Welcome to Retail Opportunity Investments 2017 First Quarter Conference Call. Participants are currently in a listen-only mode. Following the Company's prepared remarks, the call will be opened up for questions.

Please note that certain matters discussed in this call today constitute forward-looking statements within the meaning of Federal Securities Laws.

Although the company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, the company can give no assurance that these expectations will be achieved.

Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause actual results to differ materially from future results expressed or implied by such forward-looking statements and expectations.

Information regarding such risks and factors is described in the company's filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K.

Participants are encouraged to refer to the Company's filings with the SEC regarding such risks and factors, as well as for more information regarding the company's financial and operational results. The company's filings can be found on its website. Now I'd like to introduce Stuart Tanz, the Company's Chief Executive Officer..

Good morning, everyone. Here with me today is Michael Haines, our Chief Financial Officer; and Rich Schoebel, our Chief Operating Officer. As 2017 gets fully underway, we are pleased to report that the company is off to another strong start.

The lean story for us in 2017 thus far is on the acquisition front where we continue to have great success in acquiring well established grocery-anchored shopping centers that are situation in truly irreplaceable locations in the heart of the west coast most sort after thriving markets.

Many of these acquisitions are shopping centers that have been privately owned, closely held by families for years, some of which have never traded before, in other words, next to impossible for the market to get their hands on. We're sourcing these unique acquisition opportunities through our network of relationships with private owners.

Some being relationships from whom we have previously acquired shopping centers, some being relationships that we are diligently working on in pursuing for a number of years are now coming to provision and some being situations where the owners have sort us out given our market presence, reputation and ability to underwrite and close quickly.

Additionally, another contributing factor was that several of the private owners were keenly interested in taking ROIC common equity in little [ph] of cash.

In short, the relationships that we have worked hard are cultivating over the past 25 years continued to be a defining difference and our ability to gain unique access to acquire truly exceptional properties.

To take you through the specifics, year-to-date, we have lined up 268 million of acquisitions which includes seven shopping centers encompassing upwards of a million square feet diversified across our core west coast metropolitan markets, including a terrific grocery-anchored shopping center in the heart of Orange County, another great center in the Los Angeles market as well as one just north of San Francisco and four grocery-anchored shopping centers in the Pacific Northwest, including two great centers in the Seattle market and two in the Portland market.

With these acquisitions, we continue to enhance our west coast portfolio and market presence in a geographically diverse and balanced manger. All seven properties are well established shopping centers that are situated in densely populated half flowing communities that are supply constrain and highly protected.

The properties are typically with dominant, daily necessity shopping centers serving the surrounding community and feature prominent supermarkets, ranging from grocers like Safeway, Kroger and Trader Joe's to the leading organic grocer the specific North West PCC Natural Markets.

With the supermarkets all have in common is that they have all been operating highly productive and successful stores at these centers for years and all have very strong established customer basis. So blended going in cap rate for the 268 million is approximately 5.5%.

Given that the shopping centers by and large have been privately owned and managed for years. There is a multiple of opportunities for our skilled hands on team to enhance value. In fact, we already have a number of initiatives in the works that we think could increase our yield by as much as 50 to 100 basis points just in the next year or so.

Beyond that there are number of interesting recapture and repositioning opportunities that we have our sites on that could significantly increase our yield down the road. In summary, it's safe to say that we are very excited about these acquisitions.

In addition to getting off to a terrific start in 2017 with acquisitions, we are also off to another solid start on the property operations and leasing front. In fact for the 11th consecutive quarter now, we've again achieved a portfolio lease rate at or above 96%.

And we have again achieved strong rent growth posting a 24% increase on new leases executed in the first quarter. Additionally, for the 21st consecutive quarter, we grew same center net operating income.

As you will hear from Mike and Rich, we expect our NOI growth to accelerate as we move through the year as the recapturing and releasing initiatives that we successfully completed over the past year begin to flow through our numbers in earnest.

