RETAIL PROPERTIES OF AMERICA, INC. (Form: 10-Q, Received: 11/04/2015 16:06:06)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



x		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2015



o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-35481

RETAIL PROPERTIES OF AMERICA, INC.

(Exact name of registrant as specified in its charter)



Maryland		42-1579325
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2021 Spring Road, Suite 200, Oak Brook, Illinois		60523
(Address of principal executive offices)		(Zip Code)

( 630) 634-4200

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer x		Accelerated filer o

Non-accelerated filer o		Smaller reporting company o
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

Number of shares outstanding of the registrant’s classes of common stock as of October 30, 2015 :

Class A common stock: 237,267,244 shares

Table of Contents

RETAIL PROPERTIES OF AMERICA, INC.

TABLE OF CONTENTS



PART I — FINANCIAL INFORMATION
Item 1.	Financial Statements	1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	39

Item 4.	Controls and Procedures	40

PART II — OTHER INFORMATION
Item 1.	Legal Proceedings	41

Item 1A.	Risk Factors	41

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41

Item 3.	Defaults Upon Senior Securities	41

Item 4.	Mine Safety Disclosures	41

Item 5.	Other Information	41

Item 6.	Exhibits	41

SIGNATURES		42

Table of Contents

Part I — Financial Information

Item 1. Financial Statements

RETAIL PROPERTIES OF AMERICA, INC.

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands, except par value amounts)



	September 30, 2015			December 31, 2014
Assets
Investment properties:
Land	$	1,265,170		$	1,195,369
Building and other improvements	4,449,686			4,442,446
Developments in progress	47,008			42,561
	5,761,864			5,680,376
Less accumulated depreciation	(1,400,363		)	(1,365,471		)
Net investment properties	4,361,501			4,314,905
Cash and cash equivalents	116,538			112,292
Accounts and notes receivable (net of allowances of $8,160 and $7,497, respectively)	79,390			86,013
Acquired lease intangible assets, net	140,064			125,490
Assets associated with investment properties held for sale	—			33,640
Other assets, net	106,356			131,520
Total assets	$	4,803,849		$	4,803,860

Liabilities and Equity
Liabilities:
Mortgages payable, net	$	1,230,590		$	1,634,465
Unsecured notes payable, net	498,881			250,000
Unsecured term loan	450,000			450,000
Unsecured revolving line of credit	130,000			—
Accounts payable and accrued expenses	69,768			61,129
Distributions payable	39,301			39,187
Acquired lease intangible liabilities, net	117,085			100,641
Liabilities associated with investment properties held for sale	—			8,203
Other liabilities	75,175			70,860
Total liabilities	2,610,800			2,614,485

Commitments and contingencies (Note 14)

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 September 30, 2015 and December 31, 2014; liquidation preference $135,000	5			5
Class A common stock, $0.001 par value, 475,000 shares authorized, 237,287 and 236,602 shares issued and outstanding as of September 30, 2015 and December 31, 2014, respectively	237			237
Additional paid-in capital	4,929,255			4,922,864
Accumulated distributions in excess of earnings	(2,737,562		)	(2,734,688		)
Accumulated other comprehensive loss	(380		)	(537		)
Total shareholders’ equity	2,191,555			2,187,881
Noncontrolling interests	1,494			1,494
Total equity	2,193,049			2,189,375
Total liabilities and equity	$	4,803,849		$	4,803,860

See accompanying notes to condensed consolidated financial statements

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RETAIL PROPERTIES OF AMERICA, INC.

Condensed Consolidated Statements of Operations and Other Comprehensive Income

(Unaudited)

(in thousands, except per share amounts)



	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Revenues
Rental income	$	116,715		$	120,143		$	355,525		$	355,093
Tenant recovery income	28,901			29,230			89,617			86,086
Other property income	5,339			2,074			9,898			5,905
Total revenues	150,955			151,447			455,040			447,084

Expenses
Property operating expenses	22,741			23,638			71,589			72,306
Real estate taxes	20,961			20,574			61,957			58,055
Depreciation and amortization	52,871			54,691			163,345			163,582
Provision for impairment of investment properties	169			54,584			4,113			60,378
General and administrative expenses	10,939			6,982			35,949			22,794
Total expenses	107,681			160,469			336,953			377,115

Operating income (loss)	43,274			(9,022		)	118,087			69,969

Gain on extinguishment of other liabilities	—			—			—			4,258
Equity in loss of unconsolidated joint ventures, net	—			(232		)	—			(1,443		)
Gain on change in control of investment properties	—			—			—			24,158
Interest expense	(40,425		)	(37,356		)	(110,610		)	(101,092		)
Other income, net	479			4,706			1,398			5,383
Income (loss) from continuing operations	3,328			(41,904		)	8,875			1,233

Discontinued operations:
Loss, net	—			—			—			(148		)
Gain on sales of investment properties	—			—			—			655
Income from discontinued operations	—			—			—			507
Gain on sales of investment properties	75,001			15,168			113,214			15,695
Net income (loss)	78,329			(26,736		)	122,089			17,435
Net income (loss) attributable to the Company	78,329			(26,736		)	122,089			17,435
Preferred stock dividends	(2,362		)	(2,362		)	(7,087		)	(7,087		)
Net income (loss) attributable to common shareholders	$	75,967		$	(29,098	)	$	115,002		$	10,348

Earnings (loss) per common share — basic and diluted:
Continuing operations	$	0.32		$	(0.12	)	$	0.49		$	0.04
Discontinued operations	—			—			—			—
Net income (loss) per common share attributable to common shareholders	$	0.32		$	(0.12	)	$	0.49		$	0.04

Net income (loss)	$	78,329		$	(26,736	)	$	122,089		$	17,435
Other comprehensive income:
Net unrealized gain on derivative instruments (Note 9)	155			390			157			235
Comprehensive income (loss) attributable to the Company	$	78,484		$	(26,346	)	$	122,246		$	17,670

Weighted average number of common shares outstanding — basic	236,439			236,203			236,348			236,177

Weighted average number of common shares outstanding — diluted	236,553			236,203			236,400			236,180

See accompanying notes to condensed consolidated financial statements

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RETAIL PROPERTIES OF AMERICA, INC.

Condensed Consolidated Statements of Equity

(Unaudited)

(in thousands, except per share amounts)



	Preferred Stock			Class A Common Stock				Additional Paid-in Capital			Accumulated Distributions in Excess of Earnings			Accumulated Other Comprehensive (Loss) Income			Total Shareholders’ Equity			Noncontrolling Interests		Total Equity
	Shares	Amount		Shares		Amount		Additional Paid-in Capital			Accumulated Distributions in Excess of Earnings			Accumulated Other Comprehensive (Loss) Income			Total Shareholders’ Equity			Noncontrolling Interests		Total Equity
Balance as of January 1, 2014	5,400	$	5	236,302		$	236	$	4,919,633		$	(2,611,796	)	$	(738	)	$	2,307,340		$	1,494	$	2,308,834
Net income	—	—		—		—		—			17,435			—			17,435			—		17,435
Other comprehensive income	—	—		—		—		—			—			235			235			—		235
Distributions declared to preferred shareholders ($1.3125 per share)	—	—		—		—		—			(7,087		)	—			(7,087		)	—		(7,087		)
Distributions declared to common shareholders ($0.496875 per share)	—	—		—		—		—			(117,555		)	—			(117,555		)	—		(117,555		)
Issuance of common stock, net of offering costs	—	—		—		—		(114		)	—			—			(114		)	—		(114		)
Issuance of restricted shares	—	—		303		1		—			—			—			1			—		1
Stock-based compensation expense, net of forfeitures	—	—		(1	)	—		2,493			—			—			2,493			—		2,493
Shares withheld for employee taxes	—	—		(4	)	—		(66		)	—			—			(66		)	—		(66		)
Balance as of September 30, 2014	5,400	$	5	236,600		$	237	$	4,921,946		$	(2,719,003	)	$	(503	)	$	2,202,682		$	1,494	$	2,204,176

Balance as of January 1, 2015	5,400	$	5	236,602		$	237	$	4,922,864		$	(2,734,688	)	$	(537	)	$	2,187,881		$	1,494	$	2,189,375
Net income	—	—		—		—		—			122,089			—			122,089			—		122,089
Other comprehensive income	—	—		—		—		—			—			157			157			—		157
Distributions declared to preferred shareholders ($1.3125 per share)	—	—		—		—		—			(7,087		)	—			(7,087		)	—		(7,087		)
Distributions declared to common shareholders ($0.496875 per share)	—	—		—		—		—			(117,876		)	—			(117,876		)	—		(117,876		)
Issuance of common stock, net of offering costs	—	—		—		—		(111		)	—			—			(111		)	—		(111		)
Issuance of restricted shares	—	—		801		—		—			—			—			—			—		—
Stock-based compensation expense, net of forfeitures	—	—		(4	)	—		8,225			—			—			8,225			—		8,225
Shares withheld for employee taxes	—	—		(112	)	—		(1,723		)	—			—			(1,723		)	—		(1,723		)
Balance as of September 30, 2015	5,400	$	5	237,287		$	237	$	4,929,255		$	(2,737,562	)	$	(380	)	$	2,191,555		$	1,494	$	2,193,049

See accompanying notes to condensed consolidated financial statements

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RETAIL PROPERTIES OF AMERICA, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)



	Nine Months Ended September 30,
	2015			2014
Cash flows from operating activities:
Net income	$	122,089		$	17,435
Adjustments to reconcile net income to net cash provided by operating activities (including discontinued operations):
Depreciation and amortization	163,345			163,582
Provision for impairment of investment properties	4,113			60,378
Gain on sales of investment properties	(113,214		)	(16,350		)
Gain on extinguishment of other liabilities	—			(4,258		)
Gain on change in control of investment properties	—			(24,158		)
Amortization of loan fees and debt premium and discount, net	3,881			4,000
Amortization of stock-based compensation	8,225			2,493
Premium paid in connection with defeasance of mortgages payable	16,285			—
Equity in loss of unconsolidated joint ventures, net	—			1,443
Distributions on investments in unconsolidated joint ventures	—			1,360
Payment of leasing fees and inducements	(6,151		)	(6,818		)
Changes in accounts receivable, net	6,820			(867		)
Changes in accounts payable and accrued expenses, net	2,325			9,734
Changes in other operating assets and liabilities, net	2,930			(9,686		)
Other, net	(1,572		)	(336		)
Net cash provided by operating activities	209,076			197,952

Cash flows from investing activities:
Changes in restricted escrows, net	21,268			676
Purchase of investment properties	(407,857		)	(152,236		)
Capital expenditures and tenant improvements	(35,565		)	(31,254		)
Proceeds from sales of investment properties	395,207			164,581
Investment in developments in progress	(1,019		)	(2,611		)
Investment in unconsolidated joint ventures	—			(25		)
Other, net	(26		)	(150		)
Net cash used in investing activities	(27,992		)	(21,019		)

Cash flows from financing activities:
Proceeds from mortgages payable	967			3,159
Principal payments on mortgages payable	(346,164		)	(187,130		)
Proceeds from unsecured notes payable	248,815			250,000
Proceeds from unsecured credit facility	550,000			365,500
Repayments of unsecured credit facility	(420,000		)	(472,500		)
Payment of loan fees and deposits, net	(2,237		)	(1,550		)
Purchase of U.S. Treasury securities in connection with defeasance of mortgages payable	(81,547		)	—
Distributions paid	(124,849		)	(124,593		)
Other, net	(1,823		)	(179		)
Net cash used in financing activities	(176,838		)	(167,293		)

Net increase in cash and cash equivalents	4,246			9,640
Cash and cash equivalents, at beginning of period	112,292			58,190
Cash and cash equivalents, at end of period	$	116,538		$	67,830
(continued)

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RETAIL PROPERTIES OF AMERICA, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)



	Nine Months Ended September 30,
	2015			2014
Supplemental cash flow disclosure, including non-cash activities:
Cash paid for interest	$	86,054		$	91,255
Distributions payable	$	39,301		$	39,187
Accrued capital expenditures and tenant improvements	$	5,875		$	4,748
Accrued leasing fees and inducements	$	532		$	139
Developments in progress placed in service	$	2,288		$	4,047
Non-cash increase in developments in progress	$	5,806		$	—
U.S. Treasury securities transferred in connection with defeasance of mortgages payable	$	81,547		$	—
Defeasance of mortgages payable	$	65,262		$	—

Purchase of investment properties (after credits at closing):
Land, building and other improvements, net	$	(400,484	)	$	(318,666	)
Accounts receivable, acquired lease intangible and other assets	(41,450		)	(29,163		)
Accounts payable, acquired lease intangible and other liabilities	34,077			24,950
Mortgages payable assumed, net	—			146,485
Gain on change in control of investment properties	—			24,158
	$	(407,857	)	$	(152,236	)

Proceeds from sales of investment properties:
Land, building and other improvements, net	$	279,559		$	142,655
Accounts receivable, acquired lease intangible and other assets	6,583			6,986
Accounts payable, acquired lease intangible and other liabilities	(4,181		)	(1,952		)
Deferred gain	32			542
Gain on sales of investment properties	113,214			16,350
	$	395,207		$	164,581

See accompanying notes to condensed consolidated financial statements

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RETAIL PROPERTIES OF AMERICA, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Readers of this Quarterly Report should refer to the audited financial statements of Retail Properties of America, Inc. for the year ended December 31, 2014 , which are included in its 2014 Annual Report on Form 10-K, as certain footnote disclosures which would substantially duplicate those contained in the Annual Report have been omitted from this Quarterly Report. In the opinion of management, all adjustments necessary, all of which were of normal recurring nature, for a fair presentation have been included in this Quarterly Report.

(1) Organization and Basis of Presentation

Retail Properties of America, Inc. (the Company) was formed on March 5, 2003 to own and operate high quality, strategically located shopping centers in the United States.

The Company has elected to be taxed as a real estate investment trust (REIT) under the Internal Revenue Code of 1986, as amended (the Code). The Company believes it qualifies for taxation as a REIT and, as such, the Company generally will not be subject to U.S. federal income tax on taxable income that is distributed to shareholders. If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to U.S. federal corporate income tax on its taxable income. Even if the Company qualifies for taxation as a REIT, the Company may be subject to certain state and local taxes on its income, property or net worth and U.S. federal income and excise taxes on its undistributed income. The Company has one wholly-owned subsidiary that has jointly elected to be treated as a taxable REIT subsidiary (TRS) and is subject to U.S. federal, state and local income taxes at regular corporate tax rates. The income tax expense incurred as a result of the TRS did not have a material impact on the Company’s accompanying condensed consolidated financial statements.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. For example, significant estimates and assumptions have been made with respect to useful lives of assets, capitalization of development costs, fair value measurements, provision for impairment, including estimates of holding periods, capitalization rates and discount rates (where applicable), provision for income taxes, recoverable amounts of receivables, deferred taxes and initial valuations and related amortization periods of deferred costs and intangibles, particularly with respect to property acquisitions. Actual results could differ from those estimates.

All share amounts and dollar amounts in this Quarterly Report are stated in thousands with the exception of per share amounts.

The accompanying condensed consolidated financial statements include the accounts of the Company, as well as all wholly-owned subsidiaries and consolidated joint venture investments. Wholly-owned subsidiaries generally consist of limited liability companies (LLCs), limited partnerships and statutory trusts.

The Company’s property ownership as of September 30, 2015 is summarized below:



	Wholly-owned	Consolidated Joint Ventures (a)
Operating properties	202	—
Development properties	2	1


(a)	The Company has a 50% ownership interest in one LLC.

As of September 30, 2015 , the Company is the controlling member in one less-than-wholly-owned consolidated entity. The Company is entitled to a preferred return on its capital contributions to the entity. No adjustments to the carrying value of the noncontrolling interests for contributions, distributions or allocation of net income or loss were made during the nine months ended September 30, 2015 and 2014 . Subsequent to September 30, 2015, the development property held by the consolidated joint venture was sold to an affiliate of the joint venture partner and, concurrently, the joint venture was dissolved.

During the nine months ended September 30, 2014 , the Company held investments in MS Inland Fund, LLC (MS Inland) and Oak Property & Casualty LLC (Oak), which were unconsolidated joint ventures accounted for under the equity method of accounting. The Company dissolved MS Inland and terminated its participation in Oak prior to December 31, 2014. The Company

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RETAIL PROPERTIES OF AMERICA, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

recorded net equity in loss of unconsolidated joint ventures of $232 and $1,443 and received net cash distributions of $0 and $1,335 during the three and nine months ended September 30, 2014 , respectively.

(2) Summary of Significant Accounting Policies

Refer to the Company’s 2014 Annual Report on Form 10-K for a summary of the Company’s significant accounting policies. Except as disclosed below, there have been no changes to the Company’s significant accounting policies in the nine months ended September 30, 2015 .

Recent Accounting Pronouncements

Effective January 1, 2016 with early adoption permitted, the concept of extraordinary items will be eliminated from GAAP and entities will no longer be required to consider whether an underlying event or transaction is extraordinary. However, the presentation and disclosure guidance for items that are unusual in nature or occur infrequently will be retained. The Company has elected to early adopt this pronouncement effective January 1, 2015. The adoption of this pronouncement did not have any effect on the Company’s condensed consolidated financial statements.

Effective January 1, 2016 with early adoption permitted, companies will be required to present debt issuance costs related to a recognized debt liability, excluding revolving debt arrangements, as a direct deduction from the carrying amount of that debt liability on the balance sheet. The recognition and measurement guidance for debt issuance costs will not be affected. This pronouncement requires a full retrospective method of adoption and the adoption will result in the reclassification of certain unamortized capitalized loan fees from other assets to a direct reduction of the Company’s indebtedness on the condensed consolidated balance sheets. However, unamortized capitalized loan fees attributable to the Company’s unsecured revolving line of credit will continue to be recorded in other assets as they relate to a revolving debt arrangement.

Effective January 1, 2016 with early adoption permitted, a company’s management will be required to assess the entity’s ability to continue as a going concern every reporting period including interim periods for a period of one year after the date that the financial statements are issued (or available to be issued) and provide certain disclosures if conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. The Company does not expect the adoption of this pronouncement will have a material effect on its condensed consolidated financial statements.

Effective January 1, 2016 with early adoption permitted, companies will be required to evaluate whether they should consolidate certain legal entities under a revised consolidation model. All legal entities are subject to reevaluation under the revised consolidation model, which modifies the evaluation of whether limited partnerships and similar legal entities are variable interest entities (VIEs) or voting interest entities, eliminates the presumption that a general partner should consolidate a limited partnership, affects the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships, and provides a scope exception from consolidation guidance for registered money market funds. This pronouncement allows either a full or a modified retrospective method of adoption. The Company does not expect the adoption of this pronouncement will have a material effect on its condensed consolidated financial statements.

Effective January 1, 2016 with early adoption permitted, the acquirer in a business combination will be required to recognize any adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined and will no longer be required to retrospectively account for those adjustments. A company must present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The Company does not expect the adoption of this pronouncement will have a material effect on its condensed consolidated financial statements.

