Welcome to Retail Opportunity Investments 2015 Fourth Quarter and Year-End Conference Call. Participants are currently in a listen-only mode. Following the Company's prepared comments, the call will be opened up for questions. As a reminder, this conference is being recorded. Please note that certain matters discussed in this call today constitute forward-looking statements within the meaning of the 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 would like to introduce Stuart Tanz, the Company's Chief Executive Officer.

Thank you. Here with me today is Michael Haines, our Chief Financial Officer, and Rich Schoebel, our Chief Operating Officer. We are pleased to report that the Company posted another very strong year in 2015. Notwithstanding it being a year in which there was considerable uncertainty in the overall U.S. and global economies. In contrast to that within our core markets on the West Coast and specifically as it relates to the grocery-anchored shopping center sector. The fundamental demographic drivers and supply demand characteristics remain very favorable and we continue to capitalize on this to take our business to new heights achieving both portfolio growth and many operating results well above the goals we set forth at the beginning of the year. Starting with acquisitions, during 2015 we surpassed our stated target of acquiring $300 million for the year. In fact, 2015 proved to be our most successful year-to-date completing the total of $480 million of grocery-anchored acquisitions for the year running our West Coast presence by another 1.3 million square feet. Our success on the acquisition front is driven by three key factors. First is our ongoing ability to source attractive off market opportunities, capitalizing on relationships that we worked hard to cultivate over the past 25 years. Second by having a strong presence in multiple metropolitan markets up and down the West Coast we are able to generate a sizable pipeline of opportunities, which enables us to not only be highly disciplined in selecting the best most attractive transactions, but it also enables us to grow our presence in a geographically balanced manner. In fact, during 2015 we acquired properties in four different core markets, including adding grocery-anchored shopping centers to our San Francisco, Los Angeles, Portland and Seattle portfolios. The third distinguishing factor is one that has taken shape in 2015 utilizing our currency in the form of OP units to acquire well-established grocery-anchored shopping centers, properties that are situated in highly sought-after irreplaceable locations that are rarely ever traded. In fact, three out of the four shopping centers that we acquired most recently in December involved OP units. Had it not been for the seller's desire to take ROIC currency we would not have been able to acquire these exceptional properties nor on such attractive reasonable terms. While growing over portfolio was a core component of our business plan, which equally if not more important is the type of grocery-anchored shopping centers that we continue to acquire. Properties that are well situated, well-established and demographically strong affluent markets that provide a reliable stable base of cash flow and offer a number of opportunities to steadily grow the cash flow and enhance value going forward and tied to that is another very important core component of our business plan enhancing value through our proactive hands-on approach to managing and leasing our properties. Just as we set new records for the company on the acquisition front in 2015 we also achieved record operating results as well. We leased 1.3 million square feet during 2015 which was not only a new record for the Company it was also upwards of three times the amount of space originally scheduled to expire, which was in part driven by our initiative to recapture below-market space and re-lease it to new stronger retailers at considerably higher rents. In fact, same space comparable rents on new leases increased by over 40% for the year another milestone for the Company. Additionally for the second year in a row we achieved a year-end portfolio lease rate above 97%. Having managed shopping centers for over 25 years I can tell you that maintaining a large portfolio with many moving parts above 97% is no easy task. The fact that we have done it for two years running speaks not only to the quality of our shopping centers and the strength of our markets, but also to the dedication and skill set of our team. Turning to our balance sheet along with growing our portfolio, we continue to maintain our conservative strong financial position. In 2015, we raised $543 million of capital as a result our debt ratio remained in a conservative low 30% range and we ended the year again with a strong interest coverage of four times. Additionally our unencumbered portfolio reached a new record high for the Company of 96% at year-end. Lastly, in light of our growth and performance in 2015, we are pleased to announce that the board has increased the Company’s dividend by 5.9% representing the six-year in a row since we commenced operations as a shopping center REIT in 2009, that we have delivered increased dividends to shareholders. Now I'll turn the call over to Michael Haines, the Company’s Chief Financial Officer. Mike?

