HOUSTON, 2017-Apr-25 — /EPR Retail News/ — Weingarten Realty (NYSE: WRI) announced today (4/24/2017) the results of its operations for the quarter ended March 31, 2017. The supplemental financial package with additional information can be found on the Company’s website under the Investor Relations tab.
First Quarter Operating and Financial Highlights
- Net income attributable to common shareholders (“Net Income”) for the quarter was $0.24 per diluted share (hereinafter “per share”) compared to $0.85 per share in the same quarter of 2016;
- Core Funds From Operations Attributable to Common Shareholders (“Core FFO”) for the quarter increased 7% to $0.61 per share from $0.57 per share a year ago;
- Same Property Net Operating Income (“SPNOI”) including redevelopments increased 3.7% over the same quarter of the prior year;
- Rental rates on new leases and renewals were up 9.5%; and
- Dispositions for the quarter totaled $47.4 million and transactions closed after quarter-end totaled an additional $52.2 million.
Financial Results
The Company reported Net Income of $30.8 million or $0.24 per share for the first quarter of 2017, as compared to $107.1 million or $0.85 per share for the same period in 2016. This variance was due primarily to higher gains on sales of properties and a gain on the acquisition of partnership interests during 2016.
Funds From Operations attributable to common shareholders in accordance with the National Association of Real Estate Investment Trusts definition (“NAREIT FFO”) was $74.4 million or $0.57 per share for the first quarter of 2017 compared to $66.3 million or $0.52 per share for 2016. The increase is primarily due to increased rental rates, incremental income from our new developments and redevelopments, and the significant acquisitions completed in 2016. Reduced interest expense from favorable debt refinancings and proceeds from the 2016 issuance of shares also contributed to the increase; however, these increases were offset by the dilution resulting from the issuance of shares on a per share basis. Additionally, reducing NAREIT FFO for 2017 by $.04 per share were lease termination payments and impairments of non-operating property, net of the related tax benefit. In 2016, NAREIT FFO included $.05 per share of non-cash tax expense related to a gain in its taxable REIT subsidiary. These items were added back in arriving at Core FFO. Core FFO for the quarter ended March 31, 2017 was $79.5 million or $0.61 per share compared to $72.3 million or $0.57 per share for the same quarter of last year, a 7% increase.
A reconciliation of Net Income to NAREIT FFO and Core FFO is included herein.
During the quarter, the Company closed $47.4 million of dispositions and an additional $52.2 million subsequent to quarter end. These dispositions included three centers in Texas, one each in Florida and Arizona and three land parcels.
Portfolio Activity
The Company purchased a condominium interest in The Whittaker, a six-story mixed-use project co-developed with Lennar in West Seattle. The Company will begin build-out of the 63,000 square foot retail portion of this development immediately with completion expected in early 2018. The Company also purchased a land parcel adjacent to one of its Phoenix shopping centers to allow the addition of a multi-tenant building to the property.
The Company’s new development and redevelopment programs include the following:
- The Gateway Alexandria, a premier, mixed-use development in Alexandria, Virginia, that will include 282 multi-family units, 100,000 square feet of retail anchored by a 62,000 square foot Harris Teeter grocery store, 23,000 square feet of office and a below-grade parking garage. The Company’s net investment upon completion is estimated at $181 million before the planned sale of the majority of the office and all of the residential components. The land was purchased in late 2016 and development is underway.
- Columbia Pike, a premier, mixed-use project in Arlington, Virginia, will include 330 multi-family units and 65,000 square feet of retail anchored by a 50,000 square foot Harris Teeter grocery store. The Company’s pro rata net investment upon completion is estimated at $135 million before the sale of the residential component. The Company expects to purchase the land and commence development next month.
- The Driscoll at River Oaks Shopping Center, a 30-story luxury high-rise with around 10,000 square feet of ground floor retail that the Company will construct at its River Oaks Shopping Center, located adjacent to the premier residential community in Houston. The tower will include over 300 residential units and a parking garage. The total project cost will approximate $150 million. Predevelopment activities are underway with construction expected to begin in 2018.
- An additional 15 redevelopments are underway representing $74.6 million of incremental investment.
2017 Guidance
The Company affirms its guidance for Core FFO in the range of $2.37 to $2.43 per diluted share and updates NAREIT FFO for the first quarter activity to $2.33 to $2.39 per diluted share. All of the details of guidance are included on page 9 of the Company’s Supplemental.
Dividends
The Board of Trust Managers declared a quarterly cash dividend of $0.385 per common share payable on June 15, 2017 to shareholders of record on June 8, 2017.
Conference Call Information
The Company also announced that it will host a live webcast of its quarterly conference call on April 25, 2017 at 10:00 a.m. Central Time. The live webcast can be accessed via the Company’s website at www.weingarten.com. Alternatively, if you are not able to access the call on the web, you can listen live by phone by calling (888) 771-4371 (conference ID # 43147559). A replay will be available through the Company’s website starting approximately two hours following the live call.
About Weingarten Realty Investors
Weingarten Realty Investors (NYSE: WRI) is a shopping center owner, manager and developer. At March 31, 2017, the Company owned or operated under long-term leases, either directly or through its interest in real estate joint ventures or partnerships, a total of 218 properties which are located in 18 states spanning the country from coast to coast. These properties represent approximately 44.4 million square feet of which our interests in these properties aggregated approximately 28.4 million square feet of leasable area. To learn more about the Company’s operations and growth strategies, please visit 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.
Projections involve numerous assumptions such as rental income (including assumptions on percentage rent), interest rates, tenant defaults, occupancy rates, volume and pricing of properties held for disposition, volume and pricing of acquisitions, expenses (including salaries and employee costs), insurance costs and numerous other factors. Not all of these factors are determinable at this time and actual results may vary from the projected results, and may be above or below the ranges indicated. The above ranges represents management’s estimate of results based upon these assumptions as of the date of this press release. Accordingly, there is no assurance that our projections will be realized.
Contact:
Weingarten Realty
Michelle Wiggs
(713) 866-6050
Source: Weingarten Realty