Effective January 1, 2017, registrants will be required to disclose the following in any annual report, proxy or information statement, or registration statement that requires executive compensation disclosure: 1) the median of the annual total compensation of all its employees (excluding the chief executive officer), 2) the annual total compensation of its chief executive officer, and 3) the ratio of the median of the annual total compensation of all its employees to the annual total compensation of its chief executive officer. The Company does not expect the adoption of this final rule will have a material effect on its condensed consolidated financial statements.

Effective January 1, 2018 with early adoption permitted beginning January 1, 2017, companies will be required to apply a five-step model in accounting for revenue arising from contracts with customers. The core principle of this revised revenue model is

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RETAIL PROPERTIES OF AMERICA, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

that a company recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Lease contracts will be excluded from this revenue recognition criteria; however, the sale of real estate will be required to follow the new model. This pronouncement allows either a full or a modified retrospective method of adoption. Expanded quantitative and qualitative disclosures regarding revenue recognition will be required for contracts that are subject to this guidance. The Company does not expect the adoption of this pronouncement will have a material effect on its condensed consolidated financial statements; however, it will continue to evaluate this assessment until the guidance becomes effective.

(3) Acquisitions

The Company closed on the following acquisitions during the nine months ended September 30, 2015 :

Date

Property Name

Metropolitan

Statistical Area

(MSA)

Property Type

Square

Footage

Acquisition

Price

January 8, 2015

Downtown Crown

Washington, D.C.

Multi-tenant retail

258,000

162,785

January 23, 2015

Merrifield Town Center

Washington, D.C.

Multi-tenant retail

84,900

56,500

January 23, 2015

Fort Evans Plaza II

Washington, D.C.

Multi-tenant retail

228,900

65,000

February 19, 2015

Cedar Park Town Center

Austin

Multi-tenant retail

179,300

39,057

March 24, 2015

Lake Worth Towne Crossing - Parcel (a)

Dallas

Land

—

400

May 4, 2015

Tysons Corner

Washington, D.C.

Multi-tenant retail

37,700

31,556

June 10, 2015

Woodinville Plaza

Seattle

Multi-tenant retail

170,800

35,250

July 31, 2015

Southlake Town Square - Outparcel (b)

Dallas

Single-user outparcel

13,800

8,440

August 27, 2015

Coal Creek Marketplace

Seattle

Multi-tenant retail

55,900

17,600

1,029,300

416,588


(a)	The Company acquired a parcel located at its Lake Worth Towne Crossing multi-tenant retail operating property.


(b)	The Company acquired a single-user outparcel located at its Southlake Town Square multi-tenant retail operating property that was subject to a ground lease with the Company prior to the transaction.

The Company closed on the following acquisitions during the nine months ended September 30, 2014 :



Date	Property Name	MSA	Property Type	Square Footage	Acquisition Price		Pro Rata Acquisition Price
February 27, 2014	Heritage Square	Seattle	Multi-tenant retail	53,100	$	18,022	$	18,022
February 27, 2014	Bed Bath & Beyond Plaza - Fee Interest (a)	Miami	Ground lease interest	—	10,350		10,350
June 5, 2014	MS Inland Portfolio (b)	Various	Multi-tenant retail	1,194,800	292,500		234,000
June 23, 2014	Southlake Town Square - Outparcel (c)	Dallas	Single-user outparcel	8,500	6,369		6,369
				1,256,400	$	327,241	$	268,741

(a)

The Company acquired the fee interest in an existing wholly-owned multi-tenant retail operating property located in Miami, Florida, which was previously subject to a ground lease with a third party. In conjunction with this transaction, the Company reversed a straight-line ground rent liability of $4,258 , which is presented in “Gain on extinguishment of other liabilities” in the accompanying condensed consolidated statements of operations and other comprehensive income.

(b)

The Company dissolved its joint venture arrangement with its partner in MS Inland by acquiring its partner’s 80% ownership interest in the six multi-tenant retail properties owned by the joint venture (collectively, the MS Inland acquisitions). The Company paid total cash consideration of approximately $120,600 before transaction costs and prorations and after assumption of the joint venture’s in-place mortgage financing on those properties of $141,698 at a weighted average interest rate of 4.79% . The Company accounted for this transaction as a business combination achieved in stages and recognized a gain on change in control of investment properties of $24,158 as a result of remeasuring the carrying value of its 20% interest in the six acquired properties to fair value. Such gain is presented as “Gain on change in control of investment properties” in the accompanying condensed consolidated statements of operations and other comprehensive income. The following table summarizes the calculation of the gain on change in control of investment properties recognized in conjunction with this transaction:

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RETAIL PROPERTIES OF AMERICA, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)



Fair value of the net assets acquired at 100%	$	150,802

Fair value of the net assets acquired at 20%	30,160
Carrying value of the Company’s previous investment in the six properties acquired on June 5, 2014	(6,002		)
Gain on change in control of investment properties	$	24,158


(c)	The Company acquired a single-user outparcel located at its Southlake Town Square multi-tenant retail operating property that was subject to a ground lease with the Company prior to the transaction.

The following table summarizes the acquisition date fair values, before prorations, the Company recorded in conjunction with the acquisitions discussed above:



	Nine Months Ended September 30,
	2015			2014
Land	$	146,107		$	112,804
Building and other improvements	254,377			205,862
Acquired lease intangible assets (a)	39,986			33,568
Acquired lease intangible liabilities (b)	(23,882		)	(20,206		)
Mortgages payable (c)	—			(146,485		)
Net assets acquired (d)	$	416,588		$	185,543


(a)	The weighted average amortization period for acquired lease intangible assets is 15 years and eight years for acquisitions completed during the nine months ended September 30, 2015 and 2014 , respectively.


(b)	The weighted average amortization period for acquired lease intangible liabilities is 21 years and 18 years for acquisitions completed during the nine months ended September 30, 2015 and 2014 , respectively.


(c)	2014 amount includes mortgage premium of $4,787 .


(d)	Net assets attributable to the MS Inland acquisitions are presented at 100% .

The above acquisitions were funded using a combination of available cash on hand and proceeds from the Company’s unsecured revolving line of credit. Transaction costs totaling $1,297 and $363 for the nine months ended September 30, 2015 and 2014 , respectively, were expensed as incurred and included within “General and administrative expenses” in the accompanying condensed consolidated statements of operations and other comprehensive income.

Included in the Company’s condensed consolidated statements of operations and other comprehensive income from the properties acquired that were accounted for as business combinations are $41,169 and $10,251 in total revenues and $7,575 and $705 in net income attributable to common shareholders from the date of acquisition through September 30, 2015 and 2014 , respectively. These amounts do not include the total revenue and net income attributable to common shareholders from the 2015 Lake Worth Towne Crossing and 2014 Bed Bath & Beyond Plaza acquisitions as they have been accounted for as asset acquisitions.

Subsequent to September 30, 2015, the Company acquired a single-user outparcel located at its Royal Oaks Village II multi-tenant retail operating property for a gross purchase price of $6,841 . The outparcel was acquired on October 27, 2015 and contains approximately 12,300 square feet. The Company has not completed the allocation of the acquisition date fair value for the outparcel at Royal Oaks Village II; however, it expects that the purchase price of this outparcel will primarily be allocated to land, building and acquired lease intangibles.

Condensed Pro Forma Financial Information

The results of operations of the acquisitions accounted for as business combinations are included in the following unaudited condensed pro forma financial information as if these acquisitions had been completed as of the beginning of the year prior to the acquisition date. The following unaudited condensed pro forma financial information is presented as if the 2015 acquisitions, including the acquisition of the outparcel at Royal Oaks Village II, were completed as of January 1, 2014, and the 2014 acquisitions were completed as of January 1, 2013. The results of operations associated with the 2015 Lake Worth Towne Crossing and 2014 Bed Bath & Beyond Plaza acquisitions have not been included in the pro forma presentation as they have been accounted for as asset acquisitions. These pro forma results are for comparative purposes only and are not necessarily indicative of what the actual

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RETAIL PROPERTIES OF AMERICA, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

results of operations of the Company would have been had the acquisitions occurred at the beginning of the periods presented, nor are they necessarily indicative of future operating results.

The unaudited condensed pro forma financial information is as follows:



	Three Months Ended September 30,					Nine Months Ended September 30,
	2015		2014			2015		2014
Total revenues	$	151,165	$	156,841		$	458,412	$	474,555
Net income (loss)	$	78,322	$	(27,667	)	$	122,091	$	15,207
Net income (loss) attributable to common shareholders	$	75,960	$	(30,029	)	$	115,004	$	8,120
Earnings (loss) per common share — basic and diluted:
Net income (loss) per common share attributable to common shareholders	$	0.32	$	(0.13	)	$	0.49	$	0.03
Weighted average number of common shares outstanding — basic	236,439		236,203			236,348		236,177

(4) Dispositions

The Company closed on the following dispositions during the nine months ended September 30, 2015 :



Date	Property Name	Property Type	Square Footage	Consideration		Aggregate Proceeds, Net (a)		Gain
January 20, 2015	Aon Hewitt East Campus	Single-user office	343,000	$	17,233	$	16,495	$	—
February 27, 2015	Promenade at Red Cliff	Multi-tenant retail	94,500	19,050		18,848		4,572
April 7, 2015	Hartford Insurance Building	Single-user office	97,400	6,015		5,663		860
April 30, 2015	Rasmussen College	Single-user office	26,700	4,800		4,449		1,334
May 15, 2015	Mountain View Plaza	Multi-tenant retail	162,000	28,500		27,949		10,184
June 4, 2015	Massillon Commons	Multi-tenant retail	245,900	12,520		12,145		—
June 5, 2015	Citizen's Property Insurance Building	Single-user office	59,800	3,650		3,368		440
June 17, 2015	Pine Ridge Plaza	Multi-tenant retail	236,500	33,200		31,858		12,938
June 17, 2015	Bison Hollow	Multi-tenant retail	134,800	18,800		18,657		4,061
June 17, 2015	The Village at Quail Springs	Multi-tenant retail	100,400	11,350		11,267		3,824
July 17, 2015	Greensburg Commons	Multi-tenant retail	272,500	18,400		18,283		2,810
July 28, 2015	Arvada Connection and Arvada Marketplace	Multi-tenant retail	367,500	54,900		53,159		20,208
July 30, 2015	Traveler's Office Building	Single-user office	50,800	4,841		4,643		—
August 6, 2015	Shaw's Supermarket	Single-user retail	65,700	3,000		2,769		—
August 24, 2015	Harvest Towne Center	Multi-tenant retail	39,700	7,800		7,381		1,217
August 31, 2015	Trenton Crossing & McAllen Shopping Center (b)	Multi-tenant retail	265,900	39,295		38,410		13,760
September 15, 2015	The Shops at Boardwalk	Multi-tenant retail	122,400	27,400		26,634		3,146
September 29, 2015	Best on the Boulevard	Multi-tenant retail	204,400	42,500		41,542		15,932
September 29, 2015	Montecito Crossing	Multi-tenant retail	179,700	52,200		51,415		17,928
			3,069,600	$	405,454	$	394,935	$	113,214


(a)	Aggregate proceeds are net of transaction costs and exclude $272 of condemnation proceeds, which did not result in any additional gain recognition.


(b)	The terms of the disposition of Trenton Crossing and McAllen Shopping Center were negotiated as a single transaction.

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Notes to Condensed Consolidated Financial Statements

(Unaudited)

The Company closed on the following dispositions during the nine months ended September 30, 2014 :



Date	Property Name	Property Type	Square Footage	Consideration		Aggregate Proceeds, Net (a)		Gain
Discontinued Operations:
March 11, 2014	Riverpark Phase IIA	Single-user retail	64,300	$	9,269	$	9,204	$	655
Continuing Operations:
April 1, 2014	Midtown Center	Multi-tenant retail	408,500	47,150		46,043		—
May 16, 2014	Beachway Plaza & Cornerstone Plaza (b)	Multi-tenant retail	189,600	24,450		23,292		527
August 1, 2014	Battle Ridge Pavilion	Multi-tenant retail	103,500	14,100		13,722		1,327
August 15, 2014	Stanley Works/Mac Tools	Single-user office	72,500	10,350		10,184		1,375
August 15, 2014	Fisher Scientific	Single-user office	114,700	14,000		13,715		3,732
August 19, 2014	Boston Commons	Multi-tenant retail	103,400	9,820		9,586		—
August 19, 2014	Greenwich Center	Multi-tenant retail	182,600	22,700		21,977		5,871
August 26, 2014	Crossroads Plaza CVS	Single-user retail	16,000	7,650		7,411		2,863
August 27, 2014	Four Peaks Plaza	Multi-tenant retail	140,400	9,900		9,381		—
			1,331,200	160,120		155,311		15,695

			1,395,500	$	169,389	$	164,515	$	16,350


(a)	Aggregate proceeds are net of transaction costs and exclude $66 of condemnation proceeds, which did not result in any additional gain recognition.


(b)	The terms of the disposition of Beachway Plaza and Cornerstone Plaza were negotiated as a single transaction. The Company recognized an additional gain on sale of $292 during the fourth quarter of 2014 that was deferred at disposition.

As of September 30, 2015 , no properties qualified for held for sale accounting treatment. Promenade at Red Cliff and Aon Hewitt East Campus, both of which were sold during the nine months ended September 30, 2015 , were classified as held for sale as of December 31, 2014 .

The following table presents the assets and liabilities associated with the investment properties classified as held for sale:



	December 31, 2014
Assets
Land, building and other improvements	$	36,020
Accumulated depreciation	(5,358		)
Net investment properties	30,662
Other assets	2,978
Assets associated with investment properties held for sale	$	33,640

Liabilities
Mortgage payable	$	8,075
Other liabilities	128
Liabilities associated with investment properties held for sale	$	8,203

There was no activity during the nine months ended September 30, 2015 related to discontinued operations. The results of operations for the nine months ended September 30, 2014 for the investment property accounted for as discontinued operations, Riverpark Phase IIA which was classified as held for sale as of December 31, 2013, were immaterial.

(5) Compensation Plans

The Company’s 2014 Long-Term Equity Compensation Plan, subject to certain conditions, authorizes the issuance of incentive and non-qualified stock options, restricted stock and restricted stock units, stock appreciation rights and other similar awards as well as cash-based awards to the Company’s employees, non-employee directors, consultants and advisors in connection with compensation and incentive arrangements that may be established by the Company’s board of directors or executive management.

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Notes to Condensed Consolidated Financial Statements

(Unaudited)

The following table represents a summary of the Company’s unvested restricted shares as of and for the nine months ended September 30, 2015 :



	Unvested Restricted Shares		Weighted Average Grant Date Fair Value per Restricted Share
Balance as of January 1, 2015	396		$	14.26
Shares granted (a)	801		$	15.82
Shares vested	(345	)	$	14.78
Shares forfeited	(4	)	$	16.01
Balance as of September 30, 2015	848		$	15.52


(a)	Shares granted vest ratably over periods ranging from 0.4 years to 3.4 years in accordance with the terms of applicable award documents.

In addition, during the nine months ended September 30, 2015 , Performance Restricted Stock Units (RSUs) were granted to the Company’s executives. The following table represents a summary of the Company’s unvested RSUs as of and for the nine months ended September 30, 2015 :



	Unvested RSUs	Weighted Average Grant Date Fair Value per RSU
Balance as of January 1, 2015	—	$	—
RSUs granted (a)	180	$	14.19
Balance as of September 30, 2015	180	$	14.19

(a)

In 2018, following the performance period which concludes on December 31, 2017, one-third of the RSUs will convert into shares of common stock and two-thirds will convert into restricted shares with a one year vesting term. As long as the minimum hurdle is achieved, the RSUs will convert into shares of common stock and restricted shares at a conversion rate of between 50% and 200% based upon the Company’s Total Shareholder Return as compared to that of the other companies within the NAREIT Shopping Center Index for 2015 through 2017. In 2018, additional shares of common stock will also be issued in an amount equal to the accumulated value of the dividends that would have been paid during the performance period on the shares of common stock and restricted shares issued at the end of the performance period divided by the then-current market price of the Company’s common stock. The Company calculated the grant date fair value per unit using a Monte Carlo simulation based on the probability of satisfying the market performance hurdles over the remainder of the performance period. Assumptions include a weighted average risk-free interest rate of 0.80% , the Company’s historical common stock performance relative to the other companies within the NAREIT Shopping Center Index and the Company’s weighted average common stock dividend yield of 4.26% .

During the three months ended September 30, 2015 and 2014 , the Company recorded compensation expense of $2,099 and $922 , respectively, related to unvested restricted shares and RSUs. During the nine months ended September 30, 2015 and 2014 , the Company recorded compensation expense of $8,225 and $2,490 , respectively, related to unvested restricted shares and RSUs. As of September 30, 2015 , total unrecognized compensation expense related to unvested restricted shares and RSUs was $9,054 , which is expected to be amortized over a weighted average term of 1.8 years . Included within the compensation expense recorded during the nine months ended September 30, 2015 is compensation expense of $1,680 related to the accelerated vesting of 134 restricted shares in conjunction with the departure of the Company’s former Chief Financial Officer and Treasurer. The total fair value of restricted shares vested during the nine months ended September 30, 2015 was $5,334 . Subsequent to September 30, 2015, the Company recorded $479 of additional compensation expense related to the accelerated vesting of 60 restricted shares in conjunction with the departure of its former Executive Vice President and President of Property Management.

Prior to 2013, non-employee directors had been granted options to acquire shares under the Company’s Third Amended and Restated Independent Director Stock Option and Incentive Plan. As of September 30, 2015 , options to purchase 84 shares of common stock had been granted, of which options to purchase three shares had been exercised, options to purchase six shares had expired and options to purchase 22 shares had been forfeited. The Company did not grant any options in 2014 or 2015 and did not record any compensation expense related to stock options during the nine months ended September 30, 2015 . Compensation expense of $0 and $3 related to stock options was recorded during the three and nine months ended September 30, 2014 .

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Notes to Condensed Consolidated Financial Statements

(Unaudited)

(6) Mortgages Payable

The following table summarizes the Company’s mortgages payable:



	September 30, 2015						December 31, 2014
	Aggregate Principal Balance			Weighted Average Interest Rate		Weighted Average Years to Maturity	Aggregate Principal Balance			Weighted Average Interest Rate		Weighted Average Years to Maturity
Fixed rate mortgages payable (a)	$	1,212,712		6.01	%	3.9	$	1,616,063		6.03	%	4.0
Variable rate construction loan (b)	15,867			2.50	%	0.1	14,900			2.44	%	0.8
Mortgages payable	1,228,579			5.97	%	3.9	1,630,963			5.99	%	3.9
Premium, net of accumulated amortization	2,013						3,972
Discount, net of accumulated amortization	(2		)				(470		)
Mortgages payable, net	$	1,230,590					$	1,634,465

(a)

Includes $7,963 and $8,124 of variable rate mortgage debt that was swapped to a fixed rate as of September 30, 2015 and December 31, 2014 , respectively, and excludes mortgages payable of $8,075 associated with one investment property classified as held for sale as of December 31, 2014 . The fixed rate mortgages had interest rates ranging from 3.35% to 8.00% as of September 30, 2015 and December 31, 2014 , respectively.


