HOUSTON, July 31 /PRNewswire-FirstCall/ -- Weingarten Realty
announced today the results of its second quarter ended June 30,
2008. -- Net income, on a diluted per-share basis, was $0.79 for
the second quarter of 2008, the same level of net income per share
recorded in the second quarter of 2007. A $1.0 million non-cash
preferred share redemption charge recorded in the second quarter of
2008 negatively impacted the comparison to the prior year; -- Funds
from operations (FFO), a non-GAAP financial indicator considered
one of the most meaningful performance measurements within the REIT
industry, was $0.78 per share for the second quarter of 2008.
Excluding the non-cash preferred share redemption charge recorded
in the second quarter, FFO per share was $0.79, up 5% from the
prior year; -- Overall occupancy for the operating portfolio was
93.6% at the end of the second quarter of 2008 compared to 93.7% in
the previous quarter. Occupancy for the retail properties was 94.2%
compared to 94.8% in the first quarter of 2008, while industrial
occupancy increased to 91.9% compared to 90.7% in the first
quarter; -- Merchant development gains for the quarter totaled $5.7
million (net of tax) or $0.07 of FFO per share resulting from the
execution of ten separate transactions; -- During the quarter, the
Company reopened its 6.50% Series F Preferred Shares and issued an
additional 6,000,000 shares at a discount raising $118.1 million.
The effective cost of this capital is 8.25%. The proceeds were
ultimately used to repay approximately 60% of the outstanding
variable rate Series G preferred shares. As a result, a
proportionate share of the original issue costs for the Series G
preferred shares was written off, resulting in a non-cash
redemption charge of $0.01 per share in the second quarter.
Subsequent to quarter end, the Company repaid the remainder of the
Series G preferred series utilizing its existing credit facilities,
resulting in an additional non-cash redemption charge of $0.01 per
share. "Our FFO per share, excluding the non-cash preferred
redemption charge, was $0.79 for the second quarter of 2008, up 5%
from the prior year. Our high-quality portfolio of properties
continues to perform well in this challenging economic environment
with same property net operating income growth of 2.0%, occupancy
of 93.6%, and average GAAP rental rate increases of 17.2% for the
quarter. Additionally, we recorded merchant build gains of $0.07
per share (net of tax) in the second quarter," stated Drew
Alexander, President and Chief Executive Officer. Existing
Portfolio During the second quarter of 2008, the Company completed
320 new leases and renewals, totaling 1.6 million square feet with
an average rental rate increase of 17.2% on a same space GAAP basis
and 12.2% on a cash basis. The primary driver for this strong
rental rate increase was new retail leases which increased 26.2% on
a GAAP basis and 20.1% on a cash basis. Same property net operating
income (NOI), on a cash basis, grew 2.0% in the second quarter,
with growth of 2.0% from retail properties and 2.3% from industrial
properties. Retail occupancy ended the quarter at 94.2% versus
94.8% in the prior quarter. The decrease in occupancy was due
primarily to several mid-size tenant fallouts. "I am optimistic we
will see improved same property NOI through the balance of 2008 as
leases we signed in the first half of the year commence," said
Johnny Hendrix, Executive Vice President/Asset Management. "Retail
same property NOI grew 2.0% in the second quarter. Most of the
increase was attributable to contractual rent steps offsetting a
decline in occupancy. Rental growth on leases commenced and
renewals exceeded 17% on a same space GAAP basis and the volume of
leasing activity was up 15% from the prior year. While there is no
single tenant or category driving this increased leasing activity,
discount retailers, retailers that sell necessity based goods, and
health and fitness retailers were significant contributors to the
increase." New Development The Company's new development pipeline
at the end of the second quarter 2008 includes 35 properties at
various stages of development. Weingarten has invested $390 million
in these projects to date and estimates its total investment, at
completion, to be $622 million. The Company also projected that 13
of our 35 projects currently under development will be stabilized
by the end of 2009 and these centers are currently 79% leased,
including tenant-owned square footage. "We continue to make
progress in new development, including our merchant build
activities," said Robert Smith, Senior Vice President and Director
of New Development. "We recently completed two outstanding grocery
anchored shopping centers that were part of our new development
pipeline -- Raintree Ranch Center in Phoenix and Sharyland Towne
Crossing in Mission, Texas. Raintree Ranch is a 140,000 square foot
center anchored by Whole Foods and Sharyland Towne Crossing is a
489,000 square foot center anchored by Target and HEB Grocery.
