EXHIBIT 99.1
PART I
ITEM 1. | Business |
General. Weingarten Realty Investors is a real estate investment trust (“REIT”) organized under the Texas Real Estate Investment Trust Act. Effective January 1, 2010, the Texas Real Estate Investment Trust Act was replaced by the Texas Business Organizations Code. We, and our predecessor entity, began the ownership and development of shopping centers and other commercial real estate in 1948. Our primary business is leasing space to tenants in the shopping and industrial centers we own or lease. We also manage centers for joint ventures in which we are partners or for other outside owners for which we charge fees.
At December 31, 2010, we owned or operated under long-term leases, either directly or through our interest in real estate joint ventures or partnerships, a total of 383 developed income-producing properties and nine properties under various stages of construction and development. The total number of properties includes 312 neighborhood and community shopping centers, 77 industrial projects and three other operating properties located in 23 states spanning the country from coast to coast. The portfolio of properties is approximately 71.5 million square feet.
We also owned interests in 42 parcels of land held for development that totaled approximately 33.1 million square feet.
At December 31, 2010, we employed 380 full-time persons and our principal executive offices are located at 2600 Citadel Plaza Drive, Houston, Texas 77008, and our phone number is (713) 866-6000. We also have ten regional offices located in various parts of the United States.
Investment and Operating Strategy.Our long-term strategy is to focus on increasing funds from operations (“FFO”) and shareholder value. We do this through hands-on leasing, management and selected redevelopment of the existing portfolio of properties, through disciplined growth from selective acquisitions and new developments and through the disposition of assets that no longer meet our ownership criteria. We do this while remaining committed to maintaining a conservatively leveraged balance sheet, a well-staggered debt maturity schedule and strong credit agency ratings.
Currently, we are focusing our efforts on improvements to our operating fundamentals and increasing shareholder value. We have also positioned ourselves to take advantage of growth opportunities as the economy improves. We have implemented a multifaceted approach utilizing associates from our leasing, acquisitions and new development departments to source these opportunities. We are also leveraging their efforts with the relationships we have in the brokerage, banking and institutional arenas. Competition for quality acquisition opportunities remains substantial; nevertheless, we have been successful in identifying selected properties, which meet our return hurdles, and we will continue to actively evaluate other opportunities as they enter the market.
At December 31, 2010, neighborhood and community shopping centers generated 89.0% of total revenue and industrial properties accounted for 9.4%. We expect to continue to focus the future growth of the portfolio in neighborhood and community centers and bulk industrial properties in markets where we currently operate and may expand to other markets throughout the United States. We do not anticipate significant investment in other classes of real estate such as multi-family or office assets.
We may either purchase or lease income-producing properties in the future, and may also participate with other entities in property ownership through partnerships, joint ventures or similar types of co-ownership. Equity investments may be subject to existing mortgage financing and other indebtedness or such financing may be incurred in connection with acquiring such investments.
We may invest in mortgages; however, we have traditionally invested in first mortgages to real estate joint ventures or partnerships in which we own an equity interest. We may also invest in securities of other issuers for the purpose, among others, of exercising control over such entities, subject to the gross income and asset tests necessary for REIT qualification.
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Our operating strategy consists of intensive hands-on management and leasing of our properties. In acquiring and developing properties, we attempt to accumulate enough properties in a geographic area to allow for the establishment of a regional office, which enables us to obtain in-depth knowledge of the market from a leasing perspective and to have easy access to the property and our tenants from a management viewpoint.
Diversification from both a geographic and tenancy perspective is a critical component of our operating strategy. While approximately 34.4% of the building square footage of our properties is located in the State of Texas, we continue to expand our holdings outside the state. With respect to tenant diversification, our two largest tenants accounted for 3.0% and 1.8%, respectively, of our total rental revenues for the year ended December 31, 2010. No other tenant accounted for more than 1.5% of our total rental revenues.
We finance our growth and working capital needs in a conservative manner. Our credit ratings were BBB from Standard & Poors and Baa2 from Moody’s Investor Services as of December 31, 2010 and 2009. We intend to maintain a conservative approach to managing our balance sheet, which, in turn, gives us many options of raising debt or equity capital when needed. At December 31, 2010, our ratio of earnings to combined fixed charges and preferred dividends as defined by the Securities and Exchange Commission (“SEC”), not based on FFO, was 1.0 to 1 and our debt to total assets before depreciation was 44.8%.
Our policies with respect to the investment and operating strategies discussed above are reviewed by our Board of Trust Managers periodically and may be modified without a vote of our shareholders.
Location of Properties. Our properties are located in 23 states, primarily throughout the southern half of the country. As of December 31, 2010, we have 392 properties which were owned or operated under long-term leases either directly or through our interest in real estate joint ventures or partnerships. Net operating income generated by our properties located in Houston and its surrounding areas was 21.8%, and an additional 11.3% of net operating income is generated from properties that are located in other parts of Texas. We also have 42 parcels of land held for development, 11 of which are located in Houston and its surrounding areas and 10 of which are located in other parts of Texas. Because of our investments in Houston and its surrounding areas, as well as in other parts of Texas, the Houston and Texas economies affect, to a large degree, our business and operations.
Economic Factors. While downside risks still exist, most economic indicators suggest that the economy is in a recovery phase. Consumer confidence has begun to rebound from historical low levels, credit availability is improving, and retail sales showed modest growth through 2010. Sales will likely continue to trend upward, though at a decreased rate as year over year comparisons become more difficult. Various factors have aligned to cause increases in commodity prices, in turn leading to higher food and fuel costs. While top line inflation is reported to remain low in the short term, we are seeing significant increases in these sectors which are likely to generate higher year over year sales at supermarkets. With consumers remaining value oriented, “sticky” prices are likely to limit these supermarkets’ margins. Overall, we expect the improved gross sales to translate into a stronger demand for retail space which should lead to lower vacancy rates and more stable rents beyond 2011. With the majority of our shopping centers being supermarket-anchored and located in densely populated, major metropolitan areas, our portfolio came through the recession stronger than centers anchored by tenants with more discretionary product lines. Our analysis has identified stronger interest for top tier shopping centers with easier availability for credit resulting in higher prices, while second and third tier properties have seen consistent pricing. In light of these trends, we have expanded the internal resources dedicated to examining available assets in our key markets, to identify and purchase the best assets and properties with the strongest upside potential.
Competition. We compete with numerous other developers and real estate companies (both public and private), financial institutions and other investors engaged in the development, acquisition and operation of shopping centers and commercial property in our trade areas. This results in competition for the acquisition of both existing income-producing properties and prime development sites. Competition for these acquisitions may also increase as credit availability improves resulting in additional pricing pressure. There is also competition for tenants to occupy the space that is developed, acquired and managed by our competitors or us.
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We believe that the principal competitive factors in attracting tenants in our market areas are location, price, anchor tenants and maintenance of properties. We also believe that our competitive advantages include the favorable locations of our properties, knowledge of markets and customer bases, our ability to provide a retailer with multiple locations with anchor tenants and the practice of continuous maintenance and renovation of our properties.
Materials Available on Our Website. Copies of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to those reports, as well as Reports on Forms 3, 4, 5 and SC 13G regarding our officers, trust managers or 10% beneficial owners, filed or furnished pursuant to Section 13(a), 15(d) or 16(a) of the Securities Exchange Act of 1934 are available free of charge through our website (www.weingarten.com) as soon as reasonably practicable after we electronically file the material with, or furnish it to, the SEC. We have also made available on our website copies of our Audit Committee Charter, Management Development and Executive Compensation Committee Charter, Governance and Nominating Committee Charter, Code of Conduct and Ethics and Governance Guidelines. In the event of any changes to these charters or the code or guidelines, changed copies will also be made available on our website. You may also read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549 or the SEC’s Internet site atwww.sec.gov. Materials on our website are not part of our Annual Report on Form 10-K.
Financial Information. Additional financial information concerning us is included in the Consolidated Financial Statements located on pages 51 through 91 in our Annual Report on Form 10-K.
Incorporation of Documents by Reference.This document “incorporates by reference” information that we have filed with the SEC, which means we are disclosing important information to you by referring you to those documents. We incorporate by reference the following Current Reports on Form 8-K filed August 31, 2011 and October 4, 2011.
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ITEM 2. | Properties |
At December 31, 2010, our real estate properties consisted of 392 locations in 23 states. A complete listing of these properties, including the name, location, building area and land area, is as follows (in square feet):
Center and Location | Building Total | Land Total | ||||||
Retail | ||||||||
Arizona | ||||||||
Arrowhead Festival S.C., 75th Ave. at W. Bell Rd., Glendale | 198,458 | 157,000 | ||||||
Basha’s Valley Plaza, S. McClintock at E. Southern, Tempe | 145,518 | 570,000 | ||||||
Broadway Marketplace, Broadway at Rural, Tempe | 82,757 | 347,000 | ||||||
Camelback Village Square, Camelback at 7th Avenue, Phoenix | 234,494 | 543,000 | ||||||
Desert Village, Pinnacle Peak Rd. at Pima Rd., Scottsdale | 101,863 | 595,901 | ||||||
Entrada de Oro, Magee Road and Oracle Road, Tucson | 109,071 | 572,000 | ||||||
Fountain Plaza, 77th St. at McDowell, Scottsdale | 267,761 | 445,000 | ||||||
Fry’s Ellsworth Plaza, Broadway Rd. at Ellsworth Rd., Mesa | 73,608 | 58,000 | ||||||
Laveen Village Market, Baseline Rd. at 51st St., Phoenix | 111,644 | 372,274 | ||||||
Madera Village, Tanque Verde Rd. and Catalina Hwy., Tucson | 107,326 | 419,000 | ||||||
Mohave Crossroads, Bullhead Parkway at State Route 95, Bullhead City | 379,528 | 990,867 | ||||||
Monte Vista Village Center, Baseline Rd. at Ellsworth Rd., Mesa | 108,551 | 353,000 | ||||||
Oracle Crossings, Oracle Highway and Magee Road, Tucson | 260,541 | 1,307,000 | ||||||
Oracle Wetmore, Wetmore Road and Oracle Highway, Tucson | 255,290 | 711,162 | ||||||
Palmilla Center, Dysart Rd. at McDowell Rd., Avondale | 173,823 | 264,000 | ||||||
Pueblo Anozira, McClintock Dr. at Guadalupe Rd., Tempe | 158,269 | 769,000 | ||||||
Raintree Ranch, Ray Road at Price Road, Chandler | 141,230 | 714,813 | ||||||
Rancho Encanto, 35th Avenue at Greenway Rd., Phoenix | 66,787 | 246,440 | ||||||
Red Mountain Gateway, Power Rd. at McKellips Rd., Mesa | 205,212 | 353,000 | ||||||
Scottsdale Horizon, Frank Lloyd Wright Blvd. and Thompson Peak Parkway, Scottsdale | 10,237 | 61,000 | ||||||
Shoppes at Bears Path, Tanque Verde Rd. and Bear Canyon Rd., Tucson | 65,779 | 362,000 | ||||||
Squaw Peak Plaza, 16th Street at Glendale Ave., Phoenix | 60,728 | 220,000 | ||||||
The Shoppes at Parkwood Ranch, Southern Avenue and Signal Butte Road, Mesa | 92,626 | 569,966 | ||||||
Arizona, Total | 3,411,101 | 11,001,423 | ||||||
Arkansas | ||||||||
Markham Square, W. Markham at John Barrow, Little Rock | 126,904 | 514,000 | ||||||
Markham West, 11400 W. Markham, Little Rock | 178,500 | 769,000 | ||||||
Westgate, Cantrell at Bryant, Little Rock | 52,626 | 206,000 | ||||||
Arkansas, Total | 358,030 | 1,489,000 |
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Center and Location | Building Total | Land Total | ||||||||||
California | ||||||||||||
580 Market Place, E. Castro Valley at Hwy. I-580, Castro Valley | 100,165 | 444,000 | ||||||||||
Arcade Square, Watt Ave. at Whitney Ave., Sacramento | 76,497 | 234,000 | ||||||||||
Buena Vista Marketplace, Huntington Dr. at Buena Vista St., Duarte | 90,805 | 322,000 | ||||||||||
Centerwood Plaza, Lakewood Blvd. at Alondra Dr., Bellflower | 76,985 | 333,000 | ||||||||||
Chino Hills Marketplace, Chino Hills Pkwy. at Pipeline Ave., Chino Hills | 311,575 | 1,187,000 | ||||||||||
Creekside Center, Alamo Dr. at Nut Creek Rd., Vacaville | 116,229 | 400,000 | ||||||||||
Discovery Plaza, W. El Camino Ave. at Truxel Rd., Sacramento | 93,491 | 417,000 | ||||||||||
El Camino Promenade, El Camino Real at Via Molena, Encinitas | 129,651 | 451,000 | ||||||||||
Freedom Centre, Freedom Blvd. At Airport Blvd., Watsonville | 150,241 | 543,000 | ||||||||||
Fremont Gateway Plaza, Paseo Padre Pkwy. at Walnut Ave., Fremont | 194,601 | 650,000 | ||||||||||
Greenhouse Marketplace, Lewelling Blvd. at Washington Ave., San Leandro | 238,664 | 578,000 | ||||||||||
Hallmark Town Center, W. Cleveland Ave. at Stephanie Ln., Madera | 85,066 | 365,000 | ||||||||||
Jess Ranch Marketplace, Bear Valley Road at Jess Ranch Parkway, Apple Valley | (1 | )(3) | 302,463 | 920,423 | ||||||||
Jess Ranch Phase III, Bear Valley Road at Jess Ranch Parkway, Apple Valley | (1 | )(3) | 179,514 | 741,813 | ||||||||
Marshalls Plaza, McHenry at Sylvan Ave., Modesto | 78,752 | 218,000 | ||||||||||
Menifee Town Center, Antelope Rd. at Newport Rd., Menifee | 248,734 | 658,000 | ||||||||||
Prospectors Plaza, Missouri Flat Rd. at US Hwy. 50, Placerville | 228,345 | 866,684 | ||||||||||
Rancho San Marcos Village, San Marcos Blvd. at Rancho Santa Fe Rd., San Marcos | 120,829 | 541,000 | ||||||||||
San Marcos Plaza, San Marcos Blvd. at Rancho Santa Fe Rd., San Marcos | 81,086 | 116,000 | ||||||||||
Shasta Crossroads, Churn Creek Rd. at Dana Dr., Redding | 252,651 | 520,000 | ||||||||||
Silver Creek Plaza, E. Capital Expressway at Silver Creek Blvd., San Jose | 197,925 | 573,000 | ||||||||||
Southampton Center, IH-780 at Southampton Rd., Benecia | 162,764 | 596,000 | ||||||||||
Stoneridge Town Centre, Highway 60 at Nason St., Moreno Valley | (1 | )(3) | 156,630 | 1,104,246 | ||||||||
Stony Point Plaza, Stony Point Rd. at Hwy. 12, Santa Rosa | 198,528 | 619,000 | ||||||||||
Summerhill Plaza, Antelope Rd. at Lichen Dr., Sacramento | 128,880 | 704,000 | ||||||||||
Sunset Center, Sunset Ave. at State Hwy. 12, Suisun City | 85,238 | 359,000 | ||||||||||
Tully Corners Shopping Center, Tully Rd. at Quimby Rd., San Jose | (1 | )(3) | 115,992 | 430,891 | ||||||||
Valley, Franklin Boulevard and Mack Road, Sacramento | 98,240 | 580,000 | ||||||||||
Westminster Center, Westminster Blvd. at Golden West St., Westminster | 417,820 | 1,739,000 | ||||||||||
California, Total | 4,718,361 | 17,211,057 | ||||||||||
Colorado | ||||||||||||
Academy Place, Academy Blvd. at Union Blvd., Colorado Springs | 290,464 | 404,000 | ||||||||||
Aurora City Place, E. Alameda at I225, Aurora | (1 | )(3) | 547,283 | 2,260,000 | ||||||||
CityCenter Englewood, S. Santa Fe at Hampden Ave., Englewood | (1 | )(3) | 359,305 | 452,941 | ||||||||
Crossing at Stonegate, Jordon Rd. at Lincoln Ave., Parker | (1 | )(3) | 109,058 | 870,588 | ||||||||
Edgewater Marketplace, Sheridan Blvd. at 17th Ave., Edgewater | 145,780 | 538,576 | ||||||||||
Green Valley Ranch Towne Center, Tower Rd. at 48th Ave., Denver | (1 | )(3) | 114,947 | 276,000 |
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Center and Location | Building Total | Land Total | ||||||||||
Lowry Town Center, 2nd Ave. at Lowry Ave., Denver | (1 | )(3) | 129,398 | 246,000 | ||||||||
River Point at Sheridan, Highway 85 and Highway 285, Sheridan | (1 | )(2) | 434,070 | 3,266,813 | ||||||||
The Gardens on Havana, Mississippi at Havana, Aurora | (1 | )(2)(3) | 945,648 | 0 | ||||||||
Thorncreek Crossing, Washington St. at 120th St., Thornton | (1 | )(3) | 386,137 | 1,156,863 | ||||||||
Uintah Gardens, NEC 19th St. at West Uintah, Colorado Springs | 214,774 | 677,000 | ||||||||||
Westminster Plaza, North Federal Blvd. at 72nd Ave., Westminster | (1 | ) | 111,113 | 636,000 | ||||||||
Colorado, Total | 3,787,977 | 10,784,781 | ||||||||||
Florida | ||||||||||||
Alafaya Square, Alafaya Trail, Oviedo | (1 | )(3) | 176,486 | 915,000 | ||||||||
Argyle Village, Blanding at Argyle Forest Blvd., Jacksonville | 312,447 | 1,329,000 | ||||||||||
Boca Lyons, Glades Rd. at Lyons Rd., Boca Raton | 113,515 | 545,000 | ||||||||||
Clermont Landing, U.S. 27 & Steve’s Road, Clermont | (1 | )(2)(3) | 241,126 | 2,039,915 | ||||||||
Colonial Landing, East Colonial Dr. at Maguire Boulevard, Orlando | (1 | ) | 263,007 | 980,000 | ||||||||
Colonial Plaza, E. Colonial Dr. at Primrose Dr., Orlando | 502,182 | 2,009,000 | ||||||||||
Countryside Centre, US Highway 19 at Countryside Boulevard, Clearwater | 242,567 | 906,440 | ||||||||||
East Lake Woodlands, East Lake Road and Tampa Road, Palm Harbor | (1 | )(3) | 140,617 | 730,000 | ||||||||
Embassy Lakes, Sheraton St. at Hiatus Rd., Cooper City | 179,937 | 618,000 | ||||||||||