(b)	The variable rate construction loan bore interest at a floating rate of London Interbank Offered Rate (LIBOR) plus 2.25% . Subsequent to September 30, 2015, the construction loan was repaid in conjunction with the disposition of Green Valley Crossing.

During the nine months ended September 30, 2015 , the Company repaid or defeased mortgages payable in the total amount of $399,203 (excluding scheduled principal payments of $12,223 related to amortizing loans). The loans repaid or defeased during the nine months ended September 30, 2015 had a weighted average fixed interest rate of 6.10% .

During the three months ended September 30, 2015, the servicing of the Commercial Mortgage-Backed Security (CMBS) loan encumbering The Gateway was transferred to the special servicer at the request of the Company. This servicing transfer occurred notwithstanding the fact that the CMBS loan is currently performing. In 2014, this property was impaired below its debt balance, which was $94,823 as of September 30, 2015 . The loan is non-recourse to the Company, except for customary non-recourse carve-outs.

The majority of the Company’s mortgages payable require monthly payments of principal and interest, as well as reserves for real estate taxes and certain other costs. Certain of the Company’s properties and the related tenant leases are pledged as collateral for the fixed rate mortgages payable while a consolidated joint venture property and the related tenant leases are pledged as collateral for the variable rate construction loan. Although the mortgage loans obtained by the Company are generally non-recourse, occasionally, the Company may guarantee all or a portion of the debt on a full-recourse basis. As of September 30, 2015 , the Company had guaranteed $8,338 of the outstanding mortgage and construction loans with maturity dates ranging from November 2, 2015 through September 30, 2016 (see Note 14 to the condensed consolidated financial statements). Subsequent to September 30, 2015, the construction loan that had a maturity date of November 2, 2015 was repaid, which reduced the Company’s guarantee obligation by $6,347 . At times, the Company has borrowed funds financed as part of a cross-collateralized package, with cross-default provisions, in order to enhance the financial benefits of a transaction. In those circumstances, one or more of the Company’s properties may secure the debt of another of the Company’s properties. As of September 30, 2015 , the most significant cross-collateralized pool of mortgages was the IW JV 2009, LLC portfolio in the amount of $401,922 , which is cross-collateralized by 49 properties.

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RETAIL PROPERTIES OF AMERICA, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Debt Maturities

The following table shows the scheduled maturities and principal amortization of the Company’s indebtedness as of September 30, 2015 for the remainder of 2015 , each of the next four years and thereafter and the weighted average interest rates by year. The table does not reflect the impact of any debt activity that occurred after September 30, 2015 .



	2015			2016			2017			2018			2019			Thereafter			Total
Debt:
Fixed rate debt:
Mortgages payable (a)	$	61,887		$	66,435		$	319,708		$	10,882		$	448,052		$	305,748		$	1,212,712
Unsecured credit facility - fixed rate portion of term loan (b)	—			—			—			300,000			—			—			300,000
Unsecured notes payable (c)	—			—			—			—			—			500,000			500,000
Total fixed rate debt	61,887			66,435			319,708			310,882			448,052			805,748			2,012,712

Variable rate debt:
Construction loan	15,867			—			—			—			—			—			15,867
Unsecured credit facility	—			—			130,000			150,000			—			—			280,000
Total variable rate debt	15,867			—			130,000			150,000			—			—			295,867
Total debt (d)	$	77,754		$	66,435		$	449,708		$	460,882		$	448,052		$	805,748		$	2,308,579

Weighted average interest rate on debt:
Fixed rate debt	4.83		%	5.01		%	5.52		%	2.16		%	7.50		%	4.42		%	4.96		%
Variable rate debt (e)	2.50		%	—			1.70		%	1.65		%	—			—			1.72		%
Total	4.36		%	5.01		%	4.42		%	1.99		%	7.50		%	4.42		%	4.55		%


(a)	Includes $7,963 of variable rate mortgage debt that was swapped to a fixed rate as of September 30, 2015 . Excludes mortgage premium of $2,013 and discount of $(2) , net of accumulated amortization, which was outstanding as of September 30, 2015 .


(b)	$300,000 of LIBOR-based variable rate debt has been swapped to a fixed rate through February 24, 2016. The swap effectively converts one-month floating rate LIBOR to a fixed rate of 0.53875% over the term of the swap.


(c)	Excludes discount of $(1,119) , net of accumulated amortization, which was outstanding as of September 30, 2015 .


(d)	As of September 30, 2015 , the weighted average years to maturity of consolidated indebtedness was 4.5 years .


(e)	Represents interest rates as of September 30, 2015 .

The Company plans on addressing its debt maturities through a combination of proceeds from asset dispositions, capital markets transactions and its unsecured revolving line of credit.

(7) Unsecured Notes Payable

On March 12, 2015, the Company completed a public offering of $250,000 in aggregate principal amount of its 4.00% senior unsecured notes due 2025 ( 4.00% notes). The 4.00% notes were priced at 99.526% of the principal amount to yield 4.058% to maturity. In addition, on June 30, 2014, the Company completed a private placement of $250,000 of unsecured notes, consisting of $100,000 of 4.12% Series A senior notes due 2021 and $150,000 of 4.58% Series B senior notes due 2024 (collectively, Series A and B notes). The proceeds from the 4.00% notes and the Series A and B notes were used to repay a portion of the Company’s unsecured revolving line of credit.

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RETAIL PROPERTIES OF AMERICA, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The following table summarizes the Company’s unsecured notes payable as of September 30, 2015 :



Unsecured Notes Payable	Maturity Date	Principal Balance			Interest Rate/ Weighted Average Interest Rate
Senior notes - 4.12% Series A due 2021	June 30, 2021	$	100,000		4.12	%
Senior notes - 4.58% Series B due 2024	June 30, 2024	150,000			4.58	%
Senior notes - 4.00% due 2025	March 15, 2025	250,000			4.00	%
		500,000			4.20	%
Discount, net of accumulated amortization		(1,119		)
	Total	$	498,881

The indenture, as supplemented, governing the 4.00% notes (the Indenture) contains customary covenants and events of default. Pursuant to the terms of the Indenture, the Company is subject to various financial covenants, including the requirement to maintain the following: (i) maximum secured and total leverage ratios; (ii) a debt service coverage ratio; and (iii) maintenance of an unencumbered assets to unsecured debt ratio.

The note purchase agreement governing the Series A and B notes contains customary representations, warranties and covenants, and events of default. Pursuant to the terms of the note purchase agreement, the Company is subject to various financial covenants, some of which are based upon the financial covenants in effect in the Company’s primary credit facility, including the requirement to maintain the following: (i) maximum unencumbered, secured and consolidated leverage ratios; (ii) minimum interest coverage and unencumbered interest coverage ratios; and (iii) a minimum consolidated net worth.

As of September 30, 2015 , management believes the Company was in compliance with the financial covenants under the Indenture and the note purchase agreement.

(8) Unsecured Credit Facility

On May 13, 2013 , the Company entered into its third amended and restated unsecured credit agreement with a syndicate of financial institutions led by KeyBank National Association and Wells Fargo Securities LLC to provide for an unsecured credit facility aggregating $1,000,000 . The unsecured credit facility consists of a $550,000 unsecured revolving line of credit and a $450,000 unsecured term loan (collectively, the Unsecured Credit Facility). The Unsecured Credit Facility has a $450,000 accordion option that allows the Company, at its election, to increase the total credit facility up to $1,450,000 , subject to (i) customary fees and conditions including, but not limited to, the absence of an event of default as defined in the agreement and (ii) the Company’s ability to obtain additional lender commitments.

The Unsecured Credit Facility is currently priced on a leverage grid at a rate of LIBOR plus a margin ranging from 1.50% to 2.05% , plus a quarterly unused fee ranging from 0.25% to 0.30% depending on the undrawn amount, for the unsecured revolving line of credit and LIBOR plus a margin ranging from 1.45% to 2.00% for the unsecured term loan. The Company received investment grade credit ratings from two rating agencies in 2014. In accordance with the unsecured credit agreement, the Company may elect to convert to an investment grade pricing grid. Upon making such an election and depending on the Company’s credit rating, the interest rate for the unsecured revolving line of credit would equal LIBOR plus a margin ranging from 0.90% to 1.70% , plus a facility fee ranging from 0.15% to 0.35% , and for the unsecured term loan, LIBOR plus a margin ranging from 1.05% to 2.05% . As of September 30, 2015 , making such an election would have resulted in a higher interest rate and, as such, the Company has not made the election to convert to an investment grade pricing grid.

The following table summarizes the Company’s Unsecured Credit Facility:



		September 30, 2015				December 31, 2014
Unsecured Credit Facility	Maturity Date	Balance		Interest Rate/ Weighted Average Interest Rate		Balance		Interest Rate/ Weighted Average Interest Rate
Term loan - fixed rate portion (a)	May 11, 2018	$	300,000	1.99	%	$	300,000	1.99	%
Term loan - variable rate portion	May 11, 2018	150,000		1.65	%	150,000		1.62	%
Revolving line of credit - variable rate	May 12, 2017 (b)	130,000		1.70	%	—		1.67	%
	Total	$	580,000	1.84	%	$	450,000	1.87	%

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Notes to Condensed Consolidated Financial Statements

(Unaudited)


(a)	$300,000 of the term loan has been swapped to a fixed rate of 0.53875% plus a margin based on a leverage grid ranging from 1.45% to 2.00% through February 24, 2016. The applicable margin was 1.45% as of September 30, 2015 and December 31, 2014 .


(b)	The Company has a one year extension option on the unsecured revolving line of credit, which it may exercise as long as it is in compliance with the terms of the unsecured credit agreement and it pays an extension fee equal to 0.15% of the commitment amount being extended.

The unsecured credit agreement contains customary representations, warranties and covenants, and events of default. Pursuant to the terms of the unsecured credit agreement, the Company is subject to various financial covenants, including the requirement to maintain the following: (i) maximum unencumbered, secured and consolidated leverage ratios; (ii) minimum fixed charge and unencumbered interest coverage ratios; and (iii) a minimum consolidated net worth.

As of September 30, 2015 , management believes the Company was in compliance with the financial covenants and default provisions under the unsecured credit agreement.

(9) Derivatives

The Company’s objective in using interest rate derivatives is to manage its exposure to interest rate movements and add stability to interest expense. To accomplish this objective, the Company uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable rate amounts from a counterparty in exchange for the Company making fixed rate payments over the life of the agreement without exchange of the underlying notional amount.

The Company utilizes two interest rate swaps to hedge the variable cash flows associated with variable rate debt. The effective portion of changes in the fair value of derivatives that are designated and that qualify as cash flow hedges is recorded in “Accumulated other comprehensive loss” and is reclassified to interest expense as interest payments are made on the Company’s variable rate debt. Over the next 12 months, the Company estimates that an additional $380 will be reclassified as an increase to interest expense. The ineffective portion of the change in fair value of derivatives is recognized directly in earnings.

The following table summarizes the Company’s interest rate swaps that were designated as cash flow hedges of interest rate risk:



	Number of Instruments		Notional
Interest Rate Derivatives	September 30, 2015	December 31, 2014	September 30, 2015		December 31, 2014
Interest rate swaps	2	2	$	307,963	$	308,124

The table below presents the estimated fair value of the Company’s derivative financial instruments, which are presented within “Other liabilities” in the condensed consolidated balance sheets. The valuation techniques utilized are described in Note 13 to the condensed consolidated financial statements.



	Fair Value
	September 30, 2015		December 31, 2014
Derivatives designated as cash flow hedges:
Interest rate swaps	$	380	$	562

The following table presents the effect of the Company’s derivative financial instruments on the condensed consolidated statements of operations and other comprehensive income:



Derivatives in Cash Flow Hedging Relationships	Amount of Loss (Gain) Recognized in Other Comprehensive Income on Derivative (Effective Portion)					Location of Loss Reclassified from Accumulated Other Comprehensive Income (AOCI) into Income (Effective Portion)	Amount of Loss Reclassified from AOCI into Income (Effective Portion)				Location of Gain Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Interest rate swaps	Three Months Ended September 30,			Nine Months Ended September 30,			Three Months Ended September 30,		Nine Months Ended September 30,			Three Months Ended September 30,			Nine Months Ended September 30,
2015	$	109		$	691	Interest expense	$	264	$	848	Other income, net	$	(4	)	$	(25	)
2014	$	(92	)	$	649	Interest expense	$	298	$	884	Other income, net	$	—		$	(13	)

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RETAIL PROPERTIES OF AMERICA, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(10) Equity

In March 2013, the Company established an at-the-market (ATM) equity program under which it may sell shares of its Class A common stock, having an aggregate offering price of up to $200,000 , from time to time. Actual sales may depend on a variety of factors, including, among others, market conditions and the trading price of the Company’s Class A common stock. The net proceeds are expected to be used for general corporate purposes, which may include repaying debt, including the Company's unsecured revolving line of credit, and funding acquisitions or other growth initiatives.

The Company did not sell any shares under its ATM equity program during the nine months ended September 30, 2015 and 2014 .

As of September 30, 2015 , the Company had Class A common shares having an aggregate offering price of up to $115,165 remaining available for sale under its ATM equity program.

(11) Earnings per Share

The following table summarizes the components used in the calculation of basic and diluted earnings per share (EPS):



	Three Months Ended September 30,								Nine Months Ended September 30,
	2015				2014				2015				2014
Numerator:
Income (loss) from continuing operations	$	3,328			$	(41,904	)		$	8,875			$	1,233
Gain on sales of investment properties	75,001				15,168				113,214				15,695
Preferred stock dividends	(2,362		)		(2,362		)		(7,087		)		(7,087		)
Income (loss) from continuing operations attributable to common shareholders	75,967				(29,098		)		115,002				9,841
Income from discontinued operations	—				—				—				507
Net income (loss) attributable to common shareholders	75,967				(29,098		)		115,002				10,348
Distributions paid on unvested restricted shares	(130		)		(65		)		(340		)		(159		)
Net income (loss) attributable to common shareholders excluding amounts attributable to unvested restricted shares	$	75,837			$	(29,163	)		$	114,662			$	10,189

Denominator:
Denominator for earnings (loss) per common share — basic:
Weighted average number of common shares outstanding	236,439			(a)	236,203			(b)	236,348			(a)	236,177			(b)
Effect of dilutive securities:
Stock options	2			(c)	—			(c)	2			(c)	3			(c)
RSUs	112			(d)	—				50			(d)	—
Denominator for earnings (loss) per common share — diluted:
Weighted average number of common and common equivalent shares outstanding	236,553				236,203				236,400				236,180


(a)	Excludes 848 shares of unvested restricted common stock, which equate to 818 and 760 shares, respectively, on a weighted average basis for the three and nine months ended September 30, 2015 . These shares will continue to be excluded from the computation of basic EPS until contingencies are resolved and the shares are released.


(b)	Excludes 397 shares of unvested restricted common stock, which equate to 397 and 353 shares, respectively, on a weighted average basis for the three and nine months ended September 30, 2014 . These shares were excluded from the computation of basic EPS as the contingencies remained and the shares had not been released as of the end of the reporting period.

(c)

There were outstanding options to purchase 53 and 66 shares of common stock as of September 30, 2015 and 2014 , respectively, at a weighted average exercise price of $19.39 and $19.09 , respectively. Of these totals, outstanding options to purchase 45 and 54 shares of common stock as of September 30, 2015 and 2014 , respectively, at a weighted average exercise price of $20.74 and $20.72 , respectively, have been excluded from the common shares used in calculating diluted earnings per share as including them would be anti-dilutive.


(d)	There were 180 RSUs outstanding as of September 30, 2015 (see Note 5 to the condensed consolidated financial statements). These contingently issuable shares are included in diluted EPS based on the weighted average number of shares that would be outstanding during the period, if any, assuming the end of the reporting period were the end of the contingency period.

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RETAIL PROPERTIES OF AMERICA, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(12) Provision for Impairment of Investment Properties

The investment property impairment charges recorded by the Company during the nine months ended September 30, 2015 are summarized below:



Property Name	Property Type	Impairment Date	Square Footage	Provision for Impairment of Investment Properties
Massillon Commons (a)	Multi-tenant retail	June 4, 2015	245,900	$	2,289
Traveler’s Office Building (b)	Single-user office	June 30, 2015	50,800	1,655
Shaw’s Supermarket (a)	Single-user retail	August 6, 2015	65,700	169
				$	4,113
	Estimated fair value of impaired properties as of impairment date			$	20,970


(a)	The Company recorded impairment charges based upon the terms and conditions of an executed sales contract for the respective properties, which were sold during 2015.


(b)	The Company recorded an impairment charge based upon the terms and conditions of an executed sales contract. This property was classified as held for sale as of June 30, 2015 and was sold on July 30, 2015.

As of September 30, 2015 and 2014 , the Company identified indicators of impairment at certain of its properties. Such indicators included a low occupancy rate, difficulty in leasing space and related cost of re-leasing, financially troubled tenants or reduced anticipated holding periods. The following table summarizes the results of these analyses as of September 30, 2015 and 2014 :



	September 30, 2015		September 30, 2014
Number of properties for which indicators of impairment were identified	3		10		(a)
Less: number of properties for which an impairment charge was recorded	—		3
Remaining properties for which indicators of impairment were identified but no impairment charge was considered necessary	3		7

Weighted average percentage by which the projected undiscounted cash flows exceeded its respective carrying value for each of the remaining properties (b)	39	%	58	%


(a)	Includes seven properties which have subsequently been sold as of September 30, 2015 .


(b)	Based upon the estimated holding period for each asset where an undiscounted cash flow analysis was performed.

The investment property impairment charges recorded by the Company during the nine months ended September 30, 2014 are summarized below:



Property Name	Property Type	Impairment Date	Square Footage	Provision for Impairment of Investment Properties
Midtown Center (a)	Multi-tenant retail	March 31, 2014	408,500	$	394
Gloucester Town Center	Multi-tenant retail	Various (b)	107,200	6,148
Boston Commons (a)	Multi-tenant retail	August 19, 2014	103,400	453
Four Peaks Plaza (a)	Multi-tenant retail	August 27, 2014	140,400	4,154
Shaw’s Supermarket (c)	Single-user retail	September 30, 2014	65,700	6,230
The Gateway (d)	Multi-tenant retail	September 30, 2014	623,200	42,999
				$	60,378
	Estimated fair value of impaired properties as of impairment date			$	155,720


(a)	The Company recorded impairment charges based upon the terms and conditions of an executed sales contract for each of the respective properties, which were sold during 2014.


(b)	An impairment charge was recorded on June 30, 2014 based upon the terms of a bona fide purchase offer and additional impairment was recognized on September 30, 2014 pursuant to the terms and conditions of an executed sales contract. The property was sold on October 2, 2014.

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RETAIL PROPERTIES OF AMERICA, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)


(c)	The Company recorded an impairment charge upon re-evaluating the strategic alternatives for the property, which was sold on August 6, 2015.


(d)	The Company recorded an impairment charge as a result of a combination of factors including the expected impact on future operating results stemming from a re-evaluation of the anticipated positioning of, and tenant population at, the property and a re-evaluation of other potential strategic alternatives for the property.