Thanks Stuart. For the three months ended December 31, 2015 the Company had $51.3 million in total revenues and $16.3 million in GAAP operating income as compared to $41.7 million in total revenues and $11.7 million in GAAP operating income for the fourth quarter of 2014. In terms of property level net operating income on the same-center comparative basis cash NOI increased by 5.6% for the fourth quarter of 2015 as compared to the fourth quarter of last year. For the full-year 2015, the Company had $192.7 million in total revenues and $59.3 million in GAAP operating income as compared to a $155.9 million in total revenues and $43.8 million in GAAP operating income for 2014. With respect to property level NOI on a same-center comparative basis, cash NOI for the full-year 2015 increased by 4.7% over 2014, while the 4.7% is roughly at the midpoint of the range that we set forth a year-ago and our initial guidance for 2015. The numbers are a bit lower than it would have otherwise been as a result of recapturing below-market space initiative. As we recapture leases and replace those with stronger retail with higher rents, on a cash basis there is a bit of downtime between leases which is reflected in our same-center cash NOI analysis. As the new tenants take occupancy and start paying rent, we expect to see a positive impact to our same-center cash numbers going forward. Turning to GAAP net income attributable to common shareholders, for the fourth quarter of 2015 the Company had GAAP net income of $7.5 million equating to $0.07 per diluted share as compared to GAAP net income of $4.8 million or $0.05 per diluted share for the fourth quarter of 2014. For the full-year 2015, GAAP net income was $25.1 million or $0.25 per diluted share as compared to GAAP net income of $21.1 million $0.24 per diluted share for 2014. In terms of funds from operations, for the fourth quarter of 2015 FFO totaled $25.9 million as compared to FFO of $20.2 million for the fourth quarter of 2014. On a per share basis, FFO was $0.25 per diluted share for the fourth quarter of 2015, representing a 19% increase of FFO per diluted share for the fourth quarter of 2014. FFO for the full-year 2015 was $96 million as compared to FFO of $74.6 million for 2014. On a per share basis FFO increased 12.9% to $0.96 per diluted share for 2015. Turning to the Company's balance sheet, as Stuart mentioned, we raised $543 million of capital during 2015. Specifically we issued common shares through our ATM program as well as through a public offering at a blended price of $16.70 per share, raising a total of approximately $97 million of equity. Additionally, in September we closed on a new $300 million unsecured term loan and lastly in December as Stuart noted in connection with several acquisitions, we issued operating partnership units based on a value of $17.29 per unit on average equating to approximately $146 million. Taking all of this into account at year-end 2015 the Company had a total market cap of approximately $3.991 billion of debt outstanding equating to a debt-to-total market cap ratio of just 33%. With respect to the $991 million of debt outstanding the vast majority of that is unsecured. In fact, at year-end, we only had $63 million of mortgage debt outstanding. And as Stuart indicated over 96% of our portfolio in terms of gross leasable area was unencumbered at year-end. In terms of our credit line, at year-end 2015, we had $136 million outstanding meaning there was over $360 million available on our line. Additionally, both our credit line and our new term-loan have accordion features providing the Company with another $700 million of incremental capacity. One additional note regarding our credit line and term-loan, combining the two at year-end we had a total of $436 million of floating rate debt outstanding. During the first quarter of 2016, we fixed $100 million of that through two swap agreements. Taking that into account two thirds of our debt today is now effectively fixed rate. Looking ahead of 2016, we currently expect FFO to be between $1 even and $1.04 per diluted share for the year. In terms of acquisitions, our guidance assumes that will acquire approximately $300 million of shopping centers during 2016 at going in cap rates between 5% and 6% on average. Additionally, with respect to our current portfolio our FFO guidance was based on maintaining occupancy in the 96% to 97% range. And in terms of same center NOI, our FFO guidance was based on achieving same center NOI growth in the 4% to 5% range. Now I’ll turn the call over to Rich Schoebel, our COO, to discuss property operations. Rich.

