RETAIL PROPERTIES OF AMERICA, INC. - FORM 8-K - EX-99.2 - EXHIBIT 99.2

Attached files

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8-K - 8-K - RETAIL PROPERTIES OF AMERICA, INC.	form8-k6x30x17.htm
EX-99.1 - EXHIBIT 99.1 - RETAIL PROPERTIES OF AMERICA, INC.	ex-9916x30x17.htm

Exhibit 99.2

RETAIL PROPERTIES OF AMERICA, INC. REPORTS

SECOND QUARTER AND YEAR TO DATE RESULTS

Oak Brook, IL – August 1, 2017 – Retail Properties of America, Inc. (NYSE: RPAI) (the “Company”) today reported financial and operating results for the quarter and six months ended June 30, 2017.

FINANCIAL RESULTS

For the quarter ended June 30, 2017, the Company reported:


▪	Net income attributable to common shareholders of $112.4 million, or $0.48 per share, compared to $26.2 million, or $0.11 per share, for the same period in 2016;


▪	Funds from operations (FFO) attributable to common shareholders of $60.7 million, or $0.26 per share, compared to $73.9 million, or $0.31 per share, for the same period in 2016; and


▪	Operating funds from operations (Operating FFO) attributable to common shareholders of $62.9 million, or $0.27 per share, compared to $66.7 million, or $0.28 per share, for the same period in 2016.

For the six months ended June 30, 2017, the Company reported:


▪	Net income attributable to common shareholders of $100.9 million, or $0.43 per share, compared to $71.3 million, or $0.30 per share, for the same period in 2016;


▪	FFO attributable to common shareholders of $61.2 million, or $0.26 per share, compared to $150.3 million, or $0.64 per share, for the same period in 2016; and


▪	Operating FFO attributable to common shareholders of $129.8 million, or $0.55 per share, compared to $132.5 million, or $0.56 per share, for the same period in 2016.

OPERATING RESULTS

For the quarter ended June 30, 2017, the Company’s portfolio results were as follows:


▪	1.8% increase in same store net operating income (NOI) over the comparable period in 2016;


▪	Total same store portfolio percent leased, including leases signed but not commenced: 94.8% at June 30, 2017, down 50 basis points from 95.3% at March 31, 2017 and down 90 basis points from 95.7% at June 30, 2016;


▪	Retail portfolio percent leased, including leases signed but not commenced: 93.7% at June 30, 2017, down 60 basis points from 94.3% at March 31, 2017 and down 120 basis points from 94.9% at June 30, 2016;


▪	Retail portfolio annualized base rent (ABR) per occupied square foot of $18.00 at June 30, 2017, up 7.0% from $16.82 ABR per occupied square foot at June 30, 2016;


▪	797,000 square feet of retail leasing transactions comprised of 140 new and renewal leases; and


▪	Positive comparable cash leasing spreads of 28.4% on new leases and 5.6% on renewal leases for a blended spread of 8.1%. Excluding the impact from one lease within the Company’s non-target portfolio, blended comparable cash leasing spreads were 9.7% and comparable renewal cash leasing spreads were 7.2%.

n Retail Properties of America, Inc.

T: 800.541.7661

www.rpai.com 2021 Spring Road, Suite 200

Oak Brook, IL 60523

For the six months ended June 30, 2017, the Company’s portfolio results were as follows:


▪	1.9% increase in same store NOI over the comparable period in 2016;


▪	1,263,000 square feet of retail leasing transactions comprised of 261 new and renewal leases; and


▪	Positive comparable cash leasing spreads of 25.6% on new leases and 6.9% on renewal leases for a blended spread of 8.9%. Excluding the impact from one lease within the Company’s non-target portfolio, blended comparable cash leasing spreads were 9.8% and comparable renewal cash leasing spreads were 7.8%.

“Our strong leasing and transactional performance continues to counteract the current retail narrative,” stated Steve Grimes, president and chief executive officer. “With nearly two-thirds of our targeted retail dispositions closed, we remain focused on completing our 2017 strategic initiatives.”

INVESTMENT ACTIVITY

Dispositions

Year to date, the Company has completed, is under contract or has letters of intent (LOIs) for dispositions totaling $842.9 million. During the quarter, the Company completed $308.8 million of dispositions, which included the sales of 14 non-target multi-tenant retail assets for $287.2 million and three single-user retail assets for $21.6 million. Subsequent to quarter end, the Company completed the sales of three non-target multi-tenant retail assets, two of which were classified as held for sale as of June 30, 2017, for $74.3 million. Year to date, the Company has completed dispositions totaling $489.1 million.

The Company is under contract to sell seven non-target multi-tenant retail assets for $122.3 million and one single-user retail asset for $8.0 million. In addition, the Company has LOIs to sell $223.5 million of dispositions, which includes 11 non-target multi-tenant retail assets for $221.0 million and one single-user retail asset for $2.5 million. These transactions are expected to close during the second half of 2017, subject to satisfaction of customary closing conditions and, for those transactions subject to an LOI, negotiations of definitive agreements consistent with the LOIs.

Acquisitions

Year to date, the Company has completed or is under contract for $147.6 million of acquisitions. During the quarter, the Company acquired two additional phases at One Loudoun Downtown, located in the Washington, D.C. metropolitan statistical area (MSA), for a gross purchase price of $5.7 million.

Subsequent to quarter end, the Company completed the acquisition of New Hyde Park Shopping Center, located in the New York MSA, for a gross purchase price of $22.1 million. New Hyde Park Shopping Center is a 32,000 square foot neighborhood shopping center that is 96.4% leased to an impressive mix of national retailers and service-oriented tenants. The property is situated in a densely populated and highly affluent submarket that boasts a strong demographic profile with population of over 202,000 and average household income of $138,000 within a three-mile radius.

The Company remains under contract for the remaining phases at One Loudoun Downtown, representing an aggregate gross purchase price of up to $25.7 million. These transactions are expected to close, subject to satisfaction of customary closing conditions, during the third quarter of 2017 as the seller completes construction on stand-alone buildings at the property.

BALANCE SHEET AND CAPITAL MARKETS ACTIVITY

As of June 30, 2017, the Company had approximately $1.9 billion of consolidated indebtedness, which resulted in a net debt to adjusted EBITDA ratio of 5.2x, or a net debt and preferred stock to

adjusted EBITDA ratio of 5.6x. Consolidated indebtedness had a weighted average contractual interest rate of 3.64% and a weighted average maturity of 5.3 years.

During the quarter, the Company repaid $16.8 million of mortgage debt, excluding amortization, with an interest rate of 4.82% and incurred a prepayment penalty of $2.3 million. In addition, the Company repurchased 6.0 million shares of common stock under its stock repurchase program at an average price per share of $12.55 for a total of approximately $75.7 million.

GUIDANCE

The Company expects to generate net income attributable to common shareholders of $0.95 to $1.00 per share in 2017. The Company is maintaining its 2017 Operating FFO attributable to common shareholders guidance range of $1.00 to $1.05 per share, based, in part, on the following assumptions:


▪	Maintained 2017 same store NOI growth range of 1.25% to 2.25%;


▪	Revised 2017 acquisitions range of $375 to $475 million to include repurchases of common stock;


▪	Maintained 2017 dispositions range of $800 to $900 million, including the sale of Schaumburg Towers; and


▪	Maintained 2017 general and administrative expenses range of $42 to $44 million.

DIVIDEND

On July 25, 2017, the Company declared the third quarter 2017 Series A preferred stock cash dividend of $0.4375 per preferred share, for the period beginning July 1, 2017, which will be paid on October 2, 2017 to preferred shareholders of record on September 21, 2017.

On July 25, 2017, the Company also declared the third quarter 2017 quarterly cash dividend of $0.165625 per share on its outstanding Class A common stock, which will be paid on October 10, 2017 to Class A common shareholders of record on September 26, 2017.

WEBCAST AND CONFERENCE CALL INFORMATION

The Company’s management team will hold a webcast on Wednesday, August 2, 2017 at 11:00 AM (ET), to discuss its quarterly financial results and operating performance, as well as business highlights and outlook. In addition, the Company may discuss business and financial developments and trends and other matters affecting the Company, some of which may not have been previously disclosed.

A live webcast will be available online on the Company’s website at www.rpai.com in the INVEST section. A replay of the webcast will be available. To listen to the replay, please go to www.rpai.com in the INVEST section of the website and follow the instructions.

The conference call can be accessed by dialing (877) 705-6003 or (201) 493-6725 for international participants. Please dial in at least ten minutes prior to the start of the call to register. A replay of the call will be available from 2:00 PM (ET) on August 2, 2017 until midnight (ET) on August 16, 2017. The replay can be accessed by dialing (844) 512-2921 or (412) 317-6671 for international callers and entering pin number 13662949.

SUPPLEMENTAL INFORMATION

The Company has posted supplemental financial and operating information and other data in the INVEST section of its website.

ABOUT RPAI

Retail Properties of America, Inc. is a REIT that owns and operates high quality, strategically located shopping centers in the United States. As of June 30, 2017, the Company owned 132 retail operating

iii

properties representing 23.3 million square feet. The Company is publicly traded on the New York Stock Exchange under the ticker symbol RPAI. Additional information about the Company is available at www.rpai.com.

SAFE HARBOR LANGUAGE

The statements and certain other information contained in this press release, which can be identified by the use of forward-looking terminology such as “believes”, “expects”, “may”, “should”, “intends”, “plans”, “estimates”, “continue” or “anticipates” and variations of such words or similar expressions or the negative of such words, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbors created thereby. These forward-looking statements reflect the Company’s current views about its plans, intentions, expectations, strategies and prospects, which are based on the information currently available to the Company and on assumptions it has made. Although the Company believes that its plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, the Company can give no assurance that such plans, intentions, expectations or strategies will be attained or achieved. Furthermore, these forward-looking statements should be considered as subject to the many risks and uncertainties that exist in the Company’s operations and business environment. Such risks and uncertainties could cause actual results to differ materially from those projected. These uncertainties include, but are not limited to, economic, business and financial conditions, and changes in the Company’s industry and changes in the real estate markets in particular, rental rates and/or vacancy rates, frequency and magnitude of defaults on, early terminations of or non-renewal of leases by tenants, bankruptcy or insolvency of a major tenant or a significant number of smaller tenants, interest rates or operating costs, real estate valuations, the availability, terms and deployment of capital, general volatility of the capital and credit markets and the market price of the Company’s Class A common stock, risks generally associated with real estate acquisitions and dispositions, including the Company’s ability to identify and pursue acquisition and disposition opportunities, risks generally associated with redevelopment, including the impact of construction delays and cost overruns, the Company’s ability to lease redeveloped space and the Company’s ability to identify and pursue redevelopment opportunities, competitive and cost factors, the Company’s ability to enter into new leases or renew leases on favorable terms, the Company’s ability to create long-term shareholder value, satisfaction of closing conditions to the pending transactions described herein, the Company’s failure to successfully execute its non-target disposition program and capital recycling efforts, regulatory changes and other risk factors, including those detailed in the sections of the Company’s most recent Forms 10-K and 10-Q filed with the SEC titled “Risk Factors”. The Company assumes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

NON-GAAP FINANCIAL MEASURES

As defined by the National Association of Real Estate Investment Trusts (NAREIT), an industry trade group, Funds From Operations (FFO) means net income (loss) computed in accordance with generally accepted accounting principles (GAAP), excluding gains (or losses) from sales of depreciable real estate, plus depreciation and amortization and impairment charges on depreciable real estate. The Company has adopted the NAREIT definition in its computation of FFO attributable to common shareholders. The Company believes that, subject to the following limitations, FFO attributable to common shareholders provides a basis for comparing its performance and operations to those of other real estate investment trusts (REITs). The Company believes that FFO attributable to common shareholders, which is a supplemental non-GAAP financial measure, provides an additional and useful means to assess the operating performance of REITs. FFO attributable to common shareholders does not represent an alternative to (i) “Net income” or “Net income attributable to common shareholders” as an indicator of the Company’s financial performance, or (ii) “Cash flows from operating activities” in accordance with GAAP as a measure of the Company’s capacity to fund cash needs, including the payment of dividends.

