Retail Opportunity Investments (ROIC) announces densification initiatives with multifamily.

During ROIC's fourth-quarter earnings call today, the company announced that it is pursuing entitlement approvals to add multifamily units at three shopping center properties, representing a total investment of approximately $200 million.  Each project is expected to take the form of a 50/50 joint venture, where ROIC contributes land and arranges a construction loan, with the developer contributing the remaining equity component.  The first of these properties - Crossroads Shopping Center in Seattle - has already moved beyond the planning phase as ROIC expects to deliver an initial group of 185 apartment units by mid-2019.

ROIC has identified 20 properties in its current portfolio of 92 shopping centers for potential development, suggesting that the multifamily expansion program could run for several years.  The broader  strategy of adding density and value to existing properties is consistent with industry trends, where many shopping center REITs are selling non-core properties and reinvesting in existing centers, often with a mixed-use component such as office, residential or hotel.