Weingarten Realty Investors (WRI) is a real estate investment trust (REIT) that develops shopping centers, primarily in Texas and other southern states, which it then leases to commercial tenants. Of the 389 properties WRI owns or operates under long-term leases, 322 are community shopping centers and 67 are industrial projects. Altogether the properties amount to some 65 million square feet of land.
Although WRI's geographical footprint is expanding (it has properties in 22 states) a disproportionate amount of its revenue comes from Texas, its home state. WRI's Texas properties generated 64% of the company's revenues in 2001, but only 38% in 2007. As part of its effort to diversify its revenues, the company has been "recycling" its properties - selling poorly performing and non-core properties and purchasing higher potential properties on the West and East Coasts.
WRI earns most of its revenue by leasing space on its properties to tenants (rental revenue). Rental revenues include minimum lease payments, reimbursements of property operating expenses, and additional rent payments based on a percentage of the tenants' sales. In recent years, WRI has made an increasing number of acquisitions through joint-venture partnerships. In the capacity of managing or operating partner, WRI generates fee revenue in addition to its share of rental revenue.
In 2006 community shopping centers generated 89.7% of WRI's total revenue while industrial properties made up 9.8%. The company’s tenant base is very diversified, with the largest merchant accounting for only 3% of total rental revenue in 2006. From a geographic standpoint, over 44% of WRI properties are located in Texas. However, the firm has increasingly expanded its holdings outside the state in recent years; in 2006 the majority of acquisitions were on the East and West Coasts.
As the chart indicates, revenue increased by less than 50% from 2003 to 2006, while net income tripled over the same period. This trend can be partly attributed to WRI's new strategy for long-term growth. One of the key facets of this plan is to sell the company's less profitable property and redirect the sales proceeds into centers with more revenue earning potential. From 2003 to 2006, the amount WRI earned from "sale of properties" increased nearly thirty-four fold.
WRI competes with other developers and real estate companies involved in the acquisition and development of shopping centers and commercial property. Among the major retail REITs there is quite a bit of tenant overlap.
WRI's closest competitors include the following:
|Company||Rental Revenue (millions)||Number of Properties||Occupancy Rates|
|Weingarten Realty Investors||$554.4||389||94.1%|
|Developers Diversified Realty||$574.9||319||96.9%|
|NEW PLAN EXCEL RLTY TR||$339.3||467|