Thanks Mike. As Stuart indicated, we posted another very strong year in 2015 on the property operations front. We leased a record amount of space during 2015 and for the second year in a row achieved a portfolio lease rate above 97%. Specifically, we ended the year at 97.2% including having 33 of our shopping centers at 100% leased which is a new record for our Company. Breaking the 97.2% number down between anchor and non-anchor space, at year-end 2015, our anchor space was 99% leased and our shop space was 95% leased. With respect to the economic spread between occupied space and leased space, which includes newly signed tenants that will soon take occupancy and commence paying rent; you may recall that at the end of the third quarter the spread was approximately 3.9% representing about $6 million in incremental annual base rent on a cash basis. During the fourth quarter tenants representing approximately $1.8 million of that $6 million took occupancy and started paying rent. In terms of the current spread between occupied and leased space as of year-end it was approximately 4.2%. This takes into account not only those tenants that started paying rent in the fourth quarter, but also includes all the new leases we signed during the fourth quarter. With these new leases included the 4.2% spread represents about $6.5 million in incremental annual base rent on a cash basis as of year-end. For perspective during 2015 each quarter tenants representing between $1.3 million and $2.1 million of annual incremental cash flow took occupancy and started paying rent, aggregating roughly $7 million in total for the year. While at the same time we’re also signing new leases representing about $1.9 million each quarter on average of additional incremental cash rent totaling about $7.5 million for the year. As a result, we’re ending up each quarter with our economic spread being roughly the same amount in the $6 million range. Needless to say we are working hard to narrow that spread however we do believe that the fact that the spread has remained relatively level is indicative of just how strong tenant demand continues to be across our portfolio. Turning to our specific leasing statistics for the past year, during 2015, we executed 348 leases totaling approximately 1.3 million square feet of space including 159 new leases totaling approximately 600,000 square feet achieving a very strong 40.3% increase in same space cash rents and we renewed 189 leases totaling approximately 700,000 square feet achieving a solid 9% increase in cash rents. During the fourth quarter, we executed 72 leases totaling 246,000 square feet including 35 new leases totaling 124,000 square feet achieving a 27.3% increase in same space cash rents and we renewed 37 leases totaling approximately 122,000 square feet achieving a 12.9% increase in cash rents. Looking ahead to 2016 about 7% of our portfolio scheduled to expire totaling roughly 600,000 square feet which accounts for 8.6% of our total base rent. The vast majority of this is non-anchor shop space which we expect to release achieving same space double-digit rent growth on average for new and renewed leases combined. In terms of anchor space at year-end 2015 we only had five leases scheduled to expire in 2016 representing just 1.2% of our total base rent. We've already renewed one of those anchor leases here in the first quarter ahead of schedule and we expect one of the other anchors to exercise the renewal option within the next several weeks. As it relates to the other three anchor leases, we are currently in the process of releasing those spaces to new stronger retailers and expect to achieve higher rents. As we’ve discussed previously during 2015 we initiated an aggressive strategy of seeking out every possible opportunity to recapture below-market leases. Our objective was twofold. One was to increase our bottom line cash flow by taking advantage of higher market rents. With that in mind during 2015 we successfully recaptured approximately 270,000 square feet of space in total, which we estimate will add approximately $2.4 million of incremental annual cash flow. The second objective with our recapturing initiative was to improve the retailer mix which we had great success with. Just to give you a quick example at one of our shopping centers in Northern California, we recaptured an underperforming anchored space that was replaced with a much stronger supermarket operator. Additionally, capitalizing on this new grocer as a draw we recently signed two new anchored leases at the property. One with a new national retailer that has been a long time tenant of ours and other shopping centers that will be a great addition to the center and one lease with an existing anchored tenant at the property that in light of the two new retailers and the additional draw and appeal they’re bringing to the center this existing anchor elected to sign a new lease. Looking ahead in 2016 we intend to continue our recaptured initiative and currently have identified between 200,000 and 300,000 square feet of additional potential opportunities, which if successful we estimate could add as much as $1.5 million in annual incremental cash flow. In addition to our recapturing below-market space initiative we’re also capitalizing on the unique opportunities within our portfolio to enhance long-term intrinsic value. At our Crossroads Shopping Center as many of you are aware. During 2015 we entered into an agreement with the developer for one of the out-parcels to build an upscale senior living community. The project will break ground later this year with this project now underway we’re beginning discussions on another out-parcel at Crossroads, which is also slated for multifamily and retail. Looking our long-term as these out-parcels are developed over time not only will they generate additional stable revenue, but equally important is how adding these new mixed-use developments to our property will enhance the long-term intrinsic value and appeal of Crossroads. Additionally, at our Fallbrook Shopping Center, during 2015, we redeveloped one of the large outline [pad that] when all the seven done will generate over a $0.5 million in incremental annual cash flow and we are now eyeing several other potential redevelopment and out-parcel opportunities at Barbara. Again with the ultimate goal over time not only adding to our bottom line, but also enhancing Fallbrook’s long-term intrinsic value and appeal. Lastly, we currently have approximately 92,000 square feet of additional pad expansion and potential redevelopment opportunities within our portfolio that we are currently pursuing. Most of this should come to fruition in 2016 and 2017 we expect that the total costs will be between $18 million and $20 million with a projected annual yield in excess of 16% on average. Now I'll turn the call back over to Stuart.

