Steven Grimes, president and CEO of Retail Properties of America (NYSE: RPAI), joined REIT.com for a CEO Spotlight interview at REITWorld 2012: NAREIT's Annual Convention for All Things REIT at the Manchester Grand Hyatt in San Diego.
Retail Properties of America, Inc. is a self-managed REIT focused on the acquisition, development and management of strategically located retail assets. Currently, its portfolio consists of 275 properties nationally, both wholly and partially owned, totaling in excess of 40 million square feet, including lifestyle, power and community centers, as well as single-tenant, net-lease properties, in locations demonstrating strong demographics.
The company went public in April 2012 and Grimes said the response from the market has been positive. He said the company has accomplished all of its stated goals made prior to the offering, with deleveraging the balance sheet being a top priority.
Grimes said another goal was disposing of some non-core assets, and since the IPO there has been some clarity brought to that process.
"At the time of the IPO we were looking to dispose of less than 5 percent of our non-core assets (primarily office and industrial properties). But shortly after the IPO we entered into a couple of lease extensions which gave us the option to sell some of the non-core assets," Grimes said.
Grimes added that the company is now expecting to sell around 50 percent of its non-core assets this year, which puts it on track to have its greatest portfolio concentration on retail assets in its history in 2013.
"The refined focus gives us better clarity on who we are; on what direction we are going in terms of the multi-tenant retail front," he said. "But most importantly it allows us to take advantage of growth in the portfolio."
From a leasing standpoint, Grimes said the company has had three consecutive strong quarters in that regard.
"We are currently sitting on a retail occupancy perspective at about 88.4 percent with 91.1 percent leased. So that 270 basis points of occupancy is yet to come online," Grimes said.