The Company can provide no assurance that material impairment charges with respect to its investment properties will not occur in future periods.

(13) Fair Value Measurements

Fair Value of Financial Instruments

The following table presents the carrying value and estimated fair value of the Company’s financial instruments.



	September 30, 2015				December 31, 2014
	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial liabilities:
Mortgages payable, net	$	1,230,590	$	1,327,938	$	1,634,465	$	1,749,671
Unsecured notes payable, net	$	498,881	$	497,606	$	250,000	$	258,360
Unsecured credit facility	$	580,000	$	582,090	$	450,000	$	451,502
Derivative liability	$	380	$	380	$	562	$	562

The carrying values of mortgages payable, net and unsecured notes payable, net in the table are included in the condensed consolidated balance sheets under the indicated captions. The carrying value of the Unsecured Credit Facility is comprised of the “Unsecured term loan” and the “Unsecured revolving line of credit” and the carrying value of the derivative liability is included in “Other liabilities” in the condensed consolidated balance sheets.

Recurring Fair Value Measurements

The following table presents the Company’s financial instruments, which are measured at fair value on a recurring basis, by the level in the fair value hierarchy within which those measurements fall. Methods and assumptions used to estimate the fair value of these instruments are described after the table.



	Fair Value
	Level 1		Level 2		Level 3		Total
September 30, 2015
Derivative liability	$	—	$	380	$	—	$	380

December 31, 2014
Derivative liability	$	—	$	562	$	—	$	562

Derivative liability: The fair value of the derivative liability is determined using a discounted cash flow analysis on the expected future cash flows of each derivative. This analysis utilizes observable market data including forward yield curves and implied volatilities to determine the market’s expectation of the future cash flows of the variable component. The fixed and variable components of the derivative are then discounted using calculated discount factors developed based on the LIBOR swap rate and are aggregated to arrive at a single valuation for the period. The Company also incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of September 30, 2015 and December 31, 2014 , the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation. As a result, the Company has determined that its derivative valuations in their entirety are classified within Level 2 of the fair value hierarchy. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the

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RETAIL PROPERTIES OF AMERICA, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Company has considered any applicable credit enhancements. The Company’s derivative instruments are further described in Note 9 to the condensed consolidated financial statements.

Nonrecurring Fair Value Measurements

The Company did not have any assets measured at fair value on a nonrecurring basis as of September 30, 2015 .

The following table presents the Company’s assets measured at fair value on a nonrecurring basis as of December 31, 2014 aggregated by the level within the fair value hierarchy in which those measurements fall. The table includes information related to properties remeasured to fair value during the year ended December 31, 2014 , except for those properties sold prior to December 31, 2014 . Methods and assumptions used to estimate the fair value of these assets are described after the table.



	Fair Value
	Level 1		Level 2		Level 3			Total		Provision for Impairment (a)
December 31, 2014
Investment properties	$	—	$	—	$	86,500	(b)	$	86,500	$	59,352
Investment properties - held for sale (c)	$	—	$	17,233	$	—		$	17,233	$	563


(a)	Excludes impairment charges recorded on investment properties sold prior to December 31, 2014 .

(b)

Represents the fair values of the Company’s Shaw’s Supermarket, The Gateway, Hartford Insurance Building and Citizen’s Property Insurance Building investment properties. The estimated fair values of Shaw’s Supermarket and The Gateway of $3,100 and $75,400 , respectively, were determined using the income approach. The income approach involves discounting the estimated income stream and reversion (presumed sale) value of a property over an estimated holding period to a present value at a risk-adjusted rate. Discount rates, growth assumptions and terminal capitalization rates utilized in this approach are derived from property-specific information, market transactions and other industry data. The terminal capitalization rate and discount rate are significant inputs to this valuation. The following were the key Level 3 inputs used in estimating the fair value of Shaw’s Supermarket and The Gateway as of September 30, 2014, the date the assets were measured at fair value.



	2014
	Low	High
Rental growth rates	Varies (i)	Varies (i)
Operating expense growth rates	1.39%	3.70%
Discount rates	8.25%	9.50%
Terminal capitalization rates	7.50%	8.50%


(i)	Since cash flow models are established at the tenant level, projected rental revenue growth rates fluctuate over the course of the estimated holding period based upon the timing of lease rollover, amount of available space and other property and space-specific factors.

The estimated fair values of Hartford Insurance Building and Citizen’s Property Insurance Building of $5,000 and $3,000 , respectively, were based upon third party comparable sales prices, which contain unobservable inputs used by these third parties to determine the estimated fair values.

(c)

Represents an impairment charge recorded during the three months ended December 31, 2014 for Aon Hewitt East Campus, which was classified as held for sale as of December 31, 2014. Such charge, calculated as the expected sales price from the executed sales contract less estimated transaction costs as compared to the Company’s carrying value of its investment, was determined to be a Level 2 input. The estimated transaction costs totaling $738 are not reflected as a reduction to the fair value disclosed in the table above, but were included in the calculation of the impairment charge.

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RETAIL PROPERTIES OF AMERICA, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Fair Value Disclosures

The following table presents the Company’s financial liabilities, which are measured at fair value for disclosure purposes, by the level in the fair value hierarchy within which those measurements fall. Methods and assumptions used to estimate the fair value of these instruments are described after the table.



	Fair Value
	Level 1		Level 2		Level 3		Total
September 30, 2015
Mortgages payable, net	$	—	$	—	$	1,327,938	$	1,327,938
Unsecured notes payable, net	$	241,460	$	—	$	256,146	$	497,606
Unsecured credit facility	$	—	$	—	$	582,090	$	582,090

December 31, 2014
Mortgages payable, net	$	—	$	—	$	1,749,671	$	1,749,671
Unsecured notes payable	$	—	$	—	$	258,360	$	258,360
Unsecured credit facility	$	—	$	—	$	451,502	$	451,502

Mortgages payable, net: The Company estimates the fair value of its mortgages payable by discounting the anticipated future cash flows of each instrument at rates currently offered to the Company by its lenders for similar debt instruments of comparable maturities. The rates used are not directly observable in the marketplace and judgment is used in determining the appropriate rate for each of the Company’s individual mortgages payable based upon the specific terms of the agreement, including the term to maturity, the quality and nature of the underlying property and its leverage ratio. The rates used range from 2.0% to 5.5% and 2.2% to 4.0% as of September 30, 2015 and December 31, 2014 , respectively.

Unsecured notes payable, net: The quoted market price as of September 30, 2015 was used to value the Company’s 4.00% notes. The Company estimates the fair value of its Series A and B notes by discounting the future cash flows at rates currently offered to the Company by its lenders for similar debt instruments of comparable maturities. The rates used are not directly observable in the marketplace and judgment is used in determining the appropriate rates. The weighted average rate used was 4.22% and 3.97% as of September 30, 2015 and December 31, 2014 , respectively.

Unsecured Credit Facility: The Company estimates the fair value of its Unsecured Credit Facility by discounting the future cash flows related to the credit spreads at rates currently offered to the Company by its lenders for similar facilities of comparable maturities. The rates used are not directly observable in the marketplace and judgment is used in determining the appropriate rates. The rates used to discount the credit spreads were 1.30% and 1.35% for the unsecured term loan as of September 30, 2015 and December 31, 2014 , respectively, and 1.35% for the unsecured revolving line of credit as of September 30, 2015 . There were no amounts drawn on the unsecured revolving line of credit as of December 31, 2014.

There were no transfers between the levels of the fair value hierarchy during the nine months ended September 30, 2015 .

(14) Commitments and Contingencies

Insurance Captive

On December 1, 2014, the Company formed a wholly-owned captive insurance company, Birch Property and Casualty LLC (Birch), which insures the Company’s first layer of property and general liability insurance claims subject to certain limitations. The Company capitalized Birch in accordance with the applicable regulatory requirements and Birch established annual premiums based on projections derived from the past loss experience of the Company’s properties.

Guarantees

Although the mortgage loans obtained by the Company are generally non-recourse, occasionally the Company may guarantee all or a portion of the debt on a full-recourse basis. As of September 30, 2015 , the Company has guaranteed $8,338 of its outstanding mortgage and construction loans, with maturity dates ranging from November 2, 2015 through September 30, 2016 . Subsequent to September 30, 2015, the construction loan that had a maturity date of November 2, 2015 was repaid, which reduced the Company’s guarantee obligation by $6,347 .

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RETAIL PROPERTIES OF AMERICA, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(15) Litigation

The Company is subject, from time to time, to various legal proceedings and claims that arise in the ordinary course of business. While the resolution of such matters cannot be predicted with certainty, management believes, based on currently available information, that the final outcome of such matters will not have a material effect on the condensed consolidated financial statements of the Company.

(16) Subsequent Events

Subsequent to September 30, 2015 , the Company:


•	repaid mortgages payable with an aggregate principal balance of $67,319 and a weighted average interest rate of 4.97% ;

•

closed on the disposition of Green Valley Crossing, a 96,400 square foot development property located in Henderson, Nevada, which was held in a consolidated joint venture, to an affiliate of the Company’s joint venture partner. Concurrently, the joint venture was dissolved. The property was disposed for a sales price of $35,000 with an anticipated gain on sale of approximately $3,904 , of which approximately $528 will be allocated to the noncontrolling interest holder as its share of the anticipated gain. The variable rate construction loan with a principal balance of $15,949 and an interest rate of 2.50% as of the disposition date was repaid in conjunction with the sale; and


•	closed on the acquisition of a 12,300 square foot single-user outparcel located at Royal Oaks Village II, its existing multi-tenant retail operating property located in Houston, Texas, for a gross purchase price of $6,841 .

On October 7, 2015, Niall J. Byrne departed as the Company’s Executive Vice President and President of Property Management. In connection with his departure, Mr. Byrne is entitled to receive a cash payment of $677 and acceleration of vesting with respect to all of his outstanding unvested shares of restricted stock. In total, the Company expects to record realignment separation charges of approximately $1,193 during the fourth quarter of 2015 related to Mr. Byrne’s departure.

On October 27, 2015, the Board declared the cash dividend for the fourth quarter of 2015 for the Company’s 7.00% Series A cumulative redeemable preferred stock. The dividend of $0.4375 per preferred share will be paid on December 31, 2015 to preferred shareholders of record at the close of business on December 21, 2015.

On October 27, 2015, the Board declared the distribution for the fourth quarter of 2015 of $0.165625 per share on the Company’s outstanding Class A common stock, which will be paid on January 8, 2016 to Class A common shareholders of record at the close of business on December 23, 2015.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Certain statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Quarterly Report on Form 10-Q may constitute “forward-looking statements” within the meaning of the safe harbor from civil liability provided for such statements by the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act). Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods which may be incorrect or imprecise and we may not be able to realize them. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). You can identify forward-looking statements by the use of forward-looking terminology such as “believes,” “expects,” “may,” “should,” “seeks,” “approximately,” “intends,” “plans,” “pro forma,” “estimates,” “focus,” “contemplates,” “aims,” “continues,” “would” or “anticipates” and variations of such words or similar expressions or the negative of such words. You can also identify forward-looking statements by discussions of strategies, plans or intentions. Risks, uncertainties and changes in the following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements:


•	economic, business and financial conditions, and changes in our industry and changes in the real estate markets in particular;


•	economic and other developments in the state of Texas, where we have a high concentration of properties;


•	our business strategy;


•	our projected operating results;


•	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 and zoning laws and changes in real property tax rates;


•	real estate valuations, potentially resulting in impairment charges;


•	our leverage;


•	our ability to generate sufficient cash flows to service our outstanding indebtedness;


•	our ability to obtain necessary outside financing;


•	the availability, terms and deployment of capital;


•	general volatility of the capital and credit markets and the market price of our Class A common stock;


•	risks generally associated with real estate acquisitions, dispositions and redevelopment, including the impact of construction delays and cost overruns;


•	our ability to identify properties to acquire and complete acquisitions;


•	our ability to successfully operate acquired properties;


•	our ability to effectively manage growth;


•	composition of members of our senior management team;


•	our ability to attract and retain qualified personnel;


•	our ability to make distributions to our shareholders;


•	our ability to continue to qualify as a real estate investment trust (REIT);


•	governmental regulations, tax laws and rates and similar matters;

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•	our compliance with laws, rules and regulations;


•	environmental uncertainties and exposure to natural disasters;


•	insurance coverage; and


•	the likelihood or actual occurrence of terrorist attacks in the U.S.

For a further discussion of these and other factors that could impact our future results, performance or transactions, see Item 1A. “Risk Factors” in this document and in our Annual Report on Form 10-K for the year ended December 31, 2014 and in our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2015 and June 30, 2015. Readers should not place undue reliance on any forward-looking statements, which are based only on information currently available to us (or to third parties making the forward-looking statements). We undertake no obligation to publicly release any revisions to such forward-looking statements to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q, except as required by applicable law.

The following discussion and analysis should be read in conjunction with our condensed consolidated financial statements and the related notes included in this report.

Executive Summary

Retail Properties of America, Inc. is a REIT and is one of the largest owners and operators of high quality, strategically located shopping centers in the United States. As of September 30, 2015 , we owned 201 retail operating properties representing 29,160,000 square feet of gross leasable area (GLA). Our retail operating portfolio includes power centers, neighborhood and community centers, and lifestyle centers and predominantly multi-tenant retail mixed-use properties, as well as single-user retail properties.

The following table summarizes our operating portfolio as of September 30, 2015 :



Property Type	Number of Properties	GLA (in thousands)	Occupancy		Percent Leased Including Leases Signed (a)
Operating portfolio:
Multi-tenant retail
Power centers	56	13,736	94.6	%	96.0	%
Neighborhood and community centers	86	10,058	91.4	%	93.7	%
Lifestyle centers and mixed-use properties	10	4,074	88.8	%	90.5	%
Total multi-tenant retail	152	27,868	92.6	%	94.4	%
Single-user retail	49	1,292	100.0	%	100.0	%
Total retail operating portfolio	201	29,160	92.9	%	94.6	%
Office	1	895	100.0	%	100.0	%
Total operating portfolio	202	30,055	93.1	%	94.8	%


(a)	Includes leases signed but not commenced.

In addition to our operating portfolio, as of September 30, 2015 , we held interests in three retail development properties, one of which was under active development and held in a consolidated joint venture. This development property was subsequently sold on October 29, 2015.

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Company Highlights — Nine Months Ended September 30, 2015

Leasing Activity

The following table summarizes the leasing activity in our retail operating portfolio during the nine months ended September 30, 2015 . Leases with terms of less than 12 months have been excluded from the table.



	Number of Leases Signed	GLA Signed (in thousands)	New Contractual Rent per Square Foot (PSF) (a)		Prior Contractual Rent PSF (a)		% Change over Prior Annualized Base Rent (ABR) (a)		Weighted Average Lease Term	Tenant Allowances PSF
Comparable Renewal Leases	261	1,428	$	18.11	$	17.01	6.5	%	4.69	$	1.01
Comparable New Leases	42	204	$	20.60	$	16.92	21.8	%	8.38	$	30.36
Non-Comparable New and Renewal Leases (b)	109	581	$	19.90	n/a		n/a		8.26	$	32.17
Total	412	2,213	$	18.42	$	17.00	8.4	%	6.04	$	11.89


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


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

During the nine months ended September 30, 2015 , our leasing activity consisted of 412 new and renewal leases signed for a total of approximately 2,213,000 square feet and a renewal rate of 69.3%. We continued experiencing the impact of various strategic remerchandising efforts and as of September 30, 2015 , 14 of the 15 anticipated anchor spaces had vacated representing approximately 496,000 square feet. Leases have been signed representing approximately 241,000 square feet. Overall, rental rates on comparable new leases signed during 2015 increased approximately 21.8% and rental rates on comparable renewal leases signed during 2015 increased approximately 6.5% over previous rental rates, for a combined comparable re-leasing spread of approximately 8.4% for the nine months ended September 30, 2015 .

While we expect our reported activity for renewal leases to continue to be consistent with prior quarters, we anticipate ongoing volatility in our reported metrics for new leases in the fourth quarter of 2015 as we continue to execute on our strategic remerchandising opportunities across the portfolio. In addition, as portfolio occupancy increases and available inventory of vacant space decreases, we continue to anticipate that a large proportion of our new leasing activity in the fourth quarter of 2015 will be non-comparable in nature as the leased space is more likely to have been vacant for longer than 12 months.

Acquisitions

During the nine months ended September 30, 2015 , we continued executing on our investment strategy of acquiring high quality, multi-tenant retail assets within our target markets. We acquired seven multi-tenant retail operating properties and two parcels at existing wholly-owned multi-tenant retail operating properties for a total purchase price of $416,588 during the nine months ended September 30, 2015 , as detailed below.

We acquired the following four multi-tenant retail properties located in the Washington, D.C. metropolitan statistical area (MSA): the retail portion of Downtown Crown, a 258,000 square foot lifestyle center for a purchase price of $162,785; Merrifield Town Center, an 84,900 square foot lifestyle center for a purchase price of $56,500; Fort Evans Plaza II, a 228,900 square foot power center for a purchase price of $65,000; and Tysons Corner, a 37,700 square foot community center for a purchase price of $31,556. We also acquired Cedar Park Town Center, a 179,300 square foot community center located in the Austin MSA for a purchase price of $39,057 and two properties in the Seattle MSA, Woodinville Plaza, a 170,800 square foot community center for a purchase price of $35,250 and Coal Creek Marketplace, a 55,900 square foot neighborhood center for a purchase price of $17,600. In addition, we acquired a land parcel at Lake Worth Towne Crossing, one of our existing multi-tenant retail operating properties located in the Dallas MSA, for a purchase price of $400 and a 13,800 square foot single-user outparcel at Southlake Town Square, one of our existing multi-tenant retail operating properties located in the Dallas MSA, for a purchase price of $8,440.

In total for 2015, we continue to expect to acquire approximately $450,000 to $475,000 of strategic acquisitions in our target markets.

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Dispositions

During the nine months ended September 30, 2015 , we continued to pursue targeted dispositions of select non-strategic and non-core properties. Consideration from dispositions totaled $405,454 and included the sale of 14 multi-tenant retail operating properties aggregating 2,426,200 square feet for total consideration of $365,915, five single-user office properties aggregating 577,700 square feet for total consideration of $36,539 and a 65,700 square foot single-user retail property for consideration of $3,000.

In total for 2015, we continue to expect to dispose of approximately $500,000 to $550,000 of non-strategic and non-core properties.

Capital Markets

On March 12, 2015, we completed a public offering of $250,000 in aggregate principal amount of our 4.00% senior unsecured notes due 2025 (4.00% notes). The 4.00% notes were priced at 99.526% of the principal amount to yield 4.058% to maturity and will mature on March 15, 2025, unless earlier redeemed. The proceeds were used to repay a portion of our unsecured revolving line of credit.

Additionally, during the nine months ended September 30, 2015 , we continued to enhance our balance sheet flexibility by repaying or defeasing mortgage debt, including certain longer dated maturities, in amounts totaling $399,203 (excluding scheduled principal payments of $12,223 related to amortizing loans). We also borrowed $130,000, net of repayments, on our unsecured revolving line of credit.