The Company also reports Operating FFO attributable to common shareholders, which is defined as FFO attributable to common shareholders excluding the impact of discrete non-operating transactions and other events which the Company does not consider representative of the comparable operating results of its real estate operating portfolio, which is its core business platform. Specific examples of discrete non-operating transactions and other events include, but are not limited to, the financial statement impact of gains or losses associated with the early extinguishment of debt or other liabilities, impairment charges to write down the carrying value of assets other than depreciable real estate, actual or anticipated settlement of litigation involving the Company, including associated legal costs, and executive and realignment separation charges, which are otherwise excluded from the Company’s calculation of FFO attributable to common shareholders. The Company believes that Operating FFO attributable to common shareholders, which is a supplemental non-GAAP financial measure, provides an additional and useful means to assess the operating performance of REITs. Operating FFO attributable to common shareholders does not represent an alternative to (i) “Net income” or “Net income attributable to common shareholders” as an indicator of the Company’s financial performance, or (ii) “Cash flows from operating activities” in accordance with GAAP as a measure of the Company’s capacity to fund cash needs, including the payment of dividends. Comparison of the Company’s presentation of Operating FFO attributable

to common shareholders to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.

The Company also reports Net Operating Income (NOI), which it defines as all revenues other than straight-line rental income, amortization of lease inducements, amortization of acquired above and below market lease intangibles and lease termination fee income, less real estate taxes and all operating expenses other than straight-line ground rent expense and amortization of acquired ground lease intangibles, which are non-cash items. NOI consists of Same Store NOI and NOI from Other Investment Properties. Same Store NOI for the three and six months ended June 30, 2017 represents NOI from the Company’s same store portfolio consisting of 123 retail operating properties acquired or placed in service and stabilized prior to January 1, 2016. NOI from Other Investment Properties for the three and six months ended June 30, 2017 represents NOI primarily from properties acquired during 2016 and 2017, the Company’s one remaining office property, three properties where the Company has begun redevelopment and/or activities in anticipation of future redevelopment, the properties that were sold or held for sale in 2016 and 2017, the net income from the Company’s wholly-owned captive insurance company and the historical ground rent expense related to an existing same store investment property that was subject to a ground lease with a third party prior to the Company’s acquisition of the fee interest on April 29, 2016. The Company believes that NOI, Same Store NOI and NOI from Other Investment Properties, which are supplemental non-GAAP financial measures, provide an additional and useful operating perspective not immediately apparent from “Operating income” or “Net income attributable to common shareholders” in accordance with GAAP. The Company uses these measures to evaluate its performance on a property-by-property basis because they allow management to evaluate the impact that factors such as lease structure, lease rates and tenant base have on the Company’s operating results. NOI, Same Store NOI and NOI from Other Investment Properties do not represent alternatives to “Net income” or “Net income attributable to common shareholders” in accordance with GAAP as indicators of the Company’s financial performance. Comparison of the Company’s presentation of NOI, Same Store NOI and NOI from Other Investment Properties to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.

Adjusted EBITDA is a supplemental non-GAAP financial measure and represents net income attributable to common shareholders before interest, income taxes, depreciation and amortization, as further adjusted to eliminate the impact of certain items that the Company does not consider indicative of its ongoing performance. The Company believes that Adjusted EBITDA is useful because it allows investors and management to evaluate and compare the Company’s performance from period to period in a meaningful and consistent manner in addition to standard financial measurements under GAAP. Adjusted EBITDA should not be considered an alternative to “Net income attributable to common shareholders” as an indicator of the Company’s financial performance. Comparison of the Company’s presentation of Adjusted EBITDA to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.

Net Debt to Adjusted EBITDA is a supplemental non-GAAP financial measure and represents (i) the Company’s total notional debt, excluding unamortized premium, discount and capitalized loan fees, less cash and cash equivalents and disposition proceeds temporarily restricted related to potential Internal Revenue Code Section 1031 tax-deferred exchanges (1031 Exchanges) divided by (ii) Adjusted EBITDA for the prior three months, annualized. The Company believes that this ratio is useful because it provides investors with information regarding its total notional debt net of cash and cash equivalents and disposition proceeds temporarily restricted related to potential 1031 Exchanges, which could be used to repay debt, compared to its performance as measured using Adjusted EBITDA. Comparison of the Company’s presentation of Net Debt to Adjusted EBITDA to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.

Net Debt and Preferred Stock to Adjusted EBITDA is a supplemental non-GAAP financial measure and represents (i) the Company’s total notional debt, excluding unamortized premium, discount and capitalized loan fees, plus preferred stock, less cash and cash equivalents and disposition proceeds temporarily restricted related to potential 1031 Exchanges divided by (ii) Adjusted EBITDA for the prior three months, annualized. The Company believes that this ratio is useful because it provides investors with information regarding its total notional debt and preferred stock, net of cash and cash equivalents and disposition proceeds temporarily restricted related to potential 1031 Exchanges, which could be used to repay debt, compared to its performance as measured using Adjusted EBITDA. Comparison of the Company’s presentation of Net Debt and Preferred Stock to Adjusted EBITDA to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.

CONTACT INFORMATION

Michael Fitzmaurice

VP – Capital Markets & Investor Relations

Retail Properties of America, Inc.

(630) 634-4233

Retail Properties of America, Inc.

FFO Attributable to Common Shareholders and

Operating FFO Attributable to Common Shareholders Guidance



	Per Share Guidance Range Full Year 2017
	Low			High

Net income attributable to common shareholders	$	0.95		$	1.00
Depreciation and amortization of depreciable real estate	0.86			0.86
Provision for impairment of investment properties	0.06			0.06
Gain on sales of depreciable investment properties	(1.19		)	(1.19		)
FFO attributable to common shareholders	$	0.68		$	0.73

Impact on earnings from the early extinguishment of debt	0.30			0.30
Provision for hedge ineffectiveness	—			—
Preferred stock redemption in excess of carrying value	0.02			0.02
Other	—			—
Operating FFO attributable to common shareholders	$	1.00		$	1.05

Retail Properties of America, Inc.

Condensed Consolidated Balance Sheets

(amounts in thousands, except par value amounts)

(unaudited)



	June 30, 2017			December 31, 2016
Assets
Investment properties:
Land	$	1,141,172		$	1,191,403
Building and other improvements	4,023,200			4,284,664
Developments in progress	28,254			23,439
	5,192,626			5,499,506
Less accumulated depreciation	(1,363,604		)	(1,443,333		)
Net investment properties	3,829,022			4,056,173

Cash and cash equivalents	28,003			53,119
Accounts and notes receivable (net of allowances of $6,938 and $6,886, respectively)	71,588			78,941
Acquired lease intangible assets, net	131,092			142,015
Assets associated with investment properties held for sale	44,087			30,827
Other assets, net	160,531			91,898
Total assets	$	4,264,323		$	4,452,973

Liabilities and Equity
Liabilities:
Mortgages payable, net (includes unamortized premium of $1,223 and $1,437, respectively, unamortized discount of $(601) and $(622), respectively, and unamortized capitalized loan fees of $(772) and $(5,026), respectively)	$	355,239		$	769,184
Unsecured notes payable, net (includes unamortized discount of $(912) and $(971), respectively, and unamortized capitalized loan fees of $(3,647) and $(3,886), respectively)	695,441			695,143
Unsecured term loans, net (includes unamortized capitalized loan fees of $(3,446) and $(2,402), respectively)	646,554			447,598
Unsecured revolving line of credit	182,000			86,000
Accounts payable and accrued expenses	65,093			83,085
Distributions payable	38,318			39,222
Acquired lease intangible liabilities, net	102,720			105,290
Liabilities associated with investment properties held for sale	1,142			864
Other liabilities	75,339			74,501
Total liabilities	2,161,846			2,300,887

Commitments and contingencies

Equity:
Preferred stock, $0.001 par value, 10,000 shares authorized, 7.00% Series A cumulative redeemable preferred stock, 5,400 shares issued and outstanding as of June 30, 2017 and December 31, 2016; liquidation preference $135,000	5			5
Class A common stock, $0.001 par value, 475,000 shares authorized, 230,943 and 236,770 shares issued and outstanding as of June 30, 2017 and December 31, 2016, respectively	231			237
Additional paid-in capital	4,853,680			4,927,155
Accumulated distributions in excess of earnings	(2,752,648		)	(2,776,033		)
Accumulated other comprehensive income	1,209			722
Total equity	2,102,477			2,152,086
Total liabilities and equity	$	4,264,323		$	4,452,973



2nd Quarter 2017 Supplemental Information		1

Retail Properties of America, Inc.

Condensed Consolidated Statements of Operations

(amounts in thousands, except per share amounts)

(unaudited)



	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Revenues
Rental income	$	106,017		$	115,194		$	215,991		$	230,454
Tenant recovery income	29,524			29,654			60,310			60,010
Other property income	1,798			2,378			4,731			5,401
Total revenues	137,339			147,226			281,032			295,865

Expenses
Operating expenses	21,004			20,092			42,868			43,153
Real estate taxes	21,487			21,090			43,366			41,029
Depreciation and amortization	52,325			53,443			105,799			106,839
Provision for impairment of investment properties	13,034			4,142			13,034			6,306
General and administrative expenses	10,370			10,773			21,583			22,179
Total expenses	118,220			109,540			226,650			219,506

Operating income	19,119			37,686			54,382			76,359

Gain on extinguishment of debt	—			—			—			13,653
Gain on extinguishment of other liabilities	—			6,978			—			6,978
Interest expense	(21,435		)	(25,977		)	(106,967		)	(52,741		)
Other income, net	451			302			456			427
(Loss) income from continuing operations	(1,865		)	18,989			(52,129		)	44,676
Gain on sales of investment properties	116,628			9,613			157,792			31,352
Net income	114,763			28,602			105,663			76,028
Preferred stock dividends	(2,363		)	(2,363		)	(4,725		)	(4,725		)
Net income attributable to common shareholders	$	112,400		$	26,239		$	100,938		$	71,303

Earnings per common share – basic and diluted
Net income per common share attributable to common shareholders	$	0.48		$	0.11		$	0.43		$	0.30

Weighted average number of common shares outstanding – basic	234,243			236,716			235,269			236,647

Weighted average number of common shares outstanding – diluted	234,818			236,902			235,842			236,781



2nd Quarter 2017 Supplemental Information		2

Retail Properties of America, Inc.