Now I'll turn the call over to Michael Haines to take you through our financial results for the first quarter.

Mike?.

Thanks, Stuart. For the three months ended March 31st, 2017, the company had 65.9 million in total revenues and 22.9 million in GAAP operating income as compared to 56.1 million in total revenues and 18.4 million in GAAP operating income for the first quarter of 2016.

GAAP net income attributable to common shareholders for the first quarter of 2017 was 10.2 million, equating to $0.09 per diluted share as compared to GAAP net income of 8 million or $0.08 per diluted share for the first quarter of 2016.

In terms of funds from operations, for the first quarter of 2017, FFO totaled 34.3 million as compared to FFO of 29.9 million for the first quarter of 2016. On a per share basis, FFO increased to $0.28 per diluted share for the first quarter of 2017.

With respect to property level and net operating income on the same center comparative basis which includes all of the shopping centers that we have owned since the beginning of 2016, totaling 73 properties, cash NOI increased by 2% for the first quarter of 2017 as compared to the first quarter of last year.

As Stuart mentioned, and as we discussed on our year-end earnings call, we expect that same center NOI will increase as we move through the year. As new tenants that we leased based during the past year take occupancy and commence paying rent.

With that in mind as it relates to the 73 properties in our year-over-year comparative analysis, we continue to expect the same center NOI growth will be approximately 4% for the full year 2017.

Bear in mind that the quarterly same center NOI number will likely fluctuate as the pool of competitive properties on a quarterly basis will increase as we move through the year. Turning to the company's balance sheet.

At March 31st, the company had a total market cap of approximately 3.8 billion with approximately 1.3 billion of debt outstanding, equating to a debt of total market cap ratio of 33%. And for the first quarter, the company's interest coverage was a strong four times. With respect to the 1.3 billion of debt, the vast majority of that is unsecured.

Additionally, approximately 95% of our portfolio continues to be unencumbered. Lastly, in terms of FFO guidance, thus far we are on track with our previously stated guidance of achieving FFO between a $1.10 and $1.14 per diluted share for the full year 2017.

With respect to our acquisition year-to-date, notwithstanding being ahead of plan so to speak in terms of already having lined up 268 million of acquisition only four months into the year, a good portion of that mean that close until the second half of the year, which our guidance takes into account.

Now, I'll turn the call over to Rich Schoebel, our COO to discuss property operations.

Rich?.

Thanks Mike. Demand for space across our portfolio continues to be strong and we continue to make the most of it. As Stuart noted, we continue to maintain our portfolio at over 97% lease ending the first quarter specifically at 97.2%.

Breaking that down between anchor and non-anchor space, you may recall that back at year-end, we had one anchor space available in our portfolio. During the first quarter, we signed a new tenant for that space achieving a 129% increase in base rent.

And we are now in discussions with that net tenant about leasing a second space at one of the shopping centers that we recently acquired. Without one remaining anchor space now spoken for, at March 31st, our anchor space was 100% lease. And in terms of shop space, at quarter end, our shop space stood at 94% lease.

In terms of the economic spread between build and lease space, at year-end the spread was 4.7% representing roughly $8 million an additional annual rent on a cash basis.

Given that the bulk of the 8 million was attributable to new leases that we signed in the latter half of 2016, we expect the majority will take occupancy and commence paying rent later this year.

Accordingly during the first quarter, tenants representing about 1.5 million of that incremental 8 million started paying rent of which only 238,000 of the 1.5 million was received in the first quarter.

Taking the 1.5 million into account together with our leasing activity during the first quarter, as of March 31st, the spread was 4.3% representing approximately 8.2 million. As Stuart noted, we continue to achieve strong rent increases across our portfolio with our leasing activity.

Specifically, during the first quarter, we achieved a 24% increase in cash rents, our leasing executed on a same space comparative basis and a 9.1% increase on renewed leases.

