Welcome to Retail Opportunity Investments First Quarter 2012 Conference Call. [Operator Instructions] 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. Factors that could cause actual results to differ materially from current expectations include, but are not limited to, changes in economic conditions and the demand for retail space in the markets where the company operates, the financial success of its tenants, the availability of properties for acquisition, the company's ability to successfully integrate newly acquired properties and other risks, which are more fully described in the company's filings with the Securities and Exchange Commission. Now I would like to introduce Stuart Tanz, the company's Chief Executive Officer.

Thank you. Here with me today is John Roche, our Chief Financial Officer; and Rich Schoebel, our Chief Operating Officer. I am pleased to report the company is off to a strong start in 2012. We continued to successfully execute our business plan of broadening our portfolio through acquiring quality grocery-anchored shopping centers and quickly enhancing value through our proactive management and leasing programs. In terms of acquisitions, we have over $75 million of shopping center investments committed today plus we have another $100 million that we currently have tied up and are midway through our due diligence process. Beyond the $175 million, our pipeline of acquisition opportunities continues to be active. Importantly, we continue to focus on acquiring exceptional shopping centers in strong markets that offer a combination of stable cash flow derived from long-term leases to strong, well-established anchor retailers, along with identifiable opportunities to quickly enhance value. As an example, during the first quarter, we acquired a grocery and drugstore-anchored shopping center in San Diego. We acquired the property in an off-market direct-to-owner transaction. The center is 100% leased and is anchored by strong grocery and drugstore operators with well-established customer bases in the community. These anchors provide the center with a base of reliable, recurring cash flow. In terms of upside, the property is fully entitled for a 10,000-square foot expansion specifically for in-line retailers that will complement the grocery and drugstore anchors. We were already aggressively pursuing the expansion and have about 70% of the space spoken for. We expect to start construction next month, which should be completed by year end. We acquired the property at a going-in cap rate of approximately 7% based on existing in-place leases. Once we complete the expansion, our all-in overall cash yields will increase to upwards of 9%. To give you another example, we're in escrow to acquire an exceptional irreplaceable shopping center in the San Francisco market. The property is well located in a densely populated community, with very strong demographics, including a population base of 250,000 within a 5-mile radius and an average household income of $126,000. We are acquiring the property in an off-market direct-to-owner transaction. While the center is anchored by a well-established regional grocer, with very strong sales numbers, the property has been under managed by the previous private local owner. As a result, the center is currently 80% occupied with a number of in-line spaces available, which represent a great opportunity for our leasing team. In fact, notwithstanding currently being in escrow, which we expect to close on within the next few days, we're already in discussions with in-line retailers for the available space. Once we bring the occupancy level up to be in line with our core portfolio, our yield will increase by about 200 basis points similar to our acquisition in San Diego. These 2 acquisitions are indicative of the types of unique off-market opportunities that we are sourcing by capitalizing on our long-standing relationships and in-depth knowledge across our core markets. They're also indicative of our ability to quickly and significantly enhance value. Along with focusing on broadening our portfolio, we're also very focused on maximizing property operations. As Rich will discuss in a minute, we're off to a great start in 2012, including increasing our overall portfolio occupancy and achieving solid re-leasing numbers. We also posted a double-digit increase in same center net operating income for the first quarter. So with our ongoing success, both with securing off-market opportunities to acquire exceptional shopping centers and with our property operations, we are fully on track with achieving our goals for the year. And now I'll turn the call over to John to discuss the company's financial results for the quarter. John?

