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NEW YORK CITY-After several years of focusing on acquisitions and dispositions, Houston-based Weingarten Realty Trust has renewed its interest in developing retail centers.
Weingarten president and CEO Drew Alexander says the goal is to build up to $200 million of shopping centers per year. "We're putting some more human resources behind [development] efforts," he said during yesterday's NAREIT 2005 Institutional Investor Forum. He added the development docket has about $50 million of under-construction projects and an additional $150 million in the pipeline. "We think, given our experience, given our relationships, given our real estate knowledge, that the risk-reward is quite good in development."
Alexander indicated development will become a more important piece of Weingarten's growth strategy, but the REIT won't forego its core strategy for dispositions and acquisitions. Earlier this year, Alexander said Weingarten expected to sell $100 million of retail assets. "We've almost sold that much already," he said.
The lucrative disposition activity has compelled the REIT to re-evaluate its expectations.
"We've been throwing around $200 million to $300 million as a new disposition amount," Alexander said. "I can see us coming to that point where we try to cull 4% to 5% of our portfolio a year."
According to Alexander, Weingarten's disposition activity has been far more robust than its acquisition activity. "It's an extremely competitive world," he pointed out.
The acquisition front has fallen short of Alexander's prediction that $525 million of assets would be bought this year. To date, the REIT's picked up $187 million in properties. "I would be pleased if we sell $200 million and buy $300 million," he said. "I would absolutely consider that a successful year."
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