Looking ahead, we have about 0.5 million of square feet of space scheduled to roll during the next nine months across our portfolio, the bulk of which is shop space which we expect to continue achieving solid rent growth as we release and renew the space.

Additionally, we continue to actively pursue recapturing below market space well ahead of scheduled lease expirations. Lastly, we continue to make good progress with our various pad expansion projects currently underway and remain on track to complete the bulk of them later this year.

And with one of our recent acquisitions, we have added another 3,000 square foot pad to our pipeline which we just broke ground on and expect to complete by year-end as well. All totaled our pad expansion projects will add over $2 million of additional annual rent. Now, I'll turn the call back over to Stuart..

Thanks Rich. Our solid results not only are indicative of the ongoing strong fundamentals across our portfolio and markets, but they are also a direct result of how we manage our tenant base and properties.

Along with being focused on capitalizing on every opportunity, we increase rents and enhance the value of our shopping centers; we are equally focused on maintaining the very diverse and reliable revenue stream. We accomplished this by pursuing two distinct core strategies.

First, as we grow our portfolio, we are keenly focused on maintaining tenant diversity. In fact, 80% of our base rent today is derived from over 1,200 different retailers and businesses. The vast majority of which only accounts for less than a half a percent of our base rent individually.

As it relates to the remaining 20%, that too was well diversified. Our largest tenant which only accounts for 6% of our base rent is derived from leases at 19 different shopping centers spending across six of our seven metropolitan markets.

Additionally, our next largest tenant only accounts for less than 3% of our base rent and the remainder of our top ten tenants each account for less than 2% individually. This tenant diversity is not by accident, it's by design and something we look carefully at with each acquisition.

In fact, once we close on all 268 million of acquisitions that we have lined up so far this year; our top tenant will drop below 6%. Our second core strategy is the type of retailers that we focus on. That being daily necessity. Out of our top ten tenants, seven of those are supermarkets and pharmacies.

Additionally, beyond our top ten tenants, the majority of our revenues derived from a broad range of retailers including additional supermarkets and pharmacies as well as other retailers providing basis consumer goods and services that are always in demand.

Focusing on leasing to daily necessity retailers together with maintaining the broad and diverse tenant base translates into a very reliable cash flow stream year after year as our team is consistently demonstrated over the past 25 years through all kinds of market conditions.

While the retail industry today is experiencing considerable turmoil which intern is adversely impacting an increasing number of properties that is not the case with our portfolio. We continue to fire on all cylinders and remain excited and confident about the future prospects of growing our business and enhancing value.

Now, we'll open up the call for your questions.

Operator?.

Thank you. [Operator Instructions] Our first question comes from Paul Adornato with BMO Capital Markets. Your line is open..

Good morning, Paul..

Good morning.

Stuart, I was wondering if you could give us your take on the supermarket business, you mentioned you have a lot of high ends supermarkets we saw some of those move out last year, what kind of competition do you see and what kind of headwinds are your supermarkets facing?.

Paul, well, we continue to see grocers looking to expand on the west coast ranging from national players like Safeway to an increasing number of more regional, specialty type organic grocers looking to broaden their reach up and down the coast.

The only other thing to mention Paul of course is that the barriers to entry in our markets are so high that what we are finding today in terms of grocers expanding into these markets is that there is very few - there is very little space available..

Okay, I agree. And if we were to look at leasing spreads, then quite healthy for quite a while, I was wondering you know what we could expect over the longer term, are lot of the gains are I think kind of one time and so far as it's the first time you've leased or recaptured an anchor.

So I was wondering if you could kind of give us some indication of what we might expect over the longer term let's say two or three years out?.

Paul, let Rich answer the question.

So Rich?.

Yeah, I mean you know generally speaking Paul, you know our asking rents are of notably across all of our markets.

The drivers that are impacting those rents so different in each market and each you know properties submarket and very for every lease are available space, so it's always difficult to kind of come up with a specific percent change are to be looking for. But we would expect that it will be consistent with what we've seen before..