Funds From Operations (FFO) Attributable to Common Shareholders,

Operating FFO Attributable to Common Shareholders and Additional Information

(dollar amounts in thousands, except per share amounts)

(unaudited)



FFO attributable to common shareholders and Operating FFO attributable to common shareholders (a)

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016

Net income attributable to common shareholders	$	112,400		$	26,239		$	100,938		$	71,303
Depreciation and amortization of depreciable real estate	51,911			53,100			104,990			106,194
Provision for impairment of investment properties	13,034			4,142			13,034			4,142
Gain on sales of depreciable investment properties	(116,628		)	(9,613		)	(157,792		)	(31,352		)
FFO attributable to common shareholders	$	60,717		$	73,868		$	61,170		$	150,287

FFO attributable to common shareholders per common share outstanding	$	0.26		$	0.31		$	0.26		$	0.64

FFO attributable to common shareholders	$	60,717		$	73,868		$	61,170		$	150,287
Impact on earnings from the early extinguishment of debt, net	2,312			4			68,669			(12,842		)
Provision for hedge ineffectiveness	5			3			11			3
Provision for impairment of non-depreciable investment property	—			—			—			2,164
Gain on extinguishment of other liabilities	—			(6,978		)	—			(6,978		)
Other (b)	(149		)	(184		)	(19		)	(184		)
Operating FFO attributable to common shareholders	$	62,885		$	66,713		$	129,831		$	132,450

Operating FFO attributable to common shareholders per common share outstanding	$	0.27		$	0.28		$	0.55		$	0.56

Weighted average number of common shares outstanding – basic	234,243			236,716			235,269			236,647
Dividends declared per common share	$	0.165625		$	0.165625		$	0.33125		$	0.33125

Additional Information (c)
Lease-related expenditures (d)
Same store	$	8,381		$	11,521		$	13,966		$	17,891
Other investment properties (e)	$	9,790		$	1,215		$	11,094		$	3,498

Capital expenditures (f)
Same store	$	6,729		$	6,549		$	13,205		$	9,206
Other investment properties	$	1,902		$	5,322		$	3,121		$	5,588

Straight-line rental income, net	$	919		$	800		$	1,260		$	1,828
Amortization of above and below market lease intangibles and lease inducements	$	290		$	74		$	698		$	419
Non-cash ground rent expense (g)	$	537		$	624		$	1,083		$	1,400


(a)	Refer to page 19 for definitions of FFO attributable to common shareholders and Operating FFO attributable to common shareholders.


(b)	Primarily consists of the impact on earnings from actual or anticipated settlement of litigation involving the Company, including associated legal costs, which are included in "Other income, net" in the condensed consolidated statements of operations.


(c)	The same store portfolio for the three and six months ended June 30, 2017 consists of 123 retail operating properties. Refer to pages 19 – 22 for definitions and reconciliations of non-GAAP financial measures.


(d)	Consists of payments for tenant improvements, lease commissions and lease inducements and excludes developments in progress.


(e)	2017 expenditures are primarily associated with Schaumburg Towers, the Company's one remaining office property.


(f)	Consists of payments for building, site and other improvements, net of anticipated recoveries, and excludes developments in progress.


(g)	Includes amortization of acquired ground lease intangibles and straight-line ground rent expense.



2nd Quarter 2017 Supplemental Information		3

Retail Properties of America, Inc.

Supplemental Financial Statement Detail

(amounts in thousands)

(unaudited)



Supplemental Balance Sheet Detail	June 30, 2017		December 31, 2016
Accounts and Notes Receivable
Accounts and notes receivable (net of allowances of $5,913 and $6,200, respectively)	$	23,274	$	27,948
Straight-line receivables (net of allowances of $1,025 and $686, respectively)	48,314		50,993
Total	$	71,588	$	78,941

Other Assets, Net
Deferred costs, net	$	34,901	$	30,657
Restricted cash and escrows	10,083		29,230
Disposition proceeds temporarily restricted related to potential Internal Revenue Code Section 1031 tax-deferred exchanges (1031 Exchanges)	93,561		—
Fair value of derivatives	1,219		743
Other assets, net	20,767		31,268
Total	$	160,531	$	91,898

Other Liabilities
Unearned income	$	19,261	$	16,883
Straight-line ground rent liability	31,485		31,516
Other liabilities	24,593		26,102
Total	$	75,339	$	74,501

Developments in Progress
Active developments/redevelopments (a)	$	28,254	$	23,439



Supplemental Statements of Operations Detail
	Three Months Ended June 30,					Six Months Ended June 30,
	2017			2016		2017		2016
Rental Income
Base rent	$	103,843		$	113,213	$	210,860	$	225,197
Percentage and specialty rent	965			1,107		3,173		3,010
Straight-line rent	919			800		1,260		1,828
Amortization of above and below market lease intangibles and lease inducements	290			74		698		419
Total	$	106,017		$	115,194	$	215,991	$	230,454

Other Property Income
Lease termination income	$	510		$	1,027	$	2,122	$	2,685
Other property income	1,288			1,351		2,609		2,716
Total	$	1,798		$	2,378	$	4,731	$	5,401

Operating Expense Supplemental Information
Bad Debt Expense	$	(41	)	$	17	$	822	$	619
Non-Cash Ground Rent Expense (b)	$	537		$	624	$	1,083	$	1,400

General and Administrative Expense Supplemental Information
Acquisition Costs (c)	$	—		$	351	$	—	$	690
Non-Cash Amortization of Stock-Based Compensation	$	1,756		$	1,675	$	3,549	$	3,699

Additional Supplemental Information
Capitalized Compensation Costs	$	400		$	241	$	878	$	502
Capitalized Internal Leasing Incentives	$	92		$	85	$	189	$	164
Capitalized Interest	$	88		$	—	$	166	$	—


(a)	Represents Reisterstown Road Plaza and Towson Circle. See page 10 for further details.


(b)	Includes amortization of acquired ground lease intangibles and straight-line ground rent expense.


(c)	The Company adopted ASU 2017-01, Business Combinations, on a prospective basis as of October 1, 2016. As a result, 2017 acquisition costs have been capitalized.



2nd Quarter 2017 Supplemental Information		4

Retail Properties of America, Inc.

Same Store Net Operating Income (NOI)

(dollar amounts in thousands)

(unaudited)



Same store portfolio (a)
	Based on Same store portfolio as of June 30, 2017
	2017		2016		Change

Number of retail operating properties in same store portfolio	123		123		—

Occupancy	93.7	%	94.2	%	(0.5	)%

Percent leased (b)	94.8	%	95.7	%	(0.9	)%



Same Store NOI (c)
	Three Months Ended June 30,							Six Months Ended June 30,
	2017			2016		Change		2017		2016		Change

Base rent	$	88,041		$	86,806			$	175,787	$	173,126
Percentage and specialty rent	490			802				1,890		2,134
Tenant recovery income	24,562			23,992				49,926		48,738
Other property operating income (d)	874			809				1,773		1,622
	113,967			112,409				229,376		225,620

Property operating expenses (e)	15,229			15,319				30,975		31,908
Bad debt expense	(29		)	90				531		442
Real estate taxes	17,556			17,223				35,017		33,523
	32,756			32,632				66,523		65,873

Same Store NOI (c)	$	81,211		$	79,777	1.8	%	$	162,853	$	159,747	1.9	%

(a)

For the three and six months ended June 30, 2017, the Company's same store portfolio consists of 123 retail operating properties and excludes properties acquired or placed in service and stabilized during 2016 and 2017, the Company's one remaining office property, three properties where the Company has begun redevelopment and/or activities in anticipation of future redevelopment and investment properties sold or classified as held for sale during 2016 and 2017.


(b)	Includes leases signed but not commenced.


(c)	Refer to pages 19 – 22 for definitions and reconciliations of non-GAAP financial measures. Comparison of the Company's presentation of Same Store NOI to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.


(d)	Consists of all operating items included in "Other property income" in the condensed consolidated statements of operations, which include all items other than lease termination fee income.


(e)	Consists of all property operating items included in "Operating expenses" in the condensed consolidated statements of operations, which include all items other than straight-line ground rent expense and amortization of acquired ground lease intangibles, which are non-cash items.



2nd Quarter 2017 Supplemental Information		5

Retail Properties of America, Inc.

Capitalization

(dollar amounts in thousands, except share price and ratios)



Capitalization Data
	June 30, 2017		December 31, 2016
Equity Capitalization
Common stock shares outstanding (a)	230,943		236,770
Common stock share price	$	12.21	$	15.33
	2,819,814		3,629,684
Series A preferred stock	135,000		135,000
Total equity capitalization	$	2,954,814	$	3,764,684

Debt Capitalization
Mortgages payable (b)	$	355,389	$	773,395
Unsecured notes payable (c)	700,000		700,000
Unsecured term loans (d)	650,000		450,000
Unsecured revolving line of credit	182,000		86,000
Total debt capitalization	$	1,887,389	$	2,009,395

Total capitalization at end of period	$	4,842,203	$	5,774,079

Calculation of Net Debt to Adjusted EBITDA Ratios (e)



	June 30, 2017			December 31, 2016

Total notional debt	$	1,887,389		$	2,009,395
Less: consolidated cash and cash equivalents	(28,003		)	(53,119		)
Less: disposition proceeds temporarily restricted related to potential 1031 Exchanges	(93,561		)	—
Total net debt	$	1,765,825		$	1,956,276
Total net debt and preferred stock	$	1,900,825		$	2,091,276
Adjusted EBITDA (f)	$	339,716		$	351,472
Net Debt to Adjusted EBITDA	5.2x			5.6x
Net Debt and Preferred Stock to Adjusted EBITDA	5.6x			6.0x


(a)	Excludes performance restricted stock units and options outstanding, which could potentially convert into common stock in the future.


(b)	Mortgages payable excludes mortgage premium of $1,223 and $1,437, discount of $(601) and $(622), and capitalized loan fees of $(772) and $(5,026), net of accumulated amortization, as of June 30, 2017 and December 31, 2016, respectively.


(c)	Unsecured notes payable exclude discount of $(912) and $(971) and capitalized loan fees of $(3,647) and $(3,886), net of accumulated amortization, as of June 30, 2017 and December 31, 2016, respectively.


(d)	Unsecured term loans exclude capitalized loan fees of $(3,446) and $(2,402), net of accumulated amortization, as of June 30, 2017 and December 31, 2016, respectively.


(e)	Refer to pages 19 – 22 for definitions and reconciliations of non-GAAP financial measures.


(f)	For purposes of these ratio calculations, annualized three months ended figures were used.



2nd Quarter 2017 Supplemental Information		6

Retail Properties of America, Inc.