These two centers have a combined WRI investment of $56 million, a
weighted average yield of 9.1%, and current occupancy levels in
excess of 97%. Additionally, our merchant build activities
contributed $0.07 of FFO per share in the second quarter."
Portfolio Enhancements Dispositions of non-core properties in Texas
and Louisiana totaled $87 million in the second quarter,
representing five properties and 750,000 square feet. Year-to-date,
dispositions totaled $106 million. "Acquisition activity continues
to be very slow. REIT's and pension fund advisors are on the
sidelines due to a lack of quality assets for sale and concerns
about pricing," said Candace DuFour, Senior Vice President and
Director of Acquisitions. Dividends The Board of Trust Managers
declared a dividend of $0.525 for the second quarter of 2008. On an
annualized basis, this represents a dividend of $2.10 per common
share. The dividend is payable on September 15, 2008 to
shareholders of record on September 5, 2008. The Board of Trust
Managers also declared dividends on the Company's preferred shares.
Dividends related to the 6.75% Series D Cumulative Redeemable
Preferred Shares (NYSE:WRIPrD) are $0.421875 per share for the
quarter. Dividends on the 6.95% Series E Cumulative Redeemable
Preferred Shares (NYSE:WRIPrE) are $0.434375 per share for the same
period. Dividends on the 6.50% Series F Cumulative Redeemable
Preferred Shares (NYSE:WRIPrF) are $0.40625 per share. All
preferred share dividends are payable on September 15, 2008 to
shareholders of record on September 5, 2008. Outlook "Certainly
this economy is challenging and could get worse. To date, our
portfolio of properties continues to perform reasonably well. Over
70% of our retail portfolio is anchored by supermarkets which
provide the strength to weather a slowing economy," said Alexander.
"Transaction volume for acquisitions and dispositions is down
significantly from last year, although, as we demonstrated this
quarter, these markets are not totally closed. Our outstanding team
of associates successfully executed ten merchant build transactions
generating $0.07 of FFO per share this quarter and further
strengthened our existing portfolio through the disposition of five
non-core properties totaling $87 million. Markets could deteriorate
further and negatively affect our ability to do sale transactions
but at this time we are reaffirming our previously announced full
year 2008 guidance range of $3.21 to $3.27 for FFO per share,
although, as mentioned last quarter, it may be in the lower end of
the range. We are very well positioned for the future and I am
confident we will create long-term value for our investors."
Conference Call Information The Company also announced that it will
host a live webcast of its quarterly conference call on August 1,
2008 at 10:00 a.m. Central Time. The live webcast can be accessed
via the Company's Web site at http://www.weingarten.com/. A replay
is also available through the Company's Web site starting
approximately two hours following the live call or can be heard by
calling 800-642-1687, identification number 55445036 until 11:59 PM
Central Time on August 4, 2008. About Weingarten Realty Investors
As one of the largest real estate investment trusts listed on the
New York Stock Exchange, Weingarten Realty (NYSE:WRI) is
celebrating its 60th anniversary as a commercial real estate owner,
manager and developer, formed in 1948. Focused on delivering solid
returns to shareholders, Weingarten is actively developing,
acquiring, and intensively managing properties in 23 states that
span the United States from coast-to-coast. The Company's portfolio
of 414 properties includes 334 neighborhood and community shopping
centers and 80 industrial properties. Including tenant-owned square
footage, the Company's portfolio currently totals approximately 74
million square feet under management. Weingarten has one of the
most diversified tenant bases of any major REIT in its sector, with
the largest of its 5,400 tenants comprising less than 3% of its
rental revenues. To learn more about the Company's operations and
growth strategies, please visit http://www.weingarten.com/.
Forward-Looking Statements Statements included herein that state
the Company's or Management's intentions, hopes, beliefs,
expectations or predictions of the future are "forward-looking"
statements within the meaning of the Private Securities Litigation
Reform Act of 1995 which by their nature, involve known and unknown
risks and uncertainties. The Company's actual results, performance
or achievements could differ materially from those expressed or
implied by such statements. Reference is made to the Company's
regulatory filings with the Securities and Exchange Commission for
information or factors that may impact the Company's performance.
