)pursuant to which ROIC may sell, from time to time, shares of ROIC’s common stock, par value $0.0001 per share, having an aggregate offering price of up to$250.0 million through the Agents either as agents or principals. In addition, on April 30, 2018, the Company terminated sales agreements with Jefferies, KeyBancand Raymond James, dated as of September 19, 2014 and with Baird, dated as of May 23, 2016 (the “Prior Sales Agreements”), which the Company entered into inconnection with its prior “at the market” offering.During the year ended December 31, 2019, ROIC sold a total of 1,861,036 shares under the Sales Agreements, which resulted in gross proceeds of approximately$34.2 million and commissions of approximately $342,000 paid to the Agents. During the year ended December 31, 2018, ROIC sold a total of 1,251,376 sharesunder the Sales Agreements, which resulted in gross proceeds of approximately $24.2 million and commissions of approximately $242,000 paid to the Agents. Stock Repurchase Program On July 31, 2013, ROIC’s board of directors authorized a stock repurchase program to repurchase up to a maximum of $50.0 million of the Company’s commonstock. Through the year ended December 31, 2019, the Company has not repurchased any shares of common stock under this program.8. Stock Compensation and Other Benefit Plans for ROIC ROIC follows the FASB guidance related to stock compensation which establishes financial accounting and reporting standards for stock-based employeecompensation plans, including all arrangements by which employees receive shares of stock or other equity instruments of the employer, or the employer incursliabilities to employees in amounts based on the price of the employer’s stock. The guidance also defines a fair value-based method of accounting for an employeestock option or similar equity instrument. In 2009, the Company adopted the 2009 Equity Incentive Plan. The 2009 Equity Incentive Plan provided for grants of restricted common stock and stock optionawards up to an aggregate of 7.5% of the issued and outstanding shares of ROIC’s77common stock at the time of the award, subject to a ceiling of 4,000,000 shares. The Company’s Annual Meeting of Stockholders was held on April 25, 2018 atwhich time the stockholders of the Company approved the Company’s Amended and Restated 2009 Equity Incentive Plan (the “Equity Incentive Plan”). The typesof awards that may be granted under the Equity Incentive Plan include stock options, restricted shares, share appreciation rights, phantom shares, dividendequivalent rights and other equity-based awards. The Equity Incentive Plan has a fungible unit system that counts the number of shares of the Company’s commonstock used in the issuance of full-value awards, such as restricted shares, differently than the number of shares of common stock used in the issuance of stockoptions. A total of 22,500,000 Fungible Units (as defined in the Equity Incentive Plan) are reserved for grant under the Equity Incentive Plan and the FungibleUnit-to-full-value award conversion ratio is 6.25 to 1.0. The Equity Incentive Plan will expire on April 25, 2028. Any available shares that had not been grantedunder the 2009 Equity Incentive Plan were incorporated into and made available for issuance under the Equity Incentive Plan.The Company has made certain awards in the form of a separate series of units of limited partnership interests in its Operating Partnership called LTIP Units,which can be granted either as free-standing awards or in tandem with other awards under the Equity Incentive Plan. The LTIP Units are subject to such conditionsand restrictions as the compensation committee may determine, including continued employment or service, achievement of pre-established operationalperformance goals and market-indexed performance criteria. Upon the occurrence of specified events and subject to the satisfaction of applicable vestingconditions, LTIP Units (after conversion into OP Units, in accordance with the Partnership Agreement) are ultimately redeemable for cash or for unregisteredshares of ROIC common stock, at the option of ROIC, on a one-for-one basis.Restricted Stock During the year ended December 31, 2019, ROIC awarded 354,161 shares of time-based restricted common stock under the Equity Incentive Plan. A summary of the status of the Company’s non-vested restricted stock awards as of December 31, 2019, and changes during the year ended December 31, 2019 arepresented below: SharesWeighted AverageGrant Date Fair ValueNon-vested as of December 31, 20181,002,835 $16.88 Granted354,161 $17.20 Vested(364,913) $19.06 Forfeited(37,286) $12.97 Non-vested as of December 31, 2019954,797 $16.55 As of December 31, 2019, there remained a total of approximately $6.1 million of unrecognized restricted stock compensation related to outstanding non-vestedrestricted stock grants awarded under the Equity Incentive Plan. Restricted stock compensation is expected to be expensed over a remaining weighted averageperiod of 1.6 years (irrespective of achievement of the performance conditions). The total fair value of restricted stock that vested during the years endedDecember 31, 2019, 2018 and 2017 was $5.8 million, $5.5 million and $6.3 million, respectively.LTIP UnitsDuring the year ended December 31, 2019, ROIC awarded 187,279 LTIP Units under the Equity Incentive Plan. The LTIP Units vest based on both pre-definedoperational and market-indexed performance criteria with a vesting date on January 1, 2022. The LTIP Units were issued at a weighted average grant date fairvalue of $16.27.As of December 31, 2019, there remained a total of approximately $2.4 million of unrecognized compensation expense related to outstanding non-vested LTIPsawarded under the Equity Incentive Plan. LTIP compensation expense is expected to be expensed over a remaining weighted average period of 2.0 years.Stock OptionsDuring the year ended December 31, 2019, a total of 186,000 options were exercised at a weighted average exercise price of $10.44. The total intrinsic value ofstock options exercised during the year ended December 31, 2019 was approximately $1.4 million.78Stock Based Compensation ExpenseFor the years ended December 31, 2019, 2018 and 2017, the amounts charged to expense for all stock based compensation totaled approximately $8.6 million, $7.4million and $6.2 million, respectively.Profit Sharing and Savings PlanDuring 2011, the Company established a profit sharing and savings plan (the “401K Plan”), which permits eligible employees to defer a portion of theircompensation in accordance with the Code. Under the 401K Plan, the Company made matching contributions on behalf of eligible employees. The Companymade contributions to the 401K Plan of approximately $87,000, $86,000 and $70,000 for the years ended December 31, 2019, 2018 and 2017, respectively.9. Capital of the Operating Partnership As of December 31, 2019, the Operating Partnership had 127,547,106 OP Units outstanding. ROIC owned an approximate 91.3% interest in the OperatingPartnership at December 31, 2019, or 116,496,016 OP Units. The remaining 11,051,090 OP Units are owned by other limited partners. A share of ROIC’scommon stock and the OP Units have essentially the same economic characteristics as they share equally in the total net income or loss and distributions of theOperating Partnership. As of December 31, 2019, subject to certain exceptions, holders are able to redeem their OP Units, at the option of ROIC, for cash or for unregistered shares ofROIC common stock on a one-for-one basis. If cash is paid in the redemption, the redemption price is equal to the average closing price on the NASDAQ StockMarket for shares of ROIC’s common stock over the ten consecutive trading days immediately preceding the date a redemption notice is received by ROIC.During the year ended December 31, 2019, ROIC received notices of redemption for a total of 425,951 OP Units. ROIC elected to redeem 282,761 OP Units incash, and accordingly, a total of approximately $5.0 million was paid during the year ended December 31, 2019 to the holder of the respective OP Units. Inaccordance with the Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership, the redemption value of the OP Units wascalculated based on the average closing price of ROIC’s common stock on the NASDAQ Stock Market for the ten consecutive trading days immediatelypreceding the date of receipt of the notice of redemption. ROIC elected to redeem the remaining 143,190 OP Units for shares of ROIC common stock on a one-for-one basis, and accordingly, 143,190 shares of ROIC common stock were issued. The redemption value of the OP Units owned by the limited partners as of December 31, 2019, not including ROIC, had such units been redeemedat December 31, 2019, was approximately $191.5 million, calculated based on the average closing price on the NASDAQ Stock Market of ROIC common stockfor the ten consecutive trading days immediately preceding December 31, 2019, which amounted to $17.33 per share. Retail Opportunity Investments GP, LLC, ROIC’s wholly-owned subsidiary, is the sole general partner of the Operating Partnership, and as the parent company,ROIC has the full and complete authority over the Operating Partnership’s day-to-day management and control. As the sole general partner of the OperatingPartnership, ROIC effectively controls the ability to issue common stock of ROIC upon redemption of any OP Units. The redemption provisions that permit ROICto settle the redemption of OP Units in either cash or common stock, in the sole discretion of ROIC, are further evaluated in accordance with applicable accountingguidance to determine whether temporary or permanent equity classification on the balance sheet is appropriate. The Company evaluated this guidance, includingthe ability, in its sole discretion, to settle in unregistered shares of common stock, and determined that the OP Units meet the requirements to qualify forpresentation as permanent equity.10. Fair Value of Financial Instruments The Company follows the FASB guidance that defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair valuemeasurements. The guidance applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements;accordingly, the standard does not require any new fair value measurements of reported balances. The guidance emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should bedetermined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptionsin fair value measurements, the guidance establishes a fair value hierarchy that distinguishes between market participant assumptions based on market dataobtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the79reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs areinputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quotedprices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interestrates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability,which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair valuemeasurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurementfalls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particularinput to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. The following disclosures of estimated fair value were determined by management, using available market information and appropriate valuation methodologies asdiscussed in Note 1. Considerable judgment is necessary to interpret market data and develop estimated fair value. Accordingly, the estimates presented herein arenot necessarily indicative of the amounts realizable upon disposition of the financial instruments. The use of different market assumptions or estimationmethodologies may have a material effect on the estimated fair value amounts.The carrying values of cash and cash equivalents, restricted cash, tenant and other receivables, deposits, prepaid expenses, other assets, accounts payable andaccrued expenses are reasonable estimates of their fair values because of the short-term nature of these instruments. The carrying values of the term loan andrevolving credit facility are deemed to be at fair value since the outstanding debt is directly tied to monthly LIBOR contracts. The fair value of the outstandingSenior Notes Due 2027 and Senior Notes Due 2026 at December 31, 2019 was approximately $246.7 million and $195.0 million, respectively, calculated usingsignificant inputs which are not observable in the market, or Level 3. The fair value of the outstanding Senior Notes Due 2024 and Senior Notes Due 2023 atDecember 31, 2019 was approximately $260.4 million and $269.3 million, respectively, based on inputs not quoted on active markets, but corroborated by marketdata, or Level 2. Assumed mortgage notes payable were recorded at their fair value at the time they were assumed. The Company’s outstanding mortgage notespayable were estimated to have a fair value of approximately $87.2 million with a weighted average interest rate of 3.8% as of December 31, 2019. These fair valuemeasurements fall within Level 3 of the fair value hierarchy.11. Derivative and Hedging Activities The Company’s objectives in using interest rate derivatives is to add stability to interest expense and to manage its exposure to interest rate movements. Toaccomplish this objective, the Company uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flowhedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreementswithout exchange of the underlying notional amount. The following is a summary of the terms of the Company’s current interest rate swaps as of December 31, 2019 (in thousands):Swap CounterpartyNotional AmountEffective DateMaturity DateInterest Rate Swap Agreements:Bank of Montreal$100,000 12/29/20178/31/2022U.S. Bank$100,000 12/29/20178/31/2022Regions Bank$50,000 1/31/20198/31/2022Royal Bank of Canada$50,000 1/31/20198/31/2022The changes in the fair value of derivatives that are designated as cash flow hedges are recorded in accumulated other comprehensive income (“AOCI”) and will besubsequently reclassified into earnings during the period in which the hedged forecasted transaction affects earnings. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows ofthe derivative. This analysis reflects the contractual terms of the derivative, including80the period to maturity, and uses observable market-based inputs, including interest rate curves, and implied volatilities. The fair value of interest rate swaps isdetermined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cashpayments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observablemarket interest rate curves. The Company incorporated credit valuation adjustments to appropriately reflect both its own non-performance risk and the respective counterparties non-performance risk in the fair value measurements. In adjusting the fair value of its derivative contract for the effect of non-performance risk, the Companyconsidered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees. Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the creditvaluation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by theCompany and its counterparties. However, as of December 31, 2019, the Company has assessed the significance of the impact of the credit valuation adjustmentson the overall valuation of its derivative position and has determined that the credit valuation adjustments are not significant to the overall valuation of itsderivatives. As a result, the Company has determined that its derivative valuation in its entirety is classified in Level 2 of the fair value hierarchy. The table below presents the Company’s assets and liabilities measured at fair value on a recurring basis, aggregated by the level in the fair value hierarchy withinwhich those measurements fall (in thousands). Quoted Prices inActive Markets forIdentical Assetsand Liabilities(Level 1)Significant OtherObservable Inputs(Level 2)SignificantUnobservable Inputs(Level 3)TotalDecember 31, 2019: LiabilitiesDerivative financial instruments$— $(3,865) $— $(3,865) December 31, 2018: Assets Derivative financial instruments$— $4,931 $— $4,931 LiabilitiesDerivative financial instruments$— $(580) $— $(580) Amounts paid, or received, to cash settle interest rate derivatives prior to their maturity date are recorded in AOCI at the cash settlement amount, and will bereclassified to interest expense as interest expense is recognized on the hedged debt. During the next twelve months, the Company estimates that $1.5 million willbe reclassified as an increase to interest expense related to the Company’s four outstanding swap arrangements and it’s previously cash-settled swap arrangements. The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the balance sheet as of December 31,2019 and 2018, respectively (in thousands):Derivatives designed as hedging instrumentsBalance sheet locationDecember 31, 2019 FairValueDecember 31, 2018 FairValueInterest rate productsOther assets$— $4,931 Interest rate productsOther liabilities$(3,865) $(580) 81Derivatives in Cash Flow Hedging Relationships The table below details the location in the financial statements of the gain or loss recognized on interest rate derivatives designated as cash flow hedges for theyears ended December 31, 2019, 2018, and 2017, respectively (in thousands). Amounts reclassified from other comprehensive income (“OCI”) due toineffectiveness are recognized as interest expense.Year Ended December 31, 201920182017Amount of (loss) gain recognized in OCI on derivatives$(7,348) $1,648 $3,665 Amount of (gain) loss reclassified from AOCI into interest$(345) $57 $1,920 12. Commitments and Contingencies In the normal course of business, from time to time, the Company is involved in legal actions relating to the ownership and operations of its properties. Inmanagement’s opinion, the liabilities, if any, that ultimately may result from such legal actions are not expected to have a material adverse effect on theconsolidated financial position, results of operations or liquidity of the Company. The Company has signed several ground leases in which the Company is the lessee for the land beneath all or a portion of the buildings for certain properties. Inaccordance with ASU 2016-02, the Company recorded a right-of-use asset and related lease liability for these ground leases as of January 1, 2019. As ofDecember 31, 2019, the Company’s weighted average remaining lease term is approximately 37.6 years and the weighted average discount rate used to calculatethe Company’s lease liability is approximately 5.2%. Rent expense under the Company’s ground leases was approximately $1.6 million, $1.9 million, and $1.5million for the years ended December 31, 2019, 2018, and 2017, respectively.The following table represents a reconciliation of the Company’s undiscounted future minimum annual lease payments under operating leases to the lease liabilityas of December 31, 2019 (in thousands): Operating Leases2020$1,287 20211,282 20221,304 20231,330 20241,335 Thereafter32,604 Total undiscounted future minimum lease payments39,142 Future minimum lease payments, discount(21,467) Lease liability$17,675 Tax Protection Agreements In connection with certain acquisitions from September 2013 through March 2017, the Company entered into Tax Protection Agreements with certain limitedpartners of the Operating Partnership. The Tax Protection Agreements require the Company, subject to certain exceptions, to indemnify the respective sellersreceiving OP Units against certain tax liabilities incurred by them, as calculated pursuant to the respective Tax Protection Agreements, for a period of 12 years(with respect to Tax Protection Agreements entered into in September 2013), or 10 years (with respect to Tax Protection Agreements entered into from December2014 through March 2017) from the date of the Tax Protection Agreements. If the Company were to trigger the tax protection provisions under these agreements,the Company would be required to pay damages in the amount of the taxes owed by these limited partners (plus additional damages in the amount of the taxesincurred as a result of such payment).Legal SettlementDuring the year ended December 31, 2019, the Company settled an ongoing lawsuit for approximately $1.4 million and accordingly, recorded a $950,000 chargeto Other expense in the accompanying consolidated statements of operations and comprehensive income during the year ended December 31, 2019.8213. Related Party Transactions The Company has entered into several lease agreements with an officer of the Company, whereby pursuant to the lease agreements, the Company is provided theuse of storage space. For the years ended December 31, 2019, 2018, and 2017, the Company incurred approximately $84,000, $74,000 and $52,000, respectively,of expenses relating to the agreements which were included in General and administrative expenses in the accompanying consolidated statements of operations andcomprehensive income.14. Quarterly Results of Operations (Unaudited) The unaudited quarterly results of operations for the years ended December 31, 2019 and 2018 for ROIC are as follows (in thousands, except share data): Year Ended December 31, 2019 March 31June 30September 30December 31Total revenues$76,053 $72,930 $72,438 $73,619 Net income$14,583 $8,346 $19,628 $11,126 Net income attributable to ROIC$13,250 $7,585 $17,858 $10,151 Basic and diluted income per share$0.12 $0.07 $0.16 $0.09 Year Ended December 31, 2018 March 31June 30September 30December 31Total revenues$74,395 $72,341 $73,904 $75,158 Net income$11,824 $8,102 $15,647 $11,568 Net income attributable to ROIC$10,702 $7,339 $14,194 $10,501 Basic and diluted income per share$0.09 $0.06 $0.12 $0.09 The unaudited quarterly results of operations for the years ended December 31, 2019 and 2018 for the Operating Partnership are as follows (in thousands, exceptunit data): Year Ended December 31, 2019 March 31June 30September 30December 31Total revenues$76,053 $72,930 $72,438 $73,619 Net income attributable to the Operating Partnership$14,583 $8,346 $19,628 $11,126 Basic and diluted income per unit$0.12 $0.07 $0.16 $0.09 Year Ended December 31, 2018 March 31June 30September 30December 31Total revenues$74,395 $72,341 $73,904 $75,158 Net income attributable to the Operating Partnership$11,824 $8,102 $15,647 $11,568 Basic and diluted income per unit$0.09 $0.06 $0.12 $0.09 15. Subsequent EventsOn February 18, 2020, the Company’s board of directors declared a cash dividend on its common stock of $0.20 per share, payable on March 30, 2020 to holdersof record on March 16, 2020.83SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATIONDecember 31, 2019(in thousands) Initial Cost to CompanyCost CapitalizedSubsequent toAcquisitionAmount at WhichCarried at Close ofPeriod Description and Location Encumbrances LandBuilding &Improvements LandBuilding &Improvements LandBuilding &Improvements Total (a)AccumulatedDepreciation (b)(1)Date ofAcquisitionParamount Plaza, CA$— $6,347 $10,274 $530 $2,127 $6,877 $12,401 $19,278 $3,997 12/22/2009Santa Ana Downtown Plaza, CA— 7,895 9,890 — 4,029 7,895 13,919 21,814 3,812 1/26/2010Meridian Valley Plaza, WA— 1,881 4,795 — 1,757 1,881 6,552 8,433 2,085 2/1/2010The Market at Lake Stevens,WA— 3,087 12,397 — 392 3,087 12,789 15,876 3,782 3/16/2010Pleasant Hill Marketplace, CA— 6,359 6,927 — 1,590 6,359 8,517 14,876 2,765 4/8/2010Happy Valley Town Center, OR— 11,678 27,011 — 2,906 11,678 29,917 41,595 8,317 7/14/2010Cascade Summit Town Square,OR— 8,853 7,732 — 482 8,853 8,214 17,067 2,952 8/20/2010Heritage Market Center, WA— 6,595 17,399 — 756 6,595 18,155 24,750 4,751 9/23/2010Claremont Promenade, CA— 5,975 1,019 183 4,388 6,158 5,407 11,565 2,763 9/23/2010Sycamore Creek, CA— 3,747 11,584 — 520 3,747 12,104 15,851 3,949 9/30/2010Gateway Village, CA— 5,917 27,298 — 1,247 5,917 28,545 34,462 7,450 12/16/2010Division Crossing, OR— 3,706 8,327 — 5,586 3,706 13,913 17,619 4,482 12/22/2010Halsey Crossing, OR (2)— — 7,773 — 7,793 — 15,566 15,566 3,701 12/22/2010Marketplace Del Rio,CA— 13,420 22,251 9 2,905 13,429 25,156 38,585 7,084 1/3/2011Pinole Vista Shopping Center,CA— 12,894 35,689 — 5,941 12,894 41,630 54,524 7,407 1/6/2011 /8/27/2018Desert Springs Marketplace, CA— 8,517 18,761 443 6,127 8,960 24,888 33,848 6,022 2/17/2011Mills Shopping Center, CA— 4,084 16,833 — 11,004 4,084 27,837 31,921 8,990 2/17/2011Renaissance Towne Centre, CA— 8,640 13,848 — 2,346 8,640 16,194 24,834 3,587 8/3/2011Country Club Gate Center, CA— 6,487 17,341 — 777 6,487 18,118 24,605 4,593 7/8/2011Canyon Park Shopping Center,WA— 9,352 15,916 — 9,013 9,352 24,929 34,281 6,443 7/29/2011Hawks Prairie Shopping Center,WA— 5,334 20,694 — 2,225 5,334 22,919 28,253 5,505 9/8/2011The Kress Building, WA— 5,693 20,866 — 4,839 5,693 25,705 31,398 7,043 9/30/2011Hillsboro Market Center, OR (2)— — 17,553 — 4,713 — 22,266 22,266 5,240 11/23/2011Gateway Shopping Center, WA(2)— 6,242 23,462 — 397 6,242 23,859 30,101 5,318 2/16/2012Euclid Plaza, CA— 7,407 7,753 — 3,117 7,407 10,870 18,277 3,470 3/28/2012Green Valley Station, CA— 1,685 8,999 — 785 1,685 9,784 11,469 2,676 4/2/2012Aurora Square, WA— 10,325 13,336 — 2,662 10,325 15,998 26,323 2,888 5/3/2012 /5/22/2014Marlin Cove Shopping Center,CA— 8,815 6,797 — 2,151 8,815 8,948 17,763 2,599 5/4/2012Seabridge Marketplace, CA— 5,098 17,164 — 3,584 5,098 20,748 25,846 4,485 5/31/2012The Village at Novato, CA— 5,329 4,412 — 1,833 5,329 6,245 11,574 1,246 7/24/2012Glendora Shopping Center, CA— 5,847 8,758 — 298 5,847 9,056 14,903 2,375 8/1/2012Wilsonville Old Town Square,OR— 4,181 15,394 — 1,396 4,181 16,790 20,971 3,440 8/1/201284 Initial Cost to CompanyCost CapitalizedSubsequent to AcquisitionAmount at Which Carriedat Close of Period Description andLocation Encumbrances LandBuilding &Improvements LandBuilding &Improvements LandBuilding &Improvements Total (a)AccumulatedDepreciation (b)(1)Date ofAcquisitionBay Plaza, CA— 5,454 14,857 — 1,084 5,454 15,941 21,395 3,577 10/5/2012Santa Teresa Village, CA— 14,965 17,162 — 6,500 14,965 23,662 38,627 5,597 11/8/2012Cypress Center West, CA— 15,480 11,819 124 2,051 15,604 13,870 29,474 3,618 12/7/2012Redondo Beach Plaza, CA— 16,242 13,625 72 297 16,314 13,922 30,236 3,141 12/28/2012Harbor Place Center, CA— 16,506 10,527 — 533 16,506 11,060 27,566 2,240 12/28/2012Diamond Bar TownCenter, CA— 9,540 16,795 — 3,775 9,540 20,570 30,110 5,585 2/1/2013Bernardo Heights Plaza,CA— 3,192 8,940 — 728 3,192 9,668 12,860 2,219 2/6/2013Canyon Crossing, WA— 7,941 24,659 — 2,959 7,941 27,618 35,559 6,814 4/15/2013Diamond Hills Plaza, CA35,500 15,458 29,353 — 872 15,458 30,225 45,683 5,818 4/22/2013Granada Shopping Center,CA— 3,673 13,459 — 842 3,673 14,301 17,974 3,005 6/27/2013Hawthorne Crossings, CA— 10,383 29,277 — 221 10,383 29,498 39,881 5,703 6/27/2013Robinwood ShoppingCenter, OR— 3,997 11,317 18 1,141 4,015 12,458 16,473 2,721 8/23/20135 Points