Epic Village - St. Augustine, SR 207 at Rolling Hills Dr, St. Augustine | (1 | ) | 53,625 | 773,626 | ||||||||
Flamingo Pines, Pines Blvd. at Flamingo Rd., Pembroke Pines | (1 | )(3) | 126,419 | 707,075 | ||||||||
Flamingo Pines, Pines Blvd. at Flamingo Rd., Pembroke Pines | 236,292 | 739,925 | ||||||||||
Hollywood Hills Plaza, Hollywood Blvd. at North Park Rd., Hollywood | (1 | )(3) | 364,785 | 1,429,000 | ||||||||
Indian Harbour Place, East Eau Gallie Boulevard, Indian Harbour Beach | (1 | )(3) | 163,521 | 636,000 | ||||||||
International Drive Value Center, International Drive and Touchstone Drive, Orlando | (1 | )(3) | 185,664 | 985,000 | ||||||||
Kendall Corners, Kendall Drive and SW 127th Avenue, Miami | (1 | )(3) | 96,472 | 365,000 | ||||||||
Lake Washington Crossing, Wickham Rd. at Lake Washington Rd., Melbourne | (1 | )(3) | 118,828 | 580,000 | ||||||||
Lake Washington Square, Wickham Rd. at Lake Washington Rd., Melbourne | 111,811 | 688,000 | ||||||||||
Largo Mall, Ulmerton Rd. at Seminole Ave., Largo | 575,247 | 1,888,000 | ||||||||||
Market at Southside, Michigan Ave. at Delaney Ave., Orlando | 159,835 | 349,000 | ||||||||||
Marketplace at Seminole Towne Center, Central Florida Greenway and Rinehart Road, Sanford | 498,612 | 1,743,000 | ||||||||||
Northridge, E. Commercial Blvd. at Dixie Hwy., Oakland Park | (1 | )(3) | 236,069 | 901,000 | ||||||||
Palm Coast Center, State Road 100 & Belle Terre Parkway, Palm Coast | (1 | )(3) | 356,195 | 960,503 | ||||||||
Palm Lakes Plaza, Atlantic Boulevard and Rock Island Road, Maragate | (1 | )(3) | 113,752 | 550,000 | ||||||||
Palms of Carrollwood, N. Dale Maybry Dr. at Fletcher Ave., Tampa | 167,887 | 679,536 | ||||||||||
Paradise Key at Kelly Plantation, US Highway 98 and Mid Bay Bridge Rd., Destin | (1 | )(3) | 271,777 | 1,247,123 | ||||||||
Pembroke Commons, University at Pines Blvd., Pembroke Pines | (1 | )(3) | 304,395 | 1,394,000 | ||||||||
Phillips Crossing, Interstate 4 and Sand Lake Road, Orlando | 145,704 | 697,000 |
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Center and Location | Building Total | Land Total | ||||||||||
Phillips Landing, Turkey Lake Rd., Orlando | 286,038 | 311,000 | ||||||||||
Pineapple Commons, Us Highway 1 and Britt Rd., Stuart | (1 | )(3) | 249,014 | 762,736 | ||||||||
Publix at Laguna Isles, Sheridan St. at SW 196th Ave., Pembroke Pines | 69,475 | 400,000 | ||||||||||
Quesada Commons, Quesada Avenue and Toledo Blade Boulevard, Port Charlotte | (1 | )(3) | 58,890 | 312,000 | ||||||||
Shoppes at Paradise Isle, 34940 Emerald Coast Pkwy., Destin | (1 | )(3) | 171,670 | 764,000 | ||||||||
Shoppes at Parkland, Hillsboro Boulevard at State Road #7, Parkland | (1 | ) | 145,652 | 905,000 | ||||||||
Shoppes of Port Charlotte, Toledo Blade Boulevard and Tamiami Trail, Port Charlotte | (1 | )(3) | 41,011 | 276,000 | ||||||||
Shoppes of Port Charlotte, Toledo Blade Boulevard and Tamiami Trail, Port Charlotte | (1 | )(3) | 3,921 | 176,720 | ||||||||
South Dade, South Dixie Highway and Eureka Drive, Miami | (1 | )(3) | 219,473 | 1,230,000 | ||||||||
Sunrise West Shopping Center, West Commercial Drive and NW 91st Avenue, Sunrise | (1 | )(3) | 76,321 | 540,000 | ||||||||
Sunset 19, US Hwy. 19 at Sunset Pointe Rd., Clearwater | 275,910 | 1,078,000 | ||||||||||
Tamiami Trail Shops, S.W. 8th St. at S.W. 137th Ave., Miami | (1 | )(3) | 110,867 | 515,000 | ||||||||
The Marketplace at Dr. Phillips, Dr. Phillips Boulevard and Sand Lake Road, Orlando | (1 | )(3) | 326,108 | 1,495,000 | ||||||||
The Shoppes at South Semoran, Semoran Blvd. at Pershing Ave., Orlando | 101,486 | 451,282 | ||||||||||
TJ Maxx Plaza, 117th Avenue at Sunset Blvd., Kendall | 161,429 | 540,000 | ||||||||||
University Palms, Alafaya Trail at McCullough Rd., Oviedo | (1 | ) | 99,172 | 522,000 | ||||||||
Venice Pines, Center Rd. at Jacaranda Blvd., Venice | 97,303 | 525,000 | ||||||||||
Vizcaya Square, Nob Hill Rd. at Cleary Blvd., Plantation | 112,410 | 521,000 | ||||||||||
Westland Terrace Plaza, SR 50 at Apopka Vineland Rd., Orlando | 260,521 | 361,000 | ||||||||||
Winter Park Corners, Aloma Ave. at Lakemont Ave., Winter Park | 102,382 | 400,000 | ||||||||||
Florida, Total | 9,427,827 | 39,470,881 | ||||||||||
Georgia | ||||||||||||
Brookwood Marketplace, Peachtree Parkway at Mathis Airport Rd., Suwannee | 373,594 | 1,459,000 | ||||||||||
Brookwood Square, East-West Connector at Austell Rd., Austell | 253,448 | 971,000 | ||||||||||
Brownsville Commons, Brownsville Road and Hiram-Lithia Springs Road, Powder Springs | 81,886 | 205,000 | ||||||||||
Camp Creek Marketplace II, Camp Creek Parkway and Carmla Drive, Atlanta | 196,283 | 724,000 | ||||||||||
Cherokee Plaza, Peachtree Road and Colonial Drive, Atlanta | (1 | ) | 99,749 | 336,000 | ||||||||
Dallas Commons, US Highway 278 and Nathan Dean Boulevard, Dallas | 95,262 | 244,000 | ||||||||||
Grayson Commons, Grayson Hwy. at Rosebud Rd., Grayson | 76,611 | 507,383 | ||||||||||
Lakeside Marketplace, Cobb Parkway (US Hwy. 41), Acworth | 310,848 | 736,000 | ||||||||||
Mansell Crossing, North Point Parkway at Mansell Rd., Alpharetta | (1 | )(3) | 102,931 | 582,833 | ||||||||
Perimeter Village, Ashford-Dunwoody Rd., Atlanta | 387,755 | 1,803,820 | ||||||||||
Publix at Princeton Lakes, Carmia Drive and Camp Creek Drive, Atlanta | (1 | )(3) | 68,407 | 336,000 | ||||||||
Reynolds Crossing, Steve Reynolds and Old North Cross Rd., Duluth | 115,983 | 407,000 | ||||||||||
Roswell Corners, Woodstock Rd. at Hardscrabble Rd., Roswell | 318,369 | 784,000 | ||||||||||
Sandy Plains Exchange, Sandy Plains at Scufflegrit, Marietta | (1 | ) | 72,784 | 452,000 | ||||||||
Thompson Bridge Commons, Thompson Bridge Rd. at Mt. Vernon Rd., Gainesville | (1 | ) | 92,587 | 540,000 | ||||||||
Georgia, Total | 2,646,497 | 10,088,036 |
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Center and Location | Building Total | Land Total | ||||||||||
Illinois | ||||||||||||
Burbank Station, S. Cicero Ave. at W. 78th St., Burbank | 303,566 | 1,013,380 | ||||||||||
Illinois, Total | 303,566 | 1,013,380 | ||||||||||
Kansas | ||||||||||||
Kohl’s, Wanamaker Rd. at S.W. 17th St., Topeka | 115,716 | 444,000 | ||||||||||
Shawnee Village, Shawnee Mission Pkwy. at Quivera Rd., Shawnee | (4 | ) | 132,619 | 526,987 | ||||||||
Kansas, Total | 248,335 | 970,987 | ||||||||||
Kentucky | ||||||||||||
Festival at Jefferson Court, Outer Loop at Jefferson Blvd., Louisville | 218,396 | 1,153,000 | ||||||||||
Millpond Center, Boston at Man O’War, Lexington | 151,567 | 773,000 | ||||||||||
Regency Shopping Centre, Nicholasville Rd.& West Lowry Lane, Lexington | 189,016 | 590,000 | ||||||||||
Tates Creek, Tates Creek at Man O’ War, Lexington | 179,450 | 586,384 | ||||||||||
Kentucky, Total | 738,429 | 3,102,384 | ||||||||||
Louisiana | ||||||||||||
14/Park Plaza, Hwy. 14 at General Doolittle, Lake Charles | 172,068 | 535,000 | ||||||||||
Danville Plaza, Louisville at 19th, Monroe | 141,380 | 539,000 | ||||||||||
K-Mart Plaza, Ryan St., Lake Charles | (1 | )(3) | 215,948 | 126,000 | ||||||||
Manhattan Place, Manhattan Blvd. at Gretna Blvd., Harvey | 276,615 | 718,339 | ||||||||||
Orleans Station, Paris, Robert E. Lee at Chatham, New Orleans | 0 | 15,318 | ||||||||||
Prien Lake Plaza, Prien Lake Rd. at Nelson Rd., Lake Charles | 213,618 | 64,950 | ||||||||||
River Marketplace, Ambassador Caffery at Kaliste Saloom, Lafayette | (1 | )(3) | 334,939 | 1,029,415 | ||||||||
Southgate, Ryan at Eddy, Lake Charles | 157,538 | 511,000 | ||||||||||
Town & Country Plaza, U.S. Hwy. 190 West, Hammond | 227,452 | 645,000 | ||||||||||
University Place, 70th St. at Youree Dr., Shreveport | (1 | )(3) | 376,154 | 1,076,803 | ||||||||
University Place, 71st St. at Youree Dr., Shreveport | 5,100 | 37,462 | ||||||||||
Westwood Village, W. Congress at Bertrand, Lafayette | 138,034 | 942,000 | ||||||||||
Louisiana, Total | 2,258,846 | 6,240,287 | ||||||||||
Maine | ||||||||||||
The Promenade, Essex at Summit, Lewiston | (1 | ) | 204,713 | 962,667 | ||||||||
Maine, Total | 204,713 | 962,667 |
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Center and Location | Building Total | Land Total | ||||||||||
Missouri | ||||||||||||
Ballwin Plaza, Manchester Rd. at Vlasis Dr., Ballwin | 200,915 | 653,000 | ||||||||||
Western Plaza, Hwy. 141 at Hwy. 30, Fenton | (1 | )(3) | 56,634 | 654,000 | ||||||||
Missouri, Total | 257,549 | 1,307,000 | ||||||||||
Nevada | ||||||||||||
Best in the West, Rainbow at Lake Mead Rd., Las Vegas | 428,067 | 1,516,000 | ||||||||||
Charleston Commons, Charleston and Nellis, Las Vegas | 332,539 | 1,314,791 | ||||||||||
College Park S.C., E. Lake Mead Blvd. at Civic Ctr. Dr., North Las Vegas | 167,654 | 721,000 | ||||||||||
Eastern Horizon, Eastern Ave. at Horizon Ridge Pkwy., Henderson | 209,727 | 478,000 | ||||||||||
Francisco Centre, E. Desert Inn Rd. at S. Eastern Ave., Las Vegas | 148,815 | 639,000 | ||||||||||
Mission Center, Flamingo Rd. at Maryland Pkwy., Las Vegas | 212,493 | 570,000 | ||||||||||
Paradise Marketplace, Flamingo Rd. at Sandhill, Las Vegas | 148,092 | �� | 323,556 | |||||||||
Rainbow Plaza, Phase I, Rainbow Blvd. at Charleston Blvd., Las Vegas | 136,369 | 514,518 | ||||||||||
Rainbow Plaza, Rainbow Blvd. at Charleston Blvd., Las Vegas | 273,916 | 1,033,482 | ||||||||||
Rancho Towne & Country, Rainbow Blvd. at Charleston Blvd., Las Vegas | 84,743 | 350,000 | ||||||||||
Tropicana Beltway, Tropicana Beltway at Fort Apache Rd., Las Vegas | 640,754 | 1,466,000 | ||||||||||
Tropicana Marketplace, Tropicana at Jones Blvd., Las Vegas | 144,493 | 309,912 | ||||||||||
Westland Fair North, Charleston Blvd. at Decatur Blvd., Las Vegas | 600,585 | 1,008,451 | ||||||||||
Nevada, Total | 3,528,247 | 10,244,710 | ||||||||||
New Mexico | ||||||||||||
Eastdale, Candelaria Rd. at Eubank Blvd., Albuquerque | 119,111 | 601,000 | ||||||||||
North Towne Plaza, Academy Rd. at Wyoming Blvd., Albuquerque | 107,666 | 607,000 | ||||||||||
Pavillions at San Mateo, I-40 at San Mateo, Albuquerque | 196,044 | 791,000 | ||||||||||
Wyoming Mall, Academy Rd. at Northeastern, Albuquerque | 267,847 | 271,407 | ||||||||||
New Mexico, Total | 690,668 | 2,270,407 | ||||||||||
North Carolina | ||||||||||||
Avent Ferry, Avent Ferry Rd. at Gorman St., Raleigh | 111,622 | 669,000 | ||||||||||
Bull City Market, Broad St. at West Main St., Durham | 42,517 | 112,000 | ||||||||||
Capital Square, Capital Blvd. at Huntleigh Dr., Cary | 143,063 | 607,000 | ||||||||||
Chatham Crossing, US 15/501 at Plaza Dr., Chapel Hill | (1 | )(3) | 96,155 | 424,000 | ||||||||
Cole Park Plaza, US 15/501 and Plaza Dr., Chapel Hill | (1 | )(3) | 82,258 | 380,000 | ||||||||
Falls Pointe, Neuce Rd. at Durant Rd., Raleigh | 193,331 | 659,000 | ||||||||||
Galleria, Galleria Boulevard and Sardis Road, Charlotte | 328,276 | 799,000 | ||||||||||
Harrison Pointe, Harrison Ave. at Maynard Rd., Cary | 130,934 | 1,297,306 | ||||||||||
Heritage Station, Forestville Rd. at Rogers Rd., Wake Forest | (1 | ) | 68,641 | 392,000 | ||||||||
High House Crossing, NC Hwy. 55 at Green Level W. Rd., Cary | 89,997 | 606,000 | ||||||||||
Hope Valley Commons, Highway 751 and Highway 54, Durham | 81,371 | 1,247,123 |
9
Center and Location | Building Total | Land Total | ||||||||||
Johnston Road Plaza, Johnston Rd. at McMullen Creek Pkwy., Charlotte | 79,508 | 466,000 | ||||||||||
Leesville Town Centre, Leesville Rd. at Leesville Church Rd., Raleigh | 114,396 | 904,000 | ||||||||||
Little Brier Creek, Little Brier Creek Lane and Brier Leaf Lane, Raleigh | 62,921 | 90,000 | ||||||||||
Mineral Springs Village, Mineral Springs Rd. at Wake Forest Rd., Durham | 59,859 | 572,000 | ||||||||||
Northwoods Market, Maynard Rd. at Harrison Ave., Cary | 77,802 | 431,000 | ||||||||||
Parkway Pointe, Cory Parkway at S. R. 1011, Cary | 80,061 | 461,000 | ||||||||||
Pinecrest Plaza, Hwy. 15-501 at Morganton Rd., Pinehurst | 252,038 | 1,438,000 | ||||||||||
Ravenstone Commons, Hwy. 98 at Sherron Rd., Durham | 60,424 | 374,000 | ||||||||||
Six Forks Station, Six Forks Rd. at Strickland Rd., Raleigh | 466,585 | 1,843,000 | ||||||||||
Steele Creek Crossing, York Rd. at Steele Creek Rd., Charlotte | 77,301 | 491,000 | ||||||||||
Stonehenge Market, Creedmoor Rd. at Bridgeport Dr., Raleigh | 188,521 | 669,000 | ||||||||||
Surf City Crossing, Highway 17 and Highway 210, Surf City | (2 | ) | 53,776 | 434,311 | ||||||||
Waterford Village, U.S. Hwy. 17 & U.S. Hwy. 74/76, Leland | (2 | ) | 79,139 | 1,426,594 | ||||||||
Whitehall Commons, NWC of Hwy. 49 at I-485, Charlotte | 444,561 | 360,000 | ||||||||||
North Carolina, Total | 3,465,057 | 17,152,334 | ||||||||||
Oklahoma | ||||||||||||
Market Boulevard , E. Reno Ave. at N. Douglas Ave., Midwest City | 35,765 | 142,000 | ||||||||||
Town and Country, Reno Ave. at North Air Depot, Midwest City | 128,231 | 540,000 | ||||||||||
Oklahoma, Total | 163,996 | 682,000 | ||||||||||
Oregon | ||||||||||||
Clackamas Square, SE 82nd Avenue and SE Causey Avenue, Portland | (1 | )(3) | 136,739 | 215,000 | ||||||||
Oak Grove Market Center, SE Mcloughlin Blvd. & Oak Grove Ave., Portland | 97,177 | 292,288 | ||||||||||
Raleigh Hills Plaza, SW Beaverton-Hillsdale Hwy. and SW Scholls Ferry Road, Portland | (1 | )(3) | 39,520 | 165,000 | ||||||||
Oregon, Total | 273,436 | 672,288 | ||||||||||
South Carolina | ||||||||||||
Fresh Market Shoppes, 890 William Hilton Head Pkwy., Hilton Head | (1 | )(3) | 86,120 | 436,000 | ||||||||
South Carolina, Total | 86,120 | 436,000 | ||||||||||
Tennessee | ||||||||||||
Bartlett Towne Center, Bartlett Blvd. at Stage Rd., Bartlett | 192,624 | 774,000 | ||||||||||
Commons at Dexter Lake Phase II, Dexter at N. Germantown, Memphis | (1 | ) | 61,538 | 272,792 | ||||||||
Commons at Dexter Lake, Dexter at N. Germantown, Memphis | (1 | ) | 166,958 | 740,208 | ||||||||
Highland Square, Summer at Highland, Memphis | 14,490 | 84,000 | ||||||||||
Mendenhall Commons, South Mendenahall Rd. and Sanderlin Avenue, Memphis | (1 | ) | 83,847 | 250,000 | ||||||||
Ridgeway Trace, Poplar Avenue and Ridgeway Road, Memphis | (2 | ) | 251,511 | 222,553 | ||||||||
Summer Center, Summer Ave. at Waring Rd., Memphis | 137,335 | 560,000 | ||||||||||
Tennessee, Total | 908,303 | 2,903,553 |
10
Center and Location | Building Total | Land Total | ||||||||||
Texas | ||||||||||||
10/Federal, I-10 at Federal, Houston | (1 | ) | 132,472 | 474,000 | ||||||||
Alabama-Shepherd, S. Shepherd at W. Alabama, Houston | 56,110 | 176,000 | ||||||||||
Angelina Village, Hwy. 59 at Loop 287, Lufkin | 248,199 | 1,835,000 | ||||||||||
Bayshore Plaza, Spencer Hwy. at Burke Rd., Houston | 122,039 | 196,000 | ||||||||||
Bell Plaza, 45th Ave. at Bell St., Amarillo | (1 | ) | 130,631 | 682,000 | ||||||||
Bellaire Boulevard, Bellaire at S. Rice, Houston | (1 | ) | 35,081 | 137,000 | ||||||||
Boswell Towne Center, Highway 287 at Bailey Boswell Rd., Saginaw | 87,835 | 137,000 | ||||||||||
Braeswood Square, N. Braeswood at Chimney Rock, Houston | 103,336 | 422,000 | ||||||||||
Broadway , Broadway at 59th St., Galveston | (1 | ) | 74,604 | 220,000 | ||||||||
Broadway, S. Broadway at W. 9th St., Tyler | 60,400 | 259,000 | ||||||||||
Calder, Calder at 24th St., Beaumont | 34,641 | 95,000 | ||||||||||
Cedar Bayou, Bayou Rd., La Marque | 45,561 | 51,000 | ||||||||||
Central Plaza, Loop 289 at Slide Rd., Lubbock | 151,677 | 529,000 | ||||||||||
Centre at Post Oak, Westheimer at Post Oak Blvd., Houston | 184,601 | 505,000 | ||||||||||
Champions Village, F.M. 1960 at Champions Forest Dr., Houston | (1 | ) | 384,581 | 1,391,000 | ||||||||
Coronado, 34th St. at Wimberly Dr., Amarillo | 48,165 | 201,000 | ||||||||||
Crossroads, I-10 at N. Main, Vidor | 115,692 | 484,000 | ||||||||||
Cullen Center, Cullen at Reed, Houston | 7,316 | 30,000 | ||||||||||
Cullen Plaza, Cullen at Wilmington, Houston | (1 | ) | 84,517 | 318,000 | ||||||||
Custer Park, SWC Custer Road at Parker Road, Plano | 179,573 | 376,000 | ||||||||||
Cypress Pointe, F.M. 1960 at Cypress Station, Houston | 287,364 | 737,000 | ||||||||||
Eastpark, Mesa Rd. at Tidwell, Houston | 1,576 | 85,262 | ||||||||||
Edgebrook, Edgebrook at Gulf Fwy., Houston | (1 | ) | 78,460 | 360,000 | ||||||||
Fiesta Trails, I-10 at DeZavala Rd., San Antonio | 488,370 | 1,589,000 | ||||||||||
Fiesta Village, Quitman at Fulton, Houston | (1 | ) | 30,249 | 80,000 | ||||||||
Fondren/West Airport, Fondren at W. Airport, Houston | 37,117 | 223,000 | ||||||||||
Food King Place, 25th St. at Avenue P, Galveston | 28,062 | 78,000 | ||||||||||
Galveston Place, Central City Blvd. at 61st St., Galveston | 210,187 | 828,000 | ||||||||||
Gateway Station, I-35W and McAlister Rd., Burleson | (1 | ) | 68,500 | 344,286 | ||||||||
Gillham Circle, Gillham Circle at Thomas, Port Arthur | 33,134 | 94,000 | ||||||||||
Glenbrook Square, Telephone Road, Houston | (1 | ) | 77,890 | 320,000 | ||||||||
Griggs Road, Griggs at Cullen, Houston | (1 | ) | 80,116 | 382,000 | ||||||||
Harrisburg Plaza, Harrisburg at Wayside, Houston | (1 | ) | 93,438 | 334,000 | ||||||||
Heights Plaza, 20th St. at Yale, Houston | 71,777 | 228,000 | ||||||||||
Horne Street Market, I-30 & Horne Street, Fort Worth | 42,267 | 223,463 | ||||||||||
Humblewood Shopping Plaza, Eastex Fwy. at F.M. 1960, Houston | 275,673 | 784,000 | ||||||||||
I-45/Telephone Rd. Center, I-45 at Maxwell Street, Houston | (1 | ) | 171,789 | 658,586 | ||||||||
Independence Plaza, Town East Blvd., Mesquite | 170,363 | 787,000 |
11
Center and Location | Building Total | Land Total | ||||||||||
Island Market Place, 6th St. at 9th Ave., Texas City | 27,277 | 90,000 | ||||||||||
Jacinto City, Market at Baca, Houston | (1 | ) | 49,138 | 134,000 | ||||||||
Killeen Marketplace, 3200 E. Central Texas Expressway, Killeen | 251,137 | 512,000 | ||||||||||
Kirby Strip Center, Kirby Dr, Houston | 10,000 | 37,897 | ||||||||||
Lake Pointe Market Center, Dalrock Rd. at Lakeview Pkwy., Rowlett | 121,689 | 218,158 | ||||||||||
Las Tiendas Plaza, Expressway 83 at McColl Rd., McAllen | (1 | )(3) | 500,067 | 910,000 | ||||||||
Lawndale, Lawndale at 75th St., Houston | (1 | ) | 52,127 | 177,000 | ||||||||
League City Plaza, I-45 at F.M. 518, League City | (1 | ) | 126,990 | 680,000 | ||||||||
Little York Plaza, Little York at E. Hardy, Houston | (1 | ) | 113,878 | 483,000 | ||||||||
Lone Star Pavilions, Texas at Lincoln Ave., College Station | 106,907 | 439,000 | ||||||||||
Lyons Avenue, Lyons at Shotwell, Houston | (1 | ) | 67,629 | 178,000 | ||||||||
Market at Nolana, Nolana Ave. and 29th St., McAllen | (1 | )(3) | 244,501 | 181,300 | ||||||||
Market at Sharyland Place, U.S. Expressway 83 and Shary Road, Mission | (1 | )(3) | 301,174 | 543,000 | ||||||||
Market at Town Center, Town Center Blvd., Sugar Land | 375,547 | 1,733,000 | ||||||||||
Market at Westchase, Westheimer at Wilcrest, Houston | 84,081 | 318,000 | ||||||||||
Montgomery Plaza, Loop 336 West at I-45, Conroe | 300,772 | 1,179,000 | ||||||||||
Moore Plaza, S. Padre Island Dr. at Staples, Corpus Christi | 533,816 | 1,491,000 | ||||||||||
North Creek Plaza, Del Mar Blvd. at Hwy. I-35, Laredo | 445,940 | 1,251,000 | ||||||||||
North Main Square, Pecore at N. Main, Houston | 18,515 | 64,000 | ||||||||||
North Oaks, F.M. 1960 at Veterans Memorial, Houston | (1 | ) | 405,186 | 1,646,000 | ||||||||
North Park Plaza, Eastex Fwy. at Dowlen, Beaumont | (1 | )(3) | 281,401 | 636,000 | ||||||||