Distributions

We declared quarterly distributions totaling $1.3125 per share of preferred stock and quarterly distributions totaling $0.496875 per share of common stock during the nine months ended September 30, 2015 .

Results of Operations

We believe that net operating income (NOI) is a useful measure of our operating performance. We define NOI as operating revenues (rental income, tenant recovery income and other property income, excluding straight-line rental income, amortization of lease inducements, amortization of acquired above and below market lease intangibles and lease termination fee income) less property operating expenses (real estate tax expense and property operating expense, excluding straight-line ground rent expense, amortization of acquired ground lease intangibles and straight-line bad debt expense). Other REITs may use different methodologies for calculating NOI, and accordingly, our NOI may not be comparable to other REITs.

This measure provides an operating perspective not immediately apparent from operating income or net income attributable to common shareholders as defined within accounting principles generally accepted in the United States (GAAP). We use NOI to evaluate our performance on a property-by-property basis because NOI allows us to evaluate the impact that factors such as lease structure, lease rates and tenant base, which vary by property, have on our operating results. However, NOI should only be used as an alternative measure of our financial performance. For reference and as an aid in understanding our computation of NOI, a reconciliation of NOI to net income attributable to common shareholders as computed in accordance with GAAP has been presented.

Comparison of the Three Months Ended September 30, 2015 and 2014


•	the removal of eight same store investment properties sold during the three months ended September 30, 2015 ,

partially offset by


•	the addition of six investment properties acquired during the second quarter of 2014.

The sale of Greensburg Commons on July 17, 2015 and Traveler’s Office Building on July 30, 2015 did not impact the number of same store properties as they were classified as held for sale as of June 30, 2015.

The properties and financial results reported in “Other investment properties” primarily include the properties acquired after June 30, 2014, our development properties, two properties where we have begun activities in anticipation of future redevelopment, one

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property that was impaired below its debt balance during 2014 and the investment properties that were sold or held for sale in 2014 and 2015 that did not qualify for discontinued operations treatment. In addition, the financial results reported in “Other investment properties” for the three months ended September 30, 2015 include the net income from our wholly-owned captive insurance company, which was formed on December 1, 2014, and the financial results reported in “Other investment properties” for the three months ended September 30, 2014 include the historical intercompany expense elimination related to our former insurance captive unconsolidated joint venture investment, in which we terminated our participation effective December 1, 2014. For the three months ended September 30, 2014 , the historical captive insurance expense related to our portfolio was recorded in equity in loss of unconsolidated joint ventures, net.



	Three Months Ended September 30,
	2015			2014			Change			Percentage
Operating revenues:
Same store investment properties (191 properties):
Rental income	$	102,935		$	101,312		$	1,623		1.6
Tenant recovery income	25,611			25,259			352			1.4
Other property income	1,081			914			167			18.3
Other investment properties:
Rental income	12,876			17,798			(4,922		)
Tenant recovery income	3,290			3,971			(681		)
Other property income	1,013			1,014			(1		)
Operating expenses:
Same store investment properties (191 properties):
Property operating expenses	(18,338		)	(18,915		)	577			3.1
Real estate taxes	(18,718		)	(17,853		)	(865		)	(4.8	)
Other investment properties:
Property operating expenses	(3,612		)	(3,907		)	295
Real estate taxes	(2,243		)	(2,721		)	478
NOI from continuing operations:
Same store investment properties	92,571			90,717			1,854			2.0
Other investment properties	11,324			16,155			(4,831		)
Total NOI from continuing operations	103,895			106,872			(2,977		)	(2.8	)

Other income (expense):
Straight-line rental income, net	655			875			(220		)
Amortization of acquired above and below market lease intangibles, net	505			334			171
Amortization of lease inducements	(256		)	(176		)	(80		)
Lease termination fees	3,245			146			3,099
Straight-line ground rent expense	(931		)	(956		)	25
Amortization of acquired ground lease intangibles	140			140			—
Depreciation and amortization	(52,871		)	(54,691		)	1,820
Provision for impairment of investment properties	(169		)	(54,584		)	54,415
General and administrative expenses	(10,939		)	(6,982		)	(3,957		)
Equity in loss of unconsolidated joint ventures, net	—			(232		)	232
Interest expense	(40,425		)	(37,356		)	(3,069		)
Other income, net	479			4,706			(4,227		)
Total other expense	(100,567		)	(148,776		)	48,209

Income (loss) from continuing operations	3,328			(41,904		)	45,232
Gain on sales of investment properties	75,001			15,168			59,833
Net income (loss)	78,329			(26,736		)	105,065
Net income (loss) attributable to the Company	78,329			(26,736		)	105,065
Preferred stock dividends	(2,362		)	(2,362		)	—
Net income (loss) attributable to common shareholders	$	75,967		$	(29,098	)	$	105,065

Same store NOI increased $1,854 , or 2.0% , primarily due to the following:


•	rental income increased $1,623 primarily due to increases of $899 from contractual rent changes, $576 from re-leasing spreads and $128 from occupancy growth as a result of an increase from our small shop space, partially offset by a decrease from our anchor space; and

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•

total operating expenses, net of tenant recovery income, decreased $64 primarily as a result of a decrease in certain non-recoverable property operating expenses and negative tenant recovery income adjustments from the real estate tax and common area maintenance reconciliation process in 2014, which did not reoccur in 2015, partially offset by an increase in real estate taxes, certain recoverable property operating expenses and bad debt expense.

Refer to the same store NOI paragraph in the comparison of the nine months ended September 30, 2015 and 2014 table for a discussion of our same store NOI growth expectation for the remainder of 2015.

Total NOI decreased $2,977 , or 2.8% , due to a decrease in NOI related to the properties sold in 2014 and 2015, partially offset by an increase in NOI related to the properties acquired during 2014 and 2015 and the increase of $1,854 from the same store portfolio described above.

Other income (expense). This category decreased $48,209 , or 32.4% , primarily due to:


•	a $54,415 decrease in provision for impairment of investment properties in continuing operations. Based on the results of our evaluations for impairment (see Note 12 and 13 to the accompanying condensed consolidated financial statements), we recognized impairment charges of $169 and $54,584 for the three months ended September 30, 2015 and 2014, respectively;

partially offset by


•	a $4,227 decrease in other income, net primarily due to the reversal of a $4,594 excise tax accrual during the three months ended September 30, 2014; and


•	a $3,957 increase in general and administrative expenses primarily consisting of an increase in compensation expense, including bonuses and amortization of restricted stock awards, of $3,643.

Comparison of the Nine Months Ended September 30, 2015 and 2014

The following table presents NOI for our same store portfolio and “Other investment properties” along with a reconciliation to net income attributable to common shareholders. For the nine months ended September 30, 2015 , our same store portfolio consisted of 184 operating properties acquired or placed in service and stabilized prior to January 1, 2014. The number of properties in our same store portfolio decreased to 184 as of September 30, 2015 from 192 as of June 30, 2015. Refer to the lead-in paragraph to the comparison of the three months ended September 30, 2015 and 2014 table for an explanation of the change in the number of properties in our same store portfolio; however, the addition of six investment properties acquired during the second quarter of 2014 to the same store portfolio for the three months ended September 30, 2015 is not applicable to the same store portfolio for the nine months ended September 30, 2015 . In addition, “Other investment properties” for the nine months ended September 30, 2015 and 2014 includes 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 our acquisition of the fee interest during the first quarter of 2014.

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	Nine Months Ended September 30,
	2015			2014			Change			Percentage
Operating revenues:
Same store investment properties (184 properties):
Rental income	$	292,184		$	285,411		$	6,773		2.4
Tenant recovery income	72,118			70,492			1,626			2.3
Other property income	3,069			2,535			534			21.1
Other investment properties:
Rental income	60,334			65,020			(4,686		)
Tenant recovery income	17,499			15,594			1,905
Other property income	3,117			3,091			26
Operating expenses:
Same store investment properties (184 properties):
Property operating expenses	(54,293		)	(56,326		)	2,033			3.6
Real estate taxes	(50,328		)	(48,001		)	(2,327		)	(4.8	)
Other investment properties:
Property operating expenses	(14,919		)	(13,466		)	(1,453		)
Real estate taxes	(11,629		)	(10,054		)	(1,575		)
NOI from continuing operations:
Same store investment properties	262,750			254,111			8,639			3.4
Other investment properties	54,402			60,185			(5,783		)
Total NOI from continuing operations	317,152			314,296			2,856			0.9

Other income (expense):
Straight-line rental income, net	2,297			3,979			(1,682		)
Amortization of acquired above and below market lease intangibles, net	1,346			1,216			130
Amortization of lease inducements	(636		)	(533		)	(103		)
Lease termination fees	3,712			279			3,433
Straight-line ground rent expense	(2,797		)	(2,934		)	137
Amortization of acquired ground lease intangibles	420			420			—
Depreciation and amortization	(163,345		)	(163,582		)	237
Provision for impairment of investment properties	(4,113		)	(60,378		)	56,265
General and administrative expenses	(35,949		)	(22,794		)	(13,155		)
Gain on extinguishment of other liabilities	—			4,258			(4,258		)
Equity in loss of unconsolidated joint ventures, net	—			(1,443		)	1,443
Gain on change in control of investment properties	—			24,158			(24,158		)
Interest expense	(110,610		)	(101,092		)	(9,518		)
Other income, net	1,398			5,383			(3,985		)
Total other expense	(308,277		)	(313,063		)	4,786

Income from continuing operations	8,875			1,233			7,642
Discontinued operations:
Loss, net	—			(148		)	148
Gain on sales of investment properties	—			655			(655		)
Income from discontinued operations	—			507			(507		)
Gain on sales of investment properties	113,214			15,695			97,519
Net income	122,089			17,435			104,654
Net income attributable to the Company	122,089			17,435			104,654
Preferred stock dividends	(7,087		)	(7,087		)	—
Net income attributable to common shareholders	$	115,002		$	10,348		$	104,654

Same store NOI increased $8,639 , or 3.4% , primarily due to the following:


•	rental income increased $6,773 primarily due to increases of $2,684 from contractual rent changes, $2,109 from occupancy growth and $1,828 from re-leasing spreads; and

•

total operating expenses, net of tenant recovery income, decreased $1,332 primarily as a result of a decrease in certain non-recoverable property operating expenses and negative tenant recovery income adjustments from the real estate tax reconciliation process in 2014, which did not reoccur in 2015, partially offset by an increase in real estate taxes, bad debt expense and certain recoverable property operating expenses.

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We expect same store NOI growth to continue to moderate throughout the remainder of 2015, in part due to anticipated strategic remerchandising efforts at some of our same store properties as well as more difficult period-over-period comparable results from 2014.

Total NOI increased $2,856 , or 0.9% , due to an increase in NOI related to the properties acquired during 2014 and 2015 and the increase of $8,639 from the same store portfolio described above, partially offset by a decrease in NOI related to the properties sold in 2014 and 2015.

Other income (expense). This category decreased $4,786 , or 1.5% , primarily due to:


•	a $56,265 decrease in provision for impairment of investment properties in continuing operations. Based on the results of our evaluations for impairment (see Note 12 and 13 to the accompanying condensed consolidated financial statements), we recognized impairment charges of $4,113 and $60,378 for the nine months ended September 30, 2015 and 2014, respectively;

partially offset by


•	a $24,158 gain on change in control of investment properties recognized during the nine months ended September 30, 2014 associated with the dissolution of our MS Inland unconsolidated joint venture (see Note 3 to the accompanying condensed consolidated financial statements). No such gain was recorded during the nine months ended September 30, 2015 ;


•	a $13,155 increase in general and administrative expenses primarily consisting of an increase in compensation expense, including bonuses and amortization of restricted stock awards, of $9,020 and executive separation charges of $3,537;


•	a $9,518 increase in interest expense primarily consisting of:


•	an $11,051 increase in interest on our unsecured notes payable, which were issued in June 2014 and March 2015; and


•	an $8,422 increase in prepayment penalties and defeasance premiums;

partially offset by


•	a $9,851 decrease in interest on mortgages payable and our Unsecured Credit Facility due to the repayment of mortgage debt and lower average balances on our unsecured revolving line of credit.


•	a $4,258 gain on extinguishment of other liabilities recognized during the nine months ended September 30, 2014 related to the acquisition of the fee interest in one of our existing investment properties that was previously subject to a ground lease with a third party. The amount recognized represents the reversal of a straight-line ground rent liability associated with the ground lease.

Discontinued operations. No discontinued operations were reported for the nine months ended September 30, 2015 . Discontinued operations for the nine months ended September 30, 2014 consists of one property, Riverpark Phase IIA, which was classified as held for sale as of December 31, 2013, and therefore qualified for discontinued operations treatment under the previous standard, and was sold on March 11, 2014.

Funds From Operations Attributable to Common Shareholders

The National Association of Real Estate Investment Trusts, or NAREIT, an industry trade group, has promulgated a performance measure known as funds from operations (FFO). As defined by NAREIT, FFO means net income (loss) computed in accordance with GAAP, excluding gains (or losses) from sales of depreciable real estate, plus depreciation and amortization and impairment charges on depreciable real estate, including amounts from continuing and discontinued operations, as well as adjustments for unconsolidated joint ventures in which the reporting entity holds an interest. We have adopted the NAREIT definition in our computation of FFO attributable to common shareholders. Management believes that, subject to the following limitations, FFO attributable to common shareholders provides a basis for comparing our performance and operations to those of other REITs.

We define Operating FFO attributable to common shareholders as FFO attributable to common shareholders excluding the impact of discrete non-operating transactions and other events which we do not consider representative of the comparable operating results of our core business platform, our real estate operating portfolio. Specific examples of discrete non-operating transactions and

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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, actual or anticipated settlement of litigation involving the Company, executive separation charges and impairment charges to write down the carrying value of assets other than depreciable real estate, which are otherwise excluded from our calculation of FFO attributable to common shareholders.

We believe that FFO attributable to common shareholders and Operating FFO attributable to common shareholders, which are non-GAAP performance measures, provide additional and useful means to assess the operating performance of REITs. Neither FFO attributable to common shareholders nor Operating FFO attributable to common shareholders represent alternatives to “Net Income” or “Net income attributable to common shareholders” as an indicator of our performance or “Cash Flows from Operating Activities” as determined by GAAP as a measure of our capacity to fund cash needs, including the payment of dividends. Further, comparison of our 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.

FFO attributable to common shareholders and Operating FFO attributable to common shareholders are calculated as follows:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Net income (loss) attributable to common shareholders	$	75,967		$	(29,098	)	$	115,002		$	10,348
Depreciation and amortization	52,596			54,691			162,520			164,291
Provision for impairment of investment properties	169			54,584			4,113			60,378
Gain on sales of investment properties (a)	(75,001		)	(15,168		)	(113,214		)	(40,508		)
FFO attributable to common shareholders	$	53,731		$	65,009		$	168,421		$	194,509

Impact on earnings from the early extinguishment of debt, net	10,618			5,354			17,635			8,985
Provision for hedge ineffectiveness	(4		)	—			(25		)	(13		)
Reversal of excise tax accrual	—			(4,594		)	—			(4,594		)
Gain on extinguishment of other liabilities	—			—			—			(4,258		)
Executive separation charges (b)	—			—			3,537			—
Other (c)	91			(73		)	(909		)	(199		)
Operating FFO attributable to common shareholders	$	64,436		$	65,696		$	188,659		$	194,430


(a)	Results for the nine months ended September 30, 2014 include the gain on change in control of investment properties of $24,158 recognized pursuant to the dissolution of our joint venture arrangement with our partner in our MS Inland unconsolidated joint venture on June 5, 2014.


(b)	Included in “General and administrative expenses” in the condensed consolidated statements of operations and other comprehensive income.


(c)	Consists of settlement and easement proceeds, which are included in “Other income, net” in the condensed consolidated statements of operations and other comprehensive income.

Liquidity and Capital Resources

We anticipate that cash flows from the below-listed sources will provide adequate capital for the next 12 months and beyond for all scheduled principal and interest payments on our outstanding indebtedness, including maturing debt, current and anticipated tenant allowances or other capital obligations, the shareholder distributions required to maintain our REIT status and compliance with the financial covenants of our unsecured revolving line of credit and our unsecured term loan (collectively, the Unsecured Credit Facility) and our unsecured notes.

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Our primary expected sources and uses of liquidity are as follows:



	SOURCES		USES
▪	Operating cash flow		Short-Term:
▪	Cash and cash equivalents	▪	Tenant allowances and leasing costs
▪	Available borrowings under our unsecured revolving	▪	Improvements made to individual properties that are not
	line of credit		recoverable through common area maintenance charges to tenants
▪	Proceeds from asset dispositions	▪	Debt repayments
▪	Proceeds from capital markets transactions	▪	Distribution payments
		▪	Acquisitions

			Long-Term:
		▪	Major redevelopment, renovation or expansion activities
		▪	New development

We have made substantial progress over the last several years in strengthening our balance sheet and addressing debt maturities which we have accomplished through a combination of the repayment and refinancing of maturing debt. We have funded debt repayments primarily through asset dispositions and capital markets transactions, including public offerings of our common and preferred stock and private and public offerings of senior unsecured notes. As of September 30, 2015 , we had $77,754 of debt scheduled to mature through the end of 2015 , of which $74,211 was repaid subsequent to September 30, 2015, including the construction loan. The remainder of our 2015 maturities consists of principal amortization, which we plan on satisfying using available cash on hand.

The table below summarizes our consolidated indebtedness as of September 30, 2015 :



Debt	Aggregate Principal Amount			Weighted Average Interest Rate		Maturity Date	Weighted Average Years to Maturity
Fixed rate mortgages payable (a)	$	1,212,712		6.01	%	Various	3.9 years
Variable rate construction loan (b)	15,867			2.50	%	November 2, 2015	0.1 years
Total mortgages payable	1,228,579			5.97	%		3.9 years
Premium, net of accumulated amortization	2,013
Discount, net of accumulated amortization	(2		)
Total mortgages payable, net	1,230,590
Unsecured notes payable:
Senior notes - 4.12% Series A due 2021	100,000			4.12	%	June 30, 2021	5.8 years
Senior notes - 4.58% Series B due 2024	150,000			4.58	%	June 30, 2024	8.8 years
Senior notes - 4.00% due 2025	250,000			4.00	%	March 15, 2025	9.5 years
Subtotal	500,000			4.20	%		8.5 years
Discount, net of accumulated amortization	(1,119		)
Total unsecured notes payable, net	498,881
Unsecured credit facility:
Fixed rate portion of term loan (c)	300,000			1.99	%	May 11, 2018	2.6 years
Variable rate portion of term loan	150,000			1.65	%	May 11, 2018	2.6 years
Variable rate revolving line of credit (d)	130,000			1.70	%	May 12, 2017	1.6 years
Total unsecured credit facility	580,000			1.84	%		2.4 years

Total consolidated indebtedness, net	$	2,309,471		4.55	%		4.5 years


(a)	Includes $7,963 of variable rate mortgage debt that was swapped to a fixed rate as of September 30, 2015 .