Okay. Great. And thanks.

Just to clarify one point, in the press release, you mentioned that one seller was taking common stock, is that in the form of about the units or was it tradable common stock?.

Mike, do you want to just give that, so the properties we're referring to in the press release with that would be OP units, yes Paul..

OP units, so was other state situation..

I am sorry, can you hear that..

It was in the state planning decision?.

Yes. It is the state plan first state planning purposes..

Okay. Great. Thanks very much..

Thank you..

Thank you. Our next question is from Christy McElroy with Citi. Your line is open..

Good morning, Christy..

Good morning, guys..

Good morning, Christy..

Good morning. So what acquisition you are running ahead of the full year pace that you did mention that some may close in the second half.

Is that - should I take that I mean you are maintaining guidance here for transactions or could we actually see some upward pressure on going as we go through the year just given what you're seeing in the pipeline?.

We're having a great year in terms of external growth as we've articulated today. Obviously, it's tough to determine the flow of transactions and when they will occur. So we're going to keep things sort of where they are right now in terms of the guidance and probably we'll give you a much clearer update in our next call..

Okay. And then as you look at new property to buy, you talked about a little bit about the exposure, not a lot of exposure to some of the bankruptcies and bigger store closing programs out there.

As you're looking at new properties with that may have some of these at risk retailers, is that something that you're trying to avoid or do you - can you see that as an opportunity?.

We look at it in many different aspects in terms of the risks. It's tough to really tell you. I mean we certainly look at those risk and analyze them long term as it relates to our revenue stream.

Once in a while if we see a tenant primarily an anchor tenant that is - that have some risk but their rent is substantially less in terms of the market then we will take that into consideration in our underwriting as it relates to the yields that we can achieve with our platform.

But more importantly, we tend to not buy assets that hold the risk of anchors that potentially are going to go back, but we stay away from those transactions..

Okay.

And then just lastly, I think I asked this last quarter but just maybe an update on how you're thinking about equity issuance you did, they are obviously during the OP units through the some of the deals that you're doing, but how do you think about equity raised through the balance of the year?.

Hey, Christy, it's Mike. So we think about our guidance for 2017 in the pipeline we've got. Our guidance is always based on consistent wise, how we've always proceed in the past in the meeting raising new equity from balance of sources but that an equity keeping it carefully towards maintaining our credit metrics primarily..

Okay.

So no further plans or just really just a little bit?.

No further plans right at present mind..

Nothing definitive of today..

Yeah..

Okay. Thank you..

Thank you..

Thank you, Christy..

Thank you. Our next question comes from Paul Morgan with Canaccord. Your line is open..

Good morning, Paul..

Hi. Good morning. Some of the same store NOI, maybe you could just kind of help bridge the gap from kind of where you started the year 2% your target which I guess is still 4% and kind of how we should think of kind of the cadence of that over the course of the year.

I know a couple of that you know at Fallbrook and Crossroads the closings there are already released but they're not opening until late in the year.

So I mean can you give sort of a little breakdown like how much the intake was due to those two bankruptcies last year and then how we might think of things ramping to get to the full year target?.

Well, we included those in our same store this quarter our same store would have been close approximately close to three and a half. With them out of that equation when you look at the gap in terms of what we've leased and when the rent is coming in, we anticipate most of that flowing in third quarter and with the full impact in the fourth quarter.

And then 2018 assuming nothing out there happens of any significance that's when you get a full run rate of everything and that should be an extremely strong year for us on a same store basis. That's really the way things are going to flow, correct me Mike if I'm wrong in which..

I would agree that. First of course first half we're expected it to be lower than our normal run rate but it's not an indication of our run rate..

Yeah. Okay.

So that's 150 basis points I guess once that anniversary is kind of flips to the office side, you could see yourself kind of in the 5% territory, I guess would start to get you kind of closer to that?.