Thanks Rich. For 2015 in the books and with the bar set high we are now turning our sites to the New Year with the goal of raising the bar even further and we're off to a terrific start. In terms of acquisitions we have a great transaction currently under contract where we are buying two terrific grocery-anchored shopping centers in the Santa Barbara market. For those of you not familiar, Santa Barbara is considered the Gold Coast of California not only for its beauty, but also for its extraordinary affluent demographic profile. From a real estate point of view specifically as it relates to shopping centers it’s an extremely difficult market to enter as it is highly protected and supply constraint. In our 25 years of acquiring shopping centers on the West Coast this is the first time we’ve been able to enter this market. One of the key reasons for our success is the seller sought to take ROIC currency. The two shopping centers we are acquiring fit our profile perfectly. They have been privately owned for years that both feature supermarkets that have very successful stores at the centers and there are number of great opportunities to re-lease and re-tenant below-market space going forward. Needless to say, we’re very excited to be acquiring these shopping centers and entering the Santa Barbara market. Beyond this transaction, our pipeline of off-market opportunities remains active and we're confident in our ability to acquire another 300 million of shopping centers in 2016. On the property operations front, we are pursuing a number of initiatives that Rich outlined which we believe will have a very positive impact on our business and will help to drive our internal growth for the next several years. Also as Mike touched on our balance sheet continues to be very strong and is well-positioned to facilitate our ongoing growth objectives. As I noted at the outset, our core markets all continue to perform well and demand for space remains strong. What’s important to understand is that we've operated in the same West Coast markets for the past 25 years so we know them extremely well and know all of the signs of any potential change, which we’ve seen nothing today and given that we focus in mature markets that are supply constrained we are in a favorable position. Additionally, our type of shopping centers that featured daily necessity retailers serving their immediate surrounding communities and properties like ours that are well situated and sought after locations are always in demand. With that in mind, we will continue to be very excited and optimistic about the future prospects of our business. And now we’ll open up the call for your questions.

Thank you. [Operator Instructions] And our first question comes from the line of Christy McElroy with Citi. Your line is open.

Good morning Christy.

Hi, good morning all. With regard to the $300 million of acquisitions and guidance from your expected average share count this 113 million shares on average there doesn’t appear to be any additional equity issuance price built into that. What should we expect in terms of funding for acquisition beyond the OP units that you already have sort of built-in for the two assets under contracts?

Hi Christy, it’s Mike. So our FFO guidance based on keeping our credit metrics in the same places as they were at year-end, that’s because of the amount of units that we issued in the fourth quarter and we’ll issue here in the first quarter in connection with the transaction currently under contract. We do have a bit of room in terms of our debt ratio. With that in mind we are assuming we acquire $300 million for the year, we would expect to raise about $150 million or so of equity during 2016, which could come from a combination of additional units, our ATM or possibly the public offering.

Yes. And the only thing I’ll add to that Christy is certainly at the present time we don't need equity and when I say that we do have another series of OP transactions that potentially are coming our way. And the advantage with OP transactions and my humble opinion is that it's sticky equity and in terms of having that equity it’s long-term and typically these sellers tend to hold on to it for a long period of time. So at the present time as Mike has articulated it we've modeled a bit of equity, but we really where the Company is situated today and in terms of the pipeline I don't see it needing much as we move through the year.

Okay. And then in terms of the 4.2% leased to commenced spread at year-end 2015 within that 4% to 5% same store NOI growth range. Is there any assumption for a narrowing of that spread that leased to commenced spread?

This is Rich. As I mentioned during the prepared remarks we’re always adding to it and we’re expecting it's going to probably come in a little bit, but there always be somebody in that pool.

Okay. Thank you.

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

Good morning Paul.

Hi, good morning. If you look at the seven deals you closed kind of over the last few months I mean is there anything you could highlight in terms of opportunities kind of that are above and beyond the normal lease where you think you could drive same store and then kind of those properties that would stand out?

Well, Rich articulated probably three different initiatives that we’re working on to really drive same-store and as it relates to what we acquired more recently the answer is yes. Warner Plaza we’re currently looking at some redevelopment there that's more longer-term and it’s not part of those initiatives, but certainly is one property that offer some major upside given the attributes of the real estate.

I think the other one you would want to look at is potentially Sternco again given its location. We think there is a lot of opportunity up there and the leases - we are able to get to all those leases in very short-term.

So Sternco as you probably know is in Bellevue, which is the most desirable, one of them most desirable markets in the country and certainly on the West Coast. This particular asset from a mark-to-market perspective we’re getting today in Crossroads about $50 to $60 a square foot. The average rent at Sternco was only 20,22 so there is substantially some very strong upside in that asset as well as some redevelopment opportunity, but I think that's about it in terms of the last six or seven assets that we buy outside of capturing the mark-to-market rents is tenants rollover.

