Steven P. Grimes, the President and CEO of Retail Properties of America, Inc. (RPAI), Interviews with The Wall Street Transcript

Wall Street Transcript

67 WALL STREET, New York - June 23, 2014 - The Wall Street Transcript has just published its REITs Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Apartment, Lodging, Self-Storage and Office REITs - Consolidation Activity - REIT Access to Capital - Residential and Commercial REITs - Correlation Between Macroeconomy and Real Estate - Agency Mortgage REITs - Supply and Demand Dynamics - Favorable REIT Fundamentals

Companies include: Retail Properties of America, Inc. (RPAI) and many more.

In the following excerpt from the REITs Report, the President and CEO of Retail Properties of America, Inc. (RPAI) discusses company strategy and the outlook for this vital industry:

TWST: Tell us more about what characterizes the types of properties and the core markets that you're targeting.

Mr. Grimes: We are focusing on being multitenant retail only, and within that, I call it the three food groups: We like the neighborhood and community centers, we like the power centers - and then we have a component that not many of our direct peers do - and that's a lifestyle component. We have a very good concentration in each of those categories of retail assets. Neighborhood and community is more grocery-anchored; power centers, if you think Target or Wal-Mart, shadow anchored with your typical power-center-type tenants, such as the TJX stores as well as Bed Bath & Beyond; and then the lifestyle component is typically unanchored from a national concentrated focus, yet very well-concentrated in terms of tenancy.

We have two very solid assets in the Texas market from the lifestyle component, that being Southlake Town Square and The Shops at Legacy, both of which offer that really good live, work, shop life experience. We are agnostic in terms of what we are looking to acquire relative to those three retail types of properties, but by and large, we do happen to like the diversity that we have, so we will continue to focus all of our efforts toward acquisitions in any one of those three food groups.

TWST: You mentioned being able to access the unsecured bond market in the future. Right now, how do you typically finance your acquisitions?

Mr. Grimes: Right now, our acquisitions are financed through the dispositions of assets. Previously, I mentioned that we had sold off about $1 billion worth of assets in our portfolio. A good portion of the proceeds generated from those dispositions was used to pay down debt; as I mentioned, we've moved our debt from 8.3 times net debt to EBITDA down to just under six times, which is roughly the leverage level that we expect to be long term.

So we are now able to use disposition proceeds primarily to fund the acquisitions that we're looking to acquire. Our guidance that we announced in 2014 was that we'd be acquiring about $300 million to $350 million in assets in our target markets, but we also announced that we would be selling off about $300 million to $350 million worth of assets outside of our target markets, so that's primarily how the acquisitions will be funded.

TWST: And what about joint ventures? You have used them in the past. Is this something the company looks to continue?

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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