Plaza, CA— 17,920 36,965 — 4,242 17,920 41,207 59,127 7,778 9/27/2013Crossroads ShoppingCenter, WA— 68,366 67,756 — 19,067 68,366 86,823 155,189 17,347 9/27/2013Peninsula Marketplace,CA— 14,730 19,214 — 1,979 14,730 21,193 35,923 4,162 11/1/2013Country Club Village, CA— 9,986 26,579 — 1,797 9,986 28,376 38,362 5,845 11/26/2013Plaza de la Canada, CA (2)— 10,351 24,819 — 1,233 10,351 26,052 36,403 4,567 12/13/2013Tigard Marketplace, OR— 13,587 9,603 — 692 13,587 10,295 23,882 2,533 2/18/2014Creekside Plaza, CA— 14,807 29,476 — 2,495 14,807 31,971 46,778 5,737 2/28/2014North Park Plaza, CA— 13,593 17,733 — 1,737 13,593 19,470 33,063 3,042 4/30/2014Fallbrook ShoppingCenter, CA (2)— 21,232 186,197 83 9,379 21,315 195,576 216,891 32,933 6/13/2014Moorpark Town Center,CA— 7,063 19,694 — 1,631 7,063 21,325 28,388 4,498 12/4/2014Mission FoothillMarketplace Pads, CA— 3,996 11,051 — 297 3,996 11,348 15,344 1,439 12/4/2014Wilsonville Town Center,OR— 10,334 27,101 — 602 10,334 27,703 38,037 4,553 12/11/2014Park Oaks ShoppingCenter, CA— 8,527 38,064 — 569 8,527 38,633 47,160 5,934 1/6/2016Ontario Plaza, CA— 9,825 26,635 — 1,470 9,825 28,105 37,930 4,644 1/6/2015Winston Manor, CA— 10,018 9,762 — 2,132 10,018 11,894 21,912 2,053 1/7/2015Jackson Square, CA— 6,886 24,558 — 1,111 6,886 25,669 32,555 3,632 7/1/2015Tigard Promenade, OR— 9,844 10,843 — 245 9,844 11,088 20,932 1,517 7/28/2015Sunnyside Village Square,OR— 4,428 13,324 — 3,856 4,428 17,180 21,608 2,875 7/28/2015Gateway Centre, CA— 16,275 28,308 — 4,178 16,275 32,486 48,761 4,231 9/1/2015Johnson Creek Center, OR— 9,009 22,534 — 1,391 9,009 23,925 32,934 3,308 11/9/2015Iron Horse Plaza, CA— 8,187 39,654 11 2,519 8,198 42,173 50,371 4,732 12/4/2015Bellevue Marketplace, WA— 10,488 39,119 — 10,162 10,488 49,281 59,769 5,515 12/10/2015Four Corner Square, WA— 9,926 31,415 — 491 9,926 31,906 41,832 4,106 12/21/2015Warner Plaza, CA— 16,104 60,188 — 9,266 16,104 69,454 85,558 8,460 12/31/2015Magnolia ShoppingCenter, CA— 12,501 27,040 — 2,046 12,501 29,086 41,587 3,621 3/10/201685 Initial Cost to CompanyCost CapitalizedSubsequent toAcquisitionAmount at Which Carriedat Close of Period Description and Location Encumbrances LandBuilding &Improvements LandBuilding &Improvements LandBuilding &Improvements Total (a)AccumulatedDepreciation (b)(1)Date ofAcquisitionCasitas Plaza ShoppingCenter, CA7,001 10,734 22,040 — 1,431 10,734 23,471 34,205 2,626 3/10/2016Bouquet Center, CA— 10,040 48,362 — 606 10,040 48,968 59,008 5,373 4/28/2016North Ranch ShoppingCenter, CA— 31,522 95,916 — 1,826 31,522 97,742 129,264 9,622 6/1/2016Monterey Center, CA (2)— 1,073 10,609 — 237 1,073 10,846 11,919 1,080 7/14/2016Rose City Center, OR (2)— 3,637 10,301 — (78) 3,637 10,223 13,860 987 9/15/2016The Knolls, CA— 9,726 18,299 — 21 9,726 18,320 28,046 1,827 10/3/2016Bridle Trails ShoppingCenter, WA— 11,534 20,700 — 7,906 11,534 28,606 40,140 2,586 10/17/2016Torrey Hills CorporateCenter, CA— 5,579 3,915 — 2,435 5,579 6,350 11,929 1,320 12/6/2016PCC Community MarketsPlaza, WA— 1,856 6,914 — 7 1,856 6,921 8,777 657 1/25/2017The Terraces, CA— 18,378 37,103 — 1,423 18,378 38,526 56,904 3,291 3/17/2017Santa Rosa SouthsideShopping Center, CA— 5,595 24,453 — 1,788 5,595 26,241 31,836 2,057 3/24/2017Division Center, OR— 6,917 26,098 — 2,086 6,917 28,184 35,101 2,353 4/5/2017Highland Hill ShoppingCenter, WA— 10,511 37,825 29 382 10,540 38,207 48,747 3,210 5/9/2017Monta Loma Plaza, CA— 18,226 11,113 — 140 18,226 11,253 29,479 784 9/19/2017Fullerton Crossroads, CA26,000 28,512 45,419 — 476 28,512 45,895 74,407 3,205 10/11/2017Riverstone Marketplace, WA17,656 5,113 27,594 — 277 5,113 27,871 32,984 1,876 10/11/2017North Lynnwood ShoppingCenter, WA— 4,955 10,335 9 710 4,964 11,045 16,009 766 10/19/2017The Village at Nellie GailRanch, CA— 22,730 22,578 — 1,387 22,730 23,965 46,695 1,528 11/30/2017Stadium Center, WA— 1,699 17,229 7 87 1,706 17,316 19,022 861 2/23/2018King City Plaza, OR— 5,161 10,072 — 43 5,161 10,115 15,276 570 5/18/2018Summerwalk Village, WA— 2,320 9,281 — 4 2,320 9,285 11,605 20 12/13/2019 $86,157 $878,022 $2,023,831 $1,518 $228,470 $879,540 $2,252,301 $3,131,841 $390,916 a.RECONCILIATION OF REAL ESTATE – OWNED SUBJECT TO OPERATING LEASES (in thousands) Year Ended December 31, 201920182017Balance at beginning of period:$3,160,472 $3,109,397 $2,687,018 Property improvements during the year37,985 40,300 54,481 Properties acquired during the year11,601 43,387 374,004 Properties sold during the year(69,056) (24,427) — Assets written off during the year(9,161) (8,185) (6,106) Balance at end of period:$3,131,841 $3,160,472 $3,109,397 86b.RECONCILIATION OF ACCUMULATED DEPRECIATION (in thousands) Year Ended December 31, 201920182017Balance at beginning of period:$329,207 $260,115 $193,021 Depreciation expenses82,419 81,107 72,725 Properties sold during the year(10,775) (3,551) — Property assets fully depreciated and written off(9,935) (8,464) (5,631) Balance at end of period:$390,916 $329,207 $260,115 (1)Depreciation and investments in building and improvements reflected in the consolidated statements of operations is calculated over the estimated useful lifeof the assets as follows:Building: 39-40 yearsProperty Improvements: 10-20 years (2)Property, or a portion thereof, is subject to a ground lease.(3)The aggregate cost for Federal Income Tax Purposes for real estate was approximately $2.9 billion at December 31, 2019.87SCHEDULE IV – MORTGAGE LOANS ON REAL ESTATEDecember 31, 2019(in thousands)a.RECONCILIATION OF MORTGAGE LOANS ON REAL ESTATE (in thousands)Year Ended December 31,201920182017Balance at beginning of period:$— $— $— Mortgage loans acquired during the current period13,250 — — Repayments on mortgage note receivable(250) — — Balance at end of period:$13,000 $— $— Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures (Retail Opportunity Investments Corp.) ROIC maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its reports filed under the SecuritiesExchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and ExchangeCommission’s rules and forms, and that such information is accumulated and communicated to its management, including its Chief Executive Officer and ChiefFinancial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures,ROIC’s management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achievingthe desired control objectives, and its management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. ROIC’s Chief Executive Officer and Chief Financial Officer, based on their evaluation of ROIC’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) required by paragraph (b) of Rule 13a-15 or Rule 15d-15, have concluded that as of the end of the period covered bythis report, ROIC’s disclosure controls and procedures were effective to give reasonable assurances to the timely collection, evaluation and disclosure ofinformation relating to ROIC that would potentially be subject to disclosure under the Exchange Act and the rules and regulations promulgated thereunder. During the year ended December 31, 2019, there was no change in ROIC’s internal control over financial reporting that has materially affected, or is reasonablylikely to materially affect, ROIC’s internal control over financial reporting. Evaluation of Disclosure Controls and Procedures (Retail Opportunity Investments Partnership, LP) The Operating Partnership maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its reports filedunder the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the U.S. Securitiesand Exchange Commission’s rules and forms, and that such information is accumulated and communicated to its management, including its Chief ExecutiveOfficer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls andprocedures, the Operating Partnership’s management recognizes that any controls and procedures, no matter how well designed and operated, can provide onlyreasonable assurance of achieving the desired control objectives, and its management is required to apply its judgment in evaluating the cost-benefit relationship ofpossible controls and procedures. The Company’s Chief Executive Officer and Chief Financial Officer, based on their evaluation of the Operating Partnership’s disclosure controls and procedures(as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) required by paragraph (b) of Rule 13a-15 or Rule 15d-15, have concluded that as of the endof the period covered by this report, the Operating Partnership’s disclosure controls and procedures were effective to give reasonable assurances to the timelycollection, evaluation and disclosure of information relating to the Operating Partnership that would potentially be subject to disclosure under the Exchange Actand the rules and regulations promulgated thereunder. 88During the year ended December 31, 2019, there was no change in the Operating Partnership’s internal control over financial reporting that has materially affected,or is reasonably likely to materially affect, the Operating Partnership’s internal control over financial reporting.Management’s Report on Internal Control over Financial Reporting (Retail Opportunity Investments Corp.) Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of ROIC’s management, including the Chief Executive Officer and Chief Financial Officer,ROIC conducted an evaluation of the effectiveness of its internal control over financial reporting as of December 31, 2019 based on the framework in InternalControl-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework). Based on that evaluation,Management concluded that its internal control over financial reporting was effective as of December 31, 2019. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectivenessto future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies orprocedures may deteriorate. The effectiveness of internal control over financial reporting as of December 31, 2019, has been audited by Ernst & Young LLP, an independent registered publicaccounting firm, as stated in its report which appears on page 50 of this Annual Report on Form 10-K. Management’s Report on Internal Control over Financial Reporting (Retail Opportunity Investments Partnership, LP) Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of the Operating Partnership’s management, including the Chief Executive Officer and ChiefFinancial Officer of ROIC, the Operating Partnership conducted an evaluation of the effectiveness of its internal control over financial reporting as ofDecember 31, 2019 based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the TreadwayCommission (2013 Framework). Based on that evaluation, Management concluded that its internal control over financial reporting was effective as ofDecember 31, 2019. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectivenessto future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies orprocedures may deteriorate. Changes in Internal Control over Financial Reporting There was no change in ROIC’s or the Operating Partnership’s internal control over financial reporting (as such term is defined in Exchange Act Rule 13a-15(f))that occurred during its most recent quarter that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.Item 9B. Other Information None.PART III Item 10. Directors, Executive Officers and Corporate Governance Information required by this Item is hereby incorporated by reference to the material appearing in the Proxy Statement for the Company’s 2020 Annual Meeting ofStockholders to be filed within 120 days after December 31, 2019. Item 11. Executive Compensation Information required by this Item is hereby incorporated by reference to the material appearing in the Proxy Statement for the Company’s 2020 Annual Meeting ofStockholders to be filed within 120 days after December 31, 2019.89Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Information required by this Item is hereby incorporated by reference to the material appearing in the Proxy Statement for the Company’s 2020 Annual Meeting ofStockholders to be filed within 120 days after December 31, 2019.Item 13. Certain Relationships and Related Transactions, and Director Independence Information required by this Item is hereby incorporated by reference to the material appearing in the Proxy Statement for the Company’s 2020 Annual Meeting ofStockholders to be filed within 120 days after December 31, 2019.Item 14. Principal Accounting Fees and Services Information required by this Item is hereby incorporated by reference to the material appearing in the Proxy Statement for the Company’s 2020 Annual Meeting ofStockholders to be filed within 120 days after December 31, 2019.PART IVItem 15. Exhibits and Financial Statement Schedule (a)(1) and (2) Financial Statements and Schedule Please refer to the Index to Consolidated Financial Statements included under Part II, Item 8. Financial Statements and Supplementary Data. (a)(3) Exhibits2.1Articles of Merger, by and between Retail Opportunity Investments Corp., a Delaware corporation, and Retail Opportunity Investments Corp., aMaryland corporation, as survivor, dated as of June 1, 2011 (2)3.1Articles of Amendment and Restatement (2)3.2Bylaws (2)3.3Second Amended and Restated Limited Partnership Agreement of Retail Opportunity Investments Partnership, LP, by and among RetailOpportunity Investments GP, LLC as general partner, Retail Opportunity Investments Corp. and the other limited partners thereto, dated as ofSeptember 27, 2013 (5)3.4Second