Exactly..

Yeah. Okay..

Exactly..

I mean the bad debt was up year-over-year, a decent amount in the quarter was there, anything specific there?.

Our increase in bad debt was primarily due to recapturing initiatives involving short term cotenant provisions but as we released the recapture space, there is also small portion of bad debt expense that resided the one Sports Authority store in our portfolio which was as you know has been released..

Yeah. Okay. And then - that's helpful.

And then one of the line just kind of stood out in the same store numbers for your property taxes were up 8% on a same store basis which given California side, I wouldn't have expected that kind of jump, is there anything one-off there that cause that?.

It's more of a - you know the increase in part of due the properties we expanded in the past year.

And property that we recaptured causing the sub-tie to go up and then partly this some of our acquisitions in 2015 have been probably held for many years and we're recently reassessed, keeping in mind that those increase will start to recapture through recoveries, it's always bit of a time like there..

Yeah. Okay.

And then just lastly on the new deals you have announced today, a number of them have pretty high occupancy up to even 100% and I was wondering what you normally buy assets that have some type of kind of no juice and then first couple of years and I am wondering if there's any color you have on kind of what you see as the opportunity kind of beyond the kind of absolutely going in cap rate on some of those deals?.

The mark-to-market on those deals is very strong for us, right out of the box in terms of closing these transactions. So that to me is a great opportunity just sitting still as we would say.

Then if we even dive a bit further, there's a couple of spaces in these assets that are well under market that we believe we're going to be able to recapture very quickly. And that is that could be as big as 150% to 300%.

So it's a combination of rollover, combination of a bit of lease that they are primarily the aggressiveness that our platform has in terms of the like we've done with these initiatives where we play offense instead of defense..

Okay. That's perfect. Thanks..

Thank you..

Thank you. Our next question comes from Michael Gorman with BTIG. Your line is open..

Good morning, Mike..

Good morning, Michael..

Good morning, guys.

Mike if I could ask quickly going back on the same store here and I was curious I appreciate the color on the expenses, the recovery ratio at least on our numbers was down year-over-year as well, is that just a timing issue or was something else because occupancy was relatively flat?.

Yeah. I would say definitely true, it's more of a timing issue..

Okay.

So we should expect that to go back up over the course of the year?.

Yeah. It would..

Okay.

And then Rich, just to clarify the pad expansions or the out partial expansions that you're working on this year the 2 million of incremental rent, what's kind of a dollar investment that we should think about to get to that 2 million of rent at the end of the year?.

You know, I don't have this specific number right here and so we follow-up with you after the call, but obviously we look at that in terms of the market rent we can achieve and you know looking forward double digit returns on those investments..

When we ran the analysis recently Mike, the analysis showed about a 17% on levered cash returns. So - but the number, the exact number in terms of cause isn't in front of us but we can get back to good if you would like..

Yeah, that would be great, thanks.

And then Stuart, I guess just on big picture you mentioned about obviously the relationships and the desire of some of the sellers to take ROIC units back, can you maybe walk through the 5.5 cap is pretty strong, what kind of pricing advantage do you think you think you get based on those relationships and that ability to offer units.

I mean, so - if these were marketed deals, where do you think some of these assets would have traded?.

I would tell you maybe 25 basis points, but it's - maybe you know 25 maybe out of 50, but it's - I mean price is just one part of the story here. The real part of the story is the mark-to-market on these transactions.

We have found over the years that the families that we done these transactions where they have been so focused on cash flow that they really don't - they don't really capture the true mark-to-market. In the number of case, we haven't seen rents go up in years. So the real opportunity here Mike is really the mark-to-market on the rollover these leases.

It's not so much pricing; it's just the amazing amount of cash flow, increasing cash flow on a mark-to-market basis. And then on a re-merchandize, re-tenanting basis, that's really where we are able to create a lot of juice very quickly..

Got it, great.

