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HOUSTON-After another quarter of strong leasing activity, Weingarten Realty Investors predicts the retail portfolio's occupancy will only continue at its record-setting pace. Rent as well is on the rise, up 7.7% across the board in the quarterly comparison.
In Q1, the REIT's leasing team completed 296 new leases and renewals for a total of 1.8 million sf. In Q1 2004, the team inked 264 deals totaling 973,000 sf.
"Your rent spreads are uncharacteristically mall-like," Legg Mason Wood Walker Inc. analyst David Fick said during the REIT's recent earnings call.
"We consider that a positive," returned Drew Alexander, Weingarten's president and CEO. "Leasing demand is strong, and we expect occupancy to continue to improve." This year, 6.8% of Weingarten's leases expire and 12.3% are up in 2006, according to an SEC filing.
The portfolio's occupancy reached 95.1% at the quarter's end versus 93.5% for the same period last year. The quarter ended with the highest occupancy the REIT launched its IPO in 1985. Historically, the portfolio's occupancy rate has never fallen below 90%. Rental income was $132.2 million, an increase of 15.8% from the $114.2 million logged a year ago.
"We're very pleased with our results," Alexander said. Same property net operating income grew 3.1% in comparison to 2.6% in 2004 while FFO jumped to $61.2 million from $53.6 million.
During the first quarter, Weingarten added 1.3 million sf with the acquisition of two shopping centers and a 495,000-sf industrial property. According to Alexander, contracts are out for another $165 million of properties.
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