Amendment to the Second Amended and Restated Limited Partnership Agreement of Retail Opportunity Investments Partnership, LP,dated as of December 4, 2015 (10)3.5Third Amendment to the Second Amended and Restated Limited Partnership Agreement of Retail Opportunity Investments Partnership, LP, datedas of December 10, 2015 (10)3.6Fourth Amendment to the Second Amended and Restated Limited Partnership Agreement of Retail Opportunity Investments Partnership, LP, datedas of December 31, 2015 (10)3.7Fifth Amendment to the Second Amended and Restated Limited Partnership Agreement of Retail Opportunity Investments Partnership, LP, datedas of March 10, 2016 (11)3.8Sixth Amendment to the Second Amended and Restated Limited Partnership Agreement of Retail Opportunity Investments Partnership, LP, datedas of March 24, 2017 (14)3.9Seventh Amendment to the Second Amended and Restated Limited Partnership Agreement of Retail Opportunity Investments Partnership, LP,dated as of October 11, 2017 (16)4.1Specimen Unit Certificate (1)4.2Specimen Common Stock Certificate (1)4.3Indenture, by and among Retail Opportunity Investments Corp., Retail Opportunity Investments Partnership, LP and Wells Fargo Bank, NationalAssociation, dated as of December 9, 2013 (6)4.4First Supplemental Indenture, by and among Retail Opportunity Investments Partnership, LP, Retail Opportunity Investments Corp. and WellsFargo Bank, National Association, dated as of December 9, 2013 (6)904.55.000% Senior Notes due 2023 of Retail Opportunity Investments Partnership, LP, guaranteed by Retail Opportunity Investments Corp., dated asof December 9, 2013 (7)4.6Second Supplemental Indenture, by and among Retail Opportunity Investments Partnership, LP, Retail Opportunity Investments Corp. and WellsFargo Bank, National Association (including Form of 4.000% Senior Notes due 2024 of Retail Opportunity Investments Partnership, LP,guaranteed by Retail Opportunity Investments Corp.), dated as of December 3, 2014 (8)4.7*Description of Securities10.12009 Equity Incentive Plan (1)10.2Amended and Restated 2009 Equity Incentive Plan (19)10.3Form of Restricted Stock Award Agreement under 2009 Equity Incentive Plan and Amended and Restated 2009 Equity Incentive Plan (1)10.4Form of Option Award Agreement under 2009 Equity Incentive Plan and Amended and Restated 2009 Equity Incentive Plan (1)10.5Letter Agreement, by and between Retail Opportunity Investments Corp. and Richard A. Baker, dated as of April 2, 2012 (3)10.6Letter Agreement, by and between Retail Opportunity Investments Corp. and Laurie Sneve, dated as of October 24, 2012 (4)10.7Tax Protection Agreement, by and among Retail Opportunity Investments Corp., Retail Opportunity Investments Partnership, LP and theprotected partners identified therein, dated as of September 27, 2013 (5)10.8Tax Protection Agreement, by and among Retail Opportunity Investments Corp., Retail Opportunity Investments Partnership, LP and theprotected partners identified therein, dated as of September 27, 2013 (5)10.9Registration Rights Agreement, by and among Retail Opportunity Investments Corp. and the holders named therein, dated as of September 27,2013 (5)10.10Registration Rights Agreement, by and among Retail Opportunity Investments Corp. and the holders named therein, dated as of September 27,2013 (5)10.11Tax Protection Agreement, by and among Retail Opportunity Investments Corp., Retail Opportunity Investments Partnership, LP and theprotected partners identified therein, dated as of December 11, 2014 (9)10.12Registration Rights Agreement, by and among Retail Opportunity Investments Corp. and the holder named therein, dated as of December 11,2014 (9)10.13Tax Protection Agreement, by and among Retail Opportunity Investments Corp., Retail Opportunity Investments Partnership, LP and theprotected partners identified therein, dated as of December 4, 2015 (10)10.14Registration Rights Agreement, by and among Retail Opportunity Investments Corp. and the holders named therein, dated as of December 4,2015 (10)10.15Tax Protection Agreement, by and among Retail Opportunity Investments Corp., Retail Opportunity Investments Partnership, LP and theprotected partners identified therein, dated as of December 10, 2015 (10)10.16Registration Rights Agreement, by and among Retail Opportunity Investments Corp. and the holders named therein, dated as of December 10,2015 (10)10.17Tax Protection Agreement, by and among Retail Opportunity Investments Corp., Retail Opportunity Investments Partnership, LP and theprotected partner identified therein, dated as of December 31, 2015 (10)10.18Registration Rights Agreement, by and among Retail Opportunity Investments Corp. and the holder named therein, dated as of December 31,2015 (10)10.19Tax Protection Agreement, by and among Retail Opportunity Investments Corp., Retail Opportunity Investments Partnership, LP and theprotected partner identified therein, dated as of March 10, 2016 (11)10.20Registration Rights Agreement, by and among Retail Opportunity Investments Corp. and the holder named therein, dated as of March 10, 2016 (11)10.21Amended and Restated Note Purchase Agreement, dated as of September 22, 2016, by and among Retail Opportunity Investments Partnership,LP, Retail Opportunity Investments Corp and the purchasers named therein (12)9110.22Employment Agreement, dated as of March 21, 2017, by and between the Company and Stuart A. Tanz (13)10.23Employment Agreement, dated as of March 21, 2017, by and between the Company and Richard K. Schoebel (13)10.24Employment Agreement, dated as of March 21, 2017, by and between the Company and Michael B. Haines (13)10.25First Amendment to Second Amended and Restated Credit Agreement, by and among Retail Opportunity Investments Corp., as the guarantor,and Retail Opportunity Investments Partnership, LP, as the borrower, KeyBank National Association, as Administrative Agent, Swing LineLender and L/C Issuer, PNC Bank National Association and U.S. Bank National Association, as Co-Syndication Agents and the other lendersparty thereto, dated as of December 20, 2019 (21)10.26First Amendment to First Amended and Restated Term Loan Agreement, by and among Retail Opportunity Investments Corp., as the ParentGuarantor, Retail Opportunity Investments Partnership, LP, as the Borrower, KeyBank National Association, as Administrative Agent, BMOCapital Markets and Regions Bank, as Co-Syndication Agents, Capital One, National Association, as Documentation Agent, and the otherlenders party thereto, dated as of December 20, 2019 (21)10.27Second Amended and Restated Credit Agreement, by and among Retail Opportunity Investments Corp., as the guarantor, and Retail OpportunityInvestments Partnership, LP, as the borrower, KeyBank National Association, as Administrative Agent, Swing Line Lender and L/C Issuer, PNCBank National Association and U.S. Bank National Association, as Co-Syndication Agents and the other lenders party thereto, dated as ofSeptember 8, 2017 (15)10.28First Amended and Restated Term Loan Agreement, by and among Retail Opportunity Investments Corp., as the Parent Guarantor, RetailOpportunity Investments Partnership, LP, as the Borrower, KeyBank National Association, as Administrative Agent, BMO Capital Markets andRegions Bank, as Co-Syndication Agents, Capital One, National Association, as Documentation Agent, and the other lenders party thereto, datedas of September 8, 2017 (15)10.29First Amendment, dated as of September 8, 2017 to the Amended and Restated Note Purchase Agreement, dated as of September 22, 2016, byand among Retail Opportunity Investments Partnership, LP, Retail Opportunity Investments Corp and the purchasers named therein (17)10.30Note Purchase Agreement, dated as of November 10, 2017, by and among Retail Opportunity Investments Partnership, LP, Retail OpportunityInvestments Corp. and the purchasers named therein (18)10.31Sales Agreement, dated May 1, 2018, by and among Retail Opportunity Investments Corp., Retail Opportunity Investments Partnership, LP andCapital One Securities, Inc. (20)10.32Sales Agreement, dated May 1, 2018, by and among Retail Opportunity Investments Corp., Retail Opportunity Investments Partnership, LP andJefferies LLC (20)10.31Sales Agreement, dated May 1, 2018, by and among Retail Opportunity Investments Corp., Retail Opportunity Investments Partnership, LP andKeyBanc Capital Markets Inc. (20)10.33Sales Agreement, dated May 1, 2018, by and among Retail Opportunity Investments Corp., Retail Opportunity Investments Partnership, LP andRaymond James & Associates, Inc. (20)10.34Sales Agreement, dated May 1, 2018, by and among Retail Opportunity Investments Corp., Retail Opportunity Investments Partnership, LP andRobert W. Baird & Co. Incorporated (20)21.1*List of Subsidiaries of Retail Opportunity Investments Corp.23.1*Consent of Ernst & Young LLP for Retail Opportunity Investments Corp.23.2*Consent of Ernst & Young LLP for Retail Opportunity Investments Partnership, LP31.1*Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act31.2*Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act32.1**Certifications pursuant to Section 1350101 SCHInline XBRL Taxonomy Extension Schema Document92101 CALInline XBRL Taxonomy Extension Calculation Linkbase Document101 DEFInline Taxonomy Extension Definition Linkbase Document101 LABInline XBRL Taxonomy Extension Label Linkbase Document101 PREInline XBRL Taxonomy Extension Presentation Linkbase Document104The cover page from this Annual Report on Form 10-K for the year ended December 31, 2019, formatted in Inline XBRL (and contained inExhibit 101)________________________ (1)Incorporated by reference to the Company’s current report on Form 8-K filed on October 26, 2009.(2)Incorporated by reference to the Company’s current report on Form 8-K filed on June 3, 2011.(3)Incorporated by reference to the Company’s current report on Form 8-K filed on April 5, 2012.(4)Incorporated by reference to the Company’s current report on Form 8-K filed on January 3, 2013.(5)Incorporated by reference to the Company’s current report on Form 8-K filed on October 2, 2013.(6)Incorporated by reference to the Company’s current report on Form 8-K filed on December 9, 2013.(7)Incorporated by reference to the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2013, filed on February 25, 2014.(8)Incorporated by reference to the Company’s current report on Form 8-K filed on December 3, 2014.(9)Incorporated by reference to the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2014, filed on February 25, 2015.(10)Incorporated by reference to the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2015, filed on February 24, 2016.(11)Incorporated by reference to the Company’s current report on Form 8-K filed on March 16, 2016.(12)Incorporated by reference to the Company’s quarterly report on Form 10-Q for the fiscal quarter ended September 30, 2016 filed on October 26, 2016.(13)Incorporated by reference to the Company’s current report on Form 8-K filed on March 24, 2017.(14)Incorporated by reference to the Company’s quarterly report on Form 10-Q for the fiscal quarter ended March 31, 2017 filed on April 27, 2017.(15)Incorporated by reference to the Company’s current report on Form 8-K filed on September 13, 2017.(16)Incorporated by reference to the Company’s current report on Form 8-K filed on October 17, 2017.(17)Incorporated by reference to the Company’s quarterly report on Form 10-Q for the fiscal quarter ended September 30, 2017 filed on October 25, 2017.(18)Incorporated by reference to the Company’s current report on Form 8-K filed on November 13, 2017.(19)Incorporated by reference to the Company’s current report on Form 8-K filed on May 1, 2018.(20)Incorporated by reference to the Company’s current report on Form 8-K filed on May 2, 2018.(21)Incorporated by reference to the Company’s current report on Form 8-K filed on December 27, 2019.* Filed herewith.** Furnished with this report.