HOUSTON-Weingarten Realty invested nearly $200 million in shopping centers in 2010, but the REIT doesn’t expect acquisition activity to be quite so robust this year, according to President and CEO Drew Alexander.
Alexander made the comments during Weingarten’s fourth quarter 2010 earnings conference call. He was joined on the call by Steve Richter, executive vice president and CFO, who said the REIT had budgeted acquisitions of $125 million to $175 million for 2011.
“So far this year, we've seen a bit of a lull in the quality product we want to acquire,” Alexander said during the call. “We currently have about $59 million under contract, with just a little more in the pipeline behind that.”
Alexander said the lull is the result of Weingarten’s selectivity. “On the external growth front, we remain selective for opportunities where we can improve shareholder value,” he noted. “But at this moment, we are being very selective underwriting things very carefully and find things very competitive out there. In a lot of cases we bow out of the bidding pretty early because we just don't see the upside that some others do.”
Richter added that REIT plans to dispose of $75 million to $125 million in 2011. “The disposition of operating properties, as well as the monetization of some of our land held for future development, creates the possibility of additional future impairments as well,” he said.
During the fourth quarter 2010, Weingarten closed on five shopping centers totaling $168 million. Four of the five centers are anchored by supermarkets, and the fifth is anchored by Target and Kohl's.
The properties include: Village Plaza at Bunker Hill, a 491,000-square-foot center in Houston; Edgewater Marketplace, a 145,000-square-foot, King Sooper anchored center in Denver; Palms of Carrollwood, a 168,000-square-foot shopping center in Tampa, FL; Desert Village, a 102,000-square-foot center located in North Scottsdale, AZ; and Stoneridge Shopping Center, a 178,000- square-foot center in Moreno Valley, CA.
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