(b)	Subsequent to September 30, 2015, the construction loan was repaid in conjunction with the disposition of Green Valley Crossing.


(c)	Reflects $300,000 of LIBOR-based variable rate debt that matures in May 2018 and is swapped to a fixed rate of 0.53875% plus a margin based on a leverage grid ranging from 1.45% to 2.00% through February 2016. The applicable margin was 1.45% as of September 30, 2015 .


(d)	We have a one year extension option on the unsecured revolving line of credit, which we may exercise as long as we are in compliance with the terms of the unsecured credit agreement and we pay an extension fee equal to 0.15% of the commitment amount being extended.

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Mortgages Payable

During the nine months ended September 30, 2015 , we repaid or defeased mortgages payable in the total amount of $399,203 (excluding scheduled principal payments of $12,223 related to amortizing loans). The loans repaid or defeased during the nine months ended September 30, 2015 had a weighted average fixed interest rate of 6.10% .

During the three months ended September 30, 2015, the servicing of the Commercial Mortgage-Backed Security (CMBS) loan encumbering The Gateway was transferred to the special servicer at our request. This servicing transfer occurred notwithstanding the fact that the CMBS loan is currently performing. In 2014, this property was impaired below its debt balance, which was $94,823 as of September 30, 2015 . The loan is non-recourse to us, except for customary non-recourse carve-outs.

Unsecured Notes Payable

On March 12, 2015, we completed a public offering of $250,000 in aggregate principal amount of our 4.00% notes. The 4.00% notes were priced at 99.526% of the principal amount to yield 4.058% to maturity. The proceeds were used to repay a portion of our unsecured revolving line of credit.

The indenture, as supplemented, governing the 4.00% notes (the Indenture) contains customary covenants and events of default. Pursuant to the terms of the Indenture, we are subject to various financial covenants, including the requirement to maintain the following: (i) maximum secured and total leverage ratios; (ii) a debt service coverage ratio; and (iii) maintenance of an unencumbered assets to unsecured debt ratio.

The note purchase agreement governing the 4.12% Series A senior notes due 2021 and 4.58% Series B senior notes due 2024 contains customary representations, warranties and covenants, and events of default. Pursuant to the terms of the note purchase agreement, we are subject to various financial covenants, some of which are based upon the financial covenants in effect in our primary credit facility, including the requirement to maintain the following: (i) maximum unencumbered, secured and consolidated leverage ratios; (ii) minimum interest coverage and unencumbered interest coverage ratios; and (iii) a minimum consolidated net worth.

As of September 30, 2015 , management believes we were in compliance with the financial covenants under the Indenture and the note purchase agreement.

Unsecured Credit Facility

In May 2013, we entered into our third amended and restated unsecured credit agreement with a syndicate of financial institutions to provide for an Unsecured Credit Facility aggregating to $1,000,000, consisting of a $550,000 unsecured revolving line of credit and a $450,000 unsecured term loan. The Unsecured Credit Facility has a $450,000 accordion option that allows us, at our election, to increase the total credit facility up to $1,450,000, subject to (i) customary fees and conditions including, but not limited to, the absence of an event of default as defined in the agreement and (ii) our ability to obtain additional lender commitments.

The Unsecured Credit Facility is currently priced on a leverage grid at a rate of London Interbank Offered Rate (LIBOR) plus a margin ranging from 1.50% to 2.05%, plus a quarterly unused fee ranging from 0.25% to 0.30% depending on the undrawn amount, for the unsecured revolving line of credit and LIBOR plus a margin ranging from 1.45% to 2.00% for the unsecured term loan. We received investment grade credit ratings from two rating agencies in 2014. In accordance with the unsecured credit agreement, we may elect to convert to an investment grade pricing grid. Upon making such an election and depending on our credit rating, the interest rate for the unsecured revolving line of credit would equal LIBOR plus a margin ranging from 0.90% to 1.70%, plus a facility fee ranging from 0.15% to 0.35%, and for the unsecured term loan, LIBOR plus a margin ranging from 1.05% to 2.05%. As of September 30, 2015 , making such an election would have resulted in a higher interest rate and, as such, we have not made the election to convert to an investment grade pricing grid.

The unsecured credit agreement contains customary representations, warranties and covenants, and events of default. Pursuant to the terms of the unsecured credit agreement, we are subject to various financial covenants, including the requirement to maintain the following: (i) maximum unencumbered, secured and consolidated leverage ratios, (ii) minimum fixed charge and unencumbered interest coverage ratios, and (iii) a minimum consolidated net worth requirement. As of September 30, 2015 , management believes we were in compliance with the financial covenants and default provisions under the unsecured credit agreement.

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Debt Maturities

The following table shows the scheduled maturities and principal amortization of our indebtedness as of September 30, 2015 for the remainder of 2015 , each of the next four years and thereafter and the weighted average interest rates by year, as well as the fair value of our indebtedness as of September 30, 2015 . The table does not reflect the impact of any debt activity that occurred after September 30, 2015 .



	2015			2016			2017			2018			2019			Thereafter			Total			Fair Value
Debt:
Fixed rate debt:
Mortgages payable (a)	$	61,887		$	66,435		$	319,708		$	10,882		$	448,052		$	305,748		$	1,212,712		$	1,312,071
Unsecured credit facility - fixed rate portion of term loan (b)	—			—			—			300,000			—			—			300,000			301,179
Unsecured notes payable (c)	—			—			—			—			—			500,000			500,000			497,606
Total fixed rate debt	61,887			66,435			319,708			310,882			448,052			805,748			2,012,712			2,110,856

Variable rate debt:
Construction loan	15,867			—			—			—			—			—			15,867			15,867
Unsecured credit facility	—			—			130,000			150,000			—			—			280,000			280,911
Total variable rate debt	15,867			—			130,000			150,000			—			—			295,867			296,778
Total debt (d)	$	77,754		$	66,435		$	449,708		$	460,882		$	448,052		$	805,748		$	2,308,579		$	2,407,634

Weighted average interest rate on debt:
Fixed rate debt	4.83		%	5.01		%	5.52		%	2.16		%	7.50		%	4.42		%	4.96		%
Variable rate debt (e)	2.50		%	—			1.70		%	1.65		%	—			—			1.72		%
Total	4.36		%	5.01		%	4.42		%	1.99		%	7.50		%	4.42		%	4.55		%


(a)	Includes $7,963 of variable rate mortgage debt that was swapped to a fixed rate as of September 30, 2015 . Excludes mortgage premium of $2,013 and discount of $(2) , net of accumulated amortization, which was outstanding as of September 30, 2015 .


(b)	$300,000 of LIBOR-based variable rate debt that matures in May 2018 has been swapped to a fixed rate through February 24, 2016. The swap effectively converts one-month floating rate LIBOR to a fixed rate of 0.53875% over the term of the swap.


(c)	Excludes discount of $(1,119) , net of accumulated amortization, which was outstanding as of September 30, 2015 .


(d)	As of September 30, 2015 , the weighted average years to maturity of consolidated indebtedness was 4.5 years .


(e)	Represents interest rates as of September 30, 2015 .

We plan on addressing our debt maturities through a combination of proceeds from asset dispositions, capital markets transactions and our unsecured revolving line of credit.

Distributions and Equity Transactions

Our distributions of current and accumulated earnings and profits for U.S. federal income tax purposes are taxable to shareholders, generally, as ordinary income. Distributions in excess of these earnings and profits generally are treated as a non-taxable reduction of the shareholders’ basis in the shares to the extent thereof (non-dividend distributions) and thereafter as taxable gain. We intend to continue to qualify as a REIT for U.S. federal income tax purposes. The Internal Revenue Code of 1986, as amended (the Code) generally requires that a REIT annually distributes to its shareholders at least 90% of its taxable income, prior to the deduction for dividends paid and excluding net capital gains. The Code imposes tax on any taxable income, including net capital gains, retained by a REIT.

To satisfy the requirements for qualification as a REIT and generally not be subject to U.S. federal income and excise tax, we intend to make regular quarterly distributions of all, or substantially all, of our taxable income to shareholders. Our future distributions will be at the sole discretion of our board of directors. When determining the amount of future distributions, we expect that our board of directors will consider, among other factors, (i) the amount of cash generated from our operating activities, (ii) our expectations of future cash flow, (iii) our determination of near-term cash needs for debt repayments, acquisitions of new properties, redevelopment opportunities and existing or future share repurchases, (iv) the timing of significant re-leasing activities and the establishment of additional cash reserves for anticipated tenant allowances and general property capital improvements, (v) our ability to continue to access additional sources of capital, (vi) the amount required to be distributed to maintain our status as a REIT and to reduce any income and excise taxes that we otherwise would be required to pay, (vii) the amount required to declare and pay in cash, or set aside for the payment of, the dividends on our Series A preferred stock for all past dividend periods,

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(viii) any limitations on our distributions contained in our Unsecured Credit Facility, which limits our distributions to the greater of 95% of FFO, as defined in the unsecured credit agreement (which equals FFO attributable to common shareholders, as set forth in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Funds From Operations Attributable to Common Shareholders,” excluding gains or losses from extraordinary items, impairment charges not already excluded from FFO attributable to common shareholders and other non-cash charges) or the amount necessary for us to maintain our qualification as a REIT. Under certain circumstances, we may be required to make distributions in excess of cash available for distribution in order to meet the REIT distribution requirements.

In March 2013, we established an at-the-market (ATM) equity program under which we may sell shares of our Class A common stock, having an aggregate offering price of up to $200,000, from time to time. The net proceeds are expected to be used for general corporate purposes, which may include repaying debt, including our unsecured revolving line of credit, and funding acquisitions or other growth initiatives. We did not sell any shares under our ATM equity program during the nine months ended September 30, 2015 . As of September 30, 2015 , we had Class A common shares having an aggregate offering price of up to $115,165 remaining available for sale under our ATM equity program.

Capital Expenditures and Development Activity

We anticipate that obligations related to capital improvements to our properties can be met with cash flows from operations and working capital.

The following table provides summary information regarding our properties under development as of September 30, 2015 , including one consolidated joint venture and three wholly-owned properties. As of September 30, 2015 , we did not have any significant active construction ongoing at these properties, and, currently, we only intend to develop the remaining potential GLA to the extent that we have pre-leased substantially all of the space to be developed.



Location	Property Name	Our Ownership Percentage	Carrying Value			Construction Loan Balance
Henderson, Nevada	Green Valley Crossing	50.0%	$	1,561	(a)	$	15,867
Billings, Montana	South Billings Center	100.0%	5,157			—
Nashville, Tennessee	Bellevue Mall	100.0%	29,430			—
Henderson, Nevada	Lake Mead Crossing	100.0%	10,860			—
			$	47,008	(b)	$	15,867

(a)

The carrying value represents the portion of the property under development and excludes $28,398 of costs, net of accumulated depreciation, placed in service, $2,288 of which was placed in service during the nine months ended September 30, 2015 based upon completion of construction of approximately 18,500 square feet of available retail space at Green Valley Crossing. The construction loan encumbered the entire property, including the portion placed in service as well as the portion under development. Subsequent to September 30, 2015, the construction loan was repaid in conjunction with the disposition of the property.


(b)	There is no income attributable to developments in progress.

Dispositions

We continue to execute on our long-term portfolio repositioning strategy of disposing of select non-strategic and non-core properties in order to facilitate our external growth initiatives. The following table highlights our asset dispositions during 2014 and the nine months ended September 30, 2015 :



	Number of Assets Sold	Square Footage	Consideration		Aggregate Proceeds, Net (a)		Mortgage Debt Extinguished (b)
2015 Dispositions (through September 30, 2015)	20	3,069,600	$	405,454	$	394,935	$	9,775
2014 Dispositions	24	2,490,100	$	322,989	$	314,377	$	9,713


(a)	Represents total consideration net of transaction costs.


(b)	Excludes mortgages payable repaid prior to disposition transactions.

In addition to the transactions presented in the above table, we received net proceeds of $272 and $1,023 from other transactions, including condemnation awards and the sale of parcels at certain of our properties, during the nine months ended September 30, 2015 and the year ended December 31, 2014 , respectively.

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Acquisitions

We continue to execute on our investment strategy of acquiring high quality, multi-tenant retail assets within our target markets. The following table highlights our asset acquisitions during 2014 and the nine months ended September 30, 2015 :



	Number of Assets Acquired	Square Footage	Acquisition Price		Pro Rata Acquisition Price (a)		Mortgage Debt		Pro Rata Mortgage Debt (a)
2015 Acquisitions (through September 30, 2015) (b)	9	1,029,300	$	416,588	$	416,588	$	—	$	—
2014 Acquisitions (c)	11	1,339,400	$	348,061	$	289,561	$	141,698	$	113,358


(a)	Includes amounts associated with the 2014 acquisition of our partner’s 80% ownership interest in our MS Inland unconsolidated joint venture as well as acquisitions from unaffiliated third parties.


(b)	2015 acquisitions include the purchase of a land parcel at our Lake Worth Towne Crossing multi-tenant retail operating property and a single-user outparcel located at our Southlake Town Square multi-tenant retail operating property. The total number of properties in our portfolio was not affected by these transactions.

(c)

2014 acquisitions include the purchase of the following: 1) the fee interest in our Bed Bath & Beyond Plaza multi-tenant retail operating property that was previously subject to a ground lease with a third party, 2) a single-user outparcel located at our Southlake Town Square multi-tenant retail operating property that was subject to a ground lease with us prior to the transaction, and 3) a parcel located at our Lakewood Towne Center multi-tenant retail operating property. The total number of properties in our portfolio was not affected by these transactions.

Summary of Cash Flows

Cash flows during the nine months ended September 30, 2015 as compared to the nine months ended September 30, 2014 are summarized as follows:



	Nine Months Ended September 30,
	2015			2014			Change
Cash provided by operating activities	$	209,076		$	197,952		$	11,124
Cash used in investing activities	(27,992		)	(21,019		)	(6,973		)
Cash used in financing activities	(176,838		)	(167,293		)	(9,545		)
Increase in cash and cash equivalents	4,246			9,640			(5,394		)
Cash and cash equivalents, at beginning of period	112,292			58,190
Cash and cash equivalents, at end of period	$	116,538		$	67,830

Cash Flows from Operating Activities

Net cash provided by operating activities consists primarily of net income from property operations, adjusted for the following, among others, (i) depreciation and amortization, (ii) provision for impairment of investment properties, (iii) gain on sales of investment properties, (iv) gain on extinguishment of other liabilities, and (v) gain on change in control of investment properties. Net cash provided by operating activities during the nine months ended September 30, 2015 increased $11,124 primarily due to the following:


•	a $5,201 reduction in cash paid for interest;


•	a $2,937 increase in NOI (including an increase in NOI from continuing operations of $2,856);


•	a $667 decrease in cash paid for leasing fees and inducements; and


•	ordinary course fluctuations in working capital accounts.

Cash Flows used in Investing Activities

Net cash used in investing activities consists primarily of cash paid to purchase investment properties and to fund capital expenditures and tenant improvements, net of proceeds from the sales of investment properties, in addition to changes in restricted escrows. Net cash used in investing activities during the nine months ended September 30, 2015 increased $6,973 primarily due to the following:


•	a $255,621 increase in cash paid to purchase investment properties;

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partially offset by


•	a $230,626 increase in proceeds from the sales of investment properties; and


•	a $20,592 net change in restricted escrow activity, of which $19,260 relates to acquisition deposits.

We will continue to execute on our investment strategy by disposing of certain non-strategic and non-core properties. The majority of the proceeds from disposition activity for the remainder of 2015 is expected to be used to acquire high quality, multi-tenant retail assets within our target markets and repay debt. In addition, tenant improvement costs associated with re-leasing vacant space and strategic remerchandising efforts across the portfolio may continue to be significant.

Cash Flows from Financing Activities

Net cash provided by financing activities primarily consists of proceeds from our Unsecured Credit Facility and the issuance of debt instruments and equity securities, partially offset by repayments on our Unsecured Credit Facility, principal payments on mortgages payable and the purchase of U.S. Treasury securities in connection with defeasance of mortgages payable. Net cash used in financing activities during the nine months ended September 30, 2015 increased $9,545 primarily due to the following:


•	a $159,034 increase in principal payments on mortgages payable; and


•	the purchase of $81,547 of U.S. Treasury securities in connection with defeasance of mortgages payable during the nine months ended September 30, 2015 ;

partially offset by


•	a $237,000 increase in net proceeds from our Unsecured Credit Facility.

We plan to continue to address our debt maturities through a combination of proceeds from asset dispositions, capital markets transactions and our unsecured revolving line of credit.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Contractual Obligations

During the nine months ended September 30, 2015 , there were no material changes outside the normal course of business to the contractual obligations identified in our Annual Report on Form 10-K for the year ended December 31, 2014 .

Critical Accounting Policies and Estimates

Our 2014 Annual Report on Form 10-K contains a description of our critical accounting policies, including those relating to the acquisition of investment properties, impairment of long-lived assets and unconsolidated joint ventures, cost capitalization, depreciation and amortization, development and redevelopment, investment properties held for sale, partially-owned entities, derivative and hedging, revenue recognition, accounts and notes receivable and allowance for doubtful accounts and income taxes. For the nine months ended September 30, 2015 , there were no significant changes to these policies.

Impact of Recently Issued Accounting Pronouncements

See Note 2 — Summary of Significant Accounting Policies to our condensed consolidated financial statements contained herein regarding recently issued accounting pronouncements.

Subsequent Events

Subsequent to September 30, 2015 , we:


•	repaid mortgages payable with an aggregate principal balance of $67,319 and a weighted average interest rate of 4.97%;


•	closed on the disposition of Green Valley Crossing, a 96,400 square foot development property located in Henderson, Nevada, which was held in a consolidated joint venture, to an affiliate of our joint venture partner. Concurrently, the joint venture was dissolved. The property was disposed for a sales price of $35,000 with an anticipated gain on sale of

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approximately $3,904, of which approximately $528 will be allocated to the noncontrolling interest holder as its share of the anticipated gain. The variable rate construction loan with a principal balance of $15,949 and an interest rate of 2.50% as of the disposition date was repaid in conjunction with the sale; and


•	closed on the acquisition of a 12,300 square foot single-user outparcel located at Royal Oaks Village II, our existing multi-tenant retail operating property located in Houston, Texas, for a gross purchase price of $6,841.

On October 7, 2015, Niall J. Byrne departed as our Executive Vice President and President of Property Management. In connection with his departure, Mr. Byrne is entitled to receive a cash payment of $677 and acceleration of vesting with respect to all of his outstanding unvested shares of restricted stock. In total, we expect to record realignment separation charges of approximately $1,193 during the fourth quarter of 2015 related to Mr. Byrne’s departure.

On October 27, 2015, our Board declared the cash dividend for the fourth quarter of 2015 for our 7.00% Series A cumulative redeemable preferred stock. The dividend of $0.4375 per preferred share will be paid on December 31, 2015 to preferred shareholders of record at the close of business on December 21, 2015.