+ Unless otherwise noted, all exhibits have File No. 001-33479.Item 16. Form 10-K Summary None.93SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed onits behalf by the undersigned, thereunto duly authorized. RETAIL OPPORTUNITY INVESTMENTS CORP.RegistrantDate: February 19, 2020By: /s/ Stuart A. Tanz Stuart A. Tanz President and Chief Executive Officer (Principal Executive Officer) 94POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Stuart A. Tanz and Michael B. Haines,and each of them, with full power to act without the other, such person’s true and lawful attorneys-in-fact and agents, with full power of substitution andresubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign this Form 10-K and any and all amendments thereto, and tofile the same, with exhibits and schedule thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto saidattorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing necessary or desirable to be done in andabout the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact andagents, or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of theRegistrant and in the capacities and on the dates indicated.Date: February 19, 2020/s/ Richard A. Baker Richard A. Baker Non-Executive Chairman of the BoardDate: February 19, 2020/s/ Stuart A. Tanz Stuart A. Tanz President, Chief Executive Officer and Director (Principal Executive Officer)Date: February 19, 2020/s/ Michael B. Haines Michael B. Haines Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) Date: February 19, 2020/s/ Laurie A. Sneve Laurie A. Sneve Chief Accounting OfficerDate: February 19, 2020/s/ Michael J. Indiveri Michael J. Indiveri DirectorDate: February 19, 2020/s/ Edward H. Meyer Edward H. Meyer Director Date: February 19, 2020/s/ Lee S. Neibart Lee S. Neibart Director 95Date: February 19, 2020/s/ Charles J. Persico Charles J. Persico Director Date: February 19, 2020/s/ Laura H. Pomerantz Laura H. Pomerantz Director Date: February 19, 2020/s/ Eric S. Zorn Eric S. Zorn Director 96SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed onits behalf by the undersigned, thereunto duly authorized. RETAIL OPPORTUNITY INVESTMENTS PARTNERSHIP, LP, by RetailOpportunity Investments GP, LLC, its sole general partnerRegistrant Date: February 19, 2020By: /s/ Stuart A. Tanz Stuart A. Tanz President and Chief Executive Officer (Principal Executive Officer) 97POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Stuart A. Tanz and Michael B. Haines,and each of them, with full power to act without the other, such person’s true and lawful attorneys-in-fact and agents, with full power of substitution andresubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign this Form 10-K and any and all amendments thereto, and tofile the same, with exhibits and schedule thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto saidattorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing necessary or desirable to be done in andabout the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact andagents, or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of theRegistrant and in the capacities and on the dates indicated. Date: February 19, 2020/s/ Richard A. Baker Richard A. Baker Non-Executive Chairman of the Board Date: February 19, 2020/s/ Stuart A. Tanz Stuart A. Tanz President, Chief Executive Officer and Director (Principal Executive Officer) Date: February 19, 2020/s/ Michael B. Haines Michael B. Haines Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) Date: February 19, 2020/s/ Laurie A. Sneve Laurie A. Sneve Chief Accounting OfficerDate: February 19, 2020/s/ Michael J. Indiveri Michael J. Indiveri DirectorDate: February 19, 2020/s/ Edward H. Meyer Edward H. Meyer DirectorDate: February 19, 2020/s/ Lee S. Neibart Lee S. Neibart Director Date: February 19, 2020/s/ Charles J. Persico Charles J. Persico Director98 Date: February 19, 2020/s/ Laura H. Pomerantz Laura H. Pomerantz Director Date: February 19, 2020/s/ Eric S. Zorn Eric S. Zorn Director99EXHIBIT 4.7DESCRIPTION OF SECURITIES OF RETAIL OPPORTUNITY INVESTMENTS CORP.The following description of the material terms of the common stock, par value $0.0001 per share, of Retail Opportunity Investments Corp. (“commonstock”) is only a summary and is subject to, and qualified in its entirety by reference to, the more complete description of the common stock in the followingdocuments: (a) Retail Opportunity Investments Corp.’s charter, and (b) Retail Opportunity Investments Corp.’s bylaws, both of which are exhibits to our AnnualReports on Form 10-K and Quarterly Reports on Form 10-Q. Please note that references to “we,” “our” and “us” herein refer only to Retail OpportunityInvestments Corp. and not to its subsidiaries or Retail Opportunity Investments Partnership, LP, unless the context requires otherwise. This summary descriptionis not meant to be a complete descriptions of the common stock.Description of Common StockRetail Opportunity Investments Corp. was formed on July 10, 2007. Our charter provides that we may issue up to 500,000,000 shares of common stock,par value $0.0001 per share, and up to 50,000,000 shares of preferred stock, par value $0.0001 per share. Our charter also authorizes our board of directors toamend the charter by a majority vote of the entire board of directors and without stockholder approval to increase or decrease the aggregate number of authorizedshares of stock or the authorized number of shares of stock of any class or series. As of February 14, 2020, 116,455,432 shares of our common stock were issuedand outstanding. Under Maryland law, our stockholders will not be personally liable for any of our debts or obligations solely as a result of their status asstockholders.All outstanding shares of our common stock are duly authorized, validly issued, fully paid and nonassessable. Subject to the preferential rights, if any, ofholders of any other class or series of our stock and to the provisions of our charter regarding the restrictions on ownership and transfer of our stock, holders ofoutstanding shares of common stock are entitled to receive dividends and other distributions on such shares of common stock out of assets legally available forsuch purposes if, as and when authorized by our board of directors and declared by us, and the holders of outstanding shares of common stock are entitled to shareratably in our assets legally available for distribution to our stockholders in the event of our liquidation, dissolution or winding up after payment of or adequateprovision for all our known debts and liabilities and payment of any liquidation amounts for any issued and outstanding preferred stock.Subject to the provisions of our charter regarding the restrictions on ownership and transfer of our stock and except as may otherwise be specified in theterms of any class or series of our stock, each outstanding share of common stock entitles the holder to one vote on all matters submitted to a vote of stockholders,including the election of directors, and, except as provided with respect to any other class or series of stock, the holders of shares of common stock will possess theexclusive voting power. A plurality of the votes cast in the election of directors is sufficient to elect a director and there is no cumulative voting in the election ofdirectors, which means that the holders of a majority of the outstanding shares of common stock generally can elect all of the directors then standing for election,and the holders of the remaining shares will not be able to elect any directors. However, pursuant to our majority vote policy for the election of directors, in anuncontested election, any nominee who receives a greater number of votes “withheld” from his or her election than votes “for” such election is required to tenderhis or her resignation to our board of directors. Our nominating and corporate governance committee is required to promptly consider the resignation and make arecommendation to our board of directors for its consideration.Holders of shares of common stock have no preference, conversion, exchange, sinking fund or redemption rights and have no pre-emptive rights tosubscribe for any securities of our company. Our charter provides that our stockholders generally have no appraisal rights unless our board of directors determinesprospectively that appraisal rights will apply to one or more transactions in which holders of our common stock would otherwise be entitled to exercise appraisalrights. Subject to the provisions of our charter regarding the restrictions on ownership and transfer of our stock, holders of shares of common stock will have equaldividend, liquidation and other rights.Under the Maryland General Corporation Law (the “MGCL”), a Maryland corporation generally cannot dissolve, amend its charter, merge or consolidatewith another entity, sell all or substantially all of its assets, convert to another entity or engage in a statutory share exchange unless the action is advised by itsboard of directors and approved by the affirmative vote of stockholders entitled to cast at least two-thirds of the votes entitled to be cast on the matter, unless alesser percentage (but not less than a majority of all of the votes entitled to be cast on the matter) is specified in the corporation’s charter. Our charter1provides that these actions (other than certain amendments to the provisions of our charter related to the removal of directors and the restrictions on ownership andtransfer of our stock, and the vote required to amend such provisions, which must be approved by the affirmative vote of at least two-thirds of the votes entitled tobe cast on the amendment) may be approved by a majority of all of the votes entitled to be cast on the matter.Power to Reclassify Our Unissued Shares of StockOur charter authorizes our board of directors to classify and reclassify from time to time any unissued shares of common or preferred stock into otherclasses or series of stock, including one or more classes or series of stock that have priority with respect to voting rights, dividends or upon liquidation over ourcommon stock, and authorizes us to issue the newly-classified shares. Prior to the issuance of shares of each new class or series, our board of directors is requiredby Maryland law and by our charter to set, subject to the provisions of our charter regarding the restrictions on ownership and transfer of our stock, the preferences,conversion and other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications and terms and conditions of redemptionfor each class or series. Our board of directors may take these actions without stockholder approval unless stockholder approval is required by the rules of anystock exchange or automatic quotation system on which our securities are listed or traded or the terms of any class or series of stock we may issue in the future. Noshares of preferred stock are presently outstanding, and we currently have no plans to issue any shares of preferred stock.Power to Increase or Decrease Authorized Shares of Stock and Issue Additional Shares of Capital StockWe believe that the power of our board of directors to amend our charter to increase or decrease the number of authorized shares of capital stock, toauthorize us to issue additional authorized but unissued shares of common or preferred stock in one or more classes or series and to classify or reclassify unissuedshares of common or preferred stock and thereafter to authorize us to issue such classified or reclassified shares of stock will provide us with increased flexibilityin structuring possible future financings and acquisitions and in meeting other needs that might arise. The additional classes or series of capital stock, as well asthe additional shares of common stock, will be available for issuance without further action by our stockholders, unless such approval is required by the rules ofany stock exchange or automated quotation system on which our securities may be listed or traded or the terms of any class or series of stock we may issue in thefuture. Restrictions on Ownership and TransferIn order for us to qualify as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”), shares of our stock must be beneficially ownedby 100 or more persons during at least 335 days of a taxable year of 12 months (other than the first year for which an election to be a REIT has been made) orduring a proportionate part of a shorter taxable year. Also, not more than 50% of the value of the outstanding shares of our stock may be owned, directly orindirectly, by five or fewer individuals (as defined in the Code to include certain entities) during the last half of a taxable year (other than the first year for which anelection to be a REIT has been made). To qualify as a REIT, we must satisfy other requirements as well.Our charter contains restrictions on the ownership and transfer of our outstanding common stock and capital stock which are intended, among otherpurposes, to assist us in complying with these requirements and continuing to qualify as a REIT. The relevant sections of our charter provide that, subject to theexceptions described below, no person or entity may own, or be deemed to own, beneficially or by virtue of the applicable constructive ownership provisions ofthe Code, more than 9.8% by value or number of shares, whichever is more restrictive, of the outstanding shares of our common stock, or 9.8% by value or numberof shares, whichever is more restrictive, of the outstanding shares of all classes and series of our capital stock. We refer to these limits collectively as the“ownership limit.” An individual or entity is referred to as a “prohibited owner” if, but for the ownership limit or other restrictions on ownership and transfer ofour stock described below, had a violative transfer or other event been effective, the individual or entity would have been a beneficial owner or, if appropriate, arecord owner of shares of our stock.The constructive ownership rules under the Code are complex and may cause shares of stock owned actually or constructively by a group of relatedindividuals and/or entities to be owned constructively by one individual or entity. As a result, the acquisition of less than 9.8% by value or number of shares,whichever is more restrictive, of the outstanding shares of our common stock, or 9.8% by value or number of shares, whichever is more restrictive, of theoutstanding shares of all classes and series of our capital stock (or the acquisition of an interest in an entity that owns, actually or constructively, shares2of our stock by an individual or entity), could, nevertheless, cause that individual or entity, or another individual or entity, to constructively own in excess of theapplicable ownership limit.Our board of directors may, in its sole discretion, subject to such conditions as it may determine and the receipt of certain representations