North Towne Plaza, U.S. 77 and 83 at SHFM 802, Brownsville | (2 | ) | 128,200 | 303,715 | ||||||||
North Triangle , I-45 at F.M. 1960, Houston | 16,060 | 113,000 | ||||||||||
Northbrook Center, Northwest Fwy. at W. 34th, Houston | 173,288 | 655,000 | ||||||||||
Northcross, N. 10th St. at Nolana Loop, McAllen | (1 | )(3) | 75,517 | 218,000 | ||||||||
Northwest Crossing, N.W. Fwy. at Hollister, Houston | (1 | )(3) | 302,290 | 884,000 | ||||||||
Oak Forest, W. 43rd at Oak Forest, Houston | 152,504 | 541,000 | ||||||||||
Oak Park Village, Nacogdoches at New Braunfels, San Antonio | (1 | ) | 64,287 | 221,000 | ||||||||
Old Navy Building, 1815 10th Street, McAllen | (1 | )(3) | 15,000 | 62,000 | ||||||||
Orchard Green, Gulfton at Renwick, Houston | 74,983 | 273,000 | ||||||||||
Overton Park Plaza, SW Loop 820/Interstate 20 at South Hulen St., Ft. Worth | 466,322 | 1,636,000 | ||||||||||
Palmer Plaza, F.M. 1764 at 34th St., Texas City | 196,506 | 367,000 | ||||||||||
Parliament Square II, W. Ave. at Blanco, San Antonio | 54,541 | 220,919 | ||||||||||
Parliament Square, W. Ave. at Blanco, San Antonio | 64,950 | 263,081 | ||||||||||
Phelan West, Phelan at 23rd St., Beaumont | (1 | )(3) | 82,221 | 88,509 | ||||||||
Phelan, Phelan at 23rd St, Beaumont | 12,000 | 63,000 | ||||||||||
Pitman Corners, Custer Road at West 15th, Plano | 192,283 | 699,000 | ||||||||||
Plantation Centre, Del Mar Blvd. at McPherson Rd., Laredo | 134,853 | 596,000 | ||||||||||
Preston Shepard Place, Preston Rd. at Park Blvd., Plano | (1 | )(3) | 363,337 | 1,359,072 |
12
Center and Location | Building Total | Land Total | ||||||||||
Randall’s/Cypress Station, F.M. 1960 at I-45, Houston | 138,974 | 618,000 | ||||||||||
Randall’s/Kings Crossing, Kingwood Dr. at Lake Houston Pkwy., Houston | (1 | ) | 126,397 | 624,000 | ||||||||
Randall’s/Norchester, Grant at Jones, Houston | 107,200 | 475,000 | ||||||||||
Richmond Square, Richmond Ave. at W. Loop 610, Houston | 93,870 | 135,000 | ||||||||||
River Oaks East, W. Gray at Woodhead, Houston | 71,265 | 206,000 | ||||||||||
River Oaks West, W. Gray at S. Shepherd, Houston | 248,820 | 609,000 | ||||||||||
Rockwall, I-30 at Market Center Street, Rockwall | (4 | ) | 209,051 | 933,000 | ||||||||
Rose-Rich, U.S. Hwy. 90A at Lane Dr., Rosenberg | 103,385 | 386,000 | ||||||||||
Sharyland Towne Crossing, Shary Rd. at Hwy. 83, Mission | (1 | )(3) | 484,949 | 2,008,000 | ||||||||
Sheldon Forest North , North, I-10 at Sheldon, Houston | 22,040 | 131,000 | ||||||||||
Sheldon Forest South , North, I-10 at Sheldon, Houston | (1 | ) | 75,340 | 328,000 | ||||||||
Shops at Three Corners, S. Main at Old Spanish Trail, Houston | (1 | ) | 247,229 | 1,007,143 | ||||||||
South 10th St. HEB, S. 10th St. at Houston St., McAllen | (1 | )(3) | 103,702 | 368,000 | ||||||||
Southgate, W. Fuqua at Hiram Clark, Houston | (1 | ) | 125,260 | 533,000 | ||||||||
Spring Plaza, Hammerly at Campbell, Houston | (1 | ) | 59,166 | 202,000 | ||||||||
Starr Plaza, U.S. Hwy. 83 at Bridge St., Rio Grande City | (1 | )(3) | 176,693 | 742,000 | ||||||||
Stella Link, Stella Link at S. Braeswood, Houston | 71,287 | 423,588 | ||||||||||
Studemont, Studewood at E. 14th St, Houston | 28,466 | 91,000 | ||||||||||
Ten Blalock Square, I-10 at Blalock, Houston | 97,277 | 321,000 | ||||||||||
Thousand Oaks, Thousand Oaks Dr. at Jones Maltsberger Rd., San Antonio | (1 | ) | 162,882 | 730,000 | ||||||||
Tomball Marketplace, FM 2920 and Future 249, Tomball | (2 | ) | 100,341 | 963,246 | ||||||||
Valley View, West Ave. at Blanco Rd., San Antonio | 91,544 | 341,000 | ||||||||||
Village Arcade, University at Kirby, Houston | 57,203 | 276,503 | ||||||||||
Village Arcade-Phase II, University at Kirby, Houston | 28,371 | 60,099 | ||||||||||
Village Arcade-Phase III, University at Kirby, Houston | 107,134 | 231,156 | ||||||||||
Village Plaza at Bunker Hill, Bunker Hill Rd. at Interstate 10, Houston | (1 | )(3) | 490,867 | 1,921,649 | ||||||||
Westchase Center, Westheimer at Wilcrest, Houston | 331,027 | 754,000 | ||||||||||
Westhill Village, Westheimer at Hillcroft, Houston | 130,041 | 479,000 | ||||||||||
Westwood Center, Culebra Road and Westwood Loop, San Antonio | (2 | ) | 29,080 | 683,618 | ||||||||
Texas, Total | 15,639,138 | 54,699,250 | ||||||||||
Utah | ||||||||||||
Alpine Valley Center, Main St. at State St., American Fork | (1 | )(3) | 224,654 | 447,045 | ||||||||
Taylorsville Town Center, West 4700 South at Redwood Rd., Taylorsville | 134,214 | 399,000 | ||||||||||
West Jordan Town Center, West 7000 South at S. Redwood Rd., West Jordan | 304,899 | 814,000 | ||||||||||
Utah, Total | 663,767 | 1,660,045 |
13
Center and Location | Building Total | Land Total | ||||||||||
Washington | ||||||||||||
Meridian Town Center, Meridian Avenue East and 132nd Street East, Puyallup | (1 | )(3) | 143,012 | 535,000 | ||||||||
Mukilteo Speedway Center, Mukilteo Speedway, Lincoln Way, and Highway 99, Lynnwood | (1 | )(3) | 90,273 | 355,000 | ||||||||
Rainer Square Plaza, Rainer Avenue South and South Charleston Street, Seattle | (1 | )(3) | 107,423 | 345,000 | ||||||||
South Hill Center, 43rd Avenue Southwest and Meridian Street South, Puyallup | (1 | )(3) | 134,010 | 515,000 | ||||||||
Washington, Total | 474,718 | 1,750,000 | ||||||||||
Industrial | ||||||||||||
California | ||||||||||||
Siempre Viva Business Park, Siempre Viva Rd. at Kerns St., San Diego | (1 | )(3) | 726,766 | 1,760,000 | ||||||||
California, Total | 726,766 | 1,760,000 | ||||||||||
Florida | ||||||||||||
1801 Massaro, 1801 Massaro Blvd., Tampa | 159,000 | 337,000 | ||||||||||
Hopewell Industrial Center, Old Hopewell Boulevard and U.S. Highway 301, Tampa | 224,483 | 486,000 | ||||||||||
Lakeland Industrial Center, I-4 at County Rd., Lakeland | 600,000 | 1,535,000 | ||||||||||
Lakeland Interstate Industrial Park I, Interstate Drive and Kathleen Rd., Lakeland | 168,400 | 425,000 | ||||||||||
Tampa East Industrial Portfolio, 1841 Massaro Blvd., Tampa | 512,923 | 1,342,000 | ||||||||||
Florida, Total | 1,664,806 | 4,125,000 | ||||||||||
Georgia | ||||||||||||
6485 Crescent Drive, I-85 at Jimmy Carter Blvd., Norcross | (1 | )(3) | 360,460 | 965,000 | ||||||||
Atlanta Industrial Park, Atlanta Industrial Pkwy. at Atlanta Industrial Dr., Atlanta | 120,200 | 381,918 | ||||||||||
Atlanta Industrial Park II & VI, Atlanta Industrial Pkwy. at Atlanta Industrial Dr., Atlanta | 382,120 | 1,214,068 | ||||||||||
Atlanta Industrial Parkway, Atlanta Industrial Pkwy. at Atlanta Industrial Dr., Atlanta | (4 | ) | 50,000 | 159,014 | ||||||||
Kennesaw 75, 3850-3900 Kennesaw Pkwy., Kennesaw | 178,467 | 491,000 | ||||||||||
Riverview Distribution Center, Fulton Industrial Blvd. at Camp Creek Parkway, Atlanta | 265,200 | 1,301,791 | ||||||||||
Sears Logistics, 3700 Southside Industrial Way, Atlanta | (1 | )(3) | 402,554 | 890,000 | ||||||||
SouthPark 3075, Anvil Block Rd. and South Park Blvd., Atlanta | 234,525 | 1,022,292 | ||||||||||
Southside Industrial Parkway, Southside Industrial Pkwy. at Jonesboro Rd., Atlanta | 72,000 | 242,000 | ||||||||||
Westlake 125, Camp Creek Parkway and Westlake Parkway, Atlanta | 154,464 | 422,048 | ||||||||||
Georgia, Total | 2,219,990 | 7,089,131 | ||||||||||
Tennessee | ||||||||||||
Crowfarn Drive Warehouse, Crowfarn Dr. at Getwell Rd., Memphis | (1 | )(3) | 158,849 | 315,000 | ||||||||
Outland Business Center, Outland Center Dr., Memphis | (1 | )(3) | 410,438 | 1,215,000 | ||||||||
Southpoint I & II, Pleasant Hill Rd. at Shelby Dr., Memphis | 570,940 | 1,127,000 | ||||||||||
Tennessee, Total | 1,140,227 | 2,657,000 |
14
Center and Location | Building Total | Land Total | ||||||||||
Texas | ||||||||||||
1625 Diplomat Drive, SWC Diplomat Dr. at McDaniel Dr., Carrollton | 106,140 | 199,000 | ||||||||||
610 and 11th St. Warehouse, Loop 610 at 11th St., Houston | (1)(3) | 243,642 | 540,000 | |||||||||
610 and 11th St. Warehouse, Loop 610 at 11th St., Houston | 104,975 | 202,000 | ||||||||||
610/288 Business Park , Cannon Street, Houston | (1)(3) | 295,300 | 480,000 | |||||||||
Beltway 8 Business Park, Beltway 8 at Petersham Dr., Houston | 157,498 | 499,000 | ||||||||||
Blankenship Building, Kempwood Drive, Houston | 59,718 | 175,000 | ||||||||||
Braker 2 Business Center, Kramer Ln. at Metric Blvd., Austin | 27,359 | 93,000 | ||||||||||
Brookhollow Business Center, Dacoma at Directors Row, Houston | 133,970 | 405,000 | ||||||||||
Central Plano Business Park, Klein Rd. at Plano Pkwy., Plano | 137,785 | 415,000 | ||||||||||
Claywood Industrial Park, Clay at Hollister, Houston | 301,975 | 1,357,242 | ||||||||||
Corporate Center Park I and II, Putnam Dr. at Research Blvd., Austin | 120,613 | 326,000 | ||||||||||
Crestview, Bissonnet at Wilcrest, Houston | 8,970 | 35,000 | ||||||||||
Crosspoint Warehouse, Crosspoint, Houston | 72,505 | 179,000 | ||||||||||
Crosswinds Distribution Center, Tech Com at Wurzback Parkway, San Antonio | 142,276 | 470,012 | ||||||||||
Freeport Business Center, 13215 N. Promenade Blvd., Stafford | 251,645 | 635,000 | ||||||||||
Freeport Commerce Center, Sterling Street and Statesman Drive, Irving | 50,590 | 196,000 | ||||||||||
Houston Cold Storage Warehouse, 7080 Express Lane, Houston | 128,752 | 345,189 | ||||||||||
Interwest Business Park, Alamo Downs Parkway, San Antonio | 219,244 | 742,000 | ||||||||||
Isom Business Park, 919-981 Isom Road, San Antonio | 175,200 | 462,000 | ||||||||||
Jupiter Business Park, Jupiter Rd. at Summit Ave., Plano | 189,532 | 447,553 | ||||||||||
Jupiter Service Center, Jupiter near Plano Pkwy., Plano | 78,480 | 234,000 | ||||||||||
Kempwood Industrial, Kempwood Dr. at Blankenship Dr., Houston | (1)(3) | 219,489 | 530,000 | |||||||||
Kempwood Industrial, Kempwood Dr. at Blankenship Dr., Houston | 113,218 | 327,000 | ||||||||||
Lathrop Warehouse, Lathrop St. at Larimer St., Houston | (1)(3) | 251,890 | 435,000 | |||||||||
Manana Office Center, I-35 at Manana, Dallas | 223,128 | 470,000 | ||||||||||
McGraw Hill Distribution Center, 420 E. Danieldale Rd., DeSoto | 417,938 | 888,000 | ||||||||||
Midpoint I-20 Distribution Center, New York Avenue and Arbrook Boulevard, Arlington | 253,165 | 593,000 | ||||||||||
Midway Business Center, Midway at Boyington, Carrollton | 141,246 | 309,000 | ||||||||||
Navigation Business Park, Navigation at N. York, Houston | (1)(3) | 238,014 | 555,000 | |||||||||
Newkirk Service Center, Newkirk near N.W. Hwy., Dallas | 105,892 | 223,000 | ||||||||||
Northeast Crossing Office/Service Center, East N.W. Hwy. at Shiloh, Dallas | 78,700 | 199,000 | ||||||||||
Northway Park II, Loop 610 East at Homestead, Houston | (1)(3) | 303,483 | 745,000 | |||||||||
Oak Hills Industrial Park, Industrial Oaks Blvd., Austin | 89,858 | 340,000 | ||||||||||
O’Connor Road Business Park, O’Connor Road, San Antonio | 150,091 | 459,000 | ||||||||||
Railwood F, Market at U.S. 90, Houston | (1)(3) | 300,000 | 560,000 | |||||||||
Railwood G, Mesa at U.S. 90 , Houston | (1)(3) | 210,850 | 562,665 | |||||||||
Railwood Industrial Park, Mesa at U.S. 90, Houston | (1)(3) | 497,656 | 1,060,000 | |||||||||
Railwood Industrial Park, Mesa at U.S. 90, Houston | 402,680 | 1,141,764 |
15
Center and Location | Building Total | Land Total | ||||||||||
Randol Mill Place, Randol Mill Road, Arlington | 54,639 | 178,000 | ||||||||||
Redbird Distribution Center, Joseph Hardin Drive, Dallas | 110,839 | 233,000 | ||||||||||
Regal Distribution Center, Leston Avenue, Dallas | 202,559 | 318,000 | ||||||||||
Rutland 10 Business Center, Metric Blvd. at Centimeter Circle, Austin | 54,000 | 139,000 | ||||||||||
Sherman Plaza Business Park, Sherman at Phillips, Richardson | 101,140 | 312,000 | ||||||||||
Southpark A,B,C, East St. Elmo Rd. at Woodward St., Austin | 78,276 | 238,000 | ||||||||||
Southpoint Service Center, Burleson at Promontory Point Dr., Austin | 57,697 | 234,000 | ||||||||||
Southport Business Park 5, South Loop 610, Houston | 160,011 | 358,000 | ||||||||||
Space Center Industrial Park, Pulaski St. at Irving Blvd., Dallas | 264,582 | 426,000 | ||||||||||
Stonecrest Business Center, Wilcrest at Fallstone, Houston | 110,861 | 308,000 | ||||||||||
Town & Country Commerce Center, I-10 at Beltway 8, Houston | 206,056 | 0 | ||||||||||
West 10 Business Center II, Wirt Rd. at I-10, Houston | 82,658 | 147,000 | ||||||||||
West Loop Commerce Center, W. Loop N. at I-10, Houston | 34,256 | 91,000 | ||||||||||
West-10 Business Center, Wirt Rd. at I-10, Houston | 99,883 | 331,000 | ||||||||||
Westgate Service Center, Park Row Drive at Whiteback Dr., Houston | 123,399 | 499,000 | ||||||||||
Texas, Total | 8,744,323 | 21,646,425 | ||||||||||
Virginia | ||||||||||||
Enterchange at Meadowville, 2101 Bermuda Hundred Dr, Chester | (1)(3) | 226,809 | 845,717 | |||||||||
Enterchange at Northlake A, 11900-11998 North Lakeridge Parkway, Ashland | 215,191 | 697,831 | ||||||||||
Enterchange at Northlake C, North Lakeridge Parkway & Northlake Park Dr, Ashland | (1)(3) | 293,115 | 677,794 | |||||||||
Enterchange at Walthall A & B, 1900-1998 Ruffin Mill Rd., Colonial Heights | (1)(3) | 606,679 | 1,467,536 | |||||||||
Enterchange at Walthall C, 1936-1962 Ruffin Mill Rd., Colonial Heights | (1)(3) | 261,922 | 864,840 | |||||||||
Enterchange at Walthall D, 1700-1798 Ruffin Mill Rd., Colonial Heights | 287,318 | 752,020 | ||||||||||
Interport Business Center A, 4800-4890 Eubank Road, Richmond | (1)(3) | 441,018 | 1,037,556 | |||||||||
Interport Business Center B, 4700-4790 Eubank Road, Richmond | (1)(3) | 118,000 | 277,477 | |||||||||
Interport Business Center C, 5300-5390 Laburnum Ave., Richmond | (1)(3) | 54,885 | 154,202 | |||||||||
Virginia, Total | 2,504,937 | 6,774,973 | ||||||||||
Other | ||||||||||||
Arizona | ||||||||||||
Arcadia Biltmore Plaza, Campbell Ave. at North 36th St., Phoenix | 21,122 | 74,000 | ||||||||||
Arizona, Total | 21,122 | 74,000 | ||||||||||
Texas | ||||||||||||
1919 North Loop West, Hacket Drive at West Loop 610 North, Houston | 139,325 | 157,000 | ||||||||||
Citadel Plaza, Citadel Plaza Dr., Houston | 121,000 | 170,931 | ||||||||||
Texas, Total | 260,325 | 327,931 |
16
Center and Location | Building Total | Land Total | ||||
Unimproved Land | ||||||
Arizona | ||||||
Bullhead Parkway at State Route 95, Bullhead City | 312,761 | |||||
Lon Adams Rd. at Tangerine Farms Rd., Marana | 422,532 | |||||
Southern Avenue and Signal Butte Road, Mesa | 90,605 | |||||
Arizona, Total | 825,898 | |||||
California | ||||||
Bear Valley Road at Jess Ranch Parkway Phase II, Apple Valley | 138,956 | |||||
Bear Valley Road at Jess Ranch Parkway Phase III, Apple Valley | 473,497 | |||||
California, Total | 612,453 | |||||
Colorado | ||||||
Highway 85 and Highway 285, Sheridan | 1,003,187 | |||||
Mississippi at Havana, Aurora | 669,953 | |||||
Colorado, Total | 1,673,140 | |||||
Florida | ||||||
SR 207 at Rolling Hills Dr, St. Augustine | 228,254 | |||||
State Road 100 & Belle Terre Parkway, Palm Coast | 292,288 | |||||
Young Pines and Curry Ford Rd., Orange County | 132,422 | |||||
Florida, Total | 652,964 | |||||
Georgia | ||||||
NWC South Fulton Parkway @ Hwy. 92, Union City | 3,554,496 | |||||
Georgia, Total | 3,554,496 | �� | ||||
Louisiana | ||||||
70th St. at Mansfield Rd., Shreveport | 41,818 | |||||
Ambassador Caffery at W. Congress, Lafayette | 34,848 | |||||
Louisiana, Total | 76,666 | |||||
Nevada | ||||||
SWC Highway 215 at Decatur, Las Vegas | 1,103,810 | |||||
Nevada, Total | 1,103,810 | |||||
North Carolina | ||||||
Creedmoor (Highway 50) and Crabtree Valley Avenue, Raleigh | 510,959 | |||||
Highway 17 and Highway 210, Surf City | 2,024,233 | |||||
U.S. 15-501 and Bruce Wood Rd., Southern Pines | 1,047,182 |
17
Center and Location | Building Total | Land Total | ||||
U.S. Highway 1 at Caveness Farms Rd., Wake Forest | 3,074,900 | |||||
U.S. Hwy. 17 & U.S. Hwy. 74/76, Leland | 549,727 | |||||
North Carolina, Total | 7,207,001 | |||||
Tennessee | ||||||
Poplar Avenue and Ridgeway Road, Memphis | 53,579 | |||||
Tennessee, Total | 53,579 | |||||
Texas | ||||||
9th Ave. at 25th St., Port Arthur | 243,065 | |||||
Bissonnet at Wilcrest, Houston | 40,946 | |||||
Citadel Plaza at 610 North Loop, Houston | 137,214 | |||||
Culebra Road and Westwood Loop, San Antonio | 403,366 | |||||
East Orem, Houston | 121,968 | |||||
FM 1957 (Potranco Road) and FM 211, San Antonio | 8,655,372 | |||||
FM 2920 and Highway 249, Tomball | 1,467,972 | |||||
Highway 3 at Highway 1765, Texas City | 200,812 | |||||
Kirkwood at Dashwood Drive, Houston | 321,908 | |||||
Leslie Rd. at Bandera Rd., Helotes | 74,052 | |||||
Mesa Road at Tidwell, Houston | 35,719 | |||||
Nolana Ave. and 29th St., McAllen | 163,350 | |||||
Northwest Freeway at Gessner, Houston | 117,612 | |||||
River Pointe Drive at Interstate 45, Conroe | 118,483 | |||||
Rock Prairie Rd. at Hwy. 6, College Station | 394,218 | |||||
SH 151 and Ingram Rd, San Antonio | 369,389 | |||||
Shary Rd. at North Hwy. 83, Mission | 1,607,364 | |||||
U.S. 77 and 83 at SHFM 802, Brownsville | 954,835 | |||||
US Hwy. 281 at Wilderness Oaks, San Antonio | 1,269,774 | |||||
West Little York at Interstate 45, Houston | 161,172 | |||||
West Loop North at Interstate 10, Houston | 145,055 | |||||
Texas, Total | 17,003,646 | |||||
Utah | ||||||
South 300 West & West Paxton Avenue, Salt Lake City | 324,958 | |||||
Utah, Total | 324,958 |
18
Property Listing Summary
as of December 31, 2010
ALL PROPERTIES BY STATE | Number of Properties | Building Total | Land Total | |||||||||
Arizona | 24 | 3,432,223 | 11,901,321 | |||||||||
Arkansas | 3 | 358,030 | 1,489,000 | |||||||||
California | 30 | 5,445,127 | 19,583,510 | |||||||||
Colorado | 12 | 3,787,977 | 12,457,921 | |||||||||
Florida | 52 | 11,092,633 | 44,248,845 | |||||||||
Georgia | 23 | 4,866,487 | 20,731,663 | |||||||||
Illinois | 1 | 303,566 | 1,013,380 | |||||||||
Kansas | 2 | 248,335 | 970,987 | |||||||||
Kentucky | 4 | 738,429 | 3,102,384 | |||||||||
Louisiana | 11 | 2,258,846 | 6,316,953 | |||||||||
Maine | 1 | 204,713 | 962,667 | |||||||||
Missouri | 2 | 257,549 | 1,307,000 | |||||||||
Nevada | 12 | 3,528,247 | 11,348,520 | |||||||||
New Mexico | 4 | 690,668 | 2,270,407 | |||||||||
North Carolina | 25 | 3,465,057 | 24,359,335 | |||||||||
Oklahoma | 2 | 163,996 | 682,000 | |||||||||
Oregon | 3 | 273,436 | 672,288 | |||||||||
South Carolina | 1 | 86,120 | 436,000 | |||||||||
Tennessee | 9 | 2,048,530 | 5,614,132 | |||||||||
Texas | 155 | 24,643,786 | 93,677,252 | |||||||||
Utah | 3 | 663,767 | 1,985,003 | |||||||||
Virginia | 9 | 2,504,937 | 6,774,973 | |||||||||
Washington | 4 | 474,718 | 1,750,000 | |||||||||
|
|
|
|
|
| |||||||
Grand Total | 392 | 71,537,177 | 273,655,541 | |||||||||
|
|
|
|
|
| |||||||
Total Retail | 312 | 54,254,681 | 196,112,470 | |||||||||
Total Industrial | 77 | 17,001,049 | 44,052,529 | |||||||||
Total Unimproved Land | 33,088,611 | |||||||||||
Total Other | 3 | 281,447 | 401,931 |
Total square footage includes 464,561 square feet of building area and 13,354,380 square feet of land leased from others.
Footnotes for detail property listing:
(1) | Denotes property is held by a real estate joint venture or partnership; however, the building and land square feet figures include our partners’ ownership interest in the property. |
(2) | Denotes property currently under development. |
(3) | Denotes properties that are not consolidated under generally accepted accounting principles. |
(4) | Property sold subsequent to December 31, 2010 and is reported as part of discontinued operations. |