And then one last one, do any other families that you are working with on these acquisitions having additional properties that could be future opportunities or?.

Currently, the one we've announced, no, but there is more out there that are pursuing and those families do have portfolios, some are two properties and more and some are bit more than that. And it comes and goes to pending on the negotiations and the time that we're spending together.

This process is long and tedious because of these relationship that go back in some cases decades. So we will vary from seller to seller. But the answer is yes, those opportunities do exist..

Fantastic, I appreciate the color, guys..

Thanks Mike..

Thank you. Our next question comes from Collin Mings with Raymond James. Your line is open..

Hey, good morning, Collin..

Good morning.

Couple of questions, I think first going back as far as Mike just to Christy's question on capital market assumptions and guidance, can you maybe update how you are thinking about the debt market today, just given without standing on the line what you finished the quarter with on the line?.

Well, like I mentioned you know earlier Christy who keep a careful eye and look at all the different levers looking for financing but there is an equity. We are looking all those different options just a verity of ways you can make it any combination of that as well doing some debts in equity.

Lot of different things we could do, we are just kind of watching the markets and see how it develops..

Gotcha.

Along those lines, how do you think about potential ten year debt financing cost currently?.

Right now, there is - the pricing is they are still difference between private and public, so that in line I think probably price the ten year, a ten year deal in the high 3s or low 4% range..

Okay, alright.

And then switching gears, Rich, just curious, across your markets, can you drill down a bit and highlight on a relative basis just where you are seeing the strongest tenant demand and the most pricing power?.

Yeah, I would say the - you know Portland is the demand there you know were essentially full in that market right now. And that has - is a change from where we started. You Seattle continues to be a very strong market and along with LA and Orange. I mean the reality is that across all of our markets, there is still very good tenant demand.

You know probably the only place where there is any - you know anything that wouldn't fall on that category be the sacramental market..

Okay.

Then I guess Rich or Stuart, just thinking through the broader headline that they are right now for retain, I am just curious what demand is strong, and you have at least mark-to-market opportunities, just curious as far as the ask from some of the tenants that you are dealing with, has there been any shift there in terms of shorter terms, less aggressive escalators, smaller box side, is just - are there been any kind of tradeoff for that pricing power that you guys are demonstrating?.

No, I mean I don't think in terms of the you know the tenant asked that they have changed all that. I think you do see the trend of you kwon the grocer not always wanting the biggest - the big 50,000 square boxes depending on the operator as they use to have.

But in many situation that gives us an opportunity like this remainder space that we leased this quarter, you know that smaller foot print is going to demand a higher rent for square foot. So that was a remainder space from an Albertson that we had downsized previously..

And of course the other thing is we have no anchor space available, so it's tough to answer your question when you don't have….

He is talking about lease of the general..

Right, right..

Alright, I appreciate the color, guys. Thanks..

Thank you. Our next question comes from George Hoglund with Jefferies. Your line is open..

Good morning, George..

Good morning, guys.

I just want to go back to the operating expense growth and we touched on a property taxes, but on the property operating expenses line that was up 10.3%, just give a little more color there?.

That increase is a bit higher than usual and most into progress we part in 2015 has been previously under managed, spend some capital on that. The fair amount I think Chris will start to come back to us recapture or cover again to the timing effect..

Okay.

And then you touched upon the bad debt expense, but further can you give a little more color there in terms of I think you said is due to recapture of something do with co-tenancy?.

Yeah, I mean in certain circumstances you know we've had a little bit co-tenancy, it's primarily at Albert but that will go the other way as those spaces gets occupied. So while we are in the fit out period there is a little bit of impact. It's really not material in the overall big picture..

Okay, thanks.

And just in terms of the overall acquisition pipeline, is the overall interest rate environment or just macro environment having in any impact on kind of seller desire to sell properties or hold things?.

While in terms of cap rates for quality grocery-anchored centers in top markets are certainly in - in the primarily markets in the west coast, we get to see any shift in cap rates.