Okay, great. And then if you look at the - you mentioned 270,000 square feet of space recaptured in 2015 for $2.4 million. Yes, I think that was in a net cash flow increase. How should we think about that rolling through I mean when those leases take effect for the new spaces, how that will impact 2015?

It’s going to be third and fourth quarter because as we’ve terminated those leases in the third and fourth quarter of 2015 obviously there is some downtime in terms of construction and the good news is that those anchor spaces are on target one to begin paying June 1st and the other shortly thereafter. So you really going to see the momentum start to build as we move through the year as you saw in 2015 as well, but we’re very excited about a lot of these tenants that we repositioned our first-in-class and we’re very excited about the impact they’re going to bring long-term to the shopping centers.

Great. And then just lastly I mean now that the Haggen situation is kind of mostly played out, how are you seeing any shifts in the market I mean what’s your perspective on how that’s transpired and kind of what it means for demand for space in your markets?

Well I think as we've articulated demand for space has never been stronger. I know we said that as we move through 2015 and I think you saw that as it relates to our results at year-end, but as we sit here today the fundamentals are as stronger, stronger. As it relates to Haggen we feel like we are in pretty good shape, watching what's going on there and the good news is that we have been approached in one of the locations that still operating from a grocer that is considered one of the top grocers in the country to take the space if something were to happen. So we’re very excited about 2016 and as it relates to some of these moving pieces. And the only other thing I’d like to articulate Paul in terms of our business is how strong the grocery-anchored segment of retailing is when I look at the whole universe today as it relates to retail. I’ve never felt this good sitting here today looking at the changes in the industry as it relates to the different product types in the Strip Center sector I truly believe that owning grocery-anchored shopping centers it's going to prove to be the most defensive risk-adjusted product only in this business as retail continues to move through its evolution over the next several years. I feel really good in terms of where we sit today as to what we own and where we are and the team has done a great job.

Okay. Thanks Stuart.

Thank you. Our next question comes from the line of Vineet Khanna with Capital One Securities. Your line is open.

Good morning.

Good morning. Thanks for taking my questions. Just with the recent capital market volatility and the upcoming changes to this CMBS regulatory environment are you seeing any changes in product availability across your markets?

The answer is yes. We’re seeing a good product a bit more acceleration in terms of product coming to the market, but with the volatility in the market the buyer profile certainly dropped quite considerably today - four months ago on a good transaction widely marketed you would see maybe 15, 20 offers, today you are going to see three to five in terms of having buyers that can actually close these transactions. So the volatility is going to in my view bring opportunity for this Company and I actually like volatility in the capital markets because it does bring again lots of opportunity. So the CMBS market as we probably know is certainly it’s not close down but certainly closing down. We’re finding the market is definitely much thinner in terms of the buyer profile and it really puts companies like ROIC in a very strong position to continue with the disciplined approach we’ve had and more importantly to really source strong transactions or very good assets. So yes velocity is picking up.

Okay thanks. And then what are you hearing from your tenants as it relates to actual potential impact from increases in minimum-wage to either profitability or demand?

This is Rich. We are not really hearing any significant pushback as it relates to the rents that we’re able to achieve I think you know in the markets where they are raising the minimum wage it’s affecting all the retailers. So their prices are probably going up slightly to account for that, but it had no impact on the rent that they are willing to pay.

Okay sure. And then just lastly on Sports Authority I know you don’t have a whole lot of exposure, but could you just provide some numbers on your exposure and then just give thoughts on what's going on there in the liquidation restructuring and your plans for any of the Sport Authority space that you have?

Sure, so we only have one Sports Authority in the portfolio it’s up in Seattle at our Crossroads property, just over a year ago they completely redid their store at Crossroads investing considerable amount of capital. Today they’re performing well. They are current on their rent and so depending on where they go with their process, we would expect that ultimately they would accept this lease and if we got it back the rent is below-market so at some level we’d actually like to have it back would be good space.

Well great. Thanks for the time.

Thanks, Vineet.

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

Good morning Todd.

Hi, good morning. First question you know I realize the spread between leased and occupied spaces is expected to stay elevated I guess between 3% and 4% or so, so it’s an ongoing process. But if we think about the incremental ABR the $6.5 million how much capital do you expect to spend to bring that that base rent online?

I don't have a specific number here in front of us. We could probably follow up with you after the call and give you some more detail on that, and its sort all over the Board like one of the initiatives we have up in Northern California the tenants essentially taking space as is and they’re also commencing rent ahead of them starting construction. So you know there is going to be very little capital expended in that leasing commission and that's about it. And it also depends on the user so there is no real rule of thumb that you could apply to this.