Covenants



Unsecured Credit Facility, Term Loan Due 2023 and Notes Due 2021, 2024, 2026 and 2028 (a)

		Covenant		June 30, 2017

Leverage ratio (b)		< 60.0%	(b)	34.3	%

Secured leverage ratio (b)	Unsecured Credit Facility and Term Loan Due 2023: Notes Due 2021, 2024, 2026 and 2028:	< 45.0% < 40.0%	(b)	6.5	%

Fixed charge coverage ratio (c)		> 1.50x		3.2x

Interest coverage ratio (d)		> 1.50x		3.9x

Unencumbered leverage ratio (b)		< 60.0%	(b)	32.8	%

Unencumbered interest coverage ratio		> 1.75x		5.3x



Notes Due 2025 (e)
	Covenant	June 30, 2017

Leverage ratio (f)	< 60.0%	33.9	%

Secured leverage ratio (f)	< 40.0%	6.4	%

Debt service coverage ratio (g)	> 1.50x	4.8x

Unencumbered assets to unsecured debt ratio	> 150%	312	%

(a)

For a complete listing of all covenants related to the Company's Unsecured Credit Facility (comprised of the unsecured term loans and unsecured revolving line of credit) as well as covenant definitions, refer to the Fourth Amended and Restated Credit Agreement filed as Exhibit 10.8 to the Company's Annual Report on Form 10-K for the year ended December 31, 2015, filed on February 17, 2016. For a complete listing of all covenants as well as covenant definitions related to the Company's Term Loan Due 2023, refer to the credit agreement filed as Exhibit 10.1 to the Company's Current Report on Form 8-K, dated November 29, 2016. The Term Loan Due 2023 closed during the year ended December 31, 2016 and funded on January 3, 2017. For a complete listing of all covenants related to the Company's 4.12% senior unsecured notes due 2021 and 4.58% senior unsecured notes due 2024 (Notes Due 2021 and 2024) as well as covenant definitions, refer to the Note Purchase Agreement filed as Exhibit 10.1 to the Company's Current Report on Form 8-K, dated May 22, 2014. For a complete listing of all covenants related to the Company's 4.08% senior unsecured notes due 2026 and 4.24% senior unsecured notes due 2028 (Notes Due 2026 and 2028) as well as covenant definitions, refer to the Note Purchase Agreement filed as Exhibit 10.1 to the Company's Current Report on Form 8-K, dated October 5, 2016.


(b)	Based upon a capitalization rate of 6.75%.


(c)	Applies only to the Company's Unsecured Credit Facility, Term Loan Due 2023 and Notes Due 2026 and 2028. This ratio is based upon consolidated debt service, including interest expense, principal amortization and preferred dividends declared, excluding interest expense related to defeasance costs and prepayment premiums.


(d)	Applies only to the Company's Notes Due 2021, 2024, 2026 and 2028.


(e)	For a complete listing of all covenants related to the Company's 4.00% senior unsecured notes due 2025 (Notes Due 2025) as well as covenant definitions, refer to the First Supplemental Indenture filed as Exhibit 4.2 to the Company's Current Report on Form 8-K, dated March 12, 2015.


(f)	Based upon the book value of Total Assets as defined in the First Supplemental Indenture.


(g)	Based upon interest expense and excludes principal amortization and preferred dividends declared. This ratio is calculated on a pro forma basis with the assumption that debt and property transactions occurred on the first day of the preceding four-quarter period.



2nd Quarter 2017 Supplemental Information		7

Retail Properties of America, Inc.

Consolidated Debt Summary as of June 30, 2017

(dollar amounts in thousands)



	Balance		Weighted Average (WA) Interest Rate (a)		WA Years to Maturity

Fixed rate mortgages payable (b)	$	355,389	5.22	%	4.9 years

Unsecured notes payable:
Senior notes – 4.12% due 2021	100,000		4.12	%	4.0 years
Senior notes – 4.58% due 2024	150,000		4.58	%	7.0 years
Senior notes – 4.00% due 2025	250,000		4.00	%	7.7 years
Senior notes – 4.08% due 2026	100,000		4.08	%	9.3 years
Senior notes – 4.24% due 2028	100,000		4.24	%	11.5 years
Total unsecured notes payable (b)	700,000		4.19	%	7.8 years

Unsecured credit facility:
Term loan – fixed rate (c)	250,000		1.97	%	3.5 years
Term loan – variable rate	200,000		2.61	%	0.9 years
Revolving line of credit – variable rate	182,000		2.58	%	2.5 years
Total unsecured credit facility (b)	632,000		2.35	%	2.4 years

Term Loan Due 2023 – fixed rate (b) (d)	200,000		2.96	%	6.4 years

Total consolidated indebtedness	$	1,887,389	3.64	%	5.3 years



Consolidated Debt Maturity Schedule as of June 30, 2017

Year	Fixed Rate (b)		WA Rates on Fixed Debt		Variable Rate (b)		WA Rates on Variable Debt (e)		Total		% of Total		WA Rates on Total Debt (a)

2017	$	27,157	4.18	%	$	—	—		$	27,157	1.4	%	4.18	%
2018	5,065		5.49	%	200,000		2.61	%	205,065		10.9	%	2.68	%
2019	65,352		7.45	%	—		—		65,352		3.5	%	7.45	%
2020	3,923		4.62	%	182,000		2.58	%	185,923		9.8	%	2.62	%
2021	372,820		2.73	%	—		—		372,820		19.8	%	2.73	%
2022	157,216		4.97	%	—		—		157,216		8.3	%	4.97	%
2023	231,758		3.12	%	—		—		231,758		12.3	%	3.12	%
2024	151,737		4.57	%	—		—		151,737		8.0	%	4.57	%
2025	251,809		4.00	%	—		—		251,809		13.3	%	4.00	%
2026	112,634		4.15	%	—		—		112,634		6.0	%	4.15	%
Thereafter	125,918		4.26	%	—		—		125,918		6.7	%	4.26	%
Total	$	1,505,389	3.90	%	$	382,000	2.59	%	$	1,887,389	100.0	%	3.64	%


(a)	Interest rates presented exclude the impact of premium, discount and capitalized loan fee amortization. As of June 30, 2017, the Company's overall weighted average interest rate for consolidated debt including the impact of premium, discount and capitalized loan fee amortization was 3.82%.

(b)

Fixed rate mortgages payable excludes mortgage premium of $1,223, discount of $(601) and capitalized loan fees of $(772), net of accumulated amortization, as of June 30, 2017. Unsecured notes payable excludes discount of $(912) and capitalized loan fees of $(3,647), net of accumulated amortization, as of June 30, 2017. Term loans exclude capitalized loan fees of $(3,446), net of accumulated amortization, as of June 30, 2017. In the consolidated debt maturity schedule, maturity amounts for each year include scheduled principal amortization payments.


(c)	Reflects $250,000 of LIBOR-based variable rate debt that has been swapped to a weighted average fixed rate of 0.67% plus a credit spread based on a leverage grid ranging from 1.30% to 2.20% through December 31, 2017. The applicable credit spread was 1.30% as of June 30, 2017.


(d)	Reflects $200,000 of LIBOR-based variable rate debt that has been swapped to a fixed rate of 1.26% plus a credit spread based on a leverage grid ranging from 1.70% to 2.55% through November 22, 2018. The applicable credit spread was 1.70% as of June 30, 2017.


(e)	Represents interest rates as of June 30, 2017.



2nd Quarter 2017 Supplemental Information		8

Retail Properties of America, Inc.

Summary of Indebtedness as of June 30, 2017

(dollar amounts in thousands)

Description

Maturity

Date

Interest

Rate (a)

Interest

Rate Type

Secured or

Unsecured

Balance as of

6/30/2017

Consolidated Indebtedness

Lincoln Park

12/01/17

4.05%

Fixed

Secured

24,796

Corwest Plaza

04/01/19

7.25%

Fixed

Secured

13,890

Dorman Center

04/01/19

7.70%

Fixed

Secured

19,779

Shops at Park Place

05/01/19

7.48%

Fixed

Secured

7,468

Shoppes of New Hope

06/01/19

7.75%

Fixed

Secured

3,335

Village Shoppes at Simonton

06/01/19

7.75%

Fixed

Secured

3,078

Plaza at Marysville

09/01/19

8.00%

Fixed

Secured

8,478

Forks Town Center

10/01/19

7.70%

Fixed

Secured

7,734

Sawyer Heights Village

07/01/21

5.00%

Fixed

Secured

18,700

Ashland & Roosevelt (bank pad)

02/25/22

7.48%

Fixed

Secured

897

Gardiner Manor Mall

03/01/22

4.95%

Fixed

Secured

34,441

Peoria Crossings

04/01/22

4.82%

Fixed

Secured

24,131

Southlake Corners

04/01/22

4.89%

Fixed

Secured

20,945

Tollgate Marketplace

04/01/22

4.84%

Fixed

Secured

35,000

Reisterstown Road Plaza

06/01/22

5.25%

Fixed

Secured

46,250

Gateway Village

01/01/23

4.14%

Fixed

Secured

34,633

Home Depot Plaza

12/01/26

4.82%

Fixed

Secured

10,750

Northgate North

06/01/27

4.50%

Fixed

Secured

26,107

The Shoppes at Union Hill

06/01/31

3.75%

Fixed

Secured

14,977

Mortgages payable (b)

355,389

Senior notes – 4.12% due 2021

06/30/21

4.12%

Fixed

Unsecured

100,000

Senior notes – 4.58% due 2024

06/30/24

4.58%

Fixed

Unsecured

150,000

Senior notes – 4.00% due 2025

03/15/25

4.00%

Fixed

Unsecured

250,000

Senior notes – 4.08% due 2026

09/30/26

4.08%

Fixed

Unsecured

100,000

Senior notes – 4.24% due 2028

12/28/28

4.24%

Fixed

Unsecured

100,000

Unsecured notes payable (b)

700,000

Term loan

01/05/21

1.97%

(c)

Fixed

Unsecured

250,000

Term loan

05/11/18

2.61%

Variable

Unsecured

200,000

Revolving line of credit

01/05/20

2.58%

Variable

Unsecured

182,000

Unsecured credit facility (b)

632,000

Term Loan Due 2023 (b)

11/22/23

2.96%

(d)

Fixed

Unsecured

200,000

Total consolidated indebtedness

10/13/22

3.64%

1,887,389


(a)	Interest rates presented exclude the impact of the premium, discount and capitalized loan fee amortization. As of June 30, 2017, the Company's overall weighted average interest rate for consolidated debt including the impact of premium, discount and capitalized loan fee amortization was 3.82%.

(b)

Mortgages payable excludes mortgage premium of $1,223, discount of $(601) and capitalized loan fees of $(772), net of accumulated amortization, as of June 30, 2017. Unsecured notes payable excludes discount of $(912) and capitalized loan fees of $(3,647), net of accumulated amortization, as of June 30, 2017. Term loans exclude capitalized loan fees of $(3,446), net of accumulated amortization, as of June 30, 2017.


(c)	Reflects $250,000 of LIBOR-based variable rate debt that has been swapped to a weighted average fixed rate of 0.67% plus a credit spread based on a leverage grid ranging from 1.30% to 2.20% through December 31, 2017. The applicable credit spread was 1.30% as of June 30, 2017.


(d)	Reflects $200,000 of LIBOR-based variable rate debt that has been swapped to a fixed rate of 1.26% plus a credit spread based on a leverage grid ranging from 1.70% to 2.55% through November 22, 2018. The applicable credit spread was 1.70% as of June 30, 2017.



2nd Quarter 2017 Supplemental Information		9

Retail Properties of America, Inc.