On October 27, 2015, our Board declared the distribution for the fourth quarter of 2015 of $0.165625 per share on our outstanding Class A common stock, which will be paid on January 8, 2016 to Class A common shareholders of record at the close of business on December 23, 2015.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

We may be exposed to interest rate changes primarily as a result of our long-term debt that is used to maintain liquidity and fund our operations. Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs. To achieve our objectives, we borrow primarily at fixed rates, and in some cases variable rates with the ability to convert to fixed rates.

With regard to variable rate financing, we assess interest rate cash flow risk by continually identifying and monitoring changes in interest rate exposures that may adversely impact expected future cash flows and by evaluating hedging opportunities. We maintain risk management control systems to monitor interest rate cash flow risk attributable to both our outstanding or forecasted debt obligations as well as our potential offsetting hedge positions. The risk management control systems involve the use of analytical techniques, including cash flow sensitivity analysis, to estimate the expected impact of changes in interest rates on our future cash flows.

As of September 30, 2015 , we had $307,963 of variable rate debt based on LIBOR that was swapped to fixed rate debt through interest rate swaps. Our interest rate swaps as of September 30, 2015 are summarized in the following table:



	Notional Amount		Termination Date	Fair Value of Derivative Liability
Fixed rate portion of unsecured credit facility	$	300,000	February 24, 2016	$	292
Heritage Towne Crossing	7,963		September 30, 2016	88
	$	307,963		$	380

For a discussion concerning the scheduled debt maturities and principal amortization of our indebtedness as of September 30, 2015 for the remainder of 2015 , each of the next four years and thereafter and the weighted average interest rates by year to evaluate the expected cash flows and sensitivity to interest rate changes, refer to Note 6 to the condensed consolidated financial statements and “Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Debt Maturities.”

A decrease of 1% in market interest rates would result in a hypothetical increase in our derivative liability of approximately $332.

The combined carrying amount of our mortgages payable, unsecured notes payable and Unsecured Credit Facility is approximately $98,163 lower than the fair value as of September 30, 2015 .

We had $295,867 of variable rate debt, excluding $307,963 of variable rate debt that was swapped to fixed rate debt, with interest rates varying based upon LIBOR, with a weighted average interest rate of 1.72% as of September 30, 2015 . An increase in the variable interest rate on this debt constitutes a market risk. If interest rates increase by 1% based on debt outstanding as of September 30, 2015 , interest expense would increase by approximately $2,959 on an annualized basis.

We may use additional derivative financial instruments to hedge exposures to changes in interest rates. To the extent we do, we are exposed to market and credit risk. Market risk is the adverse effect on the value of a financial instrument that results from a change in interest rates. The market risk associated with interest rate contracts is managed by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes us, which creates credit risk for us. When the fair value of a derivative contract is negative, we owe the counterparty and, therefore, we generally are not exposed to the credit risk of the counterparty. We minimize credit risk in derivative instruments by entering into transactions with the same party providing the financing, with the right of offset, or by entering into transactions with highly rated counterparties.

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Item 4. Controls and Procedures

We have established disclosure controls and procedures to ensure that material information relating to us, including our consolidated subsidiaries, is made known to the officers who certify our financial reports and to the members of senior management and the board of directors.

Based on management’s evaluation as of September 30, 2015 , our president and chief executive officer and our executive vice president, chief financial officer and treasurer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) are effective to ensure that the information required to be disclosed by us in our reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management, including our president and chief executive officer and our executive vice president, chief financial officer and treasurer to allow timely decisions regarding required disclosure.

There were no changes to our internal controls over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) during the fiscal quarter ended September 30, 2015 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

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Part II — Other Information

Item 1. Legal Proceedings

We are subject, from time to time, to various legal proceedings and claims that arise in the ordinary course of business. While the resolution of such matters cannot be predicted with certainty, we believe, based on currently available information, that the final outcome of such matters will not have a material effect on our condensed consolidated financial statements.

Item 1A. Risk Factors

Except to the extent updated below or to the extent additional factual information disclosed elsewhere in this Quarterly Report on Form 10-Q relates to such factors (including, without limitation, the matters discussed in Part I, “Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations”), there have been no material changes to our risk factors during the three months ended September 30, 2015 compared to those risk factors presented in Part I, “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2014 and our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2015 and June 30, 2015.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits



Exhibit No.		Description

10.1		Indemnification Agreement, dated August 17, 2015, by and between the Registrant and Heath R. Fear (filed herewith).
10.2		Separation Agreement and General Release, dated October 2, 2015, by and between the Registrant and Niall J. Byrne (filed herewith).
31.1		Certification of President and Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 (filed herewith).
31.2		Certification of Executive Vice President, Chief Financial Officer and Treasurer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 (filed herewith).
32.1		Certification of President and Chief Executive Officer and Executive Vice President, Chief Financial Officer and Treasurer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350 (furnished herewith).
101		Attached as Exhibit 101 to this report are the following formatted in XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of September 30, 2015 and December 31, 2014, (ii) Condensed Consolidated Statements of Operations and Other Comprehensive Income for the Three-Month Periods and Nine-Month Periods Ended September 30, 2015 and 2014, (iii) Condensed Consolidated Statements of Equity for the Nine-Month Periods Ended September 30, 2015 and 2014, (iv) Condensed Consolidated Statements of Cash Flows for the Nine-Month Periods Ended September 30, 2015 and 2014, and (v) Notes to Condensed Consolidated Financial Statements.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

RETAIL PROPERTIES OF AMERICA, INC.



By:	/s/ STEVEN P. GRIMES

	Steven P. Grimes
	President and Chief Executive Officer

Date:	November 4, 2015

By:	/s/ HEATH R. FEAR

	Heath R. Fear
	Executive Vice President,
	Chief Financial Officer and Treasurer (Principal Financial Officer)

Date:	November 4, 2015

By:	/s/ JULIE M. SWINEHART

	Julie M. Swinehart
	Senior Vice President and Chief Accounting Officer
	(Principal Accounting Officer)

Date:	November 4, 2015

Exhibit 10.1

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT is made and entered into this 17 ^th day of August, 2015 ("Agreement"), by and between RETAIL PROPERTIES OF AMERICA, INC., a Maryland corporation (the "Company"), and HEATH R. FEAR ("Indemnitee").

WHEREAS, at the request of the Company, Indemnitee currently serves as an officer of the Company and may, therefore, be subjected to claims, suits or proceedings arising as a result of his service; and

WHEREAS, as an inducement to Indemnitee to continue to serve as such officer, the Company has agreed to indemnify and to advance expenses and costs incurred by Indemnitee in connection with any such claims, suits or proceedings, to the maximum extent permitted by law; and

WHEREAS, the parties by this Agreement desire to set forth their agreement regarding indemnification and advance of expenses;

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

Section I. Definitions. For purposes of this Agreement:

(a) "Change in Control" means a change in control of the Company occurring after the Effective Date of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Securities Exchange Act of 1934, as amended (the "Act"), whether or not the Company is then subject to such reporting requirement; provided, however, that, without limitation, such a Change in Control shall be deemed to have occurred if after the Effective Date (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company representing 15% or more of the combined voting power of the Company's then outstanding securities without the prior approval of at least two-thirds of the members of the Board of Directors in office immediately prior to such person attaining such percentage interest; (ii) there occurs a proxy contest, or the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization not approved by at least two-thirds of the members of the Board of Directors then in office, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board of Directors thereafter; or (iii) during any period of two consecutive years, other than as a result of an event described in clause (a)(ii) of this Section 1, individuals who at the beginning of such period constituted the Board of Directors (including for this purpose any new director whose election or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such period) cease for any reason to constitute at least a majority of the Board of Directors.

(b) "Corporate Status" means the status of a person who is or was a director, trustee, officer, employee or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise for which such person is or was serving at the request of the Company.

(c) "Disinterested Director" means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

(d) "Effective Date" means the date set forth in the first paragraph of this Agreement.

(e) "Expenses" shall include all reasonable and out-of-pocket attorneys' fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, or being or preparing to be a witness in a Proceeding.

(f) "Independent Counsel" means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party, or (ii) any other party to or witness in the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term "Independent Counsel" shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee's rights under this Agreement. If a Change of Control has not occurred, Independent Counsel shall be selected by the Board of Directors, with the approval of Indemnitee, which approval will not be unreasonably withheld. If a Change of Control has occurred, Independent Counsel shall be selected by Indemnitee, with the approval of the Board of Directors, which approval will not be unreasonably withheld.

(g) "Proceeding" includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or any other proceeding, whether civil, criminal, administrative or investigative (including on appeal), except one pending or completed on or before the Effective Date, unless otherwise specifically agreed in writing by the Company and Indemnitee.

Section 2. Services by Indemnitee. Indemnitee will serve as an officer of the Company. However, this Agreement shall not impose any obligation on Indemnitee or the Company to continue Indemnitee's service to the Company beyond any period otherwise required by law or by other agreements or commitments of the parties, if any.

Section 3. Indemnification - General. The Company shall indemnify, and advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) otherwise to the maximum extent permitted by Maryland law in effect on the date hereof and as amended from time to time; provided, however, that no change in Maryland law shall have the effect of reducing the benefits available to Indemnitee hereunder based on Maryland law as in effect on the date hereof. The rights of Indemnitee

provided in this Section 3 shall include, without limitation, the rights set forth in the other sections of this Agreement, including any additional indemnification permitted by Section 2-418(g) of the Maryland General Corporation Law ("MGCL").

Section 4. Proceedings Other Than Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 4 if, by reason of his/her Corporate Status, he/she is, or is threatened to be, made a party to or a witness in any threatened, pending, or completed Proceeding, other than a Proceeding by or in the right of the Company. Pursuant to this Section 4, Indemnitee shall be indemnified against all judgments, penalties, fines and amounts paid in settlement and all Expenses actually and reasonably incurred by him/her or on his/her behalf in connection with a Proceeding by reason of his/her Corporate Status unless it is established that (i) the act or omission of Indemnitee was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty, (ii) Indemnitee actually received an improper personal benefit in money, property or services, or (iii) in the case of any criminal Proceeding, Indemnitee had reasonable cause to believe that his/her conduct was unlawful.

Section 5. Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 5 if, by reason of his/her Corporate Status, he/she is, or is threatened to be, made a party to or a witness in any threatened, pending or completed Proceeding brought by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 5, Indemnitee shall be indemnified against all amounts paid in settlement and all Expenses actually and reasonably incurred by him/her or on his/her behalf in connection with such Proceeding unless it is established that (i) the act or omission of Indemnitee was material to the matter giving rise to such a Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (ii) Indemnitee actually received an improper personal benefit in money, property or services.

Section 6. Court-Ordered Indemnification. Notwithstanding any other provision of this Agreement, a court of appropriate jurisdiction, upon application of Indemnitee and such notice as the court shall require, may order indemnification in the following circumstances:

(a) if it determines Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the MGCL, the court shall order indemnification, in which case Indemnitee shall be entitled to recover the expenses of securing such reimbursement; or

(b) if it determines that Indemnitee is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not Indemnitee (i) has met the standards of conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such indemnification as the court shall deem proper. However, indemnification with respect to any Proceeding by or in the right of the Company or in which liability shall have been adjudged in the circumstances described in Section 2-418(c) of the MGCL shall be limited to Expenses actually and reasonably incurred by him/her or on his/her behalf in connection with a Proceeding.

Section 7. Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this Agreement, and without limiting any such provision, to the extent that Indemnitee is, by reason of his/her Corporate Status, made a party to and is successful, on the merits or otherwise, in the defense of any Proceeding, he/she shall be indemnified for all Expenses actually and reasonably incurred by him/her or on his/her behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee under this Section 7 for all Expenses actually and reasonably incurred by him/her or on his/her behalf in connection with each successfully resolved claim, issue or matter, allocated on a reasonable and proportionate basis. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

Section 8. Advance of Expenses. The Company shall advance all reasonable Expenses actually and reasonably incurred by or on behalf of Indemnitee in connection with any Proceeding (other than a Proceeding brought to enforce indemnification under this Agreement, applicable law, the Charter or Bylaws of the Company, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors) to which Indemnitee is, or is threatened to be, made a party or a witness, within ten days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written affirmation by Indemnitee of Indemnitee's good faith belief that the standard of conduct necessary for indemnification by the Company as authorized by law and by this Agreement has been met and a written undertaking by or on behalf of Indemnitee, in substantially the form attached hereto as Exhibit A or in such form as may be required under applicable law as in effect at the time of the execution thereof, to reimburse the portion of any Expenses advanced to Indemnitee relating to claims, issues or matters in the Proceeding as to which it shall ultimately be established that the standard of conduct has not been met and which have not been successfully resolved as described in Section 7. To the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or matter in the Proceeding, such Expenses shall be allocated on a reasonable and proportionate basis. The undertaking required by this Section 8 shall be an unlimited general obligation by or on behalf of Indemnitee and shall be accepted without reference to Indemnitee's financial ability to repay such advanced Expenses and without any requirement to post security therefor.

Section 9. Procedure for Determination of Entitlement to Indemnification.

(a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification.

(b) Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 9(a) hereof, a determination, if required by applicable law, with respect to Indemnitee's entitlement thereto shall promptly be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee; or (ii) if a Change of Control shall not have occurred, (A) by the Board of Directors (or a duly authorized committee thereof) by a majority vote of a quorum consisting of Disinterested Directors (as herein defined), or (B) if a quorum of the Board of Directors consisting of Disinterested Directors is not obtainable or, even if obtainable, such quorum of Disinterested Directors so directs, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee, or (C) if so directed by a majority of the members of the Board of Directors, by the stockholders of the Company. If it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee's entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination in the discretion of the Board of Directors or Independent Counsel if retained pursuant to clause (ii)(B) of this Section 9. Any Expenses actually and reasonably incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee's entitlement to indemnification) and the Company shall indemnify and hold Indemnitee harmless therefrom.

Section 10. Presumptions and Effect of Certain Proceedings.

(a) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 9(a) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making of any determination contrary to that presumption.

(b) The termination of any Proceeding by judgment, order, settlement, conviction, a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, does not create a presumption that Indemnitee did not meet the requisite standard of conduct described herein for indemnification.

Section 11. Remedies of Indemnitee.

(a) If (i) a determination is made pursuant to Section 9 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advance of Expenses is not timely made pursuant to Section 8 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 9(b) of this Agreement within 60 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 7 of this Agreement within ten days after receipt by the Company of a written request therefor, or (v) payment of indemnification is not made within ten days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication in an appropriate court located in the State of Maryland, or in any other court of competent jurisdiction, of his/her entitlement to such indemnification or advance of Expenses. Alternatively, Indemnitee, at his/her option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 11(a); provided, however, that the foregoing clause shall not apply to a proceeding brought by Indemnitee to enforce his/her rights under Section 7 of this Agreement.

(b) In any judicial proceeding or arbitration commenced pursuant to this Section 11 the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advance of Expenses, as the case may be.

(c) If a determination shall have been made pursuant to Section 9(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 11, absent a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee's statement not materially misleading, in connection with the request for indemnification.

(d) In the event that Indemnitee, pursuant to this Section 11, seeks a judicial adjudication of or an award in arbitration to enforce his/her rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company for, any and all Expenses actually and reasonably incurred by him/her in such judicial adjudication or arbitration. If it shall be determined in such judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the indemnification or advance of Expenses sought, the Expenses incurred by Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated.

Section 12. Defense of the Underlying Proceeding.

(a) Indemnitee shall notify the Company promptly upon being served with or receiving any summons, citation, subpoena, complaint, indictment, information, notice, request or other document relating to any Proceeding which may result in the right to indemnification or the advance

of Expenses hereunder; provided, however, that the failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the Company's ability to defend in such Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only to the extent the Company is thereby actually so prejudiced.

(b) Subject to the provisions of the last sentence of this Section 12(b) and of Section 12(c) below, the Company shall have the right to defend Indemnitee in any Proceeding which may give rise to indemnification hereunder; provided, however, that the Company shall notify Indemnitee of any such decision to defend within 15 calendar days following receipt of notice of any such Proceeding under Section 12(a) above. The Company shall not, without the prior written consent of Indemnitee, which shall not be unreasonably withheld or delayed, consent to the entry of any judgment against Indemnitee or enter into any settlement or compromise which (i) includes an admission of fault of Indemnitee or (ii) does not include, as an unconditional term thereof, the full release of Indemnitee from all liability in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to Indemnitee. This Section 12(b) shall not apply to a Proceeding brought by Indemnitee under Section 11 above or Section 18 below.

(c) Notwithstanding the provisions of Section 12(b) above, if in a Proceeding to which Indemnitee is a party by reason of Indemnitee's Corporate Status, (i) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that he/she may have separate defenses or counterclaims to assert with respect to any issue which may not be consistent with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that an actual or apparent conflict of interest or potential conflict of interest exists between Indemnitee and the Company, or (iii) if the Company fails to assume the defense of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee's choice, subject to the prior approval of the Company, which shall not be unreasonably withheld, at the expense of the Company. In addition, if the Company fails to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any Proceeding to deny or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counsel of Indemnitee's choice, subject to the prior approval of the Company, which shall not be unreasonably withheld, at the expense of the Company (subject to Section 11(d)), to represent Indemnitee in connection with any such matter.

Section 13. Non-Exclusivity; Survival of Rights; Subrogation; Insurance.

(a) The rights of indemnification and advance of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Charter or Bylaws of the Company, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision

hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his/her Corporate Status prior to such amendment, alteration or repeal.

(b) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

(c) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable or payable or reimbursable as Expenses hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

Section 14. Insurance. The Company will use its reasonable best efforts to acquire directors and officers liability insurance, on terms and conditions deemed appropriate by the Board of Directors of the Company, with the advice of counsel, covering Indemnitee or any claim made against Indemnitee for service as a director or officer of the Company and covering the Company for any indemnification or advance of Expenses made by the Company to Indemnitee for any claims made against Indemnitee for service as a director or officer of the Company. Without in any way limiting any other obligation under this Agreement, the Company shall indemnify Indemnitee for any payment by Indemnitee arising out of the amount of any deductible or retention and the amount of any excess of the aggregate of all judgments, penalties, fines, settlements and reasonable Expenses actually and reasonably incurred by Indemnitee in connection with a Proceeding over the coverage of any insurance referred to in the previous sentence.

Section 15. Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is or may be, by reason of his/her Corporate Status, a witness in any Proceeding, whether instituted by the Company or any other party, and to which Indemnitee is not a party but in which the Indemnitee receives a subpoena to testify, he/she shall be advanced all reasonable Expenses and indemnified against all Expenses actually and reasonably incurred by him/her or on his/her behalf in connection therewith.

Section 16. Duration of Agreement; Binding Effect.

(a) This Agreement shall continue until and terminate ten years after the date that Indemnitee's Corporate Status shall have ceased; provided, that the rights of Indemnitee hereunder shall continue until the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advance of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 11 of this Agreement relating thereto.

(b) The indemnification and advance of Expenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as

to an Indemnitee who has ceased to be a director, trustee, officer, employee or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the written request of the Company, and shall inure to the benefit of Indemnitee and his/her spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.

(c) The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.