andundertakings, prospectively or retroactively, waive the ownership limit or establish a different limit on ownership, or excepted holder limit, for a particular personif the person’s ownership in excess of the ownership limit would not result in our being “closely held” within the meaning of Section 856(h) of the Code (withoutregard to whether the ownership interest is held during the last half of a taxable year) or otherwise would result in our failing to qualify as a REIT. As a conditionof its waiver or grant of excepted holder limit, our board of directors may, but is not required to, require an opinion of counsel or ruling from the Internal RevenueService (the “IRS”), satisfactory to our board of directors in order to determine or ensure our qualification as a REIT and may impose such other conditions andlimitations as our board of directors may determine.In connection with granting a waiver of the ownership limit, creating an excepted holder limit or at any other time, our board of directors may from timeto time increase or decrease the ownership limit for all other individuals and entities unless, after giving effect to such increase, five or fewer individuals couldbeneficially own in the aggregate more than 49.9% by value of the shares of all classes and series of our capital stock then outstanding or we would otherwise failto qualify as a REIT. Prior to the modification of the ownership limit, our board of directors may require such opinions of counsel, affidavits, undertakings oragreements as it may deem necessary or advisable in order to determine or ensure our qualification as a REIT. A reduced ownership limit will not apply to anyperson or entity whose percentage ownership of our common stock or stock of all classes and series, as applicable, is in excess of such decreased ownership limituntil such time as such individual’s or entity’s percentage ownership of our common stock or stock of all classes and series, as applicable, equals or falls below thedecreased ownership limit, but any further acquisition of shares of our common stock or stock of any other class or series, as applicable, in excess of suchpercentage ownership of our common stock or stock of all classes and series will be in violation of the ownership limit.Our charter further prohibits:•any person from beneficially or constructively owning, applying certain attribution rules of the Code, shares of our stock that would result inour being “closely held” under Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of ataxable year) or otherwise cause us to fail to qualify as a REIT (including, but not limited to, beneficial ownership or constructive ownership thatwould result in us owning, actually or constructively, an interest in a tenant that is described in Section 856(d)(2)(B) of the Code if the incomederived by us from such tenant could cause us to fail to satisfy any of the gross income requirements of Section 856(c) of the Code); and•any person from transferring shares of our stock if such transfer would result in shares of our stock being owned by fewer than 100 persons(determined without reference to any rules of attribution).Any person who acquires or attempts or intends to acquire beneficial or constructive ownership of shares of our stock that will or may violate theownership limit or any of the other foregoing restrictions on ownership and transfer of our stock, or who would have owned shares of our stock transferred to atrust as described below, must immediately give us written notice of the event or, in the case of an attempted or proposed transaction, must give at least 15 daysprior written notice to us and provide us with such other information as we may request in order to determine the effect of such transfer on our qualification as aREIT. The foregoing restrictions on ownership and transfer of our stock will not apply if our board of directors determines that it is no longer in our best interest toattempt to qualify, or to continue to qualify, as a REIT or that compliance with the restrictions and limitations on ownership and transfer of our stock as describedabove is no longer required in order for us to qualify as a REIT.If any transfer of shares of our stock would result in shares of our stock being beneficially owned by fewer than 100 persons, such transfer will be nulland void and the intended transferee will acquire no rights in such shares. In addition, if any purported transfer of shares of our stock or any other event wouldotherwise result in any person violating the ownership limit or an excepted holder limit established by our board of directors or in our being “closely held” underSection 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year) or otherwise failing to qualify as a REIT,then that number of shares (rounded up to the nearest whole share) that would cause such person to violate3such restrictions will be automatically transferred to, and held by, a trust for the exclusive benefit of one or more charitable organizations selected by us and theintended transferee will acquire no rights in such shares. The automatic transfer will be effective as of the close of business on the business day prior to the date ofthe violative transfer or other event that results in a transfer to the trust. Any dividend or other distribution paid to the prohibited owner, prior to our discovery thatthe shares had been automatically transferred to a trust as described above, must be repaid to the trustee upon demand for distribution to the beneficiary by thetrust. If the transfer to the trust as described above is not automatically effective, for any reason, to prevent violation of the applicable ownership limit or our being“closely held” under Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year) or otherwise failingto qualify as a REIT, then our charter provides that the transfer of the shares will be null and void, and the intended transferee will acquire no rights in such shares.Shares of our stock transferred to the trustee are deemed offered for sale to us, or our designee, at a price per share equal to the lesser of (1) the price paidby the prohibited owner for the shares (or, if the event that resulted in the transfer to the trust did not involve a purchase of such shares of stock at market price,which is generally the last sales price reported on The Nasdaq Global Select Market on the trading day immediately preceding the day of the event which resultedin the transfer of such shares of stock to the trust, the per-share market price) and (2) the market price on the date we accept, or our designee accepts, suchoffer. We may reduce this amount by the amount of any dividend or other distribution that we have paid to the prohibited owner before we discovered that theshares had been automatically transferred to the trust and that are then owed to the trustee as described above, and we may pay the amount of any such reduction tothe trustee for the benefit of the charitable beneficiary. We have the right to accept such offer until the trustee has sold the shares of our stock held in the trust asdiscussed below. Upon a sale to us, the interest of the charitable beneficiary in the shares sold terminates, the trustee must distribute the net proceeds of the sale tothe prohibited owner and any dividends or other distributions held by the trustee with respect to such shares of stock will be paid to the charitable beneficiary.If we do not buy the shares, the trustee must, within 20 days of receiving notice from us of the transfer of shares to the trust, sell the shares to a person orentity designated by the trustee who could own the shares without violating the ownership limit or the other restrictions on ownership and transfer of ourstock. After the sale of the shares, the interest of the charitable beneficiary in the shares transferred to the trust will terminate and the trustee must distribute to theprohibited owner an amount equal to the lesser of (1) the price paid by the prohibited owner for the shares (or, if the event which resulted in the transfer to the trustdid not involve a purchase of such shares at market price, the market price of the shares) and (2) the sales proceeds (net of commissions and other expenses of sale)received by the trust for the shares. The trustee may reduce the amount payable to the prohibited owner by the amount of any dividend or other distribution that wepaid to the prohibited owner before we discovered that the shares had been automatically transferred to the trust and that are then owed to the trustee as describedabove. Any net sales proceeds in excess of the amount payable to the prohibited owner will be immediately paid to the beneficiary of the trust, together with anydividends or other distributions thereon. In addition, if, prior to discovery by us that shares of stock have been transferred to a trust, such shares of stock are soldby a prohibited owner, then such shares will be deemed to have been sold on behalf of the trust and, to the extent that the prohibited owner received an amount foror in respect of such shares that exceeds the amount that such prohibited owner was entitled to receive, such excess amount must be paid to the trustee upondemand. The prohibited owner has no rights in the shares held by the trustee.The trustee will be designated by us and must be unaffiliated with us and with any prohibited owner. Prior to the sale of any shares by the trust, thetrustee will receive, in trust for the beneficiary of the trust, all dividends and other distributions paid by us with respect to the shares held in trust and may alsoexercise all voting rights with respect to the shares held in trust. These rights will be exercised for the exclusive benefit of the beneficiary of the trust.Subject to Maryland law, effective as of the date that the shares have been transferred to the trust, the trustee will have the authority, at the trustee’s solediscretion:•to rescind as void any vote cast by a prohibited owner prior to our discovery that the shares have been transferred to the trust; and•to recast the vote in accordance with the desires of the trustee acting for the benefit of the beneficiary of the trust.However, if we have already taken irreversible corporate action, then the trustee may not rescind and recast the vote.4In addition, if our board of directors determines in good faith that a proposed transfer or other event would violate the restrictions on ownership andtransfer of our stock, our board of directors may take such action as it deems advisable to refuse to give effect to or to prevent such transfer, including, but notlimited to, causing us to redeem the shares of stock, refusing to give effect to the transfer on our books or instituting proceedings to enjoin the transfer.Every owner of 5% or more (or such lower percentage as is required by the Code or the regulations promulgated thereunder) of our stock, within 30 daysafter the end of each taxable year, must give us written notice, stating the stockholder’s name and address, the number of shares of each class and series of ourstock that the stockholder beneficially owns and a description of the manner in which the shares are held. Each such owner must provide to us in writing suchadditional information as we may request in order to determine the effect, if any, of the stockholder’s beneficial ownership on our qualification as a REIT and toensure compliance with the ownership limit. In addition, each stockholder must provide to us such information as we may request in good faith in order todetermine our qualification as a REIT and to comply with the requirements of any taxing authority or governmental authority or to determine such compliance.Any certificates representing shares of our stock shall bear a legend referring to the restrictions described above.These restrictions on ownership and transfer could delay, defer or prevent a transaction or a change in control that might involve a premium price for thecommon stock or otherwise be in the best interest of the stockholders.Transfer Agent and RegistrarThe transfer agent and registrar for our common stock is Computershare, Inc.Certain Provisions of the Maryland General Corporation Law and Our Charter and BylawsOur Board of DirectorsOur charter and bylaws provide that the number of directors we have may be established only by our board of directors but may not be fewer than theminimum required under the MGCL, which is currently one, and our bylaws provide that the number of our directors may not be more than 15. Subject to theterms of any class or series of stock, vacancies on our board of directors may be filled only by a majority of the remaining directors, even if the remaining directorsdo not constitute a quorum, and any director elected to fill a vacancy will hold office for the remainder of the full term of the directorship in which the vacancyoccurred.Removal of DirectorsOur charter provides that, subject to the rights of holders of one or more classes or series of preferred stock to elect or remove one or more directors, adirector may be removed, with or without cause, only by the affirmative vote of at least two-thirds of the votes entitled to be cast in the election of directors. Thisprovision, when coupled with the exclusive power of our board of directors to fill vacancies on our board of directors, precludes stockholders from (1) removingincumbent directors except upon a two-thirds vote and (2) filling the vacancies created by such removal with their own nominees.Business CombinationsUnder the MGCL, certain “business combinations” (including a merger, consolidation, statutory share exchange or, in certain circumstances, an assettransfer or issuance or reclassification of equity securities) between a Maryland corporation and an interested stockholder (defined generally as any person whobeneficially owns, directly or indirectly, 10% or more of the voting power of the corporation’s outstanding voting stock or an affiliate or associate of thecorporation who, at any time during the two-year period prior to the date in question, was the beneficial owner, directly or indirectly, of 10% or more of the votingpower of the then outstanding voting stock of the corporation) or an affiliate of such an interested stockholder are prohibited for five years after the most recentdate on which the interested stockholder becomes an interested stockholder. Thereafter, any such business combination must generally be recommended by theboard of directors of such corporation and approved by the affirmative vote of at least (a) 80% of the votes entitled to be cast by holders of outstanding votingstock of the corporation and (b) two-thirds of the votes entitled to be cast by holders of voting stock of the corporation5other than shares held by the interested stockholder with whom (or with whose affiliate) the business combination is to be effected or held by an affiliate orassociate of the interested stockholder, unless, among other conditions, the corporation’s common stockholders receive a minimum price (as defined in the MGCL)for their shares and the consideration is received in cash or in the same form as previously paid by the interested stockholder for its shares. A person is not aninterested stockholder under the business combination statute if the Maryland corporation’s board of directors approved in advance the transaction by which theperson otherwise would have become an interested stockholder. The board of directors may provide that its approval is subject to compliance, at or after the timeof approval, with any terms and conditions determined by it.These provisions of the MGCL do not apply, however, to business combinations that are approved or exempted by a Maryland corporation’s board ofdirectors prior to the time that the interested stockholder becomes an interested stockholder. Pursuant to the statute, our board of directors has by resolutionexempted business combinations (1) between us and any other person, provided that such business combination is first approved by our board of directors(including a majority of our directors who are not affiliates or associates of such person) and (2) among persons acting in concert with any of the foregoing. As aresult, any person described above may be able to enter into business combinations with us that may not be in the best interest of our stockholders, withoutcompliance with the supermajority vote requirements and other provisions of the business combination statute. The business combination statute may discourage others from trying to acquire control of us and increase the difficulty of consummating any offer.Control Share AcquisitionsThe MGCL provides that a holder of “control shares” of a Maryland corporation acquired in a “control share acquisition” has no voting rights with respect tosuch shares except to the extent approved by the affirmative vote of at least two-thirds of the votes entitled to be cast on the matter, excluding shares of stock ofthe corporation in respect of which any of the following persons is entitled to exercise or direct the exercise of the voting power of such shares in the election ofdirectors: (i) a person who has made or proposes to make the control share acquisition; (ii) an officer of the corporation; or (iii) an employee of the corporationwho is also a director of the corporation. “Control shares” are voting shares of stock which, if aggregated with all other such shares of stock owned by the acquirer,or in respect of which the acquirer is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle theacquirer to exercise voting power in electing directors within one of the following ranges of voting power: (A) one-tenth or more but less than one-third; (B) one-third or more but less than a majority; or (C) a majority of all voting power. Control shares do not include shares that the acquiring person is then entitled to voteas a result of having previously obtained stockholder approval or shares acquired directly from the corporation. A “control share acquisition” means theacquisition, directly or indirectly, of issued and outstanding control shares, subject to certain exceptions.A person who has made or proposes to make a control share acquisition, upon satisfaction of certain conditions (including an undertaking to pay expensesand making an “acquiring person statement” as described in the MGCL), may compel the corporation’s board of directors to call a special meeting of stockholdersto be held within 50 days of demand to consider the voting rights of the shares. If no request for a meeting is made, the corporation may itself present the questionat any stockholders meeting.If voting rights are not approved at the meeting or if the acquiring person does not deliver an “acquiring person statement” as required by the statute, then,subject to certain conditions and limitations, the corporation may redeem any or all of the control shares (except those for which voting rights have previously beenapproved) for fair value determined, without regard to the absence of voting rights for the control shares, as of the date of the last control share acquisition by theacquirer or, if a meeting of stockholders is held at which the voting rights of such shares are considered and not approved, as of the date of such meeting. If votingrights for control shares are approved at a stockholders meeting and the acquirer becomes entitled to exercise or direct the exercise of a majority of all votingpower, all other stockholders may exercise appraisal rights. The fair value of the shares as determined for purposes of such appraisal rights may not be less thanthe highest price per share paid by the acquirer in the control share acquisition.6The control share acquisition statute does not apply to, among other things, (a) shares acquired in a merger, consolidation or statutory share exchange if thecorporation is a party to the transaction or (b) acquisitions approved or exempted by the charter or bylaws of the corporation.Our bylaws contain a provision exempting from the control share acquisition statute any and all acquisitions by any person of shares of our stock. Subtitle 8Subtitle 8 of Title 3 of the MGCL permits a Maryland corporation with a class of equity securities registered under the Exchange Act and at least threeindependent directors to elect to be subject, by provision in its charter or bylaws or a resolution of its board of directors and notwithstanding any contrary provisionin the charter or bylaws, to any or all of five provisions of the MGCL which provide, respectively, for: • a classified board; • a two-thirds vote requirement for removing a director; • a requirement that the number of directors be fixed only by vote of the board of directors; • a requirement that a vacancy on the board be filled only by the remaining directors in office and for the remainder of the full term of the class ofdirectors in which the vacancy occurred; and • a majority requirement for the calling of a stockholder-requested special meeting of stockholders.We have elected in our charter to be subject to the provision of Subtitle 8 that provides that vacancies on our board may be filled only by the remainingdirectors and that directors elected to fill vacancies will serve for the remainder of the term of the directorship in which the vacancy occurred. Through provisionsin our charter and bylaws unrelated to Subtitle 8, we already (1) will require the affirmative vote of stockholders entitled to cast not less than two-thirds of all ofthe votes entitled to be cast generally in the election of directors for the removal of any director, which removal may be with or without cause, (2) vest in the boardthe exclusive power to fix the number of directorships and (3) require, unless called by the chairman of our board of directors, chief executive officer, president orboard of directors, the written request of stockholders entitled to cast a majority of all votes entitled to be cast at such a meeting on such matter to call a specialmeeting on any matter.Meetings of StockholdersPursuant to our bylaws, a meeting of our stockholders for the election of directors and the transaction of any business will be held annually on a date and atthe time and place set by our board of directors. The chairman of our board of directors, our chief executive officer, our president or our board of directors maycall a special meeting of our stockholders. Subject to the provisions of our bylaws, a special meeting of our stockholders to act on any matter that may properly bebrought before a meeting of our stockholders will also be called by our secretary upon the written request of the stockholders entitled to cast a majority of all thevotes entitled to be cast at the meeting on such matter and containing the information required by our bylaws. Our secretary will inform the requesting stockholdersof the reasonably estimated cost of preparing and delivering the notice of meeting (including our proxy materials), and the requesting stockholder must pay suchestimated cost before our secretary is required to prepare and deliver the notice of the special meeting.Amendment to Our BylawsOur board of directors has the exclusive power to adopt, alter or repeal any provision of our bylaws and to make new bylaws.Advance Notice of Director Nominations and New BusinessOur bylaws provide that, with respect to an annual meeting of stockholders, nominations of individuals for election to our board of directors and the proposalof other business to be considered by our stockholders may be made only (1) pursuant7to our notice of the meeting, (2) by or at the direction of our board of directors or (3) by a stockholder who was a stockholder of record both at the time of givingthe notice required by our bylaws and at the time of the meeting, who is entitled to vote at the meeting on such business or in the election of each such nominee andwho has provided notice to us within the time period, containing the information specified by the advance notice provisions set forth in our bylaws.With respect to special meetings of stockholders, only the business specified in our notice of meeting may be brought before the meeting. Nominations ofindividuals for election to our board of directors may be made only (1) by or at the direction of our board of directors or (2) provided that the meeting has beenproperly called for the purpose of electing directors, by a stockholder who was a stockholder of record both at the time of giving the notice required by our bylawsand at the time of the special meeting, who is entitled to vote at the meeting in the election of each such nominee and who has provided notice to us within the timeperiod, containing the information specified by the advance notice provisions set forth in our bylaws.Indemnification and Limitation of Directors’ and Officers’ LiabilityMaryland law permits a Maryland corporation to include in its charter a provision eliminating the liability of its directors and officers to the corporation andits stockholders for money damages except for liability resulting from actual receipt of an improper benefit or profit in money, property or services or active anddeliberate dishonesty that was established by a final judgment and was material to the cause of action. Our charter contains a provision that eliminates the liabilityof our directors and officers to us and our stockholders to the maximum extent permitted by Maryland law. The MGCL requires us (unless our charter provides otherwise, which our charter does not) to indemnify any of our directors or officers who have beensuccessful, on the merits or otherwise, in the defense of any proceeding to which he or she is made a party by reason of his or her service in that capacity withus. The MGCL permits us to indemnify our present and former directors and officers, among others, against judgments, penalties, fines, settlements andreasonable expenses actually incurred by them in connection with any proceeding to which they may be made or threatened to be made a party by reason of theirservice in those or other capacities unless it is established that: • the act or omission of the director or officer was material to the matter giving rise to the proceeding and (1) was committed in bad faith or (2) was theresult of active and deliberate dishonesty; • the director or officer actually received an improper personal benefit in money, property or services; or • in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful.Under the MGCL, we may not indemnify a director or officer in a suit brought by us or on our behalf in which the director or officer was adjudged liable tous or in a suit in which the director or officer was adjudged liable on the basis that personal benefit was improperly received. A court may order indemnification ifit determines that the director or officer