So I mean I just don't see you know given the fact that there is really there's been a bit of a slowdown on widening marketed deals and given the fact that you know looking at the entire weaker landscape today, the grocery anchor format or segment has become the most sort after segment in terms of the market, that's why I think cap rates just aren't going to move this especially in the top markets in the U.S..

Okay, thanks for the color..

Thank you..

Thank you. Our next question comes from Craig Schmidt with Bank of America. Your line is open..

Good morning, Craig..

Good morning.

I was wondering on the acquisitions going forward, will you - do you think the western non-California markets are more attractive or the other California markets more attractive?.

Well, we're in - as you probably know Craig, we're in more than just California but we know we are not leaving our backyard under any circumstances at this point. The pipeline of transactions look great. So now we are sticking to what we know back and where we have operated there for many decades as you have heard.

So at this point, where we have no intention of moving outside of the primary markets on the west coast..

And the Portland and Seattle still seem very attractive for you?.

Very attractive, but tough markets you know they are buying because it's just there is not as many opportunities obviously given that they are much smaller markets. But we like those markets as much as we like you know the coastal markets on the - in California..

Okay, thank you..

Thank you, Craig..

Thank you. Our next question comes from [indiscernible] with RBC Capital Markets. Your line is open..

Hey, good morning, guys..

Good morning..

Good morning, guys.

Looking at the relationship oriented deals, what is opportunity set here long term, is it 10 centers, 50 centers, can you give some commentary on that?.

I can give you some commentary on the entire market in terms of opportunities but then we try to drill down to sellers that have a starter tax issues. It's a bit more difficult to get specific. But what I can tell you is if you look at our pipeline right now, there is probably 8 to 12 centers in our pipeline that we're working on in that category..

Okay.

And then looking at your groceries and your centers, do they typically be - are they typically the top groceries in the chin top there, I mean how they groceries performing on a small store?.

Yeah the grocers are all doing quite well, I mean the year-over-year increase in sales in many cases are double digit. And they are performing in the top percentage of their change..

Okay, thanks a lot..

Thank you..

Thank you. Our next question comes from Todd Thomas with KeyBanc. Your line is open..

Good morning, Todd..

Hi Todd..

Hi good morning.

Stuart maybe Rich also, just back to leasing demand and the retail environment today overall you know how deep is the list of tenants that you're talking today for both small shop space and say junior anchor spaces and how that - how might that compare to what you've seen in prior years, have you seen any changes?.

I think we're seeing any changes our demand for space continues to come from a pretty broad range of retailers, it varies depending on the market, so for example like in the Pacific Northwest it's highly sought after you know by retailers looking to expand and gross reserve at the top of that list.

Many new grocers are trying to move into the market for the first time as well as you know the existing grocers looking to improve their market share.

And then you know just across the board, we're still seeing a lot of good interest from new restaurant concepts and health and beauty and fitness and medical they're all continuing to expand across the all of our market..

In terms of some of the retailers whether it's some restaurants or other categories, who are some of those retailers perhaps that are first expanding in your markets that could be a meaningful source of demand as they roll out stores along the west coast?.

Many of our regional players are in the restaurant categories that are back filling the prior retail type of space. And you know it's everything from an individual who is opening one unit to guys who have you know five to 10 units..

Okay and then you know Fallbrook is come up a couple of times here on the call and it's one 100% leased, it was basically 100% lease last quarter, and I know that there was some movement there, but can you just stroll down and sort of talk about the tenant rotation there that you've seen at that asset and sort of you know what changes are in motion there?.

I mean as you mentioned it's been very stable property for us, there was a former automotive pad that we redevelop right after acquiring the property that pad is now 100% leased and again you know it's a medical user or a couple of restaurants bagel store and then we also had the ones - a and the portfolio there, and I think as we've talked on previous calls you know we're bringing in the east coast retailer to the west coast with one of their first locations that space is currently being fitted out in terms of landlord work we expected to deliver very shortly here and have them commence their work.

