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ROIC Is Hitting on All Cylinders

ROIC has also been an outstanding steward of capital as reflected in the company's total market capitalization, including just $300 million of total debt outstanding, or a debt-to-total-market-cap ratio of only 24%. That's an impressive ratio, especially when you consider that the ratio was 35% at the end of 2012.

Also, ROIC has modest secured debt ($82 million) with the balance unsecured ($218 million). These conservative debt ratios -- 4 times interest coverage and 89% of assets unencumbered -- make ROIC an exceptionally disciplined and well-managed REIT.

Nice Dividend Policy

ROIC has a total of 47 shopping centers encompassing more than 5 million square feet diversified across the West Coast. Eighteen of the 47 properties (or 35% of total GLA) is located in Southern California. Twelve shopping centers are located in the Northern California region (representing 25% of our total GLA). Nine properties (representing 18% of total GLA) are located in Portland, Oregon, and 22% of GLA is in the Seattle market where ROIC owns eight shopping centers.

ROIC's occupancy is now 93.4%, up 100 basis points from a year ago. The portfolio is becoming increasingly more diversified as three leading grocery chains -- Safeway (SWY), Albertson's, and Kroger (KRO) -- account for about 18.5% of leased space.

Courtesy of SNL Financial

As ROIC continues to grow and expand its asset pool, the company should also continue to grow its dividend. Since becoming a public company, ROIC has made a splash with regard to its dividend policy. During the first quarter, the company increased its dividend by over 7% and in addition, ROIC grew its dividend by over 36% between 2011 and 2012.

Courtesy of SNL Financial

Here is a snapshot of dividends paid:

Courtesy of SNL Financial

As I head off to the Retail REIT super bowl in a few days, I am especially encouraged by the scouting report from ROIC. The latest earnings are terrific, and I expect to see shares in the REIT continue to climb. Management is doing an exceptional job at executing the focused pure-play model and especially protecting shareholder money at all costs. ROIC's unique value proposition was summed up by Stuart Tanz, CEO, during the latest earnings call:
"Our focus is really acquiring off-market unique opportunities, where we can acquire exceptional shopping centers at more reasonable terms and quickly add value. So we're going to keep to our philosophy and our knitting, in terms of how we've acquired as we've done in the past."

At the time of publication, Thomas had no positions in securities mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
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