Real Estate Investments

The following real estate investment transactions occurred during the years ended December 31, 2017 and 2016.

Property Acquisitions in 2017

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 January 25, 2017, the Company acquired the property known as PCC Community Markets Plaza located in Edmonds, Washington, within the Seattle metropolitan area, for an adjusted purchase price of approximately $8.7 million. PCC Community Markets Plaza is approximately 34,000 square feet and is anchored by PCC Community Markets. The property was acquired with available cash from operations.

On March 17, 2017, the Company acquired the property known as The Terraces located in Rancho Palos Verdes, California, within the Los Angeles metropolitan area, for an adjusted purchase price of approximately $54.2 million. The Terraces is approximately 173,000 square feet and is anchored by Trader Joe’s, Marshall’s and LA Fitness. The property was acquired with borrowings under the Company’s unsecured revolving credit facility (the “credit facility”).

On March 24, 2017, the Company acquired the property known as Santa Rosa Southside Shopping Center located in Santa Rosa, California, within the San Francisco metropolitan area, for an adjusted purchase price of approximately $28.9 million. Santa Rosa Southside Shopping Center is approximately 86,000 square feet and is anchored by REI and Cost Plus World Market. The property was acquired with borrowings under the credit facility and the issuance of 168,497 OP Units with a fair value of approximately $3.6 million.

On April 5, 2017, the Company acquired the property known as Division Center, located in Portland, Oregon, for an adjusted purchase price of approximately $33.1 million. Division Center is approximately 122,000 square feet and is anchored by Grocery Outlet Supermarket, Rite Aid Pharmacy and Petco. The property was acquired with borrowings under the credit facility.

On May 9, 2017, the Company acquired the property known as Highland Hill, located in Tacoma, Washington, within the Seattle metropolitan area, for an adjusted purchase price of approximately $47.4 million. Highland Hill is approximately 164,000 square feet and is anchored by Safeway Supermarket, LA Fitness, Dollar Tree and Petco. The property was acquired with borrowings under the credit facility.

On September 19, 2017, the Company acquired the property known as Monta Loma Plaza, located in Mountain View, California, within the San Francisco metropolitan area, for an adjusted purchase price of approximately $30.0 million. Monta Loma Plaza is approximately 48,000 square feet and is anchored by Safeway Supermarket. The property was acquired with borrowings under the credit facility.

On October 11, 2017, the Company acquired the properties known as Fullerton Crossroads and Riverstone Marketplace. Fullerton Crossroads, located in Fullerton, California, within Orange County, was acquired for an adjusted purchase price of approximately $61.6 million, is approximately 220,000 square feet and is anchored by Kroger (Ralph’s) Supermarket. Riverstone Marketplace, located in Vancouver, Washington, within the Portland metropolitan area, was acquired for an adjusted purchase price of approximately $31.7 million, is approximately 96,000 square feet and is anchored by Kroger (QFC) Supermarket. The properties were acquired through the issuance of 2,405,430 OP Units with a fair value of approximately $46.0 million and the assumption of existing debt on the properties with a fair value of approximately $46.0 million.

On October 19, 2017, the Company acquired the property known as North Lynnwood Shopping Center, located in Lynnwood, Washington, within the Seattle metropolitan area, for an adjusted purchase price of approximately $13.3 million. North Lynnwood Shopping Center is approximately 64,000 square feet and is anchored by Kroger (QFC) Supermarket. The property was acquired with borrowings under the credit facility.

On November 30, 2017, the Company acquired the property known as The Village at Nellie Gail Ranch, located in Laguna Hills, California, within Orange County, for an adjusted purchase price of approximately $46.1 million. The Village at Nellie Gail Ranch is approximately 88,000 square feet and is anchored by Smart & Final Extra Supermarket. The property was acquired with borrowings under the credit facility.

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. During the year ended December 31, 2016, the Company acquired 6 properties throughout the west coast with a total of approximately 596,000 square feet for a net adjusted purchase price of approximately $270.9 million. In each of these acquisitions, the Company allocated the total consideration for each acquisition to the individual assets and liabilities acquired based on their fair values. These acquisitions were consummated prior to October 1, 2016, and accordingly, all transaction costs incurred in these acquisitions were expensed.

Asset Acquisitions

During the year ended December 31, 2016, the Company acquired assets throughout the west coast with a total of approximately 239,000 square feet for a net adjusted purchase price of approximately $76.9 million. 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. These acquisitions were consummated subsequent to October 1, 2016, and accordingly, all transaction costs incurred in these acquisitions were capitalized.

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, 2017 and 2016 (in thousands).



	December 31, 2017		December 31, 2016
Assets
Land	$	109,356	$	96,113
Building and improvements	265,040		258,584
Acquired lease intangible asset	22,024		19,667
Deferred charges	8,034		6,876
Assets acquired	$	404,454	$	381,240
Liabilities
Mortgage notes assumed	$	46,034	$	17,618
Acquired lease intangible liability	45,456		32,615
Liabilities assumed	$	91,490	$	50,233

Pro Forma Financial Information

The pro forma financial information is based upon the Company’s historical consolidated statements of operations for the year ended December 31, 2016, 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 2015, 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 year ended December 31, 2017 or the three months ended December 31, 2016 (in thousands).



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

The following table summarizes the operating results included in the Company’s historical consolidated statement of operations for the year ended December 31, 2017 for the properties acquired during the year ended December 31, 2017 (in thousands).



	Year Ended December 31, 2017
Statement of operations:
Revenues	$	13,500
Net income attributable to Retail Opportunity Investments Corp.	$	2,948

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