Thanks, Stuart. Starting with our income statement. For the first quarter, the company had $16.6 million in total revenues as compared to $10 million in total revenues for the first quarter 2011, representing a 66% increase. The significant increase in revenues reflects the growth in our portfolio from acquisitions over the past year, as well as strong leasing activity. And as Stuart noted, same center net operating income increased significantly by 10% on a cash basis for the first quarter. In terms of net income and funds from operations, during the first quarter, the company had net income of $1.1 million equating to $0.02 per diluted share. FFO for the first quarter was $8.4 million or $0.17 per diluted share. While our earnings and FFO per share numbers are below results from the first quarter of 2011, you may recall that during the first quarter of 2011, we had a bargain purchase gain of $5.8 million related to the conversion of 3 mortgage loans to fee interest. Also affecting the quarter-over-quarter comparative per share results is the equity raise that we completed in the fourth quarter of 2011. As a result, our share count increased by 19% for the first quarter of 2012 as compared to the first quarter of 2011. With respect to dividends, during the first quarter, the company distributed a cash dividend of $0.12 per diluted share, equating to a 71% FFO payout ratio. Turning to our balance sheet. At March 31, the company had a total market cap of approximately $840 million, with $193 million of total debt outstanding equating to a conservative debt-to-total market cap ratio of approximately 23%. With respect to the $193 million of debt, $125 million is unsecured and only $68 million is secured. On a square footage basis, 87% of our portfolio was unencumbered. And at March 31, we had $15 million outstanding on our $175 million unsecured credit line. Subsequent to the end of the quarter, we repaid a $6.8 million mortgage, which was the only debt we have maturing for the next 2 years. Lastly, in terms of FFO guidance, we continue to expect FFO per share for 2012 to be between $0.68 and $0.78 per diluted share for the year. There are 2 primary drivers in achieving our 2012 guidance. One key driver is already largely in hand, that coming from internal growth attributed to our leasing activity during the past year. The other key driver is acquisitions. As Stuart discussed, we already have about $175 million in acquisitions spoken for, so we are well on our way to reaching our goal of acquiring $250 million during 2012. Now Rich Schoebel, our COO, will discuss property operations. Rich?

Thanks, John. At March 31, our portfolio totaled 34 shopping centers, encompassing approximately 3.9 million square feet of gross leaseable area, diversified across the West Coast. 10 of our properties or 30% of our GLA is located in Southern California, most notably in the Los Angeles and San Diego markets. Eight of our shopping centers are located in our Northern California region, representing 25% of our total GLA, primarily in the San Francisco and Sacramento markets. Nine properties, representing 24% of our total GLA is located in the Portland, Oregon market, and 21% of our GLA is in the Seattle market where we own 7 shopping centers. As Stuart indicated, demand for space across our portfolio continues to be strong, and we continue to work diligently to capitalize on this. In fact, during the first quarter, we increased overall portfolio occupancy by 100 basis points from 91.3% at year end to 92.3% as of March 31. This is particularly noteworthy given that in the shopping center industry, leasing activity is usually relatively quiet in the first quarter following the holiday season with occupancy typically slipping a bit. So the fact that we actually increased our overall occupancy speaks to the quality of our portfolio, to the strength of our market and to our management and leasing capabilities. Specifically, during the first quarter, we executed 53 leases totaling approximately 172,000 square feet. Breaking that down between new and renewed leases, during the first quarter, we renewed 23 leases totaling 122,000 square feet, including 2 key anchor tenants. Of the 23 tenants that we renewed, the vast majority simply exercised renewal options, many of which had built-in clauses stipulating that the renewal base rent would be the greater of market rent or their previous rent. Given that many of these leases were put in place 5 or so years ago at the height of the market, most of the renewals were executed at the previous existing rent. Accordingly, on a same-space comparative basis, base rents increased modestly on average by 1% on a cash basis during the first quarter. In terms of new leases, during the first quarter, we executed 30 new leases totaling 50,000 square feet, all of which were in-line shop space. And the bulk of this involved leasing up previously vacant space at newly acquired properties, where we achieved base rents that were at or above our initial underwriting. Furthermore, we are currently in discussion with various anchor and in-line retailers with respect to the available space across our operating portfolio, which totaled approximately 261,000 square feet as of March 31. With respect to re-leasing spreads on new leases, given that the bulk of the space was previously vacant, the amount of expiring space was minimal so the same-space comparative number, which was approximately 5% on a cash basis, is not a statistically meaningful number. However, the fact that we achieved a positive spread speaks to our ability to quickly add value at newly acquired centers. I would also like to add that while pushing rental rates is an important part of negotiating with new tenants, equally important to us is securing the right mix of tenants at newly acquired properties. Having the right mix of tenants enhances consumer traffic at our centers and drives up demand for space, which in turn will enhance our ability to drive up rental rates going forward. Our strategy is to aggressively work our tenant base with the goal of enhancing not only near-term value but also long-term value at each shopping center. Now I'll turn the call back over to Stuart.