While the good news is part of this is already been paid for two because it's tenants that took possession have been under construction and we paid for that already in 2015 and we are just waiting for them to open at this point.

Correct.

Okay and then this $300 million acquisition assumption that that's embedded in guidance is that net of dispositions I think previously you’ve talked about selling a couple of non-core or sort of non-strategic assets I think particularly in Sacramento. I'm just curious if you have anything embedded in guidance for dispositions and maybe you could just provide an update on any disposition plans?

Yes, we are certainly contemplating and moving ahead on potentially selling a couple of properties we started that process late last year nothing of real significance but around 50 million. As we built our portfolio over the past six years we’ve been highly selective and disciplined on the type of shopping centers of course that we’ve acquired. But because of that discipline there is only a handful of properties today and I think we've articulated this in the past that we would sell which is primarily the Sacramento region. So it is a net number.

Okay and then Stuart despite the strong results for the year and your comments around demand being fairly strong. You mentioned that the year was characterized by economic and some macro uncertainty at the beginning of your prepared remarks. And I was just wondering are you seeing any signs of weakness or caution in your portfolio around the retail environment at all whether small shop tenants, local tenants are there any areas of pushback or softness to speak to?

No, our core markets all continue to perform very well. I mean again despite the recent economic uncertainty our markets do remain sound and demand again for space remains very strong. Obviously we are watching our markets very carefully, but again what’s important to understand as that we've operated on these markets for the past 25 years at which time we have seen a lot of economic cycles multiple times. So as it relates today, we've seen nothing at this point in any of our - the metropolitan markets on the West Coast to suggest that any changes coming and specifically relates to the daily necessity shopping center sector are again our metropolitan markets are really protected and have very limited new supply, so we really remain and what I would call very favorable position.

Okay. Great. Thank you.

Thank you. Our next question comes from the line of Paul Adornato with BMO Capital Markets. Your line is open.

Good morning Paul.

Good morning. I was wondering if you could comment given the importance of OP units just given all the stock market volatility and where the stock is trading today, what about the appeal of OP units both for the seller and for you guys to use as currency.

I think it's a great way of issuing equity into the balance sheet personally and I think as I articulated certainly these transactions tend to be some of the best real estate on the West Coast. Again these type of assets really don't trade. But in terms of OP units we have not issued any OP units sort of less than last deal we've done and as I continue to meet with sellers that in some cases have been years in the making in terms of buying these assets. The most important aspect is to show them value that the stock is certainly worth a lot more than where it’s trading and to me that's an easy point to sell from our perspective. So I think you’re going to continue to see these sellers come to us to trade their currency and again I think it’s just a great way of buying assets because you are ending up with the highest quality in terms of these markets, in terms of grocery-anchored centers and you are issuing equity that typically will set long-term. I don't know Mike if you want to add.

Those are very cost effective way to issue equity as well.

And it’s an extremely cost-effective way, in fact if you look at the cost of raising that equity at the last deal that we've done we’ve really raised that equity at the highest price or stock or close to the highest price our stock is ever traded.

Okay, great. And Stuart I guess maybe a related question is given the arbitrage between private market and stock market valuations. In the past you’ve commented on potential sale of the Company at the right time I was wondering if you could give us an update on your thoughts both in terms of pricing as well as additional wood to chop in terms of the NOI growth that you have kind of teed up.

Sure. Obviously we emphasize whenever we are asked this question and we do get ask the question periodically that we always operate with an open-mind in terms of looking at all avenues when it comes to maximizing shareholder value. I mean that is number one for the team here at the Company. And while we’re open to all things we continue to be very excited about the future prospects of our business. I mean again as you've heard the fundamentals across our core markets continues to be very strong, job growth is expected to continue to outpace the nation there's virtually no new supply and tenant demand of course is very strong with a lot of room to continue to increasing rents. So there is a lot of embedded cash flow growth in our portfolio and so as we continue to see a lot of great acquisition opportunities. And again we’re open to all things, but right now with the way we see the Company we’re very excited about these opportunities and on the horizon that we can continue to significantly enhance value. So given all of that, again our mind is always open and we are here to create value for shareholders, but in my view this isn't the right time yet.

Okay, great. Thank you for that.

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

Good morning, Collin.

Hey, good morning guys.

Good morning.

I guess first question Mike just what was the pricing on the swap that you put in place?

We did two separate swap transactions on blended basis, fixed rate is 1.96%.