Section 17. Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

Section 18. Exception to Right of Indemnification or Advance of Expenses. Notwithstanding any other provision of this Agreement, Indemnitee shall not be entitled to indemnification or advance of Expenses under this Agreement with respect to any Proceeding brought by Indemnitee, unless (a) the Proceeding is brought to enforce indemnification under this Agreement, and then only to the extent in accordance with and as authorized by Sections 8 and 11 of this Agreement, or (b) the Company's Bylaws, as amended, the Charter, a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors or an agreement approved by the Board of Directors to which the Company is a party expressly provide otherwise.

Section 19. Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. One such counterpart signed by the party against whom enforceability is sought shall be sufficient to evidence the existence of this Agreement.

Section 20. Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

Section 21. Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver

of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

Section 22. Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:

(a) If to Indemnitee, to: The address set forth on the signature page hereto.

(b) If to the Company to:

Retail Properties of America, Inc.

2021 Spring Road, Suite 200

Oak Brook, Illinois 60523

Attn: President and Chief Executive Officer

With a copy to:

Retail Properties of America, Inc.

2021 Spring Road, Suite 200

Oak Brook, Illinois 60523

Attn: General Counsel

or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.

Section 23. Governing Law. The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Maryland, without regard to its conflicts of laws rules.

Section 24. Miscellaneous. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.



ATTEST:	COMPANY

	RETAIL PROPERTIES OF AMERICA, INC., a
	Maryland corporation

/s/ DENNIS K. HOLLAND	By:	/s/ STEVEN P. GRIMES
Dennis K. Holland		Steven P. Grimes
Secretary		President and Chief Executive Officer



		INDEMNITEE

		/s/ HEATH R. FEAR
		Heath R. Fear

		Address:	Retail Properties of America, Inc.
			2021 Spring Road, Suite 200
			Oak Brook, Illinois 60523

EXHIBIT A

FORM OF UNDERTAKING TO REPAY EXPENSES ADVANCED

The Board of Directors of Retail Properties of America, Inc.

Re: Undertaking to Repay Expenses Advanced

Ladies and Gentlemen:

This undertaking is being provided pursuant to that certain Indemnification Agreement dated the ____ day of ___________________, 20___, by and between Retail Properties of America, Inc. (the "Company") and the undersigned Indemnitee (the "Indemnification Agreement"), pursuant to which I am entitled to advance of expenses in connection with [description of proceeding] (the "Proceeding").

Terms used herein and not otherwise defined shall have the meanings specified in the Indemnification Agreement.

I am subject to the Proceeding by reason of my Corporate Status or by reason of alleged actions or omissions by me in such capacity. I hereby affirm that at all times, insofar as I was involved as a [director or officer] of the Company, in any of the facts or events giving rise to the Proceeding, I (1) acted in good faith and honestly, (2) did not receive any improper personal benefit in money, property or services and (3) in the case of any criminal proceeding, had no reasonable cause to believe that any act or omission by me was unlawful.

In consideration of the advance of Expenses by the Company for reasonable attorneys' fees and related expenses incurred by me in connection with the Proceeding (the "Advanced Expenses"), I hereby agree that if, in connection with the Proceeding, it is established that (1) an act or omission by me was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (2) I actually received an improper personal benefit in money, property or services or (3) in the case of any criminal proceeding, I had reasonable cause to believe that the act or omission was unlawful, then I shall promptly reimburse the portion of the Advanced Expenses relating to the claims, issues or matters in the Proceeding as to which the foregoing findings have been established and which have not been successfully resolved as described in Section 7 of the Indemnification Agreement. To the extent that Advanced Expenses do not relate to a specific claim, issue or matter in the Proceeding, I agree that such Expenses shall be allocated on a reasonable and proportionate basis.

IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this day of __________________, _______ .

WITNESS:

________________________ (SEAL)

Exhibit 10.2

SEPARATION AGREEMENT AND GENERAL RELEASE

This Separation Agreement and General Release (“ Agreement ”) is being entered into by Retail Properties of America, Inc. (“ Employer ” or “ Company ”) and Niall J. Byrne (“ Employee ”) (together, the “ Parties ”).


1.	SEPARATION DATE

1.1 Employee and Employer are parties to a Retention Agreement, dated effective as of February 19, 2013 (the “ Retention Agreement ”). Employee’s last day of employment with Employer is October 7, 2015 (“ Separation Date ”).


2.	VALUABLE CONSIDERATION

2.1 Severance Package . Employer agrees to provide Employee with the following payments and benefits (“ Severance Package ”). Employee acknowledges and agrees that the Severance Package constitutes adequate legal consideration for the promises and representations made by him in the Agreement. Receipt of the Severance Package is contingent upon the following conditions: (i) Employee must continue to abide by the covenants regarding confidentiality, non-solicitation and non-disparagement described in Section 11 of the Retention Agreement, and (ii) application of the Recoupment Policy described in Section 6 of the Retention Agreement, the Golden Parachute Payments provision described in Section 7 of the Retention Agreement, and the provisions regarding compliance with Section 409A of the Internal Revenue Code described in Section 13 of the Retention Agreement. Subject to the foregoing, Employer will pay the Severance Payment on the sixtieth (60th) day after the Separation Date.

2.1.1 Severance Payment . Employer agrees to pay Employee a total of $677,083, less all appropriate federal and state income and employment taxes (“ Severance Payment ”), consisting of (i) twelve (12) months of Employee’s base salary; (ii) Employee’s Target Bonus, as defined in the Retention Agreement; and (iii) one month of base salary in lieu of notice.

2.1.2 Acceleration of Vesting . The vesting of all unvested equity awards granted to Employee that are listed on Exhibit A hereto shall accelerate in full in accordance with Section 3(c) of the Retention Agreement. All other equity awards (or portions thereof) made to the Employee by the Employer that were unvested immediately prior to the Separation Date will be forfeited as of the Separation Date, except to the extent otherwise specifically provided in such awards.

2.1.3 Continued Healthcare . Provided Employee and Employee’s dependents then participating in the Employer’s group health insurance plan are eligible and timely elect coverage under the Consolidated Omnibus Reconciliation Act of 1985 (“ COBRA ”), Employer will (i) pay the COBRA premiums for Employee and Employee’s dependents for group health insurance through the earlier of (A) April 30, 2017 or (B) the first date on which Employee and Employee’s covered dependents become eligible for health insurance coverage under another employer’s plans or (ii) otherwise provide for the cost

of continued health care insurance in accordance with Section 3(d)(ii) of the Retention Agreement.

2.2 Employee acknowledges that the benefits described above are over and above anything owed to him by law, contract or under the policies of Employer, and that they are being provided to him expressly in exchange for his entering into this Agreement.


3.	GENERAL RELEASE AND WAIVER

3.1 In consideration of Employer’s promises made within this Agreement, Employee unconditionally, irrevocably and absolutely waives, releases and discharges Employer, and any parent and subsidiary corporations, divisions and affiliated corporations, partnerships or other affiliated entities of Employer, past and present, as well as the past and present employees, officers, directors, agents, successors and assigns of Employer (collectively, “ Released Parties ”), from all claims related in any way to the transactions or occurrences between them to date, to the fullest extent permitted by law, including, but not limited to, Employee’s employment with Employer, the termination of Employee’s employment with Employer, and all other losses, liabilities, claims, charges, demands and causes of action, known or unknown, suspected or unsuspected, arising directly or indirectly out of or in any way connected with Employee’s employment with Employer. This release is intended to have the broadest possible application and includes, but is not limited to, any tort, contract, common law, constitutional or other statutory claims, including, but not limited to claims involving intellectual property or innovations that Employee may have worked on or come up with during the period in which he was being compensated by any of the Released Parties, alleged violations of the Illinois Human Rights Act, the Illinois Minimum Wage Law, the Illinois Wage Payment and Collection Act, the Illinois One Day Rest in Seven Act, the Illinois Victims’ Economic Security and Safety Act, the Illinois Personnel Record Review Act, the Illinois Worker Adjustment and Retraining Notification Act, the Illinois Right to Privacy in the Workplace Act, the Illinois Workers’ Compensation Act and any other statute set forth in Chapter 820 or any other chapter of the Illinois Compiled Statutes that pertains or relates to, or otherwise touches upon, the employment relationship between Employer and Employee, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Age Discrimination in Employment Act, and all claims for attorneys’ fees, costs and expenses. Employee expressly waives Employee’s right to recovery of any type, including damages, in any administrative or court action, whether state or federal, and whether brought by Employee or on Employee’s behalf, related in any way to the matters released herein. However, this general release is not intended to bar any claims that, by statute, may not be waived, such as claims for any challenge to the validity of Employee’s release of claims under the Age Discrimination in Employment Act, as set forth in this Agreement. Further, nothing in this Section 3.1 shall release any of the Released Parties’ obligations, covenants, and agreements under this Agreement or Employee’s rights under applicable law, the Company’s Bylaws, any Company officer indemnity agreement to which Employee is a party or the Company’s director and officer liability policy to seek indemnity for acts committed, or omissions, within the course and scope of Employee’s employment duties.

3.2 Employee acknowledges that Employee may discover facts or law different from, or in addition to, the facts or law that Employee knows or believes to be true with respect to the claims released in this Agreement and agrees, nonetheless, that this Agreement and the release contained in it shall be and remain effective in all respects notwithstanding such different or additional facts or the discovery of them.

3.3 Employee declares and represents that Employee intends this Agreement to be complete and not subject to any claim of mistake, and that the release herein expresses a full and complete release and Employee intends the release herein to be final and complete.

3.4 Employee represents that, as of the date of this Agreement, he has not filed any lawsuits, charges, complaints, petitions, claims or other accusatory pleadings against Employer or any of the other Released Parties in any court.

3.5 Employee acknowledges and agrees that the general release and waiver clause in this Agreement is an essential and material term of the Agreement, and that without such clause, no agreement would have been reached by the Parties.


4.	ACKNOWLEDGEMENTS BY EMPLOYEE

4.1 Employee acknowledges that he is subject to, and will continue to abide by, all surviving provisions of the Retention Agreement, including, without limitation, the covenants regarding confidentiality, non-solicitation and non-disparagement set forth in Section 11 of the Retention Agreement (the “ Covenants ”), all of which are incorporated herein by reference as if set forth herein in their entirety. Nothing in this Agreement is intended to modify, supersede or replace any provision, right or obligation of Employee under the Covenants.

4.2 Employee acknowledges that he has been paid all wages, commissions, incentive payments, and bonuses owed to him by Employer, to date.


5.	NON-DISPARAGEMENT

5.1 Employee confirms and agrees that he will not make any oral or written statements to any third party about any of the Released Parties that are intended or reasonably likely either to disparage any of the Released Parties. Employee acknowledges and agrees that the non-disparagement clause in this Agreement is an essential and material term of the Agreement, and that without such clause, no agreement would have been reached by the Parties. Additionally, if Employee is compelled by the legal process to provide statements, information, or testimony regarding his employment with any of the Released Parties, he will do so in a truthful manner, and doing so is not a breach of the terms of this Agreement.

5.2 The Company shall direct the four current members of its Executive Management not to make any statements that disparage Employee. If any of such individuals is compelled by the legal process to provide statements, information or testimony regarding Employee’s employment with any of the Released Parties, he or she will do so in a truthful manner, and doing so is not a breach of the terms of this Agreement.

6. OLDER WORKERS’ BENEFIT PROTECTION ACT . This Agreement is intended to satisfy the requirements of the Older Workers’ Benefit Protection Act, 29 U.S.C. sec. 626(f). Employee is advised to consult with an attorney before executing this Agreement.

6.1 Acknowledgements/Time to Consider . Employee acknowledges and agrees that (a) Employee has read and understands the terms of this Agreement; (b) Employee has been advised in writing to consult with an attorney before executing this Agreement; (c) Employee has obtained and considered such legal counsel as Employee deems necessary; (d) Employee has been given twenty-one (21) days to consider whether or not to enter into this Agreement (although Employee may elect not to use the full 21-day period at Employee’s option); and (e) by signing this Agreement, Employee acknowledges that Employee does so freely, knowingly, and voluntarily.

6.2 Revocation/Effective Date . This Agreement shall not become effective or enforceable until the eighth day after Employee signs this Agreement. In other words, Employee may revoke Employee’s acceptance of this Agreement within seven (7) days after the date Employee signs it. Employee’s revocation must be in writing and received by Dennis Holland, the Company’s Executive Vice President, General Counsel and Secretary, 2021 Spring Road, Suite 200, Oak Brook, IL 60523 by 5:00 p.m. Central Time on the seventh day in order to be effective. If Employee does not revoke acceptance within the seven (7) day period, Employee’s acceptance of this Agreement shall become binding and enforceable on the eighth day (“ Effective Date ”). The Severance Package shall become due and payable in accordance with Section 2 above after the Effective Date.

6.3 Preserved Rights of Employee . This Agreement does not waive or release any rights or claims that Employee may have under the Age Discrimination in Employment Act that arise after the execution of this Agreement. In addition, this Agreement does not prohibit Employee from challenging the validity of this Agreement’s waiver and release of claims under the Age Discrimination in Employment Act.


7.	CONFIDENTIALITY/RETURN OF COMPANY PROPERTY

7.1 Employee represents and warrants that as of the Separation Date, he will have returned all property belonging to Employer. Such property includes, but is not limited to, keys, passwords, access cards, credit or phone cards, any computer hardware or software, any products relating to Employer or its competition, any design work, product engineering, test results, customer information, pricing and cost information, financial data or information, any vendor samples or information, management materials, including all correspondence, manuals, letters, notes, notebooks, data report programs, plan proposals, and other confidential, proprietary and/or trade secret information, regardless of whether the information is in written, printed, electronic, or other form and regardless of whether it was written or compiled by Employee or other persons, as well as any and all other property that comprises property owned by Employer. Employee agrees that he will not retain any originals or copies of any Employer property, whether prepared or created by Employee or otherwise coming into Employee’s possession or control in the course of his employment with Employer. Employee agrees to keep the terms of the Agreement confidential between him and Employer, except that he may tell his immediate

family and attorney or accountant, if any, as needed, but in no event should he discuss the Agreement or its terms with any current or prospective employee of Employer.


8.	MISCELLANEOUS

8.1 Nothing in this Agreement shall be interpreted or applied to prohibit Employee from making any good faith report to any governmental agency or other governmental entity concerning any acts or omissions that Employee may believe to constitute a possible violation of federal or state law or making other disclosures that are protected under the whistleblower provisions of applicable federal or state law or regulation.

8.2 The Parties agree that this Agreement, including the surviving provisions of the Retention Agreement expressly incorporated herein by reference, set forth the entire agreement between them and supersedes all other written or oral understandings or contracts. This Agreement may not be modified or amended except by a written instrument executed by both of the Parties.

8.3 The Parties agree to do all things necessary and to execute all further documents necessary and appropriate to carry out and effectuate the terms and purposes of this Agreement.

8.4 Each of the Parties to this Agreement represents and warrants that: (a) no other person or entity has or has had any interest in the claims released under this Agreement and (b) he or it has not assigned, transferred, conveyed, subjected to a security interest, or otherwise encumbered or impaired in any way any of the claims released under this Agreement.

8.5 In the event any provision of this Agreement is adjudicated to be unenforceable in whole or in part, the Parties intend for such provision to be modified to the extent necessary to render it enforceable, or alternatively, excised from the Agreement without effecting the validity of the remaining provisions of the Agreement.

8.6 By entering into this Agreement, the Released Parties make no admission that they have engaged, or are now engaging, in any unlawful conduct. This Agreement is not an admission of wrongdoing or liability by either Employer or Employee and shall not be used or construed as such in any legal or administrative proceeding.

8.7 This Agreement may be pled as a full and complete defense to, and may be used as a basis for an injunction against, any action, suit or other proceeding that may be prosecuted, instituted or attempted by Employee in breach hereof.

8.8 This Agreement shall be subject to and construed in accordance with the laws of the State of Illinois. Venue shall be in DuPage County for any disputes arising out of the interpretation or enforcement of this Agreement.

8.9 This Agreement is binding on and inures to the benefit of Employer, its successors and assigns, and is binding on and inures to the benefit of Employee, his heirs and assigns.

8.10 This Agreement may be executed in counterparts. Signatures transmitted electronically are as effective as original signatures.

8.11 Each person signing this Agreement hereby expressly represents and warrants that he is expressly authorized in law and in fact to do so individually and/or on behalf of any entity listed herein as a signatory of this Agreement.

HAVING READ AND UNDERSTOOD THIS AGREEMENT, CONSULTED COUNSEL OR VOLUNTARILY ELECTED NOT TO CONSULT COUNSEL, AND HAVING HAD SUFFICIENT TIME TO CONSIDER WHETHER TO ENTER INTO THIS AGREEMENT, THE UNDERSIGNED HEREBY EXECUTE THIS AGREEMENT ON THE DATES SET FORTH BELOW.



EMPLOYEE		RETAIL PROPERTIES OF AMERICA, INC.
/s/ Niall J. Byrne		By:	/s/ Steven P. Grimes
Niall J. Byrne

Date:	October 2, 2015	Date:	10/2/15

EXHIBIT A

Unvested Equity Awards



Award Date	Shares Awarded	Vesting Date	Shares Unvested

4/12/2011	730	4/12/2016	365
	(1,825 pre-split)

3/13/2012	3,954	3/13/2017	1,977
	(9,892 pre-split)

2/21/2013	5,380	2/21/2016	2,690
		2/21/2018	2,690

2/21/2014	14,224	2/21/2016	4,741
		2/21/2017	4,742

2/20/2015	24,345	2/20/2016	8,115
		2/20/2017	8,115
		2/20/2018	8,115

2/20/2015	16,230	2/20/2016	16,230

5/29/2015	2,500	1/4/2016	833
		1/4/2017	833
		1/4/2018	834
Total			60,280

Exhibit 31.1

CERTIFICATION

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Steven P. Grimes, certify that:


1.	I have reviewed this Quarterly Report on Form 10-Q of Retail Properties of America, Inc.;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



By:	/s/ STEVEN P. GRIMES

	Steven P. Grimes
	President and Chief Executive Officer

Date:	November 4, 2015

Exhibit 31.2

CERTIFICATION

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Heath R. Fear, certify that:


1.	I have reviewed this Quarterly Report on Form 10-Q of Retail Properties of America, Inc.;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



By:	/s/ HEATH R. FEAR

	Heath R. Fear
	Executive Vice President,
	Chief Financial Officer and Treasurer

Date:	November 4, 2015

Exhibit 32.1

Certification Pursuant to

18 U.S.C. Section 1350, as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of Retail Properties of America, Inc. (the “Company”) for the period ended September 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Steven P. Grimes as President and Chief Executive Officer of the Company and Heath R. Fear as Executive Vice President, Chief Financial Officer and Treasurer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge:


(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and


(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



By:	/s/ STEVEN P. GRIMES

	Steven P. Grimes
	President and Chief Executive Officer

Date:	November 4, 2015

By:	/s/ HEATH R. FEAR

	Heath R. Fear
	Executive Vice President,
	Chief Financial Officer and Treasurer

Date:	November 4, 2015