NOTE: | Square feet are reflective of area available to be leased. Certain listed properties may have additional square feet that are not owned by us. |
19
General. In 2010, no single property accounted for more than 4.0% of our total assets or 1.6% of revenues. The five largest properties, in the aggregate, represented approximately 7.5% of our revenues for the year ended December 31, 2010; otherwise, none of the remaining properties accounted for more than 1.3% of our revenues during the same period. As of December 31, 2010, the weighted average occupancy rate for all of our improved properties was 91.9% compared to 90.8% as of December 31, 2009. The average effective annual rental per square foot was approximately $13.60 in 2010, $13.31 in 2009, $13.16 in 2008, $12.57 in 2007 and $12.12 in 2006 for retail properties and $4.83 in 2010, $4.90 in 2009, $4.98 in 2008, $4.86 in 2007 and $4.91 in 2006 for industrial properties.
As of December 31, 2010, lease expirations for the next ten years, assuming tenants do not exercise renewal options, are as follows:
Annual Net Rent of Expiring Leases | ||||||||||||||
Year | Number of Expiring Leases | Square Feet of Expiring Leases (000’s) | Percentage of Leaseable Square Feet | Total (000’s) | Per Square Foot | |||||||||
2011 | 898 | 4,246 | 8.28 | $ | 52,572 | $ | 12.38 | |||||||
2012 | 967 | 5,242 | 10.22 | 64,279 | 12.26 | |||||||||
2013 | 993 | 6,052 | 11.80 | 68,513 | 11.32 | |||||||||
2014 | 707 | 5,455 | 10.63 | 56,936 | 10.44 | |||||||||
2015 | 698 | 4,844 | 9.44 | 55,385 | 11.43 | |||||||||
2016 | 258 | 2,932 | 5.71 | 32,243 | 11.00 | |||||||||
2017 | 120 | 1,561 | 3.04 | 19,914 | 12.76 | |||||||||
2018 | 110 | 1,435 | 2.80 | 17,676 | 12.32 | |||||||||
2019 | 79 | 1,246 | 2.43 | 15,598 | 12.52 | |||||||||
2020 | 78 | 1,169 | 2.28 | 14,677 | 12.56 |
In the ordinary course of business, we have tenants who cease making payments under their leases or who file for bankruptcy protection. We are unable to predict or forecast the timing of store closings or unexpected vacancies. While we believe the effect of this will not have a material impact on our financial position, results of operations or liquidity due to the significant diversification of our tenant base, the uncertainty in the economy and commercial credit markets could result in a negative impact.
The majority of our properties are owned directly by us (subject in some cases to mortgages), although our interests in some properties are held indirectly through interests in real estate joint ventures or under long-term leases. In our opinion, our properties are well maintained and in good repair, suitable for their intended uses, and adequately covered by insurance.
We participate in 67 real estate joint ventures or partnerships that hold 147 of our properties. Our ownership interest ranges from 7.8% to 99%; we are normally the managing or operating partner and receive a fee for acting in this capacity.
We may use a DownREIT operating partnership structure in the acquisition of some real estate properties. In these transactions, a fair value purchase price is agreed upon between us, as general partner of the DownREIT, and the seller where the seller receives operating partnership units in exchange for some or all of its ownership interest in the property. Each operating partnership unit is the equivalent of one of our common shares of beneficial interest (“common shares”). These units generally allow our partners the right to put their limited partnership units’ interest to us on or after the first anniversary of the entity’s formation. We may acquire these limited partnership units for either cash or a fixed number of our common shares at our discretion.
Shopping Centers.At December 31, 2010, we owned or operated under long-term leases, either directly or through our interest in real estate joint ventures or partnerships, a total of 303 developed income-producing properties and nine properties under various stages of construction and development, which are located in 22 states spanning the country from coast to coast.
20
Our shopping centers are primarily neighborhood and community shopping centers that typically range in size from 50,000 to 650,000 square feet of building area, as distinguished from large regional enclosed malls and small strip centers, which generally contain 5,000 to 25,000 square feet. None of the centers have climatized common areas, but are designed to allow retail customers to park their automobiles in close proximity to any retailer in the center. Our centers are customarily constructed of masonry, steel and glass, and all have lighted, paved parking areas, which are typically landscaped with berms, trees and shrubs. They are generally located at major intersections in close proximity to neighborhoods that have existing populations sufficient to support retail activities of the types conducted in our centers.
We have approximately 7,100 separate leases with 5,100 different tenants. Included among our top revenue-producing tenants are: The Kroger Co., T.J.X. Companies, Safeway, Ross Stores, H E Butt Grocery, Home Depot, Office Depot, PetSmart and Gap (primarily Old Navy stores). The diversity of our tenant base is also evidenced by the fact that our largest tenant accounted for only 3.0% of rental revenues during 2010.
Our shopping center leases have lease terms generally ranging from three to five years for tenant space under 5,000 square feet and from 10 to 25 years for tenant space over 10,000 square feet. Leases with primary lease terms in excess of 10 years, generally for anchor and out-parcels, frequently contain renewal options which allow the tenant to extend the term of the lease for one or more additional periods, with each of these periods generally being of a shorter duration than the primary lease term. The rental rates paid during a renewal period are generally based upon the rental rate for the primary term; sometimes adjusted for inflation, market conditions or an amount of the tenant’s sales during the primary term.
Most of our leases provide for the monthly payment in advance of fixed minimum rentals, the tenants’ pro rata share of real estate taxes, insurance (including fire and extended coverage, rent insurance and liability insurance) and common area maintenance for the center (based on estimates of the costs for these items). They also provide for the payment of additional rentals based on a percentage of the tenants’ sales. Utilities are generally paid directly by tenants except where common metering exists with respect to a center. In this case we make payments for the utilities, and the tenants reimburse us on a monthly basis. Generally, our leases prohibit the tenant from assigning or subletting its space. They also require the tenant to use its space for the purpose designated in its lease agreement and to operate its business on a continuous basis. Some of the lease agreements with major tenants contain modifications of these basic provisions in view of the financial condition, stability or desirability of those tenants. Where a tenant is granted the right to assign its space, the lease agreement generally provides that the original lessee will remain liable for the payment of the lease obligations under that lease agreement.
During 2010, we acquired four retail shopping centers located one each in Arizona, Colorado, Florida and North Carolina for approximately $75.3 million.
During 2010, we sold one shopping center located in Texas and a retail building at two operating properties located in Kansas and Kentucky. Gross sales proceeds from these dispositions totaled $3.0 million and generated gains of $.8 million.
During the first quarter of 2010, we contributed the final two properties to an unconsolidated joint venture for $47.3 million, which included loan assumptions of $28.1 million and the receipt of net proceeds totaling $14.0 million.
Effective April 1, 2010, we assumed control of two 50%-owned unconsolidated real estate joint ventures related to a development project in Sheridan, Colorado that we had previously accounted for under the equity method. This transaction resulted in the consolidation of these joint ventures, which required us to revalue our investments to fair value, resulting in an impairment loss of $15.8 million and an increase in net assets of $87.6 million.
During 2010, we acquired a 67%-owned unconsolidated real estate joint venture interest in a retail shopping center located in Moreno Valley, California and a 58%-owned unconsolidated real estate joint venture interest in a retail shopping center located in Houston, Texas for approximately $35.8 million. Also, two unconsolidated real estate joint ventures each sold a retail building located in California with aggregate gross sales proceeds totaling $4.4 million.
We have a real estate limited partnership agreement with a foreign institutional investor to purchase up to $280 million of retail properties in various states. Our ownership in this unconsolidated real estate limited partnership is 51%. To date, no properties had been purchased.
21
During the six months ended June 30, 2011, we sold two shopping centers located in Kansas and Texas. Sales proceeds from these dispositions totaled $28.8 million, and they are reported as discontinued operations.
Industrial Properties. At December 31, 2010, we owned, either directly or through our interest in real estate joint ventures or partnerships, 77 industrial projects and three other operating properties totaling approximately 17.3 million square feet of building area. Our industrial properties consist of bulk warehouse, business distribution and office-service center assets ranging in size from 9,000 to 727,000 square feet. Similar to our shopping centers, these properties are customarily constructed of masonry, steel and glass, and have lighted, concrete parking areas and are well landscaped. Some of the national and regional tenants in our industrial properties include Sears Logistics, Publix, Shell, Rooms to Go, Rooftop Systems Inc., Wells Fargo Bank, Fed Ex, Mazda, McGraw Hill and Iron Mountain. Our properties are located in Arizona, California, Florida, Georgia, Tennessee, Texas and Virginia.
During 2010, we acquired a distribution center and an industrial business park both located in Texas for approximately $16.8 million. Also, we sold an unconsolidated real estate joint venture interest in a Texas property to our partner with gross sales proceeds totaling $1.4 million, which generated a gain of $1.3 million.
During the six months ended June 30, 2011, we sold an industrial building located in Georgia. Sales proceeds from this disposition totaled $1.3 million, and it is reported as discontinued operations.
Land Held for Development. At December 31, 2010, we owned, either directly or through our interest in real estate joint ventures or partnerships, 42 parcels of unimproved land consisting of approximately 33.1 million square feet of land area located in Arizona, California, Colorado, Florida, Georgia, Louisiana, Nevada, North Carolina, Tennessee, Texas and Utah. These properties include approximately 3.5 million square feet of land adjacent to certain of our existing developed properties, which may be used for expansion of these developments, as well as approximately 29.6 million square feet of land, which may be used for new development. Almost all of the land held for development is served by roads and utilities and are suitable for development as shopping centers or industrial projects, and we intend to emphasize the development of these parcels for such purpose. We have approximately $170.2 million in land held for development. Due to our analysis of current economic considerations, including the effects of tenant bankruptcies, credit availability to retailers, reduction of tenant expansion plans for new development projects, declines in real estate values and any changes to our plans related to our new development properties, including land held for development, we recorded an impairment charge of $5.1 million related to land held for development for the year ended December 31, 2010.
New Development Properties.At December 31, 2010, we had nine properties in various stages of development. We have funded $155.6 million to date on these projects, and we estimate our investment upon completion to be $131.3 million, after consideration of anticipated land sales and tax incentive financing which is estimated to be $19.1 million. The majority of these properties are slated to be completed over the next three years with an average projected return on investment of approximately 6.5% when completed.
Merchant Development.During 2010, we sold two land parcels each located in Texas with gross sales proceeds of $10.6 million. Also, two unconsolidated real estate joint ventures each sold a land parcel located in Florida with gross sales proceeds totaling $2.5 million.
22
ITEM 6. | Selected Financial Data |
The following table sets forth our selected consolidated financial data and should be read in conjunction with “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation,” the Consolidated Financial Statements and accompanying Notes in “Item 8. Financial Statements and Supplementary Data” and the financial schedules included elsewhere in this Form 10-K.
(Amounts in thousands, except per share amounts) Year Ended December 31, | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
Revenues (primarily real estate rentals) | $ | 550,573 | $ | 567,887 | $ | 588,286 | $ | 556,185 | $ | 496,717 | ||||||||||
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|
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|
|
|
|
|
|
| |||||||||||
Expenses: | ||||||||||||||||||||
Depreciation and amortization | 149,882 | 146,493 | 148,607 | 121,086 | 110,558 | |||||||||||||||
Other | 227,581 | 233,236 | 260,950 | 189,304 | 162,655 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | 377,463 | 379,729 | 409,557 | 310,390 | 273,213 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Operating Income | 173,110 | 188,158 | 178,729 | 245,795 | 223,504 | |||||||||||||||
Interest Expense, net | (148,330 | ) | (152,390 | ) | (155,405 | ) | (155,234 | ) | (147,057 | ) | ||||||||||
Interest and Other Income, net | 9,825 | 11,427 | 4,333 | 8,482 | 9,042 | |||||||||||||||
(Loss) Gain on Redemption of Convertible Senior Unsecured Notes | (135 | ) | 25,311 | 12,961 | ||||||||||||||||
Equity in Earnings of Real Estate Joint Ventures and Partnerships, net | 12,889 | 5,548 | 12,196 | 19,853 | 14,655 | |||||||||||||||
Gain on Land and Merchant Development Sales | 18,688 | 8,342 | 16,385 | 7,166 | ||||||||||||||||
(Provision) Benefit for Income Taxes | (222 | ) | (6,313 | ) | 10,244 | (4,073 | ) | (1,366 | ) | |||||||||||
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|
|
|
|
|
|
|
| |||||||||||
Income from Continuing Operations | 47,137 | 90,429 | 71,400 | 131,208 | 105,944 | |||||||||||||||
Income from Discontinued Operations (1) | 1,817 | 59,581 | 81,197 | 105,044 | 179,803 | |||||||||||||||
Gain on Sale of Property | 2,284 | 25,266 | 1,998 | 4,086 | 22,493 | |||||||||||||||
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|
|
|
|
|
|
|
| |||||||||||
Net Income | $ | 51,238 | $ | 175,276 | $ | 154,595 | $ | 240,338 | $ | 308,240 | ||||||||||
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|
|
|
|
|
| |||||||||||
Net Income Adjusted for Noncontrolling Interests | $ | 46,206 | $ | 171,102 | $ | 145,652 | $ | 230,101 | $ | 301,826 | ||||||||||
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|
|
|
|
|
| |||||||||||
Net Income Attributable to Common Shareholders | $ | 10,730 | $ | 135,626 | $ | 109,091 | $ | 204,726 | $ | 291,725 | ||||||||||
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|
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| |||||||||||
Per Share Data - Basic: | ||||||||||||||||||||
Income from Continuing Operations | $ | 0.07 | $ | 0.70 | $ | 0.33 | $ | 1.17 | $ | 1.28 | ||||||||||
Net Income | $ | 0.09 | $ | 1.24 | $ | 1.29 | $ | 2.39 | $ | 3.33 | ||||||||||
Weighted Average Number of Shares | 119,935 | 109,546 | 84,474 | 85,504 | 87,719 | |||||||||||||||
Per Share Data - Diluted: | ||||||||||||||||||||
Income from Continuing Operations | $ | 0.07 | $ | 0.69 | $ | 0.33 | $ | 1.17 | $ | 1.28 | ||||||||||
Net Income | $ | 0.09 | $ | 1.23 | $ | 1.28 | $ | 2.35 | $ | 3.24 | ||||||||||
Weighted Average Number of Shares | 120,780 | 110,178 | 84,917 | 88,893 | 91,779 | |||||||||||||||
Property (at cost) | $ | 4,777,794 | $ | 4,658,396 | $ | 4,915,472 | $ | 4,972,344 | $ | 4,445,888 | ||||||||||
Total Assets | $ | 4,807,855 | $ | 4,890,385 | $ | 5,114,212 | $ | 4,992,636 | $ | 4,373,066 | ||||||||||
Debt, net | $ | 2,589,448 | $ | 2,531,847 | $ | 3,148,636 | $ | 3,131,977 | $ | 2,899,860 | ||||||||||
Other Data: | ||||||||||||||||||||
Cash Flows from Operating Activities | $ | 214,625 | $ | 244,316 | $ | 220,150 | $ | 223,309 | $ | 242,592 | ||||||||||
Cash Flows from Investing Activities | $ | (121,421 | ) | $ | 191,872 | $ | (115,391 | ) | $ | (480,630 | ) | $ | (314,686 | ) | ||||||
Cash Flows from Financing Activities | $ | (222,929 | ) | $ | (341,550 | ) | $ | (111,590 | ) | $ | 252,095 | $ | 100,407 | |||||||
Cash Dividends per Common Share | $ | 1.04 | $ | 1.28 | $ | 2.10 | $ | 1.98 | $ | 1.86 | ||||||||||
Funds from Operations: (2) | ||||||||||||||||||||
Net Income Attributable to Common Shareholders | $ | 10,730 | $ | 135,626 | $ | 109,091 | $ | 204,726 | $ | 291,725 | ||||||||||
Depreciation and Amortization | 163,478 | 162,644 | 162,035 | 141,150 | 131,792 | |||||||||||||||
Gain on Sale of Property | (3,068 | ) | (81,010 | ) | (70,068 | ) | (86,076 | ) | (172,056 | ) | ||||||||||
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|
|
|
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|
|
|
| |||||||||||
Total | $ | 171,140 | $ | 217,260 | $ | 201,058 | $ | 259,800 | $ | 251,461 | ||||||||||
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(1) | Generally accepted accounting principles (“GAAP”) requires the operating results and gain (loss) on the sale of operating properties to be reported as discontinued operations for all periods presented. |
(2) | The National Association of Real Estate Investment Trusts (“NAREIT”) defines funds from operations (“FFO”) as net income (loss) attributable to common shareholders computed in accordance with GAAP, excluding gains or losses from sales of operating real estate assets and extraordinary items, plus depreciation and amortization of operating properties, including our share of unconsolidated real estate joint ventures and partnerships. We calculate FFO in a manner consistent with the NAREIT definition. |
Management uses FFO as a supplemental measure to conduct and evaluate our business because there are certain limitations associated with using GAAP net income by itself as the primary measure of our operating performance. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, management believes that the presentation of operating results for real estate companies that uses historical cost accounting is insufficient by itself. There can be no assurance that FFO presented by us is comparable to similarly titled measures of other REITs.