Financial Statements Weingarten Realty Investors (in thousands,
except per share amounts) Three Months Ended Six Months Ended June
30, June 30, STATEMENTS OF CONSOLIDATED INCOME AND FUNDS FROM
OPERATIONS 2008 2007 2008 2007 (Unaudited) (Unaudited) Rental
Income $151,196 $139,053 $301,491 $277,709 Other Income 3,428 3,163
6,150 5,176 Total Revenues 154,624 142,216 307,641 282,885
Depreciation and Amortization 39,538 31,506 82,396 62,718 Operating
Expense 26,666 24,479 53,105 47,214 Ad Valorem Taxes 17,622 16,305
35,544 32,174 General and Administrative Expense 7,104 6,504 13,958
13,113 Total Expenses 90,930 78,794 185,003 155,219 Operating
Income 63,694 63,422 122,638 127,666 Interest Expense (38,474)
(35,624) (73,954) (71,713) Interest and Other Income 1,699 3,044
2,748 4,756 Equity in Earnings of Real Estate Joint Ventures and
Partnerships, net 5,139 4,273 10,386 7,620 Income Allocated to
Minority Interests (2,627) (3,497) (4,453) (4,675) Gain (Loss) on
Sale of Properties 132 (65) 144 2,024 Gain on Land and Merchant
Development Sales 6,303 3,285 6,822 3,951 Provision for Income
Taxes (1,543) (1,012) (2,290) (1,003) Income From Continuing
Operations 34,323 33,826 62,041 68,626 Operating Income From
Discontinued Operations 683 1,407 1,989 5,136 Gain on Sale of
Properties From Discontinued Operations 41,093 40,544 49,463 53,400
Income from Discontinued Operations 41,776 41,951 51,452 58,536 Net
Income 76,099 75,777 113,493 127,162 Less: Preferred Share
Dividends 8,110 5,775 16,728 10,503 Redemption Costs of Preferred
Shares 990 990 Net Income Available to Common Shareholders -- Basic
$66,999 $70,002 $95,775 $116,659 Net Income Per Common Share --
Basic $0.80 $0.81 $1.14 $1.35 Net Income Available to Common
Shareholders -- Diluted $68,146 $71,105 $98,074 $118,868 Net Income
Per Common Share -- Diluted $0.79 $0.79 $1.13 $1.32 Funds from
Operations: Net Income Available to Common Shareholders $66,999
$70,002 $95,775 $116,659 Depreciation and Amortization 37,951
31,902 80,253 63,881 Depreciation and Amortization of
Unconsolidated Joint Ventures 3,021 2,536 5,561 4,593 Gain on Sale
of Properties (41,231) (38,253) (48,967) (53,198) Gain on Sale of
Properties of Unconsolidated Joint Ventures (14) Funds from
Operations -- Basic $66,740 $66,187 $132,608 $131,935 Funds from
Operations Per Common Share -- Basic $0.80 $0.77 $1.58 $1.53 Funds
from Operations -- Diluted $67,887 $67,290 $134,907 $134,144 Funds
from Operations Per Common Share -- Diluted $0.78 $0.75 $1.56 $1.49
Weighted Average Shares Outstanding -- Basic 83,742 86,274 83,710
86,140 Weighted Average Shares Outstanding -- Diluted 86,766 89,735
86,668 89,768 June 30, December 31, 2008 2007 CONSOLIDATED BALANCE
SHEETS (Unaudited) (Audited) Property $5,007,361 $4,972,344
Accumulated Depreciation (791,929) (774,321) Property Held for
Sale, net 373 Investment in Real Estate Joint Ventures and
Partnerships 309,252 300,756 Notes Receivable from Real Estate
Joint Ventures and Partnerships 151,057 81,818 Unamortized Debt and
Lease Costs 120,116 114,969 Accrued Rent and Accounts Receivable,
net 83,262 94,607 Cash and Cash Equivalents 40,427 65,777
Restricted Deposits and Mortgage Escrows 34,018 38,884 Other
120,507 98,509 Total Assets $5,074,444 $4,993,343 Debt $3,187,622
$3,165,059 Accounts Payable and Accrued Expenses 160,223 155,137
Other 88,860 104,439 Total Liabilities 3,436,705 3,424,635 Minority
Interest 158,489 96,885 Preferred Shares of Beneficial Interest 9 8
Common Shares of Beneficial Interest 2,531 2,565 Treasury Shares of
Beneficial Interest (41) Accumulated Additional Paid-In Capital
1,448,162 1,442,027 Net Income in Excess of Accumulated Dividends
50,363 42,739 Accumulated Other Comprehensive Loss (21,815)
(15,475) Total Shareholders' Equity 1,479,250 1,471,823 Total
Liabilities and Shareholders' Equity $5,074,444 $4,993,343
DATASOURCE: Weingarten Realty CONTACT: Richard Summers, VP/Director
of Investor Relations of Weingarten Realty, +1-713-866-6050 Web
site: http://www.weingarten.com/
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