Development Projects as of June 30, 2017

(dollar amounts in thousands)



Property Name	Metropolitan Statistical Area (MSA)	Included in Same store portfolio (a)	Total Estimated Net Costs (b)		Net Costs Inception to Date		Incremental Gross Leasable Area (GLA)		Targeted Completion (c)	Projected Incremental Return on Cost (d)	Project Description

Redevelopments
Reisterstown Road Plaza	Baltimore	No	$9,500-$10,500		$	4,857	(61,200	)	Q4 2017	9.5%-11.5%	Reconfigure existing space with a facade renovation
Towson Circle	Baltimore	No	$33,000-$35,000		$	11,207	(40,000	)	Q4 2019	8.0%-10.0%	Mixed-use redevelopment that will include double-sided street level retail with approximately 370 third-party-owned residential units above

Expansions and Pad Developments
Lakewood Towne Center	Seattle	Yes	$	1,900	$	526	4,500		Q3 2017	7.0%-8.0%	4,500 sq. ft. pad development



Property Name	MSA	Included in Same store portfolio (a)	Targeted Commencement	Project Description

Redevelopment Pipeline
Boulevard at the Capital Centre	Washington, D.C.	No	2018	Dimensions Healthcare/University of Maryland Regional Medical Center phased redevelopment; Certificate of Need approved in October 2016
Merrifield Town Center II	Washington, D.C.	No (e)	2019	Mixed-use redevelopment and monetization of air rights
Tysons Corner	Washington, D.C.	Yes	2021	Redevelopment with increased density

(a)

The Company's same store portfolio consists of retail operating properties acquired or placed in service and stabilized prior to January 1, 2016. A property is removed from the Company's same store portfolio if the project is considered to significantly impact the existing property's NOI and activities have begun in anticipation of the project. Expansions and Pad Developments are not considered to significantly impact the existing property's NOI, and therefore, have not been removed from the Company's same store portfolio if they have otherwise met the criteria to be included in the Company's same store portfolio as of June 30, 2017.


(b)	Net costs represent the Company's estimated share of the project costs, net of proceeds from land sales, reimbursement from third parties and contributions from project partners, as applicable.


(c)	A redevelopment is considered complete and its classification changed from development to operating when it is substantially completed and held available for occupancy, but no later than one year from the completion of major construction activity.

(d)

Projected Incremental Return on Cost (ROC) generally reflects only the unleveraged incremental NOI generated by the project upon stabilization and is calculated as incremental NOI divided by incremental cost. A property is considered stabilized upon reaching 90% occupancy, but no later than one year from the date it was classified as operating. Incremental NOI is the difference between NOI expected to be generated by the stabilized project and the NOI generated prior to the commencement of active redevelopment, development or expansion of the space. ROC does not include peripheral impacts, such as the impact on future lease rollover at the property or the impact on the long-term value of the property.


(e)	Property was acquired subsequent to December 31, 2015, and as such, does not meet the criteria to be included in the Company's same store portfolio as of June 30, 2017.

The Company cannot guarantee that (i) ROC will be generated at the percentage listed or at all, (ii) total net costs associated with these projects will be equal to the total estimated net costs, (iii) project completion or stabilization will occur when anticipated or (iv) that the Company will ultimately complete any or all of these projects. The ROC and total estimated net costs reflect the Company's best estimate based upon current information, may change over time and are subject to certain conditions which are beyond the Company's control, including, without limitation, general economic conditions, market conditions and other business factors.



2nd Quarter 2017 Supplemental Information		10

Retail Properties of America, Inc.

Development Projects as of June 30, 2017 (continued)

(dollar amounts in thousands)

The Company has identified the following potential expansion and pad development opportunities to add stand-alone buildings, convert previously under-utilized space or develop additional retail GLA at existing properties. Executing on these opportunities may be subject to certain conditions which are beyond the Company's control, including, without limitation, government approvals, tenant consents as well as general economic, market and other conditions and, therefore, the Company can provide no assurances that any of the expansion and pad development opportunities (i) will be executed on, (ii) will commence when anticipated or (iii) will ultimately be realized.



Property Name	MSA	Included in Same store portfolio (a)	Potential Additional Square Feet

Expansions and Pad Development Opportunities
Southlake Town Square	Dallas	Yes	275,000
One Loudoun Downtown	Washington, D.C.	No (b)	182,000	(c)
Main Street Promenade	Chicago	No (b)	62,000
Governor's Marketplace	Tallahassee	Yes	20,600
Lakewood Towne Center	Seattle	Yes	10,500
Reisterstown Road Plaza	Baltimore	No (d)	8,000 - 12,000
Gateway Plaza	Dallas	Yes	8,000
High Ridge Crossing	St. Louis	Yes	7,500
Humblewood Shopping Center	Houston	Yes	5,000
Watauga Pavilion	Dallas	Yes	5,000
Page Field Commons	Cape Coral-Fort Myers, FL	Yes	4,700
Downtown Crown	Washington, D.C.	Yes	3,000 - 9,000

(a)

The Company's same store portfolio consists of retail operating properties acquired or placed in service and stabilized prior to January 1, 2016. A property is removed from the Company's same store portfolio if the project is considered to significantly impact the existing property's NOI and activities have begun in anticipation of the project. Expansions and Pad Development Opportunities are not considered to significantly impact the existing property's NOI, and therefore, have not been removed from the Company's same store portfolio if they have otherwise met the criteria to be included in the Company's same store portfolio as of June 30, 2017.


(b)	Property was acquired subsequent to December 31, 2015, and as such, does not meet the criteria to be included in the Company's same store portfolio as of June 30, 2017.


(c)	The acquisition of One Loudoun Downtown includes six vacant parcels that have been identified for future development of up to 182,000 square feet of commercial GLA and rights to develop 408 multi-family units at the property.


(d)	Property is an active redevelopment, and as such, does not meet the criteria to be included in the Company's same store portfolio as of June 30, 2017.



Property Name	MSA	Included in Same store portfolio (e)	Total Estimated Net Costs (e)		Net Costs Inception to Date		Incremental GLA		Completion	Projected Incremental Return on Cost (e)	Project Description

Completed Expansions and Pad Developments
Lake Worth Towne Crossing – Parcel	Dallas	Yes	$	2,872	$	2,872	15,030		Q4 2015	11.3%	15,030 sq. ft. multi-tenant retail
Parkway Towne Crossing	Dallas	Yes	$	3,468	$	3,468	21,000		Q3 2016	9.9%	21,000 sq. ft. multi-tenant retail
Heritage Square	Seattle	Yes	$	1,507	$	1,507	(360	)	Q3 2016	11.2%	4,200 sq. ft. redevelopment of outparcel for new tenant, Corner Bakery
Pavilion at King's Grant	Charlotte	Yes	$	2,500	$	2,171	32,400		Q2 2017	14.7%	32,400 sq. ft. multi-tenant retail
Shops at Park Place	Dallas	Yes	$	3,950	$	3,230	25,040		Q2 2017	9.1%	25,040 sq. ft. pad development


(e)	See footnotes on page 10.



2nd Quarter 2017 Supplemental Information		11

Retail Properties of America, Inc.

Acquisitions for the Six Months Ended June 30, 2017

(amounts in thousands, except square footage amounts)



Property Name	Acquisition Date	MSA	Property Type	GLA	Gross Purchase Price		Mortgage Debt Assumed

Main Street Promenade	January 13, 2017	Chicago	Multi-tenant retail	181,600	$	88,000	$	—
Boulevard at the Capital Centre – Fee Interest (a)	January 25, 2017	Washington, D.C.	Fee interest (a)	—	2,000		—
One Loudoun Downtown – Phase II (b)	February 24, 2017	Washington, D.C.	Additional phase of multi-tenant retail (b)	15,900	4,128		—
One Loudoun Downtown – Phase III (b)	April 5, 2017	Washington, D.C.	Additional phase of multi-tenant retail (b)	9,800	2,193		—
One Loudoun Downtown – Phase IV (b)	May 16, 2017	Washington, D.C.	Development rights (b)	—	3,500		—

	Total 2017 acquisitions (through June 30, 2017)			207,300	$	99,821	$	—

(a)

The wholly-owned multi-tenant retail operating property located in Largo, Maryland was previously subject to an approximately 70 acre long-term ground lease with a third party. The Company completed a transaction whereby it received the fee interest in approximately 50 acres of the underlying land in exchange for which (i) the Company paid $1,939 and (ii) the term of the ground lease with respect to the remaining approximately 20 acres was shortened to nine months. The Company derecognized building and improvements of $11,347 related to the remaining ground lease, recognized the fair value of land received of $15,200 and recorded a deferred gain of $2,524. The deferred gain will be recognized upon the expiration of the remaining ground lease. The total number of properties in the Company's portfolio was not affected by this transaction.

(b)

The Company acquired three additional phases, including the development rights for an additional 123 multi-family units for a total of 408, at its One Loudoun Downtown multi-tenant retail operating property. The total number of properties in the Company's portfolio was not affected by these transactions. The remaining phases at One Loudoun Downtown, representing an aggregate gross purchase price of up to $25,700, are expected to close during the third quarter of 2017 as the seller completes construction on stand-alone buildings at the property.

Subsequent to June 30, 2017, the Company closed on the following acquisition:



Property Name	Acquisition Date	MSA	Property Type	GLA	Gross Purchase Price		Mortgage Debt Assumed

New Hyde Park Shopping Center	July 6, 2017	New York	Multi-tenant retail	32,300	$	22,075	$	—

		Subsequent acquisition		32,300	$	22,075	$	—



2nd Quarter 2017 Supplemental Information		12

Retail Properties of America, Inc.

Dispositions for the Six Months Ended June 30, 2017

(amounts in thousands, except square footage amounts)



Property Name	Disposition Date	Property Type	GLA	Consideration			Debt Repaid or Defeased			Defeasance Cost / Prepayment Premium

Rite Aid Store (Eckerd), Culver Rd. – Rochester, NY	January 27, 2017	Single-user retail	10,900	$	500		$	—		$	—
Shoppes at Park West	February 21, 2017	Multi-tenant retail	63,900	15,383			4,993		(a)	792
CVS Pharmacy – Sylacauga, AL	March 7, 2017	Single-user retail	10,100	3,700		(b)	—			—
Rite Aid Store (Eckerd) – Kill Devil Hills, NC	March 8, 2017	Single-user retail	13,800	4,297			1,783		(a)	283
Century III Plaza – Home Depot (c)	March 15, 2017	Single-user parcel	131,900	17,519			—			—
Village Shoppes at Gainesville	March 16, 2017	Multi-tenant retail	229,500	41,750			19,371			2,054
Northwood Crossing	March 24, 2017	Multi-tenant retail	160,000	22,850		(b)	—			—
University Town Center	April 4, 2017	Multi-tenant retail	57,500	14,700		(b)	4,191		(a)	665
Edgemont Town Center	April 4, 2017	Multi-tenant retail	77,700	19,025		(b)	6,108		(a)	969
Phenix Crossing	April 4, 2017	Multi-tenant retail	56,600	12,400		(b)	3,923		(a)	622
Brown's Lane	April 27, 2017	Multi-tenant retail	74,700	10,575			4,637		(a)	736
Rite Aid Store (Eckerd) – Greer, SC	May 9, 2017	Single-user retail	13,800	3,050			1,498		(a)	238
Evans Towne Centre	May 9, 2017	Multi-tenant retail	75,700	11,825			4,012		(a)	637
Red Bug Village	May 25, 2017	Multi-tenant retail	26,200	8,100			—			—
Wilton Square	May 26, 2017	Multi-tenant retail	438,100	49,300			—			—
Town Square Plaza	May 30, 2017	Multi-tenant retail	215,600	28,600			16,815			2,261
Cuyahoga Falls Market Center	May 31, 2017	Multi-tenant retail	76,400	11,500			3,433		(a)	545
Plaza Santa Fe II	June 5, 2017	Multi-tenant retail	224,200	35,220			—			—
Rite Aid Store (Eckerd)–Columbia, SC	June 6, 2017	Single-user retail	13,400	3,250			1,560		(a)	248
Fox Creek Village	June 16, 2017	Multi-tenant retail	107,500	24,825			8,471		(a)	1,344
Cottage Plaza	June 29, 2017	Multi-tenant retail	85,500	23,050			10,076		(a)	1,598
Magnolia Square	June 29, 2017	Multi-tenant retail	116,000	16,000			5,974		(a)	948
Cinemark Seven Bridges	June 29, 2017	Single-user retail	70,200	15,271			4,637		(a)	736
Low Country Village I & II	June 29, 2017	Multi-tenant retail	139,900	22,075		(b)	—			—

Total 2017 dispositions (through June 30, 2017)			2,489,100	$	414,765		$	101,482		$	14,676


(a)	Debt on this property was defeased as part of the January 2017 defeasance of the IW JV portfolio of mortgages payable.