FFO should not be considered as an alternative to net income or other measurements under GAAP as an indicator of our operating performance or to cash flows from operating, investing or financing activities as a measure of liquidity. FFO does not reflect working capital changes, cash expenditures for capital improvements or principal payments on indebtedness.
ITEM 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operation |
The following discussion should be read in conjunction with the consolidated financial statements and notes thereto and the comparative summary of selected financial data appearing elsewhere in this report. Historical results and trends which might appear should not be taken as indicative of future operations. Our results of operations and financial condition, as reflected in the accompanying consolidated financial statements and related footnotes, are subject to management’s evaluation and interpretation of business conditions, retailer performance, changing capital market conditions and other factors which could affect the ongoing viability of our tenants.
Executive Overview
Weingarten Realty Investors is a real estate investment trust (“REIT”) organized under the Texas Real Estate Investment Trust Act. Effective January 1, 2010, the Texas Real Estate Investment Trust Act was replaced by the Texas Business Organizations Code. We, and our predecessor entity, began the ownership and development of shopping centers and other commercial real estate in 1948. Our primary business is leasing space to tenants in the shopping and industrial centers we own or lease. We also manage centers for joint ventures in which we are partners or for other outside owners for which we charge fees.
We operate a portfolio of rental properties which includes neighborhood and community shopping centers and industrial properties of approximately 71.5 million square feet. We have a diversified tenant base with our largest tenant comprising only 3.0% of total rental revenues during 2010.
Our long-term strategy is to focus on increasing funds from operations (“FFO”) and shareholder value. We do this through hands-on leasing and management, selective redevelopment of the existing portfolio of properties, disciplined growth from strategic acquisitions and new developments and disposition of assets that no longer meet our ownership criteria. We do this while remaining committed to maintaining a conservatively leveraged balance sheet, a well-staggered debt maturity schedule and strong credit agency ratings.
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Currently, we are focusing our efforts on improvements to our operating fundamentals and increasing shareholder value. We have also positioned ourselves to take advantage of growth opportunities as the markets continue to improve. We have implemented a multifaceted approach to utilizing associates from leasing, acquisitions and new development to source these opportunities. We are also leveraging their efforts with the relationships we have in the brokerage, banking and institutional arenas. Competition for quality acquisition opportunities remains substantial; nevertheless, we have been successful in identifying selected properties, which meet our return hurdles, and we will continue to actively evaluate other opportunities as they enter the market.
We strive to maintain a strong, conservative capital structure, which provides ready access to a variety of attractive capital sources. We carefully balance obtaining low cost financing with matching long-term liabilities with the acquired or developed long-term assets. While the availability of capital has improved over the past year, there can be no assurance that such pricing and availability will not deteriorate in the near future.
At December 31, 2010, we owned or operated under long-term leases, either directly or through our interest in real estate joint ventures or partnerships, a total of 383 developed income-producing properties and nine properties under various stages of construction and development. The total number of centers includes 312 neighborhood and community shopping centers, 77 industrial projects and three other operating properties located in 23 states spanning the country from coast to coast.
We also owned interests in 42 parcels of land held for development that totaled approximately 33.1 million square feet.
We had approximately 7,100 leases with 5,100 different tenants at December 31, 2010.
Leases for our properties range from less than a year for smaller spaces to over 25 years for larger tenants. Rental revenues generally include minimum lease payments, which often increase over the lease term, reimbursements of property operating expenses, including real estate taxes, and additional rent payments based on a percentage of the tenants’ sales. The majority of our anchor tenants are supermarkets, value-oriented apparel/discount stores and other retailers or service providers who generally sell basic necessity-type goods and services. Through this challenging economic environment, we believe the stability of our anchor tenants, combined with convenient locations, attractive and well-maintained properties, high quality retailers and a strong tenant mix, should ensure the long-term success of our merchants and the viability of our portfolio.
In assessing the performance of our properties, management carefully tracks the occupancy of the portfolio. Occupancy for the total portfolio increased from 90.8% at December 31, 2009 to 91.9% at December 31, 2010. While we will continue to monitor the economy and the effects on our retailers, we believe the significant diversification of our portfolio, both geographically and by tenant base, and the quality of our portfolio will allow us to maintain occupancy levels at or above these levels as we move through 2011, absent bankruptcies by multiple national or regional tenants. The weakened economy contributed to a decrease in rental rates on a same-space basis as we completed new leases and renewed existing leases. We completed 1,523 new leases or renewals during 2010 totaling 7.2 million square feet; decreasing rental rates an average of 2.5% on a cash basis. While we have seen some strengthening on our renewal rates, new lease rates continue to be a challenge. Although we believe the gap in the new lease rate margins will not continue to widen, they are expected to remain a challenge through 2011.
New Development
At December 31, 2010, we had nine properties in various stages of development. We have funded $155.6 million to date on these projects, and we estimate our investment upon completion to be $131.3 million, after consideration of anticipated land sales and tax incentive financing which is estimated to be $19.1 million. The majority of these properties are slated to be completed over the next three years with an average projected return on investment of approximately 6.5% when completed.
We have approximately $170.2 million in land held for development. Due to our analysis of current economic considerations, including the effects of tenant bankruptcies, credit availability to retailers, reduction of tenant expansion plans for new development projects, declines in real estate values and any changes to our plans related to our new development properties, including land held for development, we recorded an impairment charge of $5.1 million in 2010. While we will continue to monitor this market closely, we anticipate minimal investment in land held for development or new projects during 2011.
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Acquisitions and Joint Ventures
Acquisitions are a key component of our long-term strategy. The availability of quality acquisition opportunities in the market remains sporadic. Competition for the highest quality core properties is intense which has in many cases driven pricing to pre-recession highs. We remain disciplined in approaching these opportunities, pursuing only those that provide appropriate risk-adjusted returns. The use of joint venture arrangements is key to our long-term strategy. Partnering with institutional investors through real estate joint ventures enables us to acquire high quality assets in our target markets while also meeting our financial return objectives. Under these arrangements, we benefit from access to lower-cost capital, as well as leveraging our expertise to provide fee-based services, such as acquisition, leasing, property management and asset management, to the joint ventures.
During 2010, we acquired four retail shopping centers and two industrial properties with two located in Texas and one each in Arizona, Colorado, Florida and North Carolina for approximately $92.1 million. We anticipate to continue to acquire properties through 2011 that meet our strategic and pricing objectives.
During the first quarter of 2010, we contributed the final two properties to an unconsolidated real estate joint venture for $47.3 million, which included loan assumptions of $28.1 million and the receipt of net proceeds totaling $14.0 million.
Effective April 1, 2010, we assumed control of two 50%-owned unconsolidated real estate joint ventures related to a development project in Sheridan, Colorado that we had previously accounted for under the equity method. This transaction resulted in the consolidation of these joint ventures, which required us to revalue our investments to fair value, resulting in an impairment loss of $15.8 million and an increase in net assets of $87.6 million.
Also, in 2010, we acquired a 67%-owned unconsolidated real estate joint venture interest in a retail shopping center located in Moreno Valley, California and a 58%-owned unconsolidated real estate joint venture interest in a retail shopping center located in Houston, Texas for approximately $35.8 million.
We have a real estate limited partnership agreement with a foreign institutional investor to purchase up to $280 million of retail properties in various states. Our ownership in this unconsolidated real estate limited partnership is 51%. To date, no properties had been purchased.
We continue to monitor our joint venture relationships and evaluate whether new or existing relationships could provide equity for new investments.
Joint venture and outside fee income for 2010 and 2009 was approximately $7.0 million and $6.3 million, respectively. This fee income is based upon revenues, net income and in some cases appraised property values. We expect to receive approximately the same amount of fees in 2011.
Dispositions
Dispositions are also a key component of our ongoing management process where we prune from our portfolio properties that no longer meet our geographic or growth targets. Dispositions provide capital, which may be recycled into properties that have high barrier-to-entry locations within high growth metropolitan markets, and thus have higher long-term growth potential. Over time, we expect this to produce a portfolio with higher occupancy rates and stronger internal revenue growth. With a continued return of debt financing available to prospective purchasers, we expect to continue to dispose of selected non-core properties throughout 2011 as opportunities present themselves.
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Summary of Critical Accounting Policies
Our discussion and analysis of financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and contingencies as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. We evaluate our assumptions and estimates on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies require more significant judgments and estimates used in the preparation of our consolidated financial statements.
Revenue Recognition
Rental revenue is generally recognized on a straight-line basis over the term of the lease, which begins the date the leasehold improvements are substantially complete, if owned by us, or the date the tenant takes control of the space, if the leasehold improvements are owned by the tenant. Revenue from tenant reimbursements of real estate taxes, maintenance expenses and insurance is subject to our interpretation of lease provisions and is recognized in the period the related expense is recognized. Revenue based on a percentage of tenants’ sales is recognized only after the tenant exceeds their sales breakpoint. In addition, in circumstances where we would provide a tenant improvement allowance for improvements that are owned by the tenant, we would recognize the allowance as a reduction of rental revenue on a straight-line basis over the term of the lease. Other revenue is income from contractual agreements with third parties, tenants or partially owned real estate joint ventures or partnerships, which is recognized as the related services are performed under the respective agreements.
Real Estate Joint Ventures and Partnerships
To determine the method of accounting for partially owned real estate joint ventures and partnerships, we apply the guidelines as set forth in GAAP. Entities identified as variable interest entities are consolidated if we are determined to be the primary beneficiary of the partially owned real estate joint venture or partnership.
Partially owned real estate joint ventures and partnerships over which we have a controlling financial interest are consolidated in our financial statements. In determining if we have a controlling financial interest, we consider factors such as ownership interest, authority to make decisions, kick-out rights and substantive participating rights. Management continually analyzes and assesses reconsideration events, including changes in these factors, to determine if the consolidation treatment remains appropriate. Partially owned real estate joint ventures and partnerships where we do not have a controlling financial interest, but have the ability to exercise significant influence, are accounted for using the equity method. Decisions regarding consolidation of partially owned entities frequently require significant judgment by our management. Errors in the assessment of consolidation could result in material changes to our consolidated financial statements.
Property
Real estate assets are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method, generally over estimated useful lives of 18-40 years for buildings and 10-20 years for parking lot surfacing and equipment. Major replacements where the betterment extends the useful life of the asset are capitalized, and the replaced asset and corresponding accumulated depreciation are removed from the accounts. All other maintenance and repair items are charged to expense as incurred. If we do not allocate these costs appropriately or incorrectly estimate the useful lives of our real estate, depreciation expense may be misstated.
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Acquisitions of properties are accounted for utilizing the acquisition method and, accordingly, the results of operations of an acquired property are included in our results of operations from the date of acquisition. Estimates of fair values are based upon future cash flows and other valuation techniques in accordance with our fair value measurements accounting policy, which are used to record the purchase price of acquired property among land, buildings on an “as if vacant” basis, tenant improvements, other identifiable intangibles and any goodwill or gain on purchase. Other identifiable intangible assets and liabilities include the effect of out-of-market leases, the value of having leases in place (“as is” versus “as if vacant” and absorption costs), out-of-market assumed mortgages and tenant relationships. Depreciation and amortization is computed using the straight-line method, generally over estimated useful lives of 40 years for buildings and over the lease term which includes bargain renewal options for other identifiable intangible assets. The impact of these estimates, including incorrect estimates in connection with acquisition values and estimated useful lives, could result in significant differences related to the purchased assets, liabilities and resulting depreciation or amortization. Effective 2009, acquisition costs are expensed as incurred.
Property also includes costs incurred in the development of new operating properties and properties in our merchant development program. Merchant development is a program in which we develop a project with the objective of selling all or part of it, instead of retaining it in our portfolio on a long-term basis. Also, disposition of land parcels and non-operating properties are included in this program. These properties are carried at cost, and no depreciation is recorded on these assets until rent commences or no later than one year from the completion of major construction. These costs include pre-acquisition costs directly identifiable with the specific project, development and construction costs, interest and real estate taxes. Indirect development costs, including salaries and benefits, travel and other related costs that are directly attributable to the development of the property, are also capitalized. The capitalization of such costs ceases at the earlier of one year from the completion of major construction or when the property, or any completed portion, becomes available for occupancy. The impact of the estimates related to the allocation of indirect costs and interest could result in incorrect estimates in connection with determining the asset value which could be material to our consolidated financial statements.
Property also includes costs for tenant improvements paid by us, including reimbursements to tenants for improvements that are owned by us and will remain our property after the lease expires.
Impairment
Our property is reviewed for impairment if events or changes in circumstances indicate that the carrying amount of the property, including any capitalized costs and any identifiable intangible assets, may not be recoverable.
If such an event occurs, a comparison is made of the current and projected operating cash flows of each such property into the foreseeable future, with consideration of applicable holding periods, on an undiscounted basis to the carrying amount of such property. If we determine the carrying amount is not recoverable, our basis in the property is reduced to its estimated fair value to reflect impairment in the value of the asset. Fair values are determined by management utilizing cash flow models, market capitalization and discount rates, or by obtaining third-party broker or appraisal estimates in accordance with our fair value measurements accounting policy.
We review current economic considerations each reporting period, including the effects of tenant bankruptcies, the suspension of tenant expansion plans for new development projects, declines in real estate values and any changes to plans related to our new development projects including land held for development, to identify properties where we believe market values may be deteriorating. Determining whether a property is impaired and, if impaired, the amount of write-down to fair value requires a significant amount of judgment by management and is based on the best information available to management at the time of evaluation. The evaluations used in these analyses could result in incorrect estimates when determining carrying values that could be material to our consolidated financial statements.
Our investment in partially owned real estate joint ventures and partnerships is reviewed for impairment each reporting period. The ultimate realization is dependent on a number of factors, including the performance of each investment and market conditions. We will record an impairment charge if we determine that a decline in the value of an investment below its carrying amount is other than temporary. A considerable amount of judgment by our management is used in this evaluation. Our overall future plans for the investment, our investment partner’s financial outlook and our views on current market and economic conditions may have a significant impact on the resulting factors analyzed for these purposes.
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Fair Value Measurements
Certain financial instruments, estimates and transactions are required to be calculated, reported and/or recorded at fair value. The estimated fair values of such financial items, including debt instruments, impairments, acquisitions, investment securities and derivatives, have been determined using a market-based measurement. This measurement is determined based on the assumptions that management believes market participants would use in pricing an asset or liability. As a basis for considering market participant assumptions in fair value measurements, GAAP establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).
Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which is typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. The assessed inputs used in determining any fair value measurements could result in incorrect valuations that could be material to our consolidated financial statements.
Sales of Real Estate
Sales of real estate include the sale of tracts of land within a shopping center development, property adjacent to shopping centers, shopping center properties, merchant development properties, investments in real estate joint ventures and partnerships and partial sales to real estate joint ventures and partnerships in which we participate.
Profits on sales of real estate, including merchant development sales are not recognized until (a) a sale is consummated; (b) the buyer’s initial and continuing investments are adequate to demonstrate a commitment to pay; (c) the seller’s receivable is not subject to future subordination; and (d) we have transferred to the buyer the usual risks and rewards of ownership in the transaction, and we do not have a substantial continuing involvement with the property. A considerable amount of judgment by our management is used in this evaluation.
We recognize gains on the sale of real estate to joint ventures and partnerships in which we participate to the extent we receive cash from the joint venture or partnership, if it meets the sales criteria in accordance with GAAP, and we do not have a commitment to support the operations of the real estate joint venture or partnership to an extent greater than our proportionate interest in the real estate joint venture or partnership.
Accrued Rent and Accounts Receivable
Receivable balances outstanding include base rents, tenant reimbursements and receivables attributable to the straight-lining of rental commitments. An allowance for the uncollectible portion of accrued rents and accounts receivable is determined based upon an analysis of balances outstanding, historical bad debt levels, tenant creditworthiness and current economic trends. Additionally, estimates of the expected recovery of pre-petition and post-petition claims with respect to tenants in bankruptcy are considered in assessing the collectability of the related receivables. As these factors change, the allowance is subject to revision and may impact our results of operations.
Income Taxes
We have elected to be treated as a REIT under the Internal Revenue Code of 1986, as amended. As a REIT, we generally will not be subject to corporate level federal income tax on taxable income we distribute to our shareholders. To be taxed as a REIT, we must meet a number of requirements including defined percentage tests concerning the amount of our assets and revenues that come from, or are attributable to, real estate operations. As long as we distribute at least 90% of the taxable income of the REIT (without regard to capital gains or the dividends paid deduction) to our shareholders as dividends, we will not be taxed on the portion of our income we distribute as dividends.
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The Tax Relief Extension Act of 1999 gave REITs the ability to conduct activities which a REIT was previously precluded from doing as long as such activities are performed in entities which have elected to be treated as taxable REIT subsidiaries under the IRS code. These activities include buying or developing properties with the express purpose of selling them. We conduct certain of these activities in taxable REIT subsidiaries that we have created. We calculate and record income taxes in our consolidated financial statements based on the activities in those entities. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between our carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. These are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. A valuation allowance for deferred tax assets is established for those assets we do not consider the realization of such assets to be more likely than not. We use estimates in preparing our deferred tax amounts and if revised, these estimates could impact our results of operations.
Additionally, GAAP prescribes a recognition threshold and measurement attribute for the financial statement recognition of a tax position taken, or expected to be taken, in a tax return. A tax position may only be recognized in the financial statements if we believe it is more likely than not that the tax position will be sustained upon examination. This evaluation may involve a considerable amount of judgment.
Results of Operations
Comparison of the Year Ended December 31, 2010 to the Year Ended December 31, 2009
Revenues
Total revenues were $550.6 million for the year ended 2010 versus $567.9 million for the year ended 2009, a decrease of $17.3 million or 3.0%. This decrease is attributable to decreases in net rental revenues and other income of $13.2 million and $4.1 million, respectively. The decrease in net rental revenues was primarily attributable to an aggregate $17.9 million reduction from the sale of an 80% interest in six shopping centers. Offsetting this decline is rentals associated primarily with new development completions and the acquisition of six properties. The decrease in other revenues results primarily from a decline in lease cancellation revenue.
