In 2004, Weingarten bought 22 shopping centers, two industrial properties, and interest in four other properties for a total of 3.6 million sf in acquisitions, representing a total investment of about $511.2 million. The year's purchases included 11 properties in Texas (primarily in the Rio Grande Valley), five in Georgia, three in North Carolina, two each in California, Florida, New Mexico and Kentucky, and one in Missouri. The company owns about 288 neighborhood and community shopping centers, which generated about 90% of the REIT's revenues, plus 60 industrial properties.
The REIT also completed 11 development projects last year totaling 851,000 sf. Weingarten currently has five shopping centers in various stages of development, which will add 284,000 sf to its portfolio. The projects are located in North Carolina, Arizona, Colorado and Utah, and most of them will come on-line later this year.
"Our challenge in today's market is to continue our acquisition pace, as well to capitalize on the divestiture of non-core assets," said Andrew M. (Drew) Alexander, president and CEO of the REIT, during Friday's conference call. "Fluctuations in either of these could have an effect on our FFO in 2005. We'll only invest when we can achieve returns above our weighted average cost of capital."
Regarding the sale of properties, Alexander further noted that "during 2004, we accelerated our disposition program, selling six properties, which resulted in gains of $25 million. The weighed cap rate for these non-core dispositions was 8.8%, and the gain was not included in the year's FFO figures."
The company inked 1,337 new leases or renewals in 2004, representing a total of 5.6 million sf. "We increased our occupancy to 94.3%, and we continue to see good demand in our retail properties," Alexander said. "The demand is from both new and existing operators." He added that the company increased same-store rental rates an average of 6.2% during the year.
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