Thanks, Rich. Before opening up the call for your questions, I would like to make a couple of additional comments starting with our dividend. Based on our ongoing success, I am pleased to announce that the company has, again, increased its cash dividend. The quarterly dividend, which we pay on May 30, will be $0.13 per share, representing an 8.3% increase over our previous cash dividend. Since we commenced paying cash dividends back in the second quarter of 2010, we have increased the dividend 5 times, more than doubling the dividend along the way. Continuing to deliver a reliable cash dividends to our shareholders that steadily increase over time in step with our growing business and cash flow will continue to be an important part of our business plan. At the core of our business plan is maintaining a strong and diverse portfolio and tenant base. The key to our acquisition program is maintaining a well-distributed, geographically diverse portfolio. To that end, as our ongoing acquisition activity indicates, we are continuing to broaden our portfolio in each of our key markets. In fact, with respect to the $175 million of shopping center investment opportunities that we've lined up thus far in 2012, involving 8 properties, 3 of the shopping centers are located in Southern California with 2 in the Los Angeles market and 1 in San Diego; 2 investments are located in Northern California with 1 in San Francisco market and 1 in Sacramento; and 3 shopping centers are located in the Pacific Northwest, with 2 in Seattle and 1 in the Portland market. Just as we are focused on maintaining and enhancing our geographic balance, we continue to keep a careful eye on furthering our tenant diversity. Today, our portfolio is leased to over 600 tenants, the vast majority of which individually account for less than 1% of our total base rent, building and maintaining a diverse portfolio of quality shopping centers and strong markets, together with being hands-on and closely managing each property, as Rich said, aggressively working our tenant base every day is at the very core of our success today, and will continue to drive our ability to generate consistently strong results going forward. Now we'll open up the call for your questions. Operator?

[Operator Instructions] Our first question comes from Craig Schmidt of Bank of America.

Stuart, I guess my first question is how does the competition for acquisitions stand today versus, say, a year ago?

The competition out West -- there is competition. We don't see a lot of institutional capital chasing very high-quality, stabilized assets. We don't see a lot of REITs that active. And on the private side, we see some activity. But when you look at a comparison year-over-year, I will tell you, it's a bit more active. But we still have the ability to continue doing what we've done in the past, and that is to continue to source off-market transactions given our relationships.

And where do you think you might be at the end of the year with acquisitions?

Well, we're off to a great start. Primarily, everything that we've closed or are in the pipeline are off-market transactions. And I think as we move through the year, I think we will certainly meet our target of 215 and hopefully do better.

Okay. And then -- and just lastly, I mean, do you have a sense of what portion of your same-store NOI bucket is relative to the total overall NOI for the first quarter?

Well, it's 17 of the properties that we owned, overall, the percentage, I don't know off the top of my head...

About half?

But again, that number will change as year goes by, Craig, because as we've discussed, it's all 17 properties that we owned for the quarter, and obviously, as additional properties roll in, we will add those in as we go forward.

Our next question comes from Cedrik Lachance of Green Street Advisors.

Stuart, I just have a big picture question in regards to your leasing infrastructure. I'd like you to describe it a little bit. Where do you have teams in place? How many people are now in place in your leasing infrastructure? And how big do you think the portfolio can get to based on the number of people that you have at this point?

Well, the good news about our leasing structure is that, our leasing staff is the same staff that we had at Pan Pacific, both in the Pacific Northwest and California. So we've worked with these people many, many years. And currently, we've got 2 up in the Pacific Northwest led by Betsy Shriver, and we've got 2 in California led by Steve Erhard; again, both old employees of Pan Pacific. Going forward, as we continue to grow the portfolio, we will look at adding to our leasing team. But right now, given the demand that we see in the market and given the fact that we've worked so closely together for so many years doing what we've done, we believe that we'll continue to be up for that challenge and hopefully, continue to lease at the pace we've been leasing.

Okay. And then in terms of cap rates, when you go after properties, let's try to think about a property of similar quality with similar demographics and then in a similar area. If that property is located in California versus being located outside of California, what do you think the cap rate difference needs to be?

The cap rate needs to be -- outside of California?

Yes. So if you think along the West Coast, outside of California, how much more or less would you want to have in terms of cap rates versus a property that is in California?

Well, the West Coast really has 4 distinct markets that we operate in. And when you look at cap rates and compare them to California, I will tell you the Pacific Northwest is probably 25 basis points different. But they're all pretty close. I mean, there's really not -- for the quality of assets, groceries-anchored assets that we acquire, there's really not that much differential between the various markets.

Our next question comes from Paul Adornato of BMO Capital Markets.

