Real Estate Investments

The following real estate investment transactions occurred during the years ended December 31, 2016 and 2015.

Property Acquisitions in 2016

Business Combinations

Prior to the adoption of ASU 2017-1 on October 1, 2016, the Company accounted for its real estate property acquisitions as business combinations. In each of the following acquisitions, the Company allocated the total consideration for each acquisition to the individual assets and liabilities acquired based on its fair value. All transaction costs incurred in these acquisitions were expensed.

On March 10, 2016, the Company acquired a two-property portfolio for an adjusted purchase price of approximately $64.3 million. The first property known as Magnolia Shopping Center, located in Santa Barbara, California, is approximately 116,000 square feet and is anchored by Kroger (Ralph’s) Supermarket. The second property, known as Casitas Plaza Shopping Center, located in Carpinteria, California, within Santa Barbara County, is approximately 97,000 square feet and is anchored by Albertson’s Supermarket and CVS Pharmacy. The acquisitions were funded through the issuance of 2,434,833 OP Units with a fair value of approximately $46.1 million, the assumption of $9.3 million and $7.6 million in mortgage loans on Magnolia Shopping Center and Casitas Plaza Shopping Center, respectively, and available cash from operations.

On April 28, 2016, the Company acquired the property known as Bouquet Center located in Santa Clarita, California, within the Los Angeles metropolitan area, for a purchase price of approximately $59.0 million. Bouquet Center is approximately 149,000 square feet and is anchored by Safeway (Vons) Supermarket, CVS Pharmacy and Ross Dress For Less. The property was acquired with borrowings under the Company’s unsecured revolving credit facility, proceeds from the ATM program and available cash from operations.

On June 1, 2016, the Company acquired the property known as North Ranch Shopping Center located in Westlake Village, California, within the Los Angeles metropolitan area, for a purchase price of approximately $122.8 million. North Ranch Shopping Center is approximately 147,000 square feet and is anchored by Kroger (Ralph’s) Supermarket, Trader Joe’s, Rite Aid Pharmacy and Petco. The property was acquired with borrowings under the Company’s unsecured revolving credit facility, proceeds from the ATM program and available cash from operations.

On July 14, 2016, the Company acquired the property known as Monterey Center, located in downtown Monterey, California, for a purchase price of approximately $12.1 million. Monterey Center is approximately 26,000 square feet and is anchored by Trader Joe’s and Pharmaca Pharmacy. The property was acquired with available cash from operations.

On September 15, 2016, the Company acquired the property known as Rose City Center located in Portland, Oregon, for a purchase price of approximately $12.8 million. Rose City Center is approximately 61,000 square feet and is anchored by Safeway Supermarket. The property was acquired with borrowings under the Company’s unsecured revolving credit facility and available cash from operations.

Asset Acquisitions

Subsequent to the adoption of ASU 2017-1, the Company evaluated its real estate property acquisitions under the new framework for determining whether a real estate property acquisition meets the definition of a business. The Company evaluated each of the following acquisitions and determined that substantially all of the fair value related to each acquisition was concentrated in a single identifiable asset. In each of these acquisitions, 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.

On October 3, 2016, the Company acquired the property known as Trader Joe’s at the Knolls, located in Long Beach, California, within the Los Angeles metropolitan area, for a purchase price of approximately $29.1 million. Trader Joe’s at the Knolls is approximately 52,000 square feet and is anchored by Trader Joe’s. The property was acquired with borrowings under the Company’s unsecured revolving credit facility.

On October 17, 2016, the Company acquired the property known as Bridle Trails Shopping Center, located in Kirkland, Washington, within the Seattle metropolitan area, for a purchase price of approximately $32.8 million. Bridle Trails Shopping Center is approximately 104,000 square feet and is anchored by Unified (Red Apple) Supermarket and Bartell Drugs. The property was acquired with borrowings under the Company’s unsecured revolving credit facility.

On December 6, 2016, the Company acquired the property known as Torrey Hills Corporate Center, located in San Diego, California, for a purchase price of approximately $9.9 million. Torrey Hills Corporate Center is a 24,000 square foot office building and will be the Company’s new corporate headquarters in 2017. The property was acquired with borrowings under the Company’s unsecured revolving credit facility.

Property Acquisitions in 2015

Business Combinations

During the year ended December 31, 2015, the Company acquired 12 properties throughout the west coast with a total of approximately 1.3 million square feet for a net adjusted purchase price of approximately $483.0 million

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’s financial statements in accordance with the standards of the United States Public Company Accounting Oversight Board.

The financial information set forth below summarizes the Company’s purchase price allocation for the properties acquired during the years ended December 31, 2016 and 2015 (in thousands).



	December 31, 2016		December 31, 2015
Assets
Land	$	92,518	$	123,176
Building and improvements	262,571		362,147
Acquired lease intangible asset	19,321		26,507
Deferred charges	6,830		8,612
Assets acquired	$	381,240	$	520,442
Liabilities
Mortgage notes assumed	$	17,618	$	—
Acquired lease intangible liability	32,615		37,480
Liabilities assumed	$	50,233	$	37,480

Pro Forma Financial Information

The pro forma financial information is based upon the Company’s historical consolidated statements of operations for the years ended December 31, 2016 and 2015, adjusted to give effect to the above completed business combination transactions as if they occurred on January 1, 2015. The pro forma financial information set forth below is presented for informational purposes only and may not be indicative of what actual results of operations would have been had the transactions occurred as if they occurred on January 1 of each year, nor does it purport to represent the results of future operations. The below pro forma financial information does not include asset acquisitions that occurred during the three months ended December 31, 2016 (in thousands).



	Year Ended December 31,
	2016		2015
Statement of operations:
Revenues	$	245,116	$	235,199
Net income attributable to Retail Opportunity Investments Corp.	$	33,169	$	26,763

The following table summarizes the operating results included in the Company’s historical consolidated statement of operations for the year ended December 31, 2016 for the properties acquired during the year ended December 31, 2016 (in thousands).



	Year Ended December 31, 2016
Statement of operations:
Revenues	$	15,230
Net income attributable to Retail Opportunity Investments Corp.	$	2,513

The following table summarizes the operating results included in the Company’s historical consolidated statement of operations for the year ended December 31, 2015 for the properties acquired during the year ended December 31, 2015 (in thousands).



	Year Ended December 31, 2015
Statement of operations:
Revenues	$	12,706
Net income attributable to Retail Opportunity Investments Corp.	$	2,849

Property Dispositions

On June 5, 2014, the Company sold Phillips Village Shopping Center, a non-core shopping center located in Pomona, California with an occupancy rate of approximately 10.4% as of May 31, 2014. The sales price of this property of approximately $16.0 million, less costs to sell, resulted in net proceeds to the Company of approximately $15.6 million. Accordingly, the Company recorded a gain on sale of approximately $3.3 million for the year ended December 31, 2014 related to this property.

On August 25, 2014, the Company sold the Oregon City Point Shopping Center, a non-core shopping center located in Oregon City, Oregon. The sales price of this property of approximately $12.4 million, less costs to sell, resulted in net proceeds of approximately $12.0 million. Accordingly, the Company recorded a gain on sale of approximately $1.6 million for year ended December 31, 2014 related to this property.

The Company did not have any property dispositions during the years ended December 31, 2016 and 2015.