Occupancy (leased space) of the portfolio as compared to the prior year was as follows:
December 31, | ||||||||
2010 | 2009 | |||||||
Shopping Centers | 93.0 | % | 91.8 | % | ||||
Industrial | 88.8 | % | 87.8 | % | ||||
Total | 91.9 | % | 90.8 | % |
Real Estate Taxes, net
Net real estate taxes for the year ended 2010 were $64.2 million versus $69.9 million for the year ended 2009, a decrease of $5.7 million or 8.2%. The decrease resulted primarily from the sale of an 80% interest in six shopping centers and rate and valuation changes from the prior year.
Impairment Loss
The impairment loss in 2010 is attributable to a $15.8 million loss associated with the requirement to record our equity interests in two previously unconsolidated real estate joint ventures (of which both are related to the same shopping center) at their estimated fair values in accounting for the consolidation of these joint ventures, a loss of $12.3 million associated with tax increment revenue bonds and note and a $5.2 million loss associated primarily with land held for development. The 2009 impairment loss of $35.0 million relates primarily to new development properties resulting from changes in economic conditions, our new development business plans and tenant expansion plans.
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Interest Expense, net
Net interest expense totaled $148.3 million for 2010, down $4.1 million or 2.7% from 2009. The components of net interest expense were as follows (in thousands):
Year Ended December 31, | ||||||||
2010 | 2009 | |||||||
Gross interest expense | $ | 152,408 | $ | 159,920 | ||||
Amortization of convertible bond discount | 2,191 | 4,969 | ||||||
Over-market mortgage adjustment of acquired properties | (2,864 | ) | (3,783 | ) | ||||
Capitalized interest | (3,405 | ) | (8,716 | ) | ||||
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Total | $ | 148,330 | $ | 152,390 | ||||
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Gross interest expense totaled $152.4 million in 2010, down $7.5 million or 4.7% from 2009. The decrease in gross interest expense was due primarily to the reduction in the average debt outstanding, resulting from the retirement of the convertible notes and other unsecured debt. In 2010, the weighted average debt outstanding was $2.5 billion at a weighted effective interest rate of 6.1% as compared to $2.8 billion of outstanding weighted average debt at a weighted effective interest rate of 5.8% in 2009. The decrease of $2.8 million in the amortization of convertible bond discount relates to the retirement of the convertible notes. The decrease in over-market mortgage adjustment of acquired properties of $.9 million resulted primarily from the sale of an 80% interest in six shopping centers and loan payoffs that occurred in 2010 and 2009. Capitalized interest decreased $5.3 million as a result of new development stabilizations, completions and the cessation of carrying costs capitalization on several new development projects transferred to land held for development.
Equity in Earnings of Real Estate Joint Ventures and Partnerships, net
The increase in net equity earnings of real estate joint ventures and partnerships of $7.3 million or 132.3% is primarily attributable to impairment losses in 2009 of $6.8 million associated with three new development properties with a minimal impairment loss recorded in 2010 associated with a single property.
(Loss) Gain on Redemption of Convertible Senior Unsecured Notes
The loss in 2010 of $.1 million resulted from the purchase and cancellation of $4.0 million of our 3.95% convertible senior unsecured notes at a premium to par value as compared to the gain of $25.3 million from the purchase and cancellation of $402.0 million of our 3.95% convertible senior unsecured notes at a discount to par value in 2009.
Gain on Land and Merchant Development Sales
The decrease in gain on land and merchant development sales of $18.7 million is primarily attributable to the gains in 2009 that did not reoccur in 2010.
Provision for Income Taxes
The decrease in the income tax provision of $6.1 million is attributable primarily to a $5.0 million impairment valuation allowance provision in 2009 at our taxable REIT subsidiary.
Gain on Sale of Property
The decrease in gain on sale of property of $23.0 million is attributable primarily to gains in 2009 from the sale of an 80% interest in four shopping centers and the disposition of 11 retail buildings at seven operating properties. The sales activities in 2010 were not significant.
Comparison of the Year Ended December 31, 2009 to the Year Ended December 31, 2008
Revenues
Total revenues were $567.9 million for the year ended 2009 versus $588.3 million for the year ended 2008, a decrease of $20.4 million or 3.5%. This decrease resulted from a decrease in net rental revenues of $24.5 million, which is offset by an increase in other income of $4.1 million.
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This decrease in net rental revenues resulted primarily from a decline in occupancy, a $12.5 million decrease associated with the deconsolidation of four joint ventures as of December 31, 2008, and a reduction of $3.3 million from the sale of an 80% interest in four shopping centers in October 2009. The increase in other income resulted primarily from an increase in lease cancellation income from various tenants.
Occupancy (leased space) of the portfolio as compared to the prior year was as follows:
December 31, | ||||||||
2009 | 2008 | |||||||
Shopping Centers | 91.8 | % | 93.0 | % | ||||
Industrial | 87.8 | % | 91.6 | % | ||||
Total | 90.8 | % | 92.6 | % |
Expenses
Total expenses for 2009 were $379.7 million versus $409.6 million in 2008, a decrease of $29.9 million or 7.3%. This decrease resulted primarily from the $17.6 million decrease in impairment losses for certain new development properties based on current economic conditions, changes in our new development business plans, the suspension in tenant expansion plans and declines in real estate values and the $10.5 million decrease in operating expenses. The decrease in operating expenses from the prior year resulted primarily from a reduction in pre-acquisition and pre-development cost write offs and a decline in costs as a result of damage associated with Hurricane Ike in 2008. Overall, direct operating costs and expenses (operating and net real estate taxes) of operating our properties as a percentage of rental revenues were 31.3% and 31.8% in 2009 and 2008, respectively.
Interest Expense, net
Net interest expense totaled $152.4 million for 2009, down $3.0 million or 1.9% from 2008. The components of net interest expense were as follows (in thousands):
Year Ended December 31, | ||||||||
2009 | 2008 | |||||||
Gross interest expense | $ | 159,920 | $ | 174,598 | ||||
Amortization of convertible bond discount | 4,969 | 8,521 | ||||||
Over-market mortgage adjustment of acquired properties | (3,783 | ) | (7,424 | ) | ||||
Capitalized interest | (8,716 | ) | (20,290 | ) | ||||
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Total | $ | 152,390 | $ | 155,405 | ||||
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Gross interest expense totaled $159.9 million in 2009, down $14.7 million or 8.4% from 2008. The decrease in gross interest expense was due primarily to the reduction in the average debt outstanding, resulting from the retirement of the convertible notes and other unsecured debt. In 2009, the weighted average debt outstanding was $2.8 billion at a weighted effective interest rate of 5.8% as compared to $3.2 billion of outstanding weighted average debt at a weighted effective interest rate of 5.5% in 2008. The decrease of $3.6 million in the amortization of convertible bond discount relates to the retirement of the convertible notes. The decrease in over-market mortgage adjustment of acquired properties of $3.6 million resulted primarily from loan payoffs in 2008. Capitalized interest decreased $11.6 million as a result of new development stabilizations, completions and the cessation of carrying costs capitalization on several new development projects transferred to land held for development.
Interest and Other Income, net
Net interest and other income was $11.4 million in 2009 versus $4.3 million in 2008, an increase of $7.1 million or 165.1%. This increase resulted primarily from the fair value increase of $7.2 million in the assets held in a grantor trust related to our deferred compensation plan.
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Gain on Redemption of Convertible Senior Unsecured Notes
The gain in 2009 of $25.3 million resulted from the purchase and cancellation of $402.0 million of our 3.95% convertible senior unsecured notes at a discount to par value as compared to the $13.0 million gain from the purchase and cancellation of $37.8 million of our 3.95% convertible senior unsecured notes at a discount to par value in 2008.
Equity in Earnings of Real Estate Joint Ventures and Partnerships, net
The decrease in net equity in earnings of real estate joint ventures and partnerships of $6.6 million or 54.5% is primarily attributable to an increase in our share of impairment losses totaling $3.5 million with the remaining decrease resulting from a decline in income from our investments due to the cessation of carrying cost capitalization on several new development properties, a decline in occupancy, a note receivable write off and completions of new development and other capital activities.
Gain on Land and Merchant Development Sales
Gain on land and merchant development sales of $18.7 million in 2009 resulted primarily from the gain on sale of a land parcel, the sale of an unconsolidated joint venture interest in a shopping center in Colorado and the sale of an industrial building. The gain on land and merchant development sales of $8.3 million in 2008 resulted primarily from the sale of 24 land parcels plus the realization of a land parcel deferred gain totaling $2.1 million.
(Provision) Benefit for Income Taxes
The increase in the tax provision of $16.6 million is attributable primarily to our taxable REIT subsidiary. The benefit in 2008 associated with impairment losses and the write off of pre-development costs was greater compared to the activities in 2009. Also, in 2009 we recorded a valuation allowance of $9.6 million associated with impairment losses and established a $6.3 million deferred liability associated with book-tax basis differentials. The valuation allowance was established as the realization of these losses is dependent on generating sufficient taxable income in the years the related properties are sold.
Gain on Sale of Property
The increase in gain on sale of property of $23.3 million is attributable primarily to the sale of an 80% interest in four shopping centers in October 2009 and the disposition of 11 retail buildings at seven operating properties during 2009.
Effects of Inflation
We have structured our leases in such a way as to remain largely unaffected should significant inflation occur. Most of the leases contain percentage rent provisions whereby we receive increased rentals based on the tenants’ gross sales. Many leases provide for increasing minimum rentals during the terms of the leases through escalation provisions. In addition, many of our leases are for terms of less than 10 years, which allow us to adjust rental rates to changing market conditions when the leases expire. Most of our leases also require the tenants to pay their proportionate share of operating expenses and real estate taxes. As a result of these lease provisions, increases due to inflation, as well as real estate tax rate increases, generally do not have a significant adverse effect upon our operating results as they are absorbed by our tenants. Under the current economic climate, little to no inflation is occurring.
Capital Resources and Liquidity
Our primary liquidity needs are paying our common and preferred dividends, maintaining and operating our existing properties, paying our debt service costs, excluding debt maturities, and funding capital expenditures. Under our 2011 business plan cash flows from operating activities are expected to meet our planned capital needs.
33
The primary sources of capital for funding any debt maturities and acquisitions are our revolving credit facility; proceeds from both secured and unsecured debt issuances; proceeds from common and preferred capital issuances; cash generated from the sale of property and the formation of joint ventures; and cash flow generated by our operating properties. Amounts outstanding under the revolving credit facility are retired as needed with proceeds from the issuance of long-term debt, common and preferred equity, cash generated from disposition of properties and cash flow generated by our operating properties. As of December 31, 2010, we had no amounts outstanding under our $500 million revolving credit facility and $80.0 million was outstanding under our $99 million credit facility, which we use for cash management purposes. While we have more than adequate capacity under our $500 million revolving credit facility to fund the $343.5 million of 2011 debt maturities (including our 3.95% convertible senior unsecured notes), the capital markets are also available if we choose to issue unsecured debt. Although external market conditions are not within our control, we do not currently foresee any reasons that would prevent us from entering the capital markets.
During July 2010, we established a restricted cash collateral account of $47.6 million as part of a settlement agreement in connection with a development project in Sheridan, Colorado, which was replaced with a $46.3 million letter of credit in November 2010. In 2011, we plan to have this letter of credit released upon the remarketing of the underlying bonds. See “Contractual Obligations” for additional information.
Our most restrictive debt covenants including debt to assets, secured debt to assets, fixed charge and unencumbered interest coverage and debt yield ratios, limit the amount of additional leverage we can add; however, we believe the sources of capital described above are adequate to execute our business strategy and remain in compliance with our debt covenants.
We have non-recourse debt secured by acquired or developed properties held in several of our real estate joint ventures and partnerships. Off balance sheet mortgage debt for our unconsolidated real estate joint ventures and partnerships totaled $552.6 million of which our ownership percentage is $194.0 million at December 31, 2010. Scheduled principal mortgage payments on this debt, excluding non-cash related items, at 100% are as follows (in millions):
2011 | $ | 43.3 | ||
2012 | 33.6 | |||
2013 | 55.3 | |||
2014 | 105.0 | |||
2015 | 40.5 | |||
Thereafter | 272.8 | |||
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Total | $ | 550.5 | ||
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We hedge the future cash flows of certain debt transactions, as well as changes in the fair value of our debt instruments, principally through interest rate contracts with major financial institutions. We generally have the right to sell or otherwise dispose of our assets except in certain cases where we are required to obtain our joint venture partners’ consent or a third party consent for assets held in special purpose entities, which are 100% owned by us.
Investing Activities:
Acquisitions and Joint Ventures
Retail Properties.
During 2010, we contributed the final two properties to an unconsolidated real estate joint venture for $47.3 million, which included loan assumptions of $28.1 million and the receipt of net proceeds totaling $14.0 million. We also acquired four retail shopping centers with one each in Arizona, Colorado, Florida and North Carolina for approximately $75.3 million.
Also, in 2010, we acquired a 67%-owned unconsolidated real estate joint venture interest in a retail shopping center located in California and a 58%-owned unconsolidated real estate joint venture interest in a retail shopping center located in Texas for approximately $35.8 million.
Industrial Properties.
During 2010, we acquired a distribution center and an industrial business park both located in Texas for approximately $16.8 million.
34
Dispositions
Retail Properties.
During the 2010, we sold a shopping center located in Texas and a retail building at two operating properties located in Kansas and Kentucky. Gross sales proceeds from these dispositions totaled $3.0 million and generated gains of $.8 million. Also, two unconsolidated real estate joint ventures each sold a retail building located in California with aggregate gross sales proceeds totaling $4.4 million.
During the six months ended June 30, 2011, we sold two shopping centers located in Kansas and Texas. Sales proceeds from these dispositions totaled $28.8 million, and they are reported as discontinued operations.
Industrial Properties.
During 2010, we sold an unconsolidated real estate joint venture interest in a Texas property to our partner with gross sales proceeds totaling $1.4 million, which generated a gain of $1.3 million.
During the six months ended June 30, 2011, we sold an industrial building located in Georgia. Sales proceeds from this disposition totaled $1.3 million, and it is reported as discontinued operations.
Land and Merchant Development.
During 2010, we sold two land parcels each located in Texas with gross sales proceeds of $10.6 million. Also, two unconsolidated real estate joint ventures each sold a land parcel located in Florida with gross sales proceeds totaling $2.5 million.
New Development and Capital Expenditures
At December 31, 2010, we had nine projects under construction with a total square footage of approximately 1.8 million. The majority of these properties are slated to be completed over the next three years, and we expect our investment in these properties upon completion to be $131.3 million, net of proceeds from land sales and tax incentive financing of $19.1 million.
Our new development projects are financed initially under our revolving credit facility, as it is our practice not to use third party construction financing. Management monitors amounts outstanding under our revolving credit facility and periodically pays down such balances using cash generated from both secured and unsecured debt issuances, from common and preferred share issuances and from dispositions of properties.
Capital expenditures for additions to the existing portfolio, acquisitions, new development and our share of investments in unconsolidated real estate joint ventures and partnerships totaled $189.9 million in 2010, $162.9 million in 2009 and $437.7 million in 2008. We have entered into commitments aggregating $53.1 million comprised principally of construction contracts which are generally due in 12 to 36 months.
Financing Activities:
Debt
Total debt outstanding was $2.6 billion and $2.5 billion at December 31, 2010 and 2009, respectively. Total debt at December 31, 2010 included $2.3 billion on which interest rates are fixed and $239.6 million, including the effect of $120.4 million of interest rate contracts, which bears interest at variable rates. Additionally, debt totaling $1.1 billion was secured by operating properties while the remaining $1.5 billion was unsecured. During July 2010, we established a restricted cash collateral account of $47.6 million as part of a settlement agreement in connection with a development project in Sheridan, Colorado, which was replaced with a $46.3 million letter of credit in November 2010. In February 2010, we entered into an amended and restated $500 million unsecured revolving credit facility. The $500 million unsecured revolving credit facility expires in February 2013 and provides borrowing rates that float at a margin over LIBOR plus a facility fee. The borrowing margin and facility fee are priced off a grid that is tied to our senior unsecured credit ratings, which are currently 275.0 and 50.0 basis points, respectively. The facility also contains a competitive bid feature that will allow us to request bids for up to $250 million. Additionally, an accordion feature allows us to increase the new facility amount up to $700 million. During 2010, the maximum balance and weighted average balance outstanding under both facilities combined were $80.0 million and $12.2 million, respectively, at a weighted average interest rate of 1.8%. As of February 25, 2011, no amounts were outstanding under this facility.
35
Effective May 2010, we entered into an agreement with a bank for an unsecured and uncommitted overnight facility totaling $99 million that we intend to maintain for cash management purposes. The facility provides for fixed interest rate loans at a 30 day LIBOR rate plus a borrowing margin based on market liquidity. As of February 25, 2011, $75.0 million was outstanding under this facility.
The available balance under our revolving credit facility was $448.7 million at February 25, 2011, which is net of $51.3 million in outstanding letters of credit, and the available balance under our unsecured and uncommitted overnight facility was $24.0 million at February 25, 2011.
Our five most restrictive covenants include debt to assets, secured debt to assets, fixed charge and unencumbered interest coverage and debt yield ratios. We believe we were in full compliance with all of our covenants as of December 31, 2010.
Our public debt covenant ratios as defined in our indenture agreement were as follows at December 31, 2010:
Covenant | Restriction | Actual | ||||
Debt to Asset Ratio | Less than 60.0% | 45.9 | % | |||
Secured Debt to Asset Ratio | Less than 40.0% | 19.8 | % | |||
Fixed Charge Ratio | Greater than 1.5 | 2.4 | ||||
Unencumbered Asset Test | Greater than 100% | 249.7 | % |
In December 2009, we entered into 11 interest rate contracts with a total notional amount of $302.6 million, which had various maturities through February 2014. These contracts were designated as fair value hedges, and we determined that they were highly effective in limiting our risk of changes in the fair value of fixed-rate notes attributable to changes in variable interest rates. In February 2010, we settled $7 million of these interest rate contracts in conjunction with the repurchase of the related unsecured fixed-rate medium term notes, and a $.02 million gain was realized. In November 2010, the remaining $295.6 million of these interest rate contracts was settled for $8.9 million including accrued interest whereby net debt was increased by $8.2 million, and a gain of $.1 million was realized. The increase in net debt is being amortized to net interest expense over the remaining life of the original underlying debt instruments.
In April 2010, we entered into two interest rate contracts with a total notional amount of $71.3 million that mature in October 2017, which convert fixed interest payments at rates of 7.5% to variable interest payments. These contracts were designated as fair value hedges, and we have determined that they are highly effective in limiting our risk of changes in the fair value of fixed-rate notes attributable to changes in variable interest rates.
At December 31, 2010, we had four interest rate contracts with an aggregate notional amount of $120.4 million that were designated as fair value hedges and convert fixed interest payments at rates ranging from 4.2% to 7.5% to variable interest payments ranging from .3% to 4.4%.
We also have two interest rate contracts with an aggregate notional amount of $11.8 million that were designated as cash flow hedges and fix interest rates at 2.3% and 2.4% at December 31, 2010. We have determined that these contracts are highly effective in offsetting future variable interest cash flows.
We could be exposed to losses in the event of nonperformance by the counter-parties; however, management believes such nonperformance is unlikely.
36
Equity
Common and preferred dividends decreased to $158.0 million in 2010 compared to $168.6 million in 2009. The dividend rate for our common shares of beneficial interest (“common shares”) for each quarter of 2010 was $.26. The quarterly dividend rate for our common shares was $.525 for the first quarter of 2009 and $.25 from the remaining quarters of 2009. Our dividend payout ratio (as calculated as dividends paid on common shares divided by FFO - basic) for 2010, 2009 and 2008 approximated 73.1%, 62.5% and 88.5%, respectively. These ratios are inclusive of the non-cash transactions including impairment charges and the (loss) gain on the redemption of the convertible senior unsecured notes in the respective periods. Subsequent to December 31, 2010, our Board of Trust Managers approved an increase to our quarterly dividend rate to $.275 per share.
In May 2010, our shareholders approved an amendment to our declaration of trust increasing the number of our authorized common shares, $0.03 par value per share, from 150.0 million to 275.0 million.
In December 2008, we filed a universal shelf registration which is effective for three years. We will continue to closely monitor both the debt and equity markets and carefully consider our available financing alternatives, including both public and private placements.