is fairly and reasonably entitled to indemnification, even though the director or officer did not meet the prescribed standardof conduct or was adjudged liable on the basis that personal benefit was improperly received. However, indemnification for an adverse judgment in a suit by us oron our behalf, or for a judgment of liability on the basis that personal benefit was improperly received, is limited to expenses.In addition, the MGCL permits us to advance reasonable expenses to a director or officer upon our receipt of: • a written affirmation by the director or officer of his or her good faith belief that he or she has met the standard of conduct necessary forindemnification by us; and • a written undertaking by the director or officer or on the director’s or officer’s behalf to repay the amount paid or reimbursed by us if it is ultimatelydetermined that the director or officer did not meet the standard of conduct.Our charter authorizes us to obligate ourselves and our bylaws obligate us, to the maximum extent permitted by Maryland law in effect from time to time, toindemnify and, without requiring a preliminary determination of the ultimate entitlement to indemnification, pay or reimburse reasonable expenses in advance offinal disposition of a proceeding to:8 • any present or former director or officer who is made or threatened to be made a party to the proceeding by reason of his or her service in thatcapacity; or • any individual who, while a director or officer of our company and at our request, serves or has served as a director, officer, partner, manager,managing member or trustee of another corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employeebenefit plan or any other enterprise and who is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity.Our charter and bylaws also permit us to indemnify and advance expenses to any person who served a predecessor of ours in any of the capacities describedabove and to any employee or agent of our company or a predecessor of our company.We have entered into indemnification agreements with each of our directors and officers that provide for indemnification to the maximum extent permittedby Maryland law. Insofar as the foregoing provisions permit indemnification of directors, officers or persons controlling us for liability arising under the Securities Act, wehave been informed that, in the opinion of the SEC, this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.REIT QualificationOur charter provides that our board of directors may authorize us to revoke or otherwise terminate our REIT election, without approval of our stockholders,if it determines that it is no longer in our best interests to continue to qualify as a REIT.9EXHIBIT 21.1 LIST OF SUBSIDIARIES OF RETAIL OPPORTUNITY INVESTMENTS CORP. CompanyJurisdiction of OrganizationRetail Opportunity Investments Partnership, LPDelawareRetail Opportunity Investments GP, LLCDelawareROIC Paramount Plaza, LLCDelawareROIC Santa Ana, LLCDelawareROIC Washington, LLCDelawareROIC Oregon, LLCDelawareROIC California, LLCDelawareROIC Crossroads GP, LLCDelawareROIC Crossroads LP, LLCDelawareROIC Pinole Vista, LLCDelawareROIC Hillsboro, LLCDelawareROIC Cypress West, LLCDelawareROIC Redondo Beach Plaza, LLCDelawareROIC DBTC, LLCDelawareTerranomics Crossroads Associates, LPDelawareSARM Five Points Plaza, LLCDelawareROIC Robinwood, LLCDelawareROIC Creekside Plaza, LLCDelawareROIC Park Oaks, LLCDelawareROIC Diamond Hills Plaza, LLCDelawareROIC Warner Plaza, LLCDelawareROIC Four Corner Square, LLCDelawareROIC Casitas Plaza, LLCDelawareROIC Bouquet Center, LLCDelawareROIC Monterey, LLCDelawareROIC IGAP, LLCDelawareROIC TUO, LLCDelawareSunhill Properties, LLCCaliforniaUhlmann-Burbank, LLCCaliforniaROIC Riverstone Marketplace, LLCDelawareROIC Fullerton Crossroads, LLCDelawareEXHIBIT 23.1Consent of Independent Registered Public Accounting FirmWe consent to the incorporation by reference in the following Registration Statements:(1)Registration Statement (Form S-8 No. 333-170692) pertaining to the 2009 Equity Incentive Plan of Retail OpportunityInvestments Corp.,(2)Post-Effective Amendment No. 1 to Form S-1/MEF on Registration Statement (Form S-3 No. 333-146777), and in the relatedProspectus, of Retail Opportunity Investments Corp,(3)Registration Statement (Form S-3 No. 333-198974), and the related Prospectus, of Retail Opportunity Investments Corp.,(4)Registration Statement (Form S-3 ASR No. 333-210413), and the related Prospectus, of Retail Opportunity Investments Corp.,(5)Registration Statement (Form S-3 ASR No. 333-231088), and the related Prospectus, of Retail Opportunity Investments Corp.and Retail Opportunity Investments Partnership, LP, and(6)Registration Statement (Form S-8 No. 333-229053) pertaining to the 2009 Equity Incentive Plan and Amended and Restated2009 Equity Incentive Planof our reports dated February 19, 2020, with respect to the consolidated financial statements and schedule of Retail Opportunity InvestmentsCorp. and the effectiveness of internal control over financial reporting of Retail Opportunity Investments Corp., included in this AnnualReport (Form 10-K) for the year ended December 31, 2019./s/ Ernst & Young LLPSan Diego, CaliforniaFebruary 19, 2020EXHIBIT 23.2Consent of Independent Registered Public Accounting FirmWe consent to the incorporation by reference in the following Registration Statement (Form S-3 ASR No. 333-231088-01) of RetailOpportunity Investments Corp. and Retail Opportunity Investments Partnership, LP and in the related Prospectus of our reports datedFebruary 19, 2020, with respect to the consolidated financial statements and schedule of Retail Opportunity Investments Partnership, LP,included in this Annual Report (Form 10-K) for the year ended December 31, 2019. /s/ Ernst & Young LLPSan Diego, CaliforniaFebruary 19, 2020EXHIBIT 31.1RETAIL OPPORTUNITY INVESTMENTS CORP.CERTIFICATION OF CHIEF EXECUTIVE OFFICERI, Stuart A. Tanz, certify that:1.I have reviewed this Annual Report on Form 10-K of Retail Opportunity Investments Corp.;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) forthe registrant and have:a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant’s internal control over financial reporting; and5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant’s ability to record, process, summarize and report financial information; andb.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controlover financial reporting.Date: February 19, 2020 By: /s/ Stuart A. Tanz Name: Stuart A. Tanz Title: Chief Executive OfficerRETAIL OPPORTUNITY INVESTMENTS PARTNERSHIP, LPCERTIFICATION OF CHIEF EXECUTIVE OFFICER I, Stuart A. Tanz, certify that:1.I have reviewed this Annual Report on Form 10-K of Retail Opportunity Investments Partnership, LP;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) forthe registrant and have:a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant’s internal control over financial reporting; and5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant’s ability to record, process, summarize and report financial information; andb.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controlover financial reporting.Date: February 19, 2020 By: /s/ Stuart A. Tanz Name: Stuart A. Tanz Title: Chief Executive OfficerEXHIBIT 31.2 RETAIL OPPORTUNITY INVESTMENTS CORP.CERTIFICATION OF CHIEF FINANCIAL OFFICER I, Michael B. Haines, certify that: 1.I have reviewed this Annual Report on Form 10-K of Retail Opportunity Investments Corp.;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) forthe registrant and have:a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant’s internal control over financial reporting; and5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant’s ability to record, process, summarize and report financial information; andb.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controlover financial reporting.Date: February 19, 2020 By: /s/ Michael B. Haines Name: Michael B. Haines Title: Chief Financial OfficerRETAIL OPPORTUNITY INVESTMENTS PARTNERSHIP, LPCERTIFICATION OF CHIEF FINANCIAL OFFICER I, Michael B. Haines, certify that: 1.I have reviewed this Annual Report on Form 10-K of Retail Opportunity Investments Partnership, LP;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) forthe registrant and have:a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant’s internal control over financial reporting; and5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant’s ability to record, process, summarize and report financial information; andb.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controlover financial reporting.Date: February 19, 2020 By: /s/ Michael B. Haines Name: Michael B. Haines Title: Chief Financial OfficerEXHIBIT 32.1 RETAIL OPPORTUNITY INVESTMENTS CORP.Certification of Chief Executive Officer and Chief Financial OfficerPursuant to18 U.S.C. Section 1350as adopted pursuant toSection 906 of The Sarbanes-Oxley Act of 2002 The undersigned, the Chief Executive Officer of Retail Opportunity Investments Corp. (the “Company”), hereby certifies to the best of his knowledge on the datehereof, pursuant to 18 U.S.C. 1350(a), as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002, that the Annual Report on Form 10-K for the yearended December 31, 2019 (the “Form 10-K”), filed concurrently herewith by the Company, fully complies with the requirements of Section 13(a) or 15(d) of theSecurities Exchange Act of 1934, as amended, and that the information contained in the Form 10-K fairly presents, in all material respects, the financial conditionand results of operations of the Company.Date: February 19, 2020 By: /s/ Stuart A. Tanz Name: Stuart A. Tanz Title: Chief Executive Officer The undersigned, the Chief Financial Officer of Retail Opportunity Investments Corp. (the “Company”), hereby certifies to the best of his knowledge on the datehereof, pursuant to 18 U.S.C. 1350(a), as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002, that the Annual Report on Form 10-K for the yearended December 31, 2019 (the “Form 10-K”), filed concurrently herewith by the Company, fully complies with the requirements of Section 13(a) or 15(d) of theSecurities Exchange Act of 1934, as amended, and that the information contained in the Form 10-K fairly presents, in all material respects, the financial conditionand results of operations of the Company.Date: February 19, 2020 By: /s/ Michael B. Haines Name: Michael B. Haines Title: Chief Financial Officer Pursuant to the Securities and Exchange Commission release 33-8238 dated June 5, 2003, this certification is being furnished and shall not be deemed filed by theCompany for purposes of Section 18 of the Securities Exchange Act of 1934, as amended or incorporated by reference in any registration statement of theCompany filed under the Securities Act of 1933, as amended. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to theSecurities and Exchange Commission or its staff upon request.RETAIL OPPORTUNITY INVESTMENTS PARTNERSHIP, LPCertification of Chief Executive Officer and Chief Financial OfficerPursuant to18 U.S.C. Section 1350as adopted pursuant toSection 906 of The Sarbanes-Oxley Act of 2002 The undersigned, the Chief Executive Officer of Retail Opportunity Investments GP, LLC, the sole general partner of Retail Opportunity Investments Partnership,LP (the “Operating Partnership”), hereby certifies to the best of his knowledge on the date hereof, pursuant to 18 U.S.C. 1350(a), as adopted pursuant toSection 906 of The Sarbanes-Oxley Act of 2002, that the Annual Report on Form 10-K for the year ended December 31, 2019 (the “Form 10-K”), filedconcurrently herewith by the Operating Partnership, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, asamended, and that the information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of theOperating Partnership.Date: February 19, 2020 By: /s/ Stuart A. Tanz Name: Stuart A. Tanz Title: Chief Executive Officer The undersigned, the Chief Financial Officer of Retail Opportunity Investments GP, LLC, the sole general partner of Retail Opportunity Investments Partnership,LP (the “Operating Partnership”), hereby certifies to the best of his knowledge on the date hereof, pursuant to 18 U.S.C. 1350(a), as adopted pursuant toSection 906 of The Sarbanes-Oxley Act of 2002, that the Annual Report on Form 10-K for the year ended December 31, 2019 (the “Form 10-K”), filedconcurrently herewith by the Operating Partnership, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, asamended, and that the information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of theOperating Partnership.Date: February 19, 2020 By: /s/ Michael B. Haines Name: Michael B. Haines Title: Chief Financial Officer Pursuant to the Securities and Exchange Commission release 33-8238 dated June 5, 2003, this certification is being furnished and shall not be deemed filed by theOperating Partnership for purposes of Section 18 of the Securities Exchange Act of 1934, as amended or incorporated by reference in any registration statement ofthe Operating Partnership filed under the Securities Act of 1933, as amended. A signed original of this written statement required by Section 906 has been provided to the Operating Partnership and will be retained by the OperatingPartnership and furnished to the Securities and Exchange Commission or its staff upon request. 

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