(b)	Disposition proceeds related to this property are temporarily restricted related to a potential 1031 Exchange. As of June 30, 2017, disposition proceeds totaling $93,561 are temporarily restricted and are included in "Other assets, net" in the condensed consolidated balance sheets.


(c)	The Company disposed of the Home Depot parcel at Century III Plaza, an existing 284,100 square foot multi-tenant retail operating property. The remaining portion of Century III Plaza is classified as held for sale as of June 30, 2017.

Subsequent to June 30, 2017, the Company closed on the following dispositions:



Property Name	Disposition Date	Property Type	GLA	Consideration			Debt Repaid or Defeased			Defeasance Cost / Prepayment Premium

Boulevard Plaza	July 20, 2017	Multi-tenant retail	111,100	$	14,300		$	2,229	(d)	$	354
Irmo Station	July 26, 2017	Multi-tenant retail	99,400	16,027		(e)	4,726		(d)	750
Hickory Ridge	July 27, 2017	Multi-tenant retail	380,600	44,020			18,100		(d)	2,872

	Subsequent dispositions		591,100	$	74,347		$	25,055		$	3,976


(d)	Debt on this property was defeased as part of the January 2017 defeasance of the IW JV portfolio of mortgages payable.


(e)	Disposition proceeds of $15,643 are temporarily restricted related to a potential 1031 Exchange.



2nd Quarter 2017 Supplemental Information		13

Retail Properties of America, Inc.

Market Summary as of June 30, 2017

(dollar amounts and square footage in thousands)



Property Type/Market	Number of Properties	Annualized Base Rent (ABR) (a)		% of Total Multi-Tenant Retail ABR (a)		ABR per Occupied Sq. Ft.		GLA (a)	% of Total Multi-Tenant Retail GLA (a)		Occupancy		% Leased Including Signed

Multi-Tenant Retail:
Target Markets
Dallas, Texas	19	$	80,210	21.2	%	$	21.96	3,927	17.2	%	93.0	%	94.4	%
Washington, D.C. / Baltimore, Maryland	13	49,327		13.0	%	22.32		2,643	11.5	%	83.6	%	84.7	%
New York, New York	8	33,891		9.0	%	27.79		1,260	5.5	%	96.8	%	97.8	%
Chicago, Illinois	7	25,537		6.8	%	22.98		1,257	5.5	%	88.4	%	91.8	%
Seattle, Washington	8	20,149		5.3	%	15.13		1,473	6.4	%	90.4	%	92.8	%
Atlanta, Georgia	9	19,108		5.1	%	13.20		1,513	6.6	%	95.7	%	95.7	%
Houston, Texas	9	15,317		4.0	%	14.18		1,141	5.0	%	94.7	%	94.9	%
San Antonio, Texas	3	12,232		3.2	%	17.14		723	3.2	%	98.7	%	100.0	%
Phoenix, Arizona	3	10,114		2.7	%	17.41		632	2.8	%	91.9	%	91.9	%
Austin, Texas	4	5,253		1.4	%	16.10		350	1.5	%	93.2	%	94.1	%
Subtotal	83	271,138		71.7	%	19.84		14,919	65.2	%	91.6	%	92.9	%

Non-Target – Top 50 MSAs
California	3	11,542		3.0	%	20.28		658	2.9	%	86.5	%	92.7	%
Florida	4	7,177		1.9	%	19.96		370	1.6	%	97.2	%	98.1	%
Missouri	2	4,779		1.3	%	9.71		530	2.3	%	92.9	%	93.5	%
Virginia	1	4,746		1.3	%	18.02		308	1.3	%	85.5	%	89.7	%
North Carolina	1	3,338		0.9	%	11.59		318	1.4	%	90.6	%	90.6	%
Pennsylvania	2	3,315		0.9	%	12.90		257	1.1	%	100.0	%	100.0	%
Indiana	2	2,974		0.8	%	14.67		205	0.9	%	98.9	%	98.9	%
Connecticut	1	2,671		0.7	%	24.50		115	0.5	%	94.8	%	94.8	%
Massachusetts	1	1,719		0.4	%	16.22		106	0.5	%	100.0	%	100.0	%
Tennessee	1	1,048		0.3	%	11.67		93	0.4	%	96.6	%	96.6	%
South Carolina	1	845		0.2	%	12.43		68	0.3	%	100.0	%	100.0	%
Subtotal	19	44,154		11.7	%	15.75		3,028	13.2	%	92.6	%	94.6	%

Subtotal Target Markets and Top 50 MSAs	102	315,292		83.4	%	19.14		17,947	78.4	%	91.8	%	93.2	%

Non-Target – Other
South Carolina	5	10,545		2.8	%	12.33		870	3.8	%	98.3	%	98.3	%
Texas	3	8,422		2.2	%	13.35		651	2.8	%	96.9	%	96.9	%
Florida	3	7,597		2.0	%	13.92		616	2.7	%	88.6	%	90.0	%
Michigan	1	7,189		1.9	%	22.63		333	1.5	%	95.4	%	96.7	%
Massachusetts	1	5,417		1.4	%	10.92		537	2.3	%	92.4	%	92.4	%
Tennessee	2	4,934		1.3	%	11.61		445	1.9	%	95.5	%	96.3	%
Washington	1	4,186		1.1	%	13.12		378	1.7	%	84.4	%	84.8	%
North Carolina	1	4,136		1.1	%	11.03		380	1.7	%	98.7	%	98.7	%
Pennsylvania	3	3,543		0.9	%	14.96		264	1.2	%	89.7	%	89.7	%
Connecticut	2	2,628		0.7	%	13.55		194	0.8	%	100.0	%	100.0	%
Maryland	1	2,060		0.6	%	19.15		113	0.5	%	95.2	%	95.2	%
New York	1	2,040		0.6	%	12.38		166	0.7	%	99.3	%	99.3	%
Subtotal	24	62,697		16.6	%	13.44		4,947	21.6	%	94.3	%	94.7	%

Total Multi-Tenant Retail	126	377,989		100.0	%	17.87		22,894	100.0	%	92.4	%	93.5	%

Single-User Retail	6	10,669				23.45		455			100.0	%	100.0	%

Total Retail	132	388,658				18.00		23,349			92.5	%	93.7	%

Office	1	1,891				15.54		895			13.6	%	46.1	%

Total Operating Portfolio (b)	133	$	390,549			$	17.98	24,244			89.6	%	91.9	%


(a)	Excludes $7,501 of multi-tenant retail ABR and 816 square feet of multi-tenant retail GLA attributable to the Company's two active redevelopments, which are located in the Washington, D.C./Baltimore MSA. Including these amounts, 72.3% of the Company's multi-tenant retail ABR and 66.4% of the Company's multi-tenant retail GLA is located in Target Markets.


(b)	Excludes four multi-tenant retail operating properties classified as held for sale as of June 30, 2017.



2nd Quarter 2017 Supplemental Information		14

Retail Properties of America, Inc.

Retail Operating Portfolio Occupancy Breakdown as of June 30, 2017

(square footage in thousands)



Total Retail Operating Portfolio:

	Target Markets			Non-Target – Top 50 MSAs			Non-Target – Other			Total Multi-Tenant Retail (a)			Single-User Retail			Total Retail
Number of Properties	83			19			24			126			6			132
	GLA	Occupancy		GLA	Occupancy		GLA	Occupancy		GLA	Occupancy		GLA	Occupancy		GLA	Occupancy		% Leased Including Signed

25,000+ sq ft	6,708	94.1	%	1,695	95.7	%	2,831	95.8	%	11,234	94.8	%	430	100.0	%	11,664	94.9	%	95.5	%
10,000-24,999 sq ft	2,710	94.0	%	626	89.0	%	851	98.2	%	4,187	94.1	%	25	100.0	%	4,212	94.1	%	96.2	%
Anchor	9,418	94.0	%	2,321	93.8	%	3,682	96.4	%	15,421	94.6	%	455	100.0	%	15,876	94.7	%	95.7	%

5,000-9,999 sq ft	2,145	91.2	%	292	94.4	%	543	95.5	%	2,980	92.3	%	—	—		2,980	92.3	%	93.4	%
0-4,999 sq ft	3,356	85.2	%	415	84.6	%	722	83.0	%	4,493	84.8	%	—	—		4,493	84.8	%	86.7	%
Non-Anchor	5,501	87.5	%	707	88.7	%	1,265	88.4	%	7,473	87.8	%	—	—		7,473	87.8	%	89.4	%

Total	14,919	91.6	%	3,028	92.6	%	4,947	94.3	%	22,894	92.4	%	455	100.0	%	23,349	92.5	%	93.7	%


(a)	Excludes four multi-tenant retail operating properties classified as held for sale as of June 30, 2017.



2nd Quarter 2017 Supplemental Information		15

Retail Properties of America, Inc.

Top Retail Tenants as of June 30, 2017

(dollar amounts and square footage in thousands)

The following table sets forth information regarding the 20 largest tenants in the Company's retail operating portfolio based on ABR as of June 30, 2017. Dollars (other than per square foot information) and square feet of GLA are presented in thousands.



Tenant	Primary DBA	Number of Stores	ABR		% of Total ABR		ABR per Occupied Sq. Ft.		Occupied GLA	% of Occupied GLA

Best Buy Co., Inc.	Best Buy, Pacific Sales	19	$	12,011	3.1	%	$	15.91	755	3.5	%

Ahold U.S.A. Inc.	Giant Foods, Stop & Shop, Martin's	7	9,030		2.3	%	21.05		429	2.0	%

The TJX Companies, Inc.	HomeGoods, Marshalls, T.J. Maxx	31	8,823		2.3	%	9.98		884	4.1	%

Ross Stores, Inc.	Ross Dress for Less	25	8,423		2.2	%	11.52		731	3.4	%

Bed Bath & Beyond Inc.	Bed Bath & Beyond, Buy Buy Baby, Cost Plus World Market	22	7,909		2.0	%	13.59		582	2.7	%

Regal Entertainment Group	Edwards Cinema	2	6,911		1.8	%	31.56		219	1.0	%

AB Acquisition LLC	Safeway, Jewel-Osco, Tom Thumb	8	6,252		1.6	%	13.45		465	2.2	%

PetSmart, Inc.		20	6,142		1.6	%	14.98		410	1.9	%

Michaels Stores, Inc.	Michaels, Aaron Brothers Art & Frame	19	5,471		1.4	%	12.69		431	2.0	%

Ascena Retail Group, Inc.	Dress Barn, Lane Bryant, Justice, Catherine's, Ann Taylor, Maurices, LOFT	45	5,294		1.4	%	21.70		244	1.1	%

Gap Inc.	Old Navy, Banana Republic, The Gap, Gap Factory Store, Athleta	25	5,225		1.4	%	16.53		316	1.5	%

Dick's Sporting Goods, Inc.	Dick's Sporting Goods, Field & Stream	8	5,139		1.3	%	13.52		380	1.8	%

Pier 1 Imports, Inc.		23	4,792		1.2	%	20.66		232	1.1	%

Office Depot, Inc.	Office Depot, OfficeMax	16	4,766		1.2	%	14.36		332	1.5	%

BJ's Wholesale Club, Inc.		2	4,609		1.2	%	18.81		245	1.1	%

The Home Depot, Inc.		3	4,162		1.1	%	11.86		351	1.6	%

Party City Holdings Inc.		20	4,061		1.0	%	14.61		278	1.3	%

The Kroger Co.	Kroger, Harris Teeter, King Soopers, QFC	8	4,005		1.0	%	10.09		397	1.8	%

Lowe's Companies, Inc.		4	3,944		1.0	%	6.47		610	2.8	%

Petco Animal Supplies, Inc.		16	3,879		1.0	%	17.63		220	1.0	%
Total Top Retail Tenants		323	$	120,848	31.1	%	$	14.20	8,511	39.4	%



2nd Quarter 2017 Supplemental Information		16

Retail Properties of America, Inc.