I'm going to ask my favorite question and that is was wondering if you could provide any update with respect to the warrants. And perhaps more broadly, looking at the next, let's say, $100 million of potential acquisitions, how might we expect that to be funded?

Talking about -- addressing the warrants, Paul, we continue to meet with our advisors, continue to evaluate the alternatives, but at this point in time, there's nothing new to report.

The $100 million, John, in terms of funding the next $100 million of acquisition.

Again, we have capacity under our existing credit facility which also has an accordion. And we would anticipate issuing new term debt as we need capacity under our credit facility. And so we believe that, that does -- support is there from our bank group. And that's how we fund it.

Okay. And Stuart, you talked about kind of the quick turnaround that you're able to execute on these assets. Might that include some dispositions in the intermediate term?

We continue to look at the disposition side, and as we look out certainly for the balance of the year, we will focus on that. But again, we, Paul, as you know, are in the growth stage of the company. So -- and there are several assets that we don't have a lot of internal growth left. So we do keep evaluating them, and as we move through the year, we probably will look at disposing of a couple of assets.

And finally, just looking at the smaller tenants. Obviously, in some markets, you're bullish enough to start adding small tenant space, the San Diego asset that you described. Was wondering if you could perhaps generalize and compare the appetite for space among small tenants today versus 6 months or a year ago?

Well, there's demand across all 3 aspects of the tenant base: National, regional and local. In terms of the local markets, Rich?

I'd say this -- I'd say that the demand from the local tenants has picked up this year over last year, and we're seeing a lot more inquiries coming in and seeing really good activity from the local tenant base.

Our next question comes from Jeff Lau of Sidoti & Company.

A question on the piece of debt or the loan that you guys purchased. Was there something about the shopping center that, I guess, attracted you to that debt, or can you talk a little bit about that?

Sure. I mean, the property is located in the Sacramento market. It's a drugstore-anchored shopping center, and it's a good property, well-located in a strong submarket. The current owner was under a lot of financial distress, and the property was under managed, it was only about 70% occupied. We'd love to own the center. We purchased the mortgage at about a 25% discount to the face amount, and we are currently in discussions with the owner about getting the property in lieu of foreclosure. Going in -- our analysis going in, Jeff, on -- with all the vacancy is about a 7, just over a 7 cap rate. We believe once we get a hold of the property, we can pick that up by 200 or 300 basis points.

[Operator Instructions] Our next question comes from David West of Davenport & Company.

Just on the incremental $100 million of potential investments you've talked about, could you characterize those a little bit in terms, are they mostly stabilized properties or ones need repositioning and what kind of cap rates are you seeing on those opportunities?

Well, the $100 million includes 3 exceptional irreplaceable shopping centers. In that $100 million is also Wilsonville, which is a joint venture that we've talked about in the past. That particular project, we have passed the 90% mark, and we will be purchasing that asset over the next 30 days. The other 2 properties are located in Southern California, and we, again, in terms of these assets being stabilized versus value-add, I will tell you, primarily they're all stabilized, well leased, but there is some components through our leasing that we believe we can add value. And whether that's taking a tenant out and re-tenanting or repositioning 1 or 2 of these assets, they are very strong assets, and we're very excited about what we see in the pipeline as it relates to what we have under contract.

Good. Well, you addressed my Wilsonville questions. And I guess lastly, for John, I noticed in the disclosures on the supplement that you added a couple interest rate swaps, I think, totaling $75 million in April. What kind of impact will that have on interest expenses?

It's always -- it's been out there actually for a period of time. They commenced in April. We had actually put them on, I'm going to say, last year. And it is part of our interest rate management, again, we note in the information that we were 70% plus fixed at 330. We're actually 100% fixed today as a function of those swaps, which kicked in, in April.

I'm showing no further questions at this time, and I'd like to turn the conference back over to Mr. Stuart Tanz for any closing remarks.

Thank you. In closing, I would like to thank all of you for joining us today. If you have any additional questions, please feel free to call John, Rich or myself. You can also, of course, find additional information on the company's quarterly supplemental package, which is posted on our website at www.roicreit.net. And lastly, for those who are attending the ICSC convention in Las Vegas starting May 20, be sure to look us up. Our booth is C147 J Street, and we hope to see all of you there. Thanks again, and have a great day, everyone.

Ladies and gentlemen, this does conclude today's conference. You may all disconnect, and have a wonderful day.