Contractual Obligations
We have debt obligations related to our mortgage loans and unsecured debt, including any draws on our revolving credit facilities. We have shopping centers that are subject to non-cancelable long-term ground leases where a third party owns and has leased the underlying land to us to construct and/or operate a shopping center. In addition, we have non-cancelable operating leases pertaining to office space from which we conduct our business. The table below excludes obligations related to our new development projects because such amounts are not fixed or determinable. We have entered into commitments aggregating $53.1 million comprised principally of construction contracts which are generally due in 12 to 36 months. The following table summarizes our primary contractual obligations as of December 31, 2010 (in thousands):
2011 | 2012 | 2013 | 2014 | 2015 | Thereafter | Total | ||||||||||||||||||||||
Mortgages and Notes | ||||||||||||||||||||||||||||
Payable: (1) | ||||||||||||||||||||||||||||
Unsecured Debt | $ | 81,075 | $ | 363,346 | $ | 221,403 | $ | 422,619 | $ | 112,490 | $ | 491,027 | (2) | $ | 1,691,958 | |||||||||||||
Secured Debt | 151,373 | 185,084 | 218,846 | 206,822 | 187,187 | 506,019 | 1,455,331 | |||||||||||||||||||||
Lease Payments | 3,570 | 3,382 | 3,352 | 3,118 | 2,891 | 123,870 | 140,183 | |||||||||||||||||||||
Other Obligations (3) | 36,148 | 223 | 36,371 | |||||||||||||||||||||||||
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Total Contractual Obligations | $ | 272,166 | $ | 552,035 | $ | 443,601 | $ | 632,559 | $ | 302,568 | $ | 1,120,916 | $ | 3,323,843 | ||||||||||||||
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(1) | Includes principal and interest with interest on variable-rate debt calculated using rates at December 31, 2010, excluding the effect of interest rate swaps. Also, excludes a $97.0 million debt service guaranty liability. |
(2) | Includes our 3.95% convertible senior unsecured notes that mature in 2026, which have a call/put option feature beginning in 2011. |
(3) | Other obligations include income and real estate tax payments, commitments associated with our secured debt, contributions to our retirement plan and other employee payments. Severance and change in control agreements have not been included as the amounts and payouts are not anticipated. |
Related to our investment in a development project in Sheridan, Colorado we, our joint venture partner and the joint venture have each provided a guaranty for the payment of any debt service shortfalls on tax increment revenue bonds issued in connection with the project. The Sheridan Redevelopment Agency (“Agency”) issued $97 million of Series A bonds used for an urban renewal project. The bonds are to be repaid with incremental sales and property taxes and a public improvement fee (“PIF”) to be assessed on current and future retail sales and, to the extent necessary, any amounts we may have to provide under a guaranty. The incremental taxes and PIF are to remain intact until the earlier of the bond liability has been paid in full or 2030 (unless such date is otherwise extended by the Agency).
37
In July 2009, we settled a lawsuit in connection with the above project. Among the obligations performed or to be performed by us under the terms of the settlement agreement was to cause the joint venture to purchase a portion of the bonds in the amount of $51.3 million at par, plus accrued and unpaid interest to the date of such purchase. We established a restricted cash collateral account of $47.6 million in lieu of a back-to-back letter of credit previously supporting additional bonds totaling $45.7 million. We replaced the restricted cash collateral account with a $46.3 million letter of credit in November 2010.
Also, in connection with the Sheridan, Colorado joint venture and the issuance of the related Series A bonds, we, our joint venture partner and the joint venture have also provided a performance guaranty on behalf of the Agency for the satisfaction of all obligations arising from two interest rate contracts for the combined notional amount of $97 million that matures in December 2029. We evaluated and determined that the fair value of the guaranty both at inception and December 31, 2010 was nominal.
In conjunction with the Agency, we are currently working towards bond reissuance alternatives in which the incremental taxes and PIF would be extended an additional 10 years. If we move ahead with the reissuance plan, we would expect the outstanding senior and subordinate bonds to be recalled during the first half of 2011 and new senior and subordinate bonds to be reissued. This transaction could likely result in the receipt of approximately $16 million in cash proceeds and $57 million in new subordinated bonds replacing the face value of our $51 million of senior bonds and $22 million of subordinate bonds, which have been impaired by $11.7 million at December 31, 2010. Furthermore, upon completion of this transaction, we anticipate having to record an additional loss on the new subordinate bonds in a range between $16 million to $18 million based on revised fair value estimates using current market factors and assumptions. This transaction is dependent on many factors including the Agency’s ability to reissue the bonds which can not be assured.
We have evaluated the remaining outstanding guaranties and have determined that the fair value of these guaranties is nominal.
Off Balance Sheet Arrangements
As of December 31, 2010, none of our off balance sheet arrangements had a material effect on our liquidity or availability of, or requirement for, our capital resources. Letters of credit totaling $52.4 million and $7.2 million were outstanding under the revolving credit facility at December 31, 2010 and 2009, respectively.
We have entered into several unconsolidated real estate joint ventures and partnerships. Under many of these agreements, we and our joint venture partners are required to fund operating capital upon shortfalls in working capital. We have also committed to fund the capital requirements of several new development joint ventures. As operating manager of most of these entities, we have considered these funding requirements in our business plan.
Reconsideration events, including changes in variable interests, could cause us to consolidate these joint ventures and partnerships. We continuously evaluate these events as we become aware of them. Some triggers to be considered are additional contributions required by each partner and each partner’s ability to make those contributions. Under certain of these circumstances, we may purchase our partner’s interest. Our material unconsolidated real estate joint ventures are with entities which appear sufficiently stable; however, if market conditions were to continue to deteriorate and our partners are unable to meet their commitments, there is a possibility we may have to consolidate these entities. If we were to consolidate all of our unconsolidated real estate joint ventures, we would still be in compliance with our debt covenants.
An unconsolidated real estate joint venture was determined to be a variable interest entity (“VIE”) through the issuance of a secured loan since the lender has the ability to make decisions that could have a significant impact on the success of the entity. In addition, we have another unconsolidated real estate joint venture with an interest in an entity which is deemed to be a VIE since the unconsolidated joint venture provided a guaranty on debt obtained from its investment in a joint venture. Our maximum risk of loss associated with these VIEs was limited to $56.4 million at December 31, 2010.
We have a real estate limited partnership agreement with a foreign institutional investor to purchase up to $280 million of retail properties in various states. Our ownership in this unconsolidated real estate limited partnership is 51%. To date, no properties had been purchased.
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Funds from Operations
The National Association of Real Estate Investment Trusts (“NAREIT”) defines FFO as net income (loss) attributable to common shareholders computed in accordance with GAAP, excluding gains or losses from sales of operating real estate assets and extraordinary items, plus depreciation and amortization of operating properties, including our share of unconsolidated real estate joint ventures and partnerships. We calculate FFO in a manner consistent with the NAREIT definition.
Management uses FFO as a supplemental measure to conduct and evaluate our business because there are certain limitations associated with using GAAP net income by itself as the primary measure of our operating performance. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, management believes that the presentation of operating results for real estate companies that uses historical cost accounting is insufficient by itself. There can be no assurance that FFO presented by us is comparable to similarly titled measures of other REITs.
FFO should not be considered as an alternative to net income or other measurements under GAAP as an indicator of our operating performance or to cash flows from operating, investing or financing activities as a measure of liquidity. FFO does not reflect working capital changes, cash expenditures for capital improvements or principal payments on indebtedness.
FFO is calculated as follows (in thousands):
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Net income attributable to common shareholders | $ | 10,730 | $ | 135,626 | $ | 109,091 | ||||||
Depreciation and amortization | 143,393 | 144,211 | 150,137 | |||||||||
Depreciation and amortization of unconsolidated real estate joint ventures and partnerships | 20,085 | 18,433 | 11,898 | |||||||||
Gain on sale of property | (3,069 | ) | (81,006 | ) | (70,066 | ) | ||||||
Loss (gain) on sale of property of unconsolidated real estate joint ventures and partnerships | 1 | (4 | ) | (2 | ) | |||||||
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Funds from operations - basic and diluted | $ | 171,140 | $ | 217,260 | $ | 201,058 | ||||||
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Weighted average shares outstanding - basic | 119,935 | 109,546 | 84,474 | |||||||||
Effect of dilutive securities: | ||||||||||||
Share options and awards | 845 | 632 | 443 | |||||||||
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Weighted average shares outstanding - diluted | 120,780 | 110,178 | 84,917 | |||||||||
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Newly Issued Accounting Pronouncements
In July 2010, the Financial Accounting Standards Board issued Accounting Standards Update No. 2010-20, “Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses,” which provides for additional disclosures about the credit quality of an entity’s financing receivables, including loans and trade accounts receivables with contractual maturities exceeding one year and any related allowance for losses. The provisions of this update were effective for us at December 31, 2010, with the exception of disclosures related to activity occurring during a reporting period, which is effective for us in the first quarter of 2011. We do not expect the adoption of this update to materially impact our consolidated financial statements.
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ITEM 8. | Financial Statements and Supplementary Data |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trust Managers and Shareholders of
Weingarten Realty Investors
Houston, Texas
We have audited the accompanying consolidated balance sheets of Weingarten Realty Investors and subsidiaries (the “Company”) as of December 31, 2010 and 2009, and the related consolidated statements of income and comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2010. Our audits also included the financial statement schedules appearing on pages 81 through 91. These financial statements and financial statement schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements and financial statement schedules based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Weingarten Realty Investors and subsidiaries as of December 31, 2010 and 2009, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2010, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.
/s/ Deloitte & Touche LLP
Houston, Texas
March 1, 2011 (October 6, 2011 as to the effects
of the 2011 discontinued operations described in Note 10)
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STATEMENTS OF CONSOLIDATED INCOME AND COMPREHENSIVE INCOME
(In thousands, except per share amounts)
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Revenues: | ||||||||||||
Rentals, net | $ | 536,727 | $ | 549,960 | $ | 574,514 | ||||||
Other | 13,846 | 17,927 | 13,772 | |||||||||
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Total | 550,573 | 567,887 | 588,286 | |||||||||
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Expenses: | ||||||||||||
Depreciation and amortization | 149,882 | 146,493 | 148,607 | |||||||||
Operating | 105,051 | 102,387 | 112,842 | |||||||||
Real estate taxes, net | 64,213 | 69,936 | 69,808 | |||||||||
Impairment loss | 33,317 | 34,983 | 52,539 | |||||||||
General and administrative | 25,000 | 25,930 | 25,761 | |||||||||
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Total | 377,463 | 379,729 | 409,557 | |||||||||
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Operating Income | 173,110 | 188,158 | 178,729 | |||||||||
Interest Expense, net | (148,330 | ) | (152,390 | ) | (155,405 | ) | ||||||
Interest and Other Income, net | 9,825 | 11,427 | 4,333 | |||||||||
(Loss) Gain on Redemption of Convertible Senior Unsecured Notes | (135 | ) | 25,311 | 12,961 | ||||||||
Equity in Earnings of Real Estate Joint Ventures and Partnerships, net | 12,889 | 5,548 | 12,196 | |||||||||
Gain on Land and Merchant Development Sales | 18,688 | 8,342 | ||||||||||
(Provision) Benefit for Income Taxes | (222 | ) | (6,313 | ) | 10,244 | |||||||
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Income from Continuing Operations | 47,137 | 90,429 | 71,400 | |||||||||
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Operating Income from Discontinued Operations | 1,003 | 3,816 | 12,475 | |||||||||
Gain on Sale of Property from Discontinued Operations | 814 | 55,765 | 68,722 | |||||||||
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Income from Discontinued Operations | 1,817 | 59,581 | 81,197 | |||||||||
Gain on Sale of Property | 2,284 | 25,266 | 1,998 | |||||||||
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Net Income | 51,238 | 175,276 | 154,595 | |||||||||
Less: Net Income Attributable to Noncontrolling Interests | (5,032 | ) | (4,174 | ) | (8,943 | ) | ||||||
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Net Income Adjusted for Noncontrolling Interests | 46,206 | 171,102 | 145,652 | |||||||||
Dividends on Preferred Shares | (35,476 | ) | (35,476 | ) | (34,711 | ) | ||||||
Redemption Cost of Preferred Shares | (1,850 | ) | ||||||||||
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Net Income Attributable to Common Shareholders | $ | 10,730 | $ | 135,626 | $ | 109,091 | ||||||
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Earnings Per Common Share - Basic: | ||||||||||||
Income from continuing operations attributable to common shareholders | $ | 0.07 | $ | 0.70 | $ | 0.33 | ||||||
Income from discontinued operations | 0.02 | 0.54 | 0.96 | |||||||||
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Net income attributable to common shareholders | $ | 0.09 | $ | 1.24 | $ | 1.29 | ||||||
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Earnings Per Common Share - Diluted: | ||||||||||||
Income from continuing operations attributable to common shareholders | $ | 0.07 | $ | 0.69 | $ | 0.33 | ||||||
Income from discontinued operations | 0.02 | 0.54 | 0.95 | |||||||||
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Net income attributable to common shareholders | $ | 0.09 | $ | 1.23 | $ | 1.28 | ||||||
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Comprehensive Income: | ||||||||||||
Net Income | $ | 51,238 | $ | 175,276 | $ | 154,595 | ||||||
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Other Comprehensive Income (Loss): | ||||||||||||
Loss on derivatives | (7,204 | ) | ||||||||||
Net unrealized gain on derivatives | 123 | |||||||||||
Amortization of loss on derivatives | 2,566 | 2,481 | 2,095 | |||||||||
Minimum pension liability adjustment | (505 | ) | 3,237 | (9,092 | ) | |||||||
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Total | 2,184 | 5,718 | (14,201 | ) | ||||||||
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Comprehensive Income | 53,422 | 180,994 | 140,394 | |||||||||
Comprehensive Income Attributable to Noncontrolling Interests | (5,032 | ) | (4,174 | ) | (8,943 | ) | ||||||
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Comprehensive Income Adjusted for Noncontrolling Interests | $ | 48,390 | $ | 176,820 | $ | 131,451 | ||||||
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See Notes to Consolidated Financial Statements.
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CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
December 31, | December 31, | |||||||
2010 | 2009 | |||||||
ASSETS | ||||||||
Property | $ | 4,777,794 | $ | 4,658,396 | ||||
Accumulated Depreciation | (971,249 | ) | (856,281 | ) | ||||
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Property, net * | 3,806,545 | 3,802,115 | ||||||
Investment in Real Estate Joint Ventures and Partnerships, net | 347,526 | 315,248 | ||||||
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Total | 4,154,071 | 4,117,363 | ||||||
Notes Receivable from Real Estate Joint Ventures and Partnerships | 184,788 | 317,838 | ||||||
Unamortized Debt and Lease Costs, net | 116,437 | 103,396 | ||||||
Accrued Rent and Accounts Receivable (net of allowance for doubtful accounts of $10,137 in 2010 and $10,380 in 2009) * | 95,859 | 96,372 | ||||||
Cash and Cash Equivalents * | 23,859 | 153,584 | ||||||
Restricted Deposits and Mortgage Escrows | 10,208 | 12,778 | ||||||
Other, net | 222,633 | 89,054 | ||||||
|
|
|
| |||||
Total | $ | 4,807,855 | $ | 4,890,385 | ||||
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|
|
| |||||
LIABILITIES AND EQUITY | ||||||||
Debt, net * | $ | 2,589,448 | $ | 2,531,847 | ||||
Accounts Payable and Accrued Expenses | 126,767 | 137,727 | ||||||
Other, net | 111,383 | 114,155 | ||||||
|
|
|
| |||||
Total | 2,827,598 | 2,783,729 | ||||||
|
|
|
| |||||
Commitments and Contingencies | ||||||||
Equity: | ||||||||
Preferred Shares of Beneficial Interest - par value, $.03 per share; shares authorized: 10,000 | ||||||||
6.75% Series D cumulative redeemable preferred shares of beneficial interest; 100 shares issued and outstanding in 2010 and 2009; liquidation preference $75,000 | 3 | 3 | ||||||
6.95% Series E cumulative redeemable preferred shares of beneficial interest; 29 shares issued and outstanding in 2010 and 2009; liquidation preference $72,500 | 1 | 1 | ||||||
6.5% Series F cumulative redeemable preferred shares of beneficial interest; 140 shares issued and outstanding in 2010 and 2009; liquidation preference $350,000 | 4 | 4 | ||||||
Common Shares of Beneficial Interest - par value, $.03 per share; shares authorized: 275,000; shares issued and outstanding: 120,492 in 2010 and 120,098 in 2009 | 3,630 | 3,615 | ||||||
Accumulated Additional Paid-In Capital | 1,969,905 | 1,958,975 | ||||||
Net Income Less Than Accumulated Dividends | (151,780 | ) | (37,350 | ) | ||||
Accumulated Other Comprehensive Loss | (21,774 | ) | (23,958 | ) | ||||
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|
|
| |||||
Shareholders’ Equity | 1,799,989 | 1,901,290 | ||||||
Noncontrolling Interests | 180,268 | 205,366 | ||||||
|
|
|
| |||||
Total Equity | 1,980,257 | 2,106,656 | ||||||
|
|
|
| |||||
Total | $ | 4,807,855 | $ | 4,890,385 | ||||
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|
|
* | Consolidated Variable Interest Entities’ Assets and Liabilities included in the above balances (See Notes 2 and 3): |
Property, net | $ | 233,706 | $ | 237,710 | ||||
Accrued Rent and Accounts Receivable, net | 9,514 | 9,515 | ||||||
Cash and Cash Equivalents | 10,397 | 13,085 | ||||||
Debt, net | 281,519 | 282,096 |
See Notes to Consolidated Financial Statements.
42
STATEMENTS OF CONSOLIDATED CASH FLOWS
(In thousands)
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Cash Flows from Operating Activities: | ||||||||||||
Net Income | $ | 51,238 | $ | 175,276 | $ | 154,595 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization | 151,107 | 151,888 | 157,894 | |||||||||
Write-off of pre-development/acquisition costs | 11,724 | |||||||||||
Amortization of deferred financing costs and debt discount | 5,017 | 6,083 | 13,496 | |||||||||
Impairment loss | 33,317 | 38,836 | 52,539 | |||||||||
Equity in earnings of real estate joint ventures and partnerships, net | (12,889 | ) | (5,548 | ) | (12,196 | ) | ||||||
Gain on land and merchant development sales | 0 | (18,688 | ) | (8,342 | ) | |||||||
Gain on sale of property | (3,098 | ) | (81,031 | ) | (70,720 | ) | ||||||
Loss (gain) on redemption of convertible senior unsecured notes | 135 | (25,311 | ) | (12,961 | ) | |||||||
Distributions of income from unconsolidated real estate joint ventures and partnerships | 1,733 | 2,841 | 3,602 | |||||||||
Changes in accrued rent and accounts receivable, net | (2,898 | ) | (568 | ) | (11,255 | ) | ||||||
Changes in other assets, net | (16,225 | ) | (10,309 | ) | (29,669 | ) | ||||||
Changes in accounts payable, accrued expenses and other liabilities, net | (3,875 | ) | 147 | (36,397 | ) | |||||||
Other, net | 11,063 | 10,700 | 7,840 | |||||||||
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|
|
|
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| |||||||
Net cash provided by operating activities | 214,625 | 244,316 | 220,150 | |||||||||
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|
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|
| |||||||
Cash Flows from Investing Activities: | ||||||||||||
Investment in property | (142,972 | ) | (108,914 | ) | (294,886 | ) | ||||||
Proceeds from sale and disposition of property, net | 29,064 | 333,412 | 265,421 | |||||||||
Change in restricted deposits and mortgage escrows | 2,175 | 20,480 | 2,688 | |||||||||
Notes receivable from real estate joint ventures and partnerships and other receivables: | ||||||||||||
Advances | (9,145 | ) | (100,800 | ) | (150,064 | ) | ||||||
Collections | 20,010 | 22,301 | 46,254 | |||||||||
Real estate joint ventures and partnerships: | ||||||||||||
Investments | (37,738 | ) | (5,247 | ) | (4,759 | ) | ||||||
Distributions of capital | 15,663 | 30,640 | 19,955 | |||||||||
Other, net | 1,522 | |||||||||||
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|
|
|
|
| |||||||
Net cash (used in) provided by investing activities | (121,421 | ) | 191,872 | (115,391 | ) | |||||||
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|
| |||||||
Cash Flows from Financing Activities: | ||||||||||||
Proceeds from issuance of: | ||||||||||||
Debt | 336 | 367,640 | 258,060 | |||||||||
Common shares of beneficial interest, net | 3,122 | 439,272 | 101,016 | |||||||||
Preferred shares of beneficial interest, net | 117,891 | |||||||||||
Repurchase of preferred shares of beneficial interest, net | (195,824 | ) | ||||||||||
Principal payments of debt | (139,722 | ) | (578,390 | ) | (296,902 | ) | ||||||
Changes in unsecured revolving credit facilities | 80,000 | (383,000 | ) | 128,000 | ||||||||
Common and preferred dividends paid | (158,012 | ) | (168,583 | ) | (213,569 | ) | ||||||
Debt issuance costs paid | (6,622 | ) | (6,446 | ) | (6,822 | ) | ||||||
Other, net | (2,031 | ) | (12,043 | ) | (3,440 | ) | ||||||
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|
|
|
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| |||||||
Net cash used in financing activities | (222,929 | ) | (341,550 | ) | (111,590 | ) | ||||||
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|
|
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| |||||||
Net (decrease) increase in cash and cash equivalents | (129,725 | ) | 94,638 | (6,831 | ) | |||||||
Cash and cash equivalents at January 1 | 153,584 | 58,946 | 65,777 | |||||||||
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| |||||||
Cash and cash equivalents at December 31 | $ | 23,859 | $ | 153,584 | $ | 58,946 | ||||||
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|
|
|
|
|
See Notes to Consolidated Financial Statements.