Okay. All right, thanks. That’s helpful. And then I guess Stuart just talking a little bit more about the strength that you’ve already referenced as far as your markets overall. I think going back six to nine months ago I know that you really hit home on how the strengthening you are seeing in Portland? Can you maybe just update us if that’s still a bright spot in the portfolio or if there has been any other markets where you have seen kind of incrementally more strength over the last three to six months?

Well, Portland remains in my view to be one of the great markets on the West Coast right now. The index that came out yesterday at Portland at the top in terms of increase in housing prices year-over-year Portland led the nation. I think that certainly gives you an indication of how strong Portland has got and I think we articulated, the team articulated that when we did our Investor Day in Portland about a month and a half, two months ago. So Portland continues to be again a really, really strong market and Rich I don’t know if you want to add anything to that, but it really continues to outshine a lot of the other markets we operate in. However, the other markets are still doing as good, but Portland is really doing considerably well. Remember, Portland was the last market on the West Coast to come out of the recession. So or out of the credit crisis along with Southern California. So Portland really looks strong right now.

Yes, we’d like to highlight how well Portland is doing I mean I think Seattle is still very strong, the Bay Area is doing very well for us the LA Orange County is doing extremely well for us. So we’re very pleased in terms of our markets.

Okay. And then just on the guidance, I know you referenced kind of cap rates in the range of 5% to 6% as far as acquisitions that you would be looking at just maybe any sort of differential between your different markets that you are seeing either in cap rates or just on the margin or any sort of feedback from potential sellers on if you get into - the sense that cap rates may be moving lower or higher in any of your specific markets?

Sure. Well again the West Coast seems to continue to be the most sought after markets in the country, the metropolitan markets on the West Coast. In terms of cap rates they continue to in some cases even trend lower. For the product of course that we own and operate. If you were to bifurcate the markets, what you would find is that the Pacific Northwest really doesn't trade much given that those markets are typically much smaller than Northern - Southern California. So those markets continue to be very strong in terms of cap rate compression and that's primarily driven by very little product that's on the market. Northern and Southern California continue to again outshine the country in terms of cap rates in the compression of cap rates. We continue to see strong grocery-anchored centers in both Northern California [indiscernible] talk in the Bay Area primarily and Orange County San Diego and LA trade in the sub five cap rate and we haven't seen any change in the market certainly from last quarter or the quarter before.

All right. Thanks for that extra color.

Thank you.

Thank you. Our next question comes from the line of Jay Carlington with Green Street Advisors. Your line is open.

Well I know it’s good morning for you Jay.

Good morning Stuart. Maybe just a follow-up on that last question, we’ve heard that the bidding tends for lower quality assets within bid center and I’m curious to your comment on maybe whether you have observed any change in the cap rates spread between high-quality stuff that you've been bidding on the other low-quality properties out there?

Yes, as you move into the tertiary and secondary markets what you have found is that cap rates have begun to move up and when I say move up not much as trading right now. So it’s a very hard to put a number on the arbitrage or the difference and the spread in terms of where those cap rates have gone because again nothing is really trading. However, I would tell you today that real estate that is more tertiary or secondary in nature is probably moved of about 25 to 35 basis points over the last 2 to 3 months or certainly since the volatility began in the market and the CMBS market has begun to freeze up.

Okay helpful. And may be just going back to the Sternco acquisition you mentioned rents kind of $20 and you’d like to push them to kind of $50 to $60. So I am just - how did the tenants managed through that type of OCR increase just given modest consumer demand. Are the current tenants profitable enough to justify that OCR increase or do you just need better tenants?

Well, I think it’s a combination, this is Rich. The tenants have actually been enjoying a very low rent for a very long time. So the seller profile here you know its local family so they were more focused on keeping the tenants in place then we’re driving the rents and that’s seen in a lot of recent acquisitions where they were more concerned about occupancy then driving the rents. We believe there is still a lot of room and the rents of the tenants can handle that increase, but to your point some tenants will not make it and we’ll replace them with higher quality tenant has the ability to pay those rents.

Okay.

I mean it’s a great property to re-merchandise in terms of tenant base and we really think given the connection it’s only a mile away from Crossroads. So there's a lot of what I would call crossover and in terms of working both assets in the market and we believe that and when you look at the rollover on this asset there is a lot rolling over in the next three years. So it’s really been able to capture that submarket and being able to utilize our team on the ground to really take advantage of the demand in Bellevue to really re-merchandize the tenant base. So I really I think you’re going to see some turnover in Sternco. And at the end of the day if they don't pay the rents.