Retail Leasing Activity Summary

(square footage amounts in thousands)

The following table summarizes the leasing activity in the Company's retail operating portfolio as of June 30, 2017 and for the preceding four quarters. Leases of less than 12 months have been excluded.



Total Leases
	Number of Leases Signed	GLA Signed	New Contractual Rent per Square Foot (PSF) (a)		Prior Contractual Rent PSF (a)		% Change over Prior ABR (a)			WA Lease Term	Tenant Allowances PSF
Q2 2017	140	797	$	17.65	$	16.32	8.1	%	(b)	5.7	$	8.63
Q1 2017	121	466	$	27.14	$	24.68	10.0	%		5.3	$	12.14
Q4 2016	136	502	$	23.20	$	21.73	6.8	%		6.0	$	10.98
Q3 2016	135	1,121	$	16.62	$	15.36	8.2	%		5.7	$	5.58
Total – 12 months	532	2,886	$	19.71	$	18.21	8.2	%		5.7	$	8.42

Comparable Renewal Leases
	Number of Leases Signed	GLA Signed	New Contractual Rent PSF		Prior Contractual Rent PSF		% Change over Prior ABR			WA Lease Term	Tenant Allowances PSF
Q2 2017	107	637	$	17.03	$	16.13	5.6	%	(b)	4.8	$	0.73
Q1 2017	88	308	$	27.51	$	25.33	8.6	%		4.6	$	2.49
Q4 2016	89	357	$	23.71	$	22.70	4.4	%		4.9	$	0.62
Q3 2016	87	756	$	16.44	$	15.34	7.2	%		4.7	$	0.13
Total – 12 months	371	2,058	$	19.54	$	18.36	6.4	%		4.8	$	0.75

Comparable New Leases
	Number of Leases Signed	GLA Signed	New Contractual Rent PSF		Prior Contractual Rent PSF		% Change over Prior ABR			WA Lease Term	Tenant Allowances PSF
Q2 2017	9	71	$	23.16	$	18.04	28.4	%		9.3	$	39.94
Q1 2017	9	45	$	24.57	$	20.17	21.8	%		7.8	$	47.57
Q4 2016	10	57	$	19.95	$	15.66	27.4	%		9.3	$	47.54
Q3 2016	15	85	$	18.22	$	15.58	16.9	%		9.1	$	33.65
Total – 12 months	43	258	$	21.07	$	17.07	23.4	%		9.0	$	40.87

Non-Comparable New and Renewal Leases (c)
	Number of Leases Signed	GLA Signed	New Contractual Rent PSF		Prior Contractual Rent PSF		% Change over Prior ABR			WA Lease Term	Tenant Allowances PSF
Q2 2017	24	89	$	22.72	n/a		n/a			7.3	$	40.36
Q1 2017	24	113	$	12.93	n/a		n/a			7.0	$	24.38
Q4 2016	37	88	$	23.44	n/a		n/a			8.4	$	29.26
Q3 2016	33	280	$	11.44	n/a		n/a			8.1	$	11.77
Total – 12 months	118	570	$	15.35	n/a		n/a			7.8	$	21.43


(a)	Excludes the impact of Non-Comparable New and Renewal Leases.


(b)	Excluding the impact from one lease within the Company's non-target portfolio, combined comparable re-leasing spreads were approximately 9.7% and comparable renewal re-leasing spreads were approximately 7.2% over previous rental rates for the three months ended June 30, 2017.


(c)	Includes (i) leases signed on units that were vacant for over 12 months, (ii) leases signed without fixed rental payments and (iii) leases signed where the previous and the current lease do not have a consistent lease structure.



2nd Quarter 2017 Supplemental Information		17

Retail Properties of America, Inc.

Retail Lease Expirations as of June 30, 2017

(dollar amounts and square footage in thousands)

The following tables set forth a summary, as of June 30, 2017, of lease expirations scheduled to occur during the remainder of 2017 and each of the nine calendar years from 2018 to 2026 and thereafter, assuming no exercise of renewal options or early termination rights for all leases in the Company's retail operating portfolio. The following tables are based on leases commenced as of June 30, 2017. Dollars (other than per square foot information) and square feet of GLA are presented in thousands in the table.



Lease Expiration Year	Lease Count	ABR		% of Total ABR		ABR per Occupied Sq. Ft.		ABR at Exp. (a)		ABR per Occupied Sq. Ft. at Exp.		GLA	% of Occupied GLA		% of Total GLA
2017	144	$	10,514	2.7	%	$	22.18	$	10,520	$	22.19	474	2.2	%	2.1	%
2018	425	45,130		11.6	%	19.68		45,432		19.81		2,293	10.6	%	9.8	%
2019	491	66,571		17.1	%	19.52		67,298		19.74		3,410	15.8	%	14.6	%
2020	350	42,725		11.0	%	16.97		43,559		17.30		2,518	11.6	%	10.7	%
2021	301	45,347		11.7	%	19.23		46,531		19.73		2,358	10.9	%	10.1	%
2022	283	48,264		12.4	%	15.78		50,584		16.54		3,058	14.2	%	13.1	%
2023	132	28,108		7.2	%	15.47		30,233		16.64		1,817	8.4	%	7.8	%
2024	151	24,941		6.4	%	17.00		27,373		18.66		1,467	6.8	%	6.2	%
2025	106	22,707		5.9	%	16.95		24,995		18.65		1,340	6.2	%	5.8	%
2026	80	15,160		3.9	%	19.66		17,503		22.70		771	3.6	%	3.3	%
Thereafter	101	37,789		9.7	%	18.59		44,567		21.92		2,033	9.4	%	8.7	%
Month to month	24	1,402		0.4	%	23.76		1,402		23.76		59	0.3	%	0.3	%
Leased Total	2,588	$	388,658	100.0	%	$	18.00	$	409,997	$	18.98	21,598	100.0	%	92.5	%

Leases signed but not commenced	46	$	6,138	—		$	22.82	$	6,869	$	25.54	269	—		1.2	%
Available												1,482	—		6.3	%

The following tables break down the above information into anchor (10,000 sf and above) and non-anchor (under 10,000 sf) details for the Company's retail operating portfolio. Dollars (other than per square foot information) and square feet of GLA are presented in thousands in the tables.
Anchor
Lease Expiration Year	Lease Count	ABR		% of Total ABR		ABR per Occupied Sq. Ft.		ABR at Exp. (a)		ABR per Occupied Sq. Ft. at Exp.		GLA	% of Occupied GLA		% of Total GLA
2017	6	$	1,470	0.4	%	$	11.14	$	1,470	$	11.14	132	0.6	%	0.6	%
2018	49	16,337		4.2	%	13.47		16,412		13.53		1,213	5.6	%	5.2	%
2019	80	33,856		8.7	%	15.44		33,978		15.49		2,193	10.2	%	9.4	%
2020	61	19,799		5.1	%	12.22		19,817		12.23		1,620	7.5	%	6.9	%
2021	57	24,524		6.3	%	15.27		24,610		15.32		1,606	7.4	%	6.9	%
2022	67	29,794		7.7	%	12.54		30,479		12.83		2,376	11.0	%	10.2	%
2023	44	19,031		4.9	%	12.89		20,118		13.63		1,476	6.8	%	6.3	%
2024	34	12,893		3.3	%	11.84		13,687		12.57		1,089	5.1	%	4.6	%
2025	28	13,106		3.4	%	12.84		13,998		13.71		1,021	4.7	%	4.4	%
2026	23	7,772		2.0	%	14.58		8,444		15.84		533	2.5	%	2.3	%
Thereafter	39	29,756		7.6	%	16.71		34,648		19.45		1,781	8.2	%	7.6	%
Month to month	—	—		—	%	—		—		—		—	—	%	—	%
Leased Total	488	$	208,338	53.6	%	$	13.85	$	217,661	$	14.47	15,040	69.6	%	64.4	%

Leases signed but not commenced	7	$	2,398	—		$	16.20	$	2,542	$	17.18	148	—		0.7	%
Available												688	—		2.9	%

Non-Anchor
Lease Expiration Year	Lease Count	ABR		% of Total ABR		ABR per Occupied Sq. Ft.		ABR at Exp. (a)		ABR per Occupied Sq. Ft. at Exp.		GLA	% of Occupied GLA		% of Total GLA
2017	138	$	9,044	2.3	%	$	26.44	$	9,050	$	26.46	342	1.6	%	1.5	%
2018	376	28,793		7.4	%	26.66		29,020		26.87		1,080	5.0	%	4.6	%
2019	411	32,715		8.4	%	26.88		33,320		27.38		1,217	5.6	%	5.2	%
2020	289	22,926		5.9	%	25.53		23,742		26.44		898	4.1	%	3.8	%
2021	244	20,823		5.4	%	27.69		21,921		29.15		752	3.5	%	3.2	%
2022	216	18,470		4.7	%	27.08		20,105		29.48		682	3.2	%	2.9	%
2023	88	9,077		2.3	%	26.62		10,115		29.66		341	1.6	%	1.5	%
2024	117	12,048		3.1	%	31.87		13,686		36.21		378	1.7	%	1.6	%
2025	78	9,601		2.5	%	30.10		10,997		34.47		319	1.5	%	1.4	%
2026	57	7,388		1.9	%	31.04		9,059		38.06		238	1.1	%	1.0	%
Thereafter	62	8,033		2.1	%	31.88		9,919		39.36		252	1.2	%	1.1	%
Month to month	24	1,402		0.4	%	23.76		1,402		23.76		59	0.3	%	0.3	%
Leased Total	2,100	$	180,320	46.4	%	$	27.50	$	192,336	$	29.33	6,558	30.4	%	28.1	%

Leases signed but not commenced	39	$	3,740	—		$	30.91	$	4,327	$	35.76	121	—		0.5	%
Available												794	—		3.4	%


(a)	Represents annualized base rent at the scheduled expiration of the lease giving effect to fixed contractual increases in base rent.



2nd Quarter 2017 Supplemental Information		18

Retail Properties of America, Inc.

Non-GAAP Financial Measures and Other Definitions

Gross Leasable Area (GLA)

Gross Leasable Area (GLA) is defined as the aggregate number of square feet available for lease. GLA excludes square footage attributable to third-party managed storage units, of which the Company owned 62,000 square feet as of June 30, 2017.