You know it's bit of work there because you're converting you know supporting goods to another use and there was very large swimming pool involved that had to be filled and et cetera.

The other moving parts there is that is the one coals in our portfolio that space is dark at the present time, but the present update from coals that they have a sub tenant to fill the space..

Into came and use too which is something we don't have at Fallbrook and something that will certainly bring a nice sort of flavor to the shopping center, so it's not actually, it's a retailer, but at different type of retailer, which is going to be very strong for the asset long term..

Okay, got it. That's helpful.

And then just last question for Mike, in terms of same store NOI growth you talk about that accelerating throughout the year here, but you also mentioned that in every quarter the pole changes a little bit, and I'm just curious how much of a lift does that change in the same store pole for the full year represent as we think about the 4% in total, are you able to break that out?.

Now the 4% would just be for the 73 properties that constitute the cohort be for the entire year, so that's what we're measuring on that, so as properties are added to the pool during year because we've gone into parity both comparative quarters those on the fact the year-over-year pool..

Right, but if we think about all of the properties that are going to be in the full year pool that will roll in throughout the year essentially when we think about that, what's - if we were to look at last year same store pool what would the same store growth look like for last year's pool essentially?.

So this year's full year pool are all the properties owned at the beginning of 2016. So we have to look back at the ones that we had in 2015 there being added into the 2016 pool, but I don't have break down in front of me. I can get back to you when you talk about on that..

Okay. All right, that's fine. All right, thank you..

Thank you..

Thank you..

Thank you. Our next question comes from Nakita Bailey with JPMorgan. Your line is open..

Good morning guys..

Good morning..

Good morning Stuart.

A very quick question more high level I guess, when you talk about buying these grate replaceable locations centers, what would be the metrics that you would look kind inside actually to not buy an asset, even it isn't a great location what would stop you from doing that?.

There's going to be a number of metrics, I mean there's a lot of metrics we look at when we buy properties, I think the most important metric is the tenant and the covenant behind this tenant. And so I think the revenue stream is the most important thing to begin with and you know how it's the downside risk, that's what we look at first.

But it's you know tenant demand it is it's the marketplace from a competitor viewpoint it is environmental, it is you know changes in terms of rollover or the leases that are rolling over, there's really a number of metrics that we look at.

So it's just hard to identify what metric is the most important as it relates to a rejecting a transaction But let me let me try to put in this content, every week we probably look at about 100 deals, and I say a 100, I'm talking about all over the markets on the West Coast.

We probably chased one out of that 100 on a weekly basis in terms of trying to get through all of these metrics and something that we really want to pursue and by, so there's a lot of again kind of metrics to look at here, but we are extremely selective when it comes to what we're buying, I think that's the bottom line.

And more importantly just watch the downside risk, as it relates to tenant diversity and the things we spoke about and today on our call as it relates to diversification and the actual revenue stream itself..

And those 100 that you mentioned are those all in prime irreplaceable occasions that do you speak off?.

No, this would be all over the market, so we get a lot of real estate on a daily basis just comes from different places, because of our reputation and because we've been doing it so long, we have lot of market people that just send us stuff that we does it doesn't fit..

All right, thank you..

Thank you..

Thank you I'm showing no further questions at this time. I would like to turn the conference back over to Stuart Tanz, Chief Executive Officer for closing remarks..

Thank you. In closing I'd like to thank all of you for joining us today. And if you have additional questions please feel free to contact Mike, Rich or myself, you can also find additional information in the Company's quarterly supplemental package, which is posted on our website.

And lastly for those who are attending an ICFC the convention in Vegas, Las Vegas next month starting on May 21, please stop fire boo, which will be in the South Hall at the corner of N. Street and 50th Avenue and we hope to see you all there. Thanks again and have a great day everyone..

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program. And you may now disconnect. Everyone have a great day..