Got it. I got it so maybe you just answered just as your final question may be just answer this for me but when you look at that 28% call it small shop re-leasing spread on new leases. Are there particular markets that are benefiting that number more than others because we’ve heard anecdotally the rents in California are already relatively high so getting meaningful growth is going to be challenging. So is there a difference or is that across the Board is the Northwest driving a lot of that or how do you think about that?

I think it’s across the Board I mean obviously every deal is a different deal but we are seeing those types of increase across the Board.

And of course Jay as you know it all starts with the way you buy, if you buy older assets, when I say older assets if you buy assets that typically or either owned by Mom & Pop’s or other owners that really are not - don’t manage the asset as effective as REITs do. I do think there is an inherited advantage in terms of going in, in terms of capturing the fundamentals of our markets and that's what we've done for the last several years and we’ll continue to do.

Okay. Appreciated guys. Thanks.

Thank you.

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

Good morning Craig.

Hey. I was wondering what was driving the slightly higher tenant improvement cost particularly in the third and fourth quarter for non-anchored new leases.

I don't think there is any particular trend there that you would see, again it's really just a function of the type of deals we’re doing with some of these repositionings or take a bit more TI to reconfigure the space there's some restaurants that cost a bit more, but there's not a trend where we see it’s costing us more in TI or other concessions.

So there is no expectation as you kind of do this re-tenanting the below-market spaces to maybe better spaces, you might need to spend more tenant improvement that’s not the case?

Correct.

Okay. And then just when you - you incur a cost trying to get a below-market tenant out of the space, what line items does that come under is that a property expense?

You mean in a situation where we might pay a termination fee of some sort or you are referring to TI dollars?

No, I think what he is saying is that are we - I mean typically those are being done for anchored-tenants, right. I mean that’s where our initiatives have been focused. For smaller tenants we really - we don't really - anyone I may.

Okay.

Somewhere in the financials you would see that number.

We’re not incurring at that.

Okay. Very little of those expenses that you are coming across the line.

Yes.

Okay. I appreciate it.

Thank you.

Thank you. And our last question is from the line of Michael Gorman with Cowen. Your line is open.

Good morning Michael.

Good morning guys. Stuart if I could just go back to some of your earlier comments, some of the capital markets volatility is maybe thinning out some of the bidding packs even though it’s not impacting pricing yet. I’m curious are we trending towards the spot where it might be attractive for you guys to start participating in marketed deals as well as your off market initiatives are we still pretty far apart from that?

Well we look at everything both marketed and we don't tend to chase marketing deals, but we do look at everything. So it's hard to really answer your question in terms of whether we’re going to end up buying a lot. I mean it will be off-market or a combination of both. It’s a tough question to answer because the pipeline right now is really both for us. We have the advantage of series of off-market transactions and widely marketed, but we’ll continue to look at both. It’s about the - the spread historically is really been Mike about 85% off-market, 15% on-market, so that spread or that difference may change a bit I just can't tell you how it will change at this point earlier this early in the year.

Okay. Fair enough. And then Mike just a quick question on guidance I apologize if I missed it, but what are your assumptions as you think about the debt side of the balance sheet over the course of this year in terms of funding the deal flow just what the unsecured markets look like and what kind of rate you are thinking about?

Well, it’s an interesting market kind of keep our eyes on, we opted to do the swaps because of the volatility in the bond market very, very choppy as you know, so we’ve got some floating rate debt and we’ve plenty of capacity in the line as well. So we blend that with the equity side of the equation we are growing the company in 2016. We are just looking at all our options, we are keeping eye on the bond market, if we were to try to do 10-year bond deal today you are going to be pricing probably in the high 4% which is - it gets just - it’s not the right time. So the good news is our balance sheet is in a good position and we have the benefit of being able to be patience and wait to see what happen in the market.

Okay, great. And then just last one for me. Are there any options, do you have any options what the debt that would be assumed with the $63 million in acquisitions to pay that off?

You are talking about the Santa Barbara once coming up shortly; we are assuming those loans as part of the transaction actually with the tax protection stuff for the seller.

Okay, got it. Thank you.

So equity is all OP units and then the debt we are assuming.

Correct.

Great, thanks guys.

Thank you.

Thank you, Michael.

Thank you. And this concludes our Q&A session for today. I would now like to turn the call back over to Stuart Tanz for closing remarks.

Great. In closing, I'd like to thank all of you for joining us today. If you have any additional questions, please contact Mike, Rich or me directly. Also you can find additional information in the Company's quarterly supplemental package which is posted on our website. Thanks again and have a great day everyone.

Ladies and gentlemen, this concludes our conference for today. Thank you for participating in today’s conference. Everyone have a great day.