Retail Properties of America, Inc. Reports Third Quarter And Year To Date Results

The Company has an LOI to sell its one remaining office building, Schaumburg Towers, located in the northwest suburbs of Chicago, for a purchase price of $87.6 million. In addition, the Company is under contract to sell nine non-target multi-tenant retail assets for $212.7 million. The Company also has LOIs to sell one non-target multi-tenant retail asset for $23.1 million and two single-user retail assets for $9.5 million. The sale of Schaumburg Towers is expected to close during the first quarter of 2018 and the remaining transactions are expected to close during the fourth quarter of 2017 and the first quarter of 2018, 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 $147.6 million of acquisitions. During the quarter, as previously announced, the Company completed the acquisition of New Hyde Park Shopping Center, located in the New York metropolitan statistical area (MSA), for a gross purchase price of $22.1 million. In addition, the Company acquired the remaining phases at One Loudoun Downtown, located in the Washington, D.C. MSA, for a gross purchase price of $25.7 million.

BALANCE SHEET AND CAPITAL MARKETS ACTIVITY
As of September 30, 2017, the Company had approximately $1.7 billion of consolidated indebtedness, which resulted in a net debt to adjusted EBITDA ratio of 5.1x, or a net debt and preferred stock to adjusted EBITDA ratio of 5.5x. Consolidated indebtedness had a weighted average contractual interest rate of 3.60% and a weighted average maturity of 5.4 years.

During the quarter, the Company repaid $58.2 million of mortgage debt, excluding amortization, with a weighted average interest rate of 6.04% and incurred a prepayment penalty of $3.0 million. Additionally, the Company repaid $100.0 million of its unsecured term loan due 2018, which had an interest rate of 2.68% and a remaining outstanding balance of $100.0 million as of September 30, 2017. Subsequent to quarter end, the Company repaid a $7.7 million mortgage payable with an interest rate of 7.70%.

During the quarter, the Company repurchased 3.8 million shares of common stock under its stock repurchase program at an average price per share of $13.09 for a total of approximately $49.9 million, including 0.4 million shares repurchased in September 2017 at an average price per share of $13.08 for a total of $5.2 million, which settled on October 2, 2017.

Year to date, the Company has repaid $581.5 million of total debt, excluding amortization, with a weighted average interest rate of 6.34% and incurred prepayment penalties of $68.5 million, primarily due to the defeasance of the IW JV cross-collateralized portfolio of mortgages payable in January 2017.

Year to date, the Company has repurchased 9.8 million shares of common stock under its stock repurchase program at an average price per share of $12.76 for a total of approximately $125.6 million.

GUIDANCE
The Company is revising its 2017 guidance range for net income attributable to common shareholders to $1.06 to $1.08 per share from $0.95 to $1.00 per share. The Company is increasing its 2017 Operating FFO attributable to common shareholders guidance range to $1.03 to $1.05 per share from $1.00 to $1.05 per share, based, in part, on the following assumptions:

• Increased 2017 same store NOI growth range to 1.75% to 2.25% from 1.25% to 2.25%;
• Increased 2017 dispositions range to $850 million to $1 billion from $800 to $900 million;
• Maintained 2017 acquisitions range of $375 to $475 million, including repurchases of common stock; and
• Decreased 2017 general and administrative expenses range to $39 to $41 million from $42 to $44 million.

PREFERRED STOCK REDEMPTION
On October 26, 2017, the Company announced that it will redeem all 5.4 million outstanding shares of its 7.00% Series A cumulative redeemable preferred stock on December 20, 2017 for cash at a redemption price of $25.00 per preferred share, plus $0.3840 per preferred share representing all accrued and unpaid dividends up to, but excluding, December 20, 2017.

DIVIDEND
On October 26, 2017, the Company declared the fourth quarter 2017 quarterly cash dividend of $0.165625 per share on its outstanding Class A common stock, which will be paid on January 10, 2018 to Class A common shareholders of record on December 27, 2017.

WEBCAST AND CONFERENCE CALL INFORMATION
The Company's management team will hold a webcast on Wednesday, November 1, 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 November 1, 2017 until midnight (ET) on November 15, 2017. The replay can be accessed by dialing (844) 512-2921 or (412) 317-6671 for international callers and entering pin number 13669182.

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 September 30, 2017, the Company owned 120 retail operating properties representing 21.6 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 impact on earnings from 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, litigation involving the Company, including actual or anticipated settlement and associated legal costs, and the impact on earnings from executive separation, which are not otherwise adjusted in 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 (non-cash) and amortization of acquired ground lease intangibles (non-cash). NOI consists of Same Store NOI and NOI from Other Investment Properties. Same Store NOI for the three and nine months ended September 30, 2017 represents NOI from the Company's same store portfolio consisting of 110 retail operating properties acquired or placed in service and stabilized prior to January 1, 2016. NOI from Other Investment Properties for the three and nine months ended September 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
Senior Vice President – Finance
Retail Properties of America, Inc.       
(630) 634-4233

Retail Properties of America, Inc. Condensed Consolidated Balance Sheets (amounts in thousands, except par value amounts) (unaudited)
		September 30, 2017				December 31, 2016
Assets
Investment properties:
Land		$	1,090,790			$	1,191,403
Building and other improvements		3,773,266				4,284,664
Developments in progress		31,083				23,439
		4,895,139				5,499,506
Less accumulated depreciation		(1,250,619)				(1,443,333)
Net investment properties		3,644,520				4,056,173
Cash and cash equivalents		29,652				53,119
Accounts and notes receivable (net of allowances of $6,421 and $6,886, respectively)		72,496				78,941
Acquired lease intangible assets, net		126,487				142,015
Assets associated with investment properties held for sale		64,673				30,827
Other assets, net		131,265				91,898
Total assets		$	4,069,093			$	4,452,973
Liabilities and Equity
Liabilities:
Mortgages payable, net (includes unamortized premium of $1,087 and $1,437, respectively, unamortized discount of $(590) and $(622), respectively, and unamortized capitalized loan fees of $(649) and $(5,026), respectively)		$	288,100			$	769,184
Unsecured notes payable, net (includes unamortized discount of $(882) and $(971), respectively, and unamortized capitalized loan fees of $(3,523) and $(3,886), respectively)		695,595				695,143
Unsecured term loans, net (includes unamortized capitalized loan fees of $(3,086) and $(2,402), respectively)		546,914				447,598
Unsecured revolving line of credit		187,000				86,000
Accounts payable and accrued expenses		74,105				83,085
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