43
STATEMENTS OF CONSOLIDATED EQUITY
(In thousands, except per share amounts)
Year Ended December 31, 2010, 2009 and 2008
Preferred Shares of Beneficial Interest | Common Shares of Beneficial Interest | Treasury Shares of Beneficial Interest | Accumulated Additional Paid-In Capital | Net Income Less Than Accumulated Dividends | Accumulated Other Comprehensive Loss | Noncontrolling Interests | Total | |||||||||||||||||||||||||
Balance, January 1, 2008 | $ | 8 | $ | 2,565 | $ | (41 | ) | $ | 1,485,496 | $ | 31,639 | $ | (15,475 | ) | $ | 96,885 | $ | 1,601,077 | ||||||||||||||
Net income | 145,652 | 8,943 | 154,595 | |||||||||||||||||||||||||||||
Issuance of Series F preferred shares | 2 | 116,949 | 883 | 117,834 | ||||||||||||||||||||||||||||
Redemption of Series G preferred shares | (2 | ) | (193,548 | ) | (1,850 | ) | (195,400 | ) | ||||||||||||||||||||||||
Shares issued in exchange for non-controlling interests | 1 | 1,093 | (1,094 | ) | — | |||||||||||||||||||||||||||
Issuance of common shares | 90 | 97,971 | 98,061 | |||||||||||||||||||||||||||||
Shares issued under benefit plans | 9 | 8,703 | 8,712 | |||||||||||||||||||||||||||||
Dividends declared – common shares(1) | (177,975 | ) | (177,975 | ) | ||||||||||||||||||||||||||||
Dividends declared – preferred shares(2) | (35,594 | ) | (35,594 | ) | ||||||||||||||||||||||||||||
Sale of properties with noncontrolling interests | 116,541 | 116,541 | ||||||||||||||||||||||||||||||
Treasury shares cancelled(3) | (41 | ) | 41 | — | ||||||||||||||||||||||||||||
Purchase and cancellation of convertible senior unsecured notes | (3,926 | ) | (3,926 | ) | ||||||||||||||||||||||||||||
Distributions to noncontrolling interests | (9,962 | ) | (9,962 | ) | ||||||||||||||||||||||||||||
Contributions from noncontrolling interests | 634 | 634 | ||||||||||||||||||||||||||||||
Other comprehensive loss | (14,201 | ) | (14,201 | ) | ||||||||||||||||||||||||||||
Other, net | 1 | 2,202 | (7,916 | ) | (5,713 | ) | ||||||||||||||||||||||||||
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Balance, December 31, 2008 | 8 | 2,625 | — | 1,514,940 | (37,245 | ) | (29,676 | ) | 204,031 | 1,654,683 | ||||||||||||||||||||||
Net income | 171,102 | 4,174 | 175,276 | |||||||||||||||||||||||||||||
Shares issued in exchange for noncontrolling interests | 15 | 14,236 | (14,251 | ) | — | |||||||||||||||||||||||||||
Issuance of common shares | 966 | 438,089 | 439,055 | |||||||||||||||||||||||||||||
Shares issued under benefit plans | 9 | 5,147 | 5,156 | |||||||||||||||||||||||||||||
Dividends declared – common shares(1) | (135,731 | ) | (135,731 | ) | ||||||||||||||||||||||||||||
Dividends declared – preferred shares(4) | (32,852 | ) | (32,852 | ) | ||||||||||||||||||||||||||||
Sale of properties with noncontrolling interests | 23,521 | 23,521 | ||||||||||||||||||||||||||||||
Distributions to noncontrolling interests | (16,368 | ) | (16,368 | ) | ||||||||||||||||||||||||||||
Contributions from noncontrolling interests | 4,518 | 4,518 | ||||||||||||||||||||||||||||||
Purchase and cancellation of convertible senior unsecured notes | (16,110 | ) | (16,110 | ) | ||||||||||||||||||||||||||||
Other comprehensive income | 5,718 | 5,718 | ||||||||||||||||||||||||||||||
Other, net | 2,673 | (2,624 | ) | (259 | ) | (210 | ) | |||||||||||||||||||||||||
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Balance, December 31, 2009 | 8 | 3,615 | — | 1,958,975 | (37,350 | ) | (23,958 | ) | 205,366 | 2,106,656 | ||||||||||||||||||||||
Net income | 46,206 | 5,032 | 51,238 | |||||||||||||||||||||||||||||
Shares issued in exchange for non-controlling interests | 1 | 745 | (746 | ) | — | |||||||||||||||||||||||||||
Shares issued under benefit plans | 14 | 8,005 | 8,019 | |||||||||||||||||||||||||||||
Dividends declared – common shares(1) | (125,160 | ) | (125,160 | ) | ||||||||||||||||||||||||||||
Dividends declared – preferred shares(4) | (32,852 | ) | (32,852 | ) | ||||||||||||||||||||||||||||
Distributions to noncontrolling interests | (13,014 | ) | (13,014 | ) | ||||||||||||||||||||||||||||
Contributions from noncontrolling interests | 2,686 | 2,686 | ||||||||||||||||||||||||||||||
Consolidation of joint ventures | (18,573 | ) | (18,573 | ) | ||||||||||||||||||||||||||||
Other comprehensive income | 2,184 | 2,184 | ||||||||||||||||||||||||||||||
Other, net | 2,180 | (2,624 | ) | (483 | ) | (927 | ) | |||||||||||||||||||||||||
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| |||||||||||||||||
Balance, December 31, 2010 | $ | 8 | $ | 3,630 | $ | — | $ | 1,969,905 | $ | (151,780 | ) | $ | (21,774 | ) | $ | 180,268 | $ | 1,980,257 | ||||||||||||||
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(1) | Common dividend per share was $1.04, $1.275 and $2.10 for the year ended December 31, 2010, 2009 and 2008, respectively. |
(2) | Series D, E, F and G preferred dividend per share was $50.63, $173.75, $162.50 and $73.73, respectively, for the year ended December 31, 2008. |
(3) | A total of 1.4 million common shares of beneficial interest were purchased in 2007 and subsequently retired on January 11, 2008. |
(4) | Series D, E and F preferred dividend per share was $50.63, $173.75 and $162.50 for the year ended December 31, 2010 and 2009, respectively. |
See Notes to Consolidated Financial Statements.
44
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Summary of Significant Accounting Policies
Business
Weingarten Realty Investors is a real estate investment trust (“REIT”) organized under the Texas Real Estate Investment Trust Act. Effective January 1, 2010, the Texas Real Estate Investment Trust Act was replaced by the Texas Business Organizations Code. We, and our predecessor entity, began the ownership and development of shopping centers and other commercial real estate in 1948. Our primary business is leasing space to tenants in the shopping and industrial centers we own or lease. We also manage centers for joint ventures in which we are partners or for other outside owners for which we charge fees.
We operate a portfolio of properties that include neighborhood and community shopping centers and industrial properties of approximately 71.5 million square feet. We have a diversified tenant base with our largest tenant comprising only 3.0% of total rental revenues during 2010.
We currently operate, and intend to operate in the future, as a REIT.
Basis of Presentation
Our consolidated financial statements include the accounts of our subsidiaries, certain partially owned real estate joint ventures or partnerships and variable interest entities which meet the guidelines for consolidation. All intercompany balances and transactions have been eliminated.
Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). Such statements require management to make estimates and assumptions that affect the reported amounts on our consolidated financial statements. Actual results could differ from these estimates.
Revenue Recognition
Rental revenue is generally recognized on a straight-line basis over the term of the lease, which begins the date the leasehold improvements are substantially complete, if owned by us, or the date the tenant takes control of the space, if the leasehold improvements are owned by the tenant. Revenue from tenant reimbursements of taxes, maintenance expenses and insurance is subject to our interpretation of lease provisions and is recognized in the period the related expense is recognized. Revenue based on a percentage of tenants’ sales is recognized only after the tenant exceeds their sales breakpoint. In addition, in circumstances where we provide a tenant improvement allowance for improvements that are owned by the tenant, we recognize the allowance as a reduction of rental revenue on a straight-line basis over the term of the lease. Other revenue is income from contractual agreements with third parties, tenants or partially owned real estate joint ventures or partnerships, which is recognized as the related services are performed under the respective agreements.
Real Estate Joint Ventures and Partnerships
To determine the method of accounting for partially owned real estate joint ventures and partnerships, we apply the guidelines as set forth in GAAP. Entities identified as variable interest entities are consolidated if we are determined to be the primary beneficiary of the partially owned real estate joint venture or partnership.
Partially owned real estate joint ventures and partnerships over which we have a controlling financial interest are consolidated in our financial statements. In determining if we have a controlling financial interest, we consider factors such as ownership interest, authority to make decisions, kick-out rights and substantive participating rights. Management continually analyzes and assesses reconsideration events, including changes in these factors, to determine if the consolidation treatment remains appropriate. Partially owned real estate joint ventures and partnerships where we do not have a controlling financial interest, but have the ability to exercise significant influence, are accounted for using the equity method.
45
Property
Real estate assets are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method, generally over estimated useful lives of 18-40 years for buildings and 10-20 years for parking lot surfacing and equipment. Major replacements where the betterment extends the useful life of the asset are capitalized and the replaced asset and corresponding accumulated depreciation are removed from the accounts. All other maintenance and repair items are charged to expense as incurred.
Acquisitions of properties are accounted for utilizing the acquisition method and, accordingly, the results of operations of an acquired property are included in our results of operations from the date of acquisition. Estimates of fair values are based upon future cash flows and other valuation techniques in accordance with our fair value measurements accounting policy, which are used to record the purchase price of acquired property among land, buildings on an “as if vacant” basis, tenant improvements, other identifiable intangibles and any goodwill or gain on purchase. Other identifiable intangible assets and liabilities include the effect of out-of-market leases, the value of having leases in place (“as is” versus “as if vacant” and absorption costs), out-of-market assumed mortgages and tenant relationships. Depreciation and amortization is computed using the straight-line method, generally over estimated useful lives of 40 years for buildings and over the lease term which includes bargain renewal options for other identifiable intangible assets. Effective 2009, acquisition costs are expensed as incurred.
Property also includes costs incurred in the development of new operating properties and properties in our merchant development program. Merchant development is a program in which we develop a project with the objective of selling all or part of it, instead of retaining it in our portfolio on a long-term basis. Also, disposition of land parcels and non-operating properties are included in this program. These properties are carried at cost, and no depreciation is recorded on these assets until rent commences or no later than one year from the completion of major construction. These costs include preacquisition costs directly identifiable with the specific project, development and construction costs, interest and real estate taxes. Indirect development costs, including salaries and benefits, travel and other related costs that are directly attributable to the development of the property, are also capitalized. The capitalization of such costs ceases at the earlier of one year from the completion of major construction or when the property, or any completed portion, becomes available for occupancy.
Property also includes costs for tenant improvements paid by us, including reimbursements to tenants for improvements that are owned by us and will remain our property after the lease expires.
Some of our properties are held in single purpose entities. A single purpose entity is a legal entity typically established at the request of a lender solely for the purpose of owning a property or group of properties subject to a mortgage. There may be restrictions limiting the entity’s ability to engage in an activity other than owning or operating the property, assuming or guaranteeing the debt of any other entity, or dissolving itself or declaring bankruptcy before the debt has been repaid. Most of our single purpose entities are 100% owned by us and are consolidated in our financial statements.
Impairment
Our property is reviewed for impairment if events or changes in circumstances indicate that the carrying amount of the property, including any capitalized costs and any identifiable intangible assets, may not be recoverable.
If such an event occurs, a comparison is made of the current and projected operating cash flows of each such property into the foreseeable future, with consideration of applicable holding periods, on an undiscounted basis to the carrying amount of such property. If we determine the carrying amount is not recoverable, our basis in the property is reduced to its estimated fair value to reflect impairment in the value of the asset. Fair values are determined by management utilizing cash flow models, market capitalization rates and market discount rates, or by obtaining third-party broker or appraisal estimates in accordance with our fair value measurements accounting policy.
46
We continuously review economic considerations at each reporting period, including the effects of tenant bankruptcies, the suspension of tenant expansion plans for new development projects, declines in real estate values, and any changes to plans related to our new development properties including land held for development, to identify properties where we believe market values may be deteriorating. Impairments, primarily related to land held for development, of $5.2 million, $38.8 million and $52.5 million were recognized for the year ended December 31, 2010, 2009 and 2008, respectively. Determining whether a property is impaired and, if impaired, the amount of write-down to fair value requires a significant amount of judgment by management and is based on the best information available to management at the time of evaluation. If market conditions continue to deteriorate or management’s plans for certain properties change, additional write-downs could be required in the future.
Our investment in partially owned real estate joint ventures and partnerships is reviewed for impairment each reporting period. The ultimate realization is dependent on a number of factors, including the performance of each investment and market conditions. We will record an impairment charge if we determine that a decline in the value of an investment below its carrying amount is other than temporary. For the year ended December 31, 2010, an impairment loss of $15.8 million was recognized in connection with the revaluation of our 50% equity interest in a development project in Sheridan, Colorado, as a result of our assumption of control of the project as of April 1, 2010. See Note 4 for additional information. No impairment on these investments was recorded for the year ended December 31, 2009 and 2008. However, due to the current credit and real estate market conditions, there is no certainty that impairments would not occur in the future.
Our investments in tax increment revenue bonds, which were classified as held to maturity during 2010, are reviewed for impairment, if events or circumstances change indicating that the carrying amount of the investment may not be recoverable. Realization is dependent on a number of factors, including investment performance and market conditions. We will record an impairment charge if we determine that a decline in the value of the investment below its carrying amount is other than temporary, and it is uncertain if the investment will be held to maturity. For the year ended December, 31, 2010, we recorded an $11.7 million impairment associated with our investment in the subordinated tax increment revenue bonds (see Note 18 for further information). No such impairment was recorded for the year ended December 31, 2009 and 2008. On December 31, 2010, the tax increment revenue bonds have been classified as available for sale based on our anticipation that the bonds may be reissued during 2011.
Interest Capitalization
Interest is capitalized on land under development and buildings under construction based on rates applicable to borrowings outstanding during the period and the weighted average balance of qualified assets under development/construction during the period.
Fair Value Measurements
Certain financial instruments, estimates and transactions are required to be calculated, reported and/or recorded at fair value. The estimated fair values of such financial items, including debt instruments, impairments, acquisitions, investment securities and derivatives, have been determined using a market-based measurement. This measurement is determined based on the assumptions that management believes market participants would use in pricing an asset or liability. As a basis for considering market participant assumptions in fair value measurements, GAAP establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).
Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which is typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. The fair value of such financial instruments estimates and transactions was determined using available market information and appropriate valuation methodologies as prescribed by GAAP.
47
Notes Receivable from Real Estate Joint Ventures and Partnerships
Notes receivable from real estate joint ventures and partnerships in which we have an ownership interest, primarily represent mortgage construction notes. We consider applying a reserve to a note receivable when it becomes apparent that conditions exist that may lead to our inability to fully collect on outstanding amounts due. Such conditions include delinquent or late payments on notes, deterioration in the ongoing relationship with the borrower and other relevant factors. When such conditions leading to expected losses exist, we would estimate a reserve by reviewing the borrower’s ability to meet scheduled debt service, our partner’s ability to make contributions and the fair value of the collateral.
Deferred Charges
Debt financing costs are amortized primarily on a straight-line basis, which approximates the effective interest method, over the terms of the debt. Lease costs represent the initial direct costs incurred in origination, negotiation and processing of a lease agreement. Such costs include outside broker commissions and other independent third party costs, as well as salaries and benefits, travel and other internal costs directly related to completing a lease and are amortized over the life of the lease on a straight-line basis. Costs related to supervision, administration, unsuccessful origination efforts and other activities not directly related to completed lease agreements are charged to expense as incurred.
Sales of Real Estate
Sales of real estate include the sale of tracts of land within a shopping center development, property adjacent to shopping centers, shopping center properties, merchant development properties, investments in real estate joint ventures and partnerships and partial sales to real estate joint ventures and partnerships in which we participate.
Profits on sales of real estate, including merchant development sales are not recognized until (a) a sale is consummated; (b) the buyer’s initial and continuing investments are adequate to demonstrate a commitment to pay; (c) the seller’s receivable is not subject to future subordination; and (d) we have transferred to the buyer the usual risks and rewards of ownership in the transaction, and we do not have a substantial continuing involvement with the property.
We recognize gains on the sale of real estate to joint ventures and partnerships in which we participate to the extent we receive cash from the joint venture or partnership, if it meets the sales criteria in accordance with GAAP and we do not have a commitment to support the operations of the real estate joint venture or partnership to an extent greater than our proportionate interest in the real estate joint venture or partnership.
Accrued Rent and Accounts Receivable, net
Receivable balances outstanding include base rents, tenant reimbursements and receivables attributable to the straight-lining of rental commitments. An allowance for the uncollectible portion of accrued rents and accounts receivable is determined based upon an analysis of balances outstanding, historical bad debt levels, tenant creditworthiness and current economic trends. Additionally, estimates of the expected recovery of pre-petition and post-petition claims with respect to tenants in bankruptcy are considered in assessing the collectibility of the related receivables. Management’s estimate of the collectibility of accrued rents and accounts receivable is based on the best information available to management at the time of evaluation.
Restricted Deposits and Mortgage Escrows
Restricted deposits and mortgage escrows consist of escrow deposits held by lenders primarily for property taxes, insurance and replacement reserves and restricted cash that is held for a specific use or in a qualified escrow account for the purposes of completing like-kind exchange transactions. At December 31, 2010 and 2009, we had $1.8 million and $1.6 million of restricted cash, respectively, and $8.4 million and $11.1 million held in escrow related to our mortgages, respectively.
48
Other Assets, net
Other assets include an asset related to the debt service guaranty (see Note 6 for further information), tax increment revenue bonds, investments held in grantor trusts, deferred tax assets, prepaid expenses, interest rate derivatives, the value of above-market leases and the related accumulated amortization and other miscellaneous receivables. Investments held in grantor trusts are adjusted to fair value at each period end with changes included in our Statements of Consolidated Income and Comprehensive Income. Above-market leases are amortized as adjustments to rental revenues over terms of the acquired leases. Other miscellaneous receivables have a reserve applied to the carrying amount when it becomes apparent that conditions exist that may lead to our inability to fully collect on outstanding amounts due. Such conditions include delinquent or late payments on receivables, deterioration in the ongoing relationship with the borrower and other relevant factors. We would apply a reserve when expected loss conditions exist by reviewing the borrower’s ability to generate revenues to meet debt service requirements and the fair value of any collateral.
Per Share Data
Earnings per common share – basic is computed using net income attributable to common shareholders and the weighted average shares outstanding. Earnings per common share – diluted include the effect of potentially dilutive securities. Income from continuing operations attributable to common shareholders includes gain on sale of property in accordance with SEC guidelines. Earnings per common share – basic and diluted components for the periods indicated are as follows (in thousands):
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Numerator: | ||||||||||||
Net income attributable to common shareholders – basic and diluted | $ | 10,730 | $ | 135,626 | $ | 109,091 | ||||||
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Denominator: | ||||||||||||
Weighted average shares outstanding – basic | 119,935 | 109,546 | 84,474 | |||||||||
Effect of dilutive securities: | ||||||||||||
Share options and awards | 845 | 632 | 443 | |||||||||
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Weighted average shares outstanding – diluted | 120,780 | 110,178 | 84,917 | |||||||||
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Options to purchase common shares of beneficial interest (“common shares”) of 3.5 million, 3.1 million and 2.4 million for the year ended December 31, 2010, 2009 and 2008, respectively, were not included in the calculation of net income per common share - diluted as the exercise prices were greater than the average market price for the year. For the year ended December 31, 2010, 2009 and 2008, 1.7 million, 2.0 million and 2.4 million, respectively, of operating partnership units were not included in the calculation of net income per common share – diluted because these units had an anti-dilutive effect.
Income Taxes
We have elected to be treated as a REIT under the Internal Revenue Code of 1986, as amended. As a REIT, we generally will not be subject to corporate level federal income tax on taxable income we distribute to our shareholders. To be taxed as a REIT, we must meet a number of requirements including defined percentage tests concerning the amount of our assets and revenues that come from, or are attributable to, real estate operations. As long as we distribute at least 90% of the taxable income of the REIT (without regard to capital gains or the dividends paid deduction) to our shareholders as dividends, we will not be taxed on the portion of our income we distribute as dividends unless we have ineligible transactions.
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The Tax Relief Extension Act of 1999 gave REITs the ability to conduct activities which a REIT was previously precluded from doing as long as such activities are performed in entities which have elected to be treated as taxable REIT subsidiaries under the IRS code. These activities include buying or developing properties with the express purpose of selling them. We conduct certain of these activities in taxable REIT subsidiaries that we have created. We calculate and record income taxes in our consolidated financial statements based on the activities in those entities. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between our carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. These are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. A valuation allowance for deferred tax assets is established for those assets we do not consider the realization of such assets to be more likely than not.
Additionally, GAAP prescribes a recognition threshold and measurement attribute for the financial statement recognition of a tax position taken, or expected to be taken, in a tax return. A tax position may only be recognized in the financial statements if it is more likely than not that the tax position will be sustained upon examination. We believe it is more likely than not that our tax positions will be sustained in any tax examinations.
Cash and Cash Equivalents
All highly liquid investments with original maturities of three months or