Occupancy

Occupancy is defined, for a property or group of properties, as the ratio, expressed as a percentage, of (a) the number of square feet of such property economically occupied by tenants under leases with an initial term of greater than one year, to (b) the aggregate number of square feet for such property.

Percent Leased Including Signed

Percent Leased Including Signed is defined, for a property or group of properties, as the ratio, expressed as a percentage, of (a) the sum of occupied square feet (pursuant to the definition above) of such property and vacant square feet for which a lease with an initial term of greater than one year has been signed, but rent has not yet commenced, to (b) the aggregate number of square feet for such property.

Funds From Operations (FFO) Attributable to Common Shareholders

As defined by the National Association of Real Estate Investment Trusts (NAREIT), an industry trade group, Funds From Operations (FFO) means net income (loss) computed in accordance with generally accepted accounting principles (GAAP), excluding gains (or losses) from sales of depreciable real estate, plus depreciation and amortization and impairment charges on depreciable real estate. The Company has adopted the NAREIT definition in its computation of FFO attributable to common shareholders. The Company believes that, subject to the following limitations, FFO attributable to common shareholders provides a basis for comparing its performance and operations to those of other real estate investment trusts (REITs). The Company believes that FFO attributable to common shareholders, which is a supplemental non-GAAP financial measure, provides an additional and useful means to assess the operating performance of REITs. FFO attributable to common shareholders does not represent an alternative to (i) "Net income" or "Net income attributable to common shareholders" as an indicator of the Company's financial performance, or (ii) "Cash flows from operating activities" in accordance with GAAP as a measure of the Company's capacity to fund cash needs, including the payment of dividends.

Operating FFO Attributable to Common Shareholders

Operating FFO attributable to common shareholders is defined as FFO attributable to common shareholders excluding the impact of discrete non-operating transactions and other events which the Company does not consider representative of the comparable operating results of its real estate operating portfolio, which is its core business platform. Specific examples of discrete non-operating transactions and other events include, but are not limited to, the financial statement impact of gains or losses associated with the early extinguishment of debt or other liabilities, impairment charges to write down the carrying value of assets other than depreciable real estate, actual or anticipated settlement of litigation involving the Company, including associated legal costs, and executive and realignment separation charges, which are otherwise excluded from the Company's calculation of FFO attributable to common shareholders. The Company believes that Operating FFO attributable to common shareholders, which is a supplemental non-GAAP financial measure, provides an additional and useful means to assess the operating performance of REITs. Operating FFO attributable to common shareholders does not represent an alternative to (i) "Net income" or "Net income attributable to common shareholders" as an indicator of the Company's financial performance, or (ii) "Cash flows from operating activities" in accordance with GAAP as a measure of the Company's capacity to fund cash needs, including the payment of dividends. Comparison of the Company's presentation of Operating FFO attributable to common shareholders to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.

Net Operating Income (NOI)

The Company defines Net Operating Income (NOI) as all revenues other than straight-line rental income, amortization of lease inducements, amortization of acquired above and below market lease intangibles and lease termination fee income, less real estate taxes and all operating expenses other than straight-line ground rent expense and amortization of acquired ground lease intangibles, which are non-cash items. NOI consists of Same Store NOI and NOI from Other Investment Properties. The Company believes that NOI, which is a supplemental non-GAAP financial measure, provides an additional and useful operating perspective not immediately apparent from "Operating income" or "Net income attributable to common shareholders" in accordance with GAAP. The Company uses NOI to evaluate its performance on a property-by-property basis because this measure allows management to evaluate the impact that factors such as lease structure, lease rates and tenant base have on the Company's operating results. NOI does not represent an alternative to "Net income" or "Net income attributable to common shareholders" in accordance with GAAP as an indicator of the Company's financial performance. Comparison of the Company's presentation of NOI to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.



2nd Quarter 2017 Supplemental Information		19

Retail Properties of America, Inc.

Non-GAAP Financial Measures and Other Definitions (continued)

Same Store NOI and NOI from Other Investment Properties

Same Store NOI for the three and six months ended June 30, 2017 represents NOI from the Company's same store portfolio consisting of 123 retail operating properties acquired or placed in service and stabilized prior to January 1, 2016. NOI from Other Investment Properties for the three and six months ended June 30, 2017 represents NOI primarily from properties acquired during 2016 and 2017, the Company's one remaining office property, three properties where the Company has begun redevelopment and/or activities in anticipation of future redevelopment, the properties that were sold or held for sale in 2016 and 2017, the net income from the Company's wholly-owned captive insurance company and the historical ground rent expense related to an existing same store investment property that was subject to a ground lease with a third party prior to the Company's acquisition of the fee interest on April 29, 2016.

The Company believes that Same Store NOI and NOI from Other Investment Properties, which are supplemental non-GAAP financial measures, provide an additional and useful operating perspective not immediately apparent from "Operating income" or "Net income attributable to common shareholders" in accordance with GAAP. The Company uses these measures to evaluate its performance on a property-by-property basis because they allow management to evaluate the impact that factors such as lease structure, lease rates and tenant base have on the Company's operating results. Same Store NOI and NOI from Other Investment Properties do not represent alternatives to "Net income" or "Net income attributable to common shareholders" in accordance with GAAP as indicators of the Company's financial performance. Comparison of the Company's presentation of Same Store NOI and NOI from Other Investment Properties to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.

Adjusted EBITDA

Adjusted EBITDA is a supplemental non-GAAP financial measure and represents net income attributable to common shareholders before interest, income taxes, depreciation and amortization, as further adjusted to eliminate the impact of certain items that the Company does not consider indicative of its ongoing performance. The Company believes that Adjusted EBITDA is useful because it allows investors and management to evaluate and compare the Company's performance from period to period in a meaningful and consistent manner in addition to standard financial measurements under GAAP. Adjusted EBITDA should not be considered an alternative to "Net income attributable to common shareholders" as an indicator of the Company's financial performance. Comparison of the Company's presentation of Adjusted EBITDA to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.

Net Debt to Adjusted EBITDA

Net Debt to Adjusted EBITDA is a supplemental non-GAAP financial measure and represents (i) the Company's total notional debt, excluding unamortized premium, discount and capitalized loan fees, less cash and cash equivalents and disposition proceeds temporarily restricted related to potential 1031 Exchanges divided by (ii) Adjusted EBITDA for the prior three months, annualized. The Company believes that this ratio is useful because it provides investors with information regarding its total notional debt net of cash and cash equivalents and disposition proceeds temporarily restricted related to potential 1031 Exchanges, which could be used to repay debt, compared to its performance as measured using Adjusted EBITDA. Comparison of the Company's presentation of Net Debt to Adjusted EBITDA to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.

Net Debt and Preferred Stock to Adjusted EBITDA

Net Debt and Preferred Stock to Adjusted EBITDA is a supplemental non-GAAP financial measure and represents (i) the Company's total notional debt, excluding unamortized premium, discount and capitalized loan fees, plus preferred stock, less cash and cash equivalents and disposition proceeds temporarily restricted related to potential 1031 Exchanges divided by (ii) Adjusted EBITDA for the prior three months, annualized. The Company believes that this ratio is useful because it provides investors with information regarding its total notional debt and preferred stock, net of cash and cash equivalents and disposition proceeds temporarily restricted related to potential 1031 Exchanges, which could be used to repay debt, compared to its performance as measured using Adjusted EBITDA. Comparison of the Company's presentation of Net Debt and Preferred Stock to Adjusted EBITDA to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.



2nd Quarter 2017 Supplemental Information		20

Retail Properties of America, Inc.

Reconciliation of Non-GAAP Financial Measures

(amounts in thousands)

(unaudited)

Reconciliation of Net Income Attributable to Common Shareholders to Same Store NOI



	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016

Net income attributable to common shareholders	$	112,400		$	26,239		$	100,938		$	71,303
Adjustments to reconcile to Same Store NOI:
Preferred stock dividends	2,363			2,363			4,725			4,725
Gain on sales of investment properties	(116,628		)	(9,613		)	(157,792		)	(31,352		)
Depreciation and amortization	52,325			53,443			105,799			106,839
Provision for impairment of investment properties	13,034			4,142			13,034			6,306
General and administrative expenses	10,370			10,773			21,583			22,179
Gain on extinguishment of debt	—			—			—			(13,653		)
Gain on extinguishment of other liabilities	—			(6,978		)	—			(6,978		)
Interest expense	21,435			25,977			106,967			52,741
Straight-line rental income, net	(919		)	(800		)	(1,260		)	(1,828		)
Amortization of acquired above and below market lease intangibles, net	(549		)	(395		)	(1,280		)	(971		)
Amortization of lease inducements	259			321			582			552
Lease termination fees	(510		)	(1,027		)	(2,122		)	(2,685		)
Straight-line ground rent expense	677			764			1,363			1,680
Amortization of acquired ground lease intangibles	(140		)	(140		)	(280		)	(280		)
Other income, net	(451		)	(302		)	(456		)	(427		)
NOI	93,666			104,767			191,801			208,151
NOI from Other Investment Properties	(12,455		)	(24,990		)	(28,948		)	(48,404		)
Same Store NOI	$	81,211		$	79,777		$	162,853		$	159,747



2nd Quarter 2017 Supplemental Information		21

Retail Properties of America, Inc.

Reconciliation of Non-GAAP Financial Measures (continued)

(amounts in thousands)

(unaudited)

Reconciliation of Mortgages Payable, Net, Unsecured Notes Payable, Net, Unsecured Term Loans, Net and

Unsecured Revolving Line of Credit to Total Net Debt and Total Net Debt and Preferred Stock



	June 30, 2017			December 31, 2016

Mortgages payable, net	$	355,239		$	769,184
Unsecured notes payable, net	695,441			695,143
Unsecured term loans, net	646,554			447,598
Unsecured revolving line of credit	182,000			86,000
Total	1,879,234			1,997,925
Mortgage premium, net of accumulated amortization	(1,223		)	(1,437		)
Mortgage discount, net of accumulated amortization	601			622
Unsecured notes payable discount, net of accumulated amortization	912			971
Capitalized loan fees, net of accumulated amortization	7,865			11,314
Total notional debt	1,887,389			2,009,395
Less: consolidated cash and cash equivalents	(28,003		)	(53,119		)
Less: disposition proceeds temporarily restricted related to potential 1031 Exchanges	(93,561		)	—
Total net debt	1,765,825			1,956,276
Series A preferred stock	135,000			135,000
Total net debt and preferred stock	$	1,900,825		$	2,091,276

Reconciliation of Net Income Attributable to Common Shareholders to Adjusted EBITDA



	Three Months Ended
	June 30, 2017			December 31, 2016

Net income attributable to common shareholders	$	112,400		$	15,932
Preferred stock dividends	2,363			2,363
Interest expense	21,435			31,387
Depreciation and amortization	52,325			60,828
Gain on sales of investment properties	(116,628		)	(31,970		)
Provision for impairment of investment properties	13,034			9,328
Adjusted EBITDA	$	84,929		$	87,868
Annualized	$	339,716		$	351,472



2nd Quarter 2017 Supplemental Information		22

RETAIL PROPERTIES OF AMERICA, INC. - FORM 8-K - EX-99.2 - EXHIBIT 99.2 - August 1, 2017

Attached files

RETAIL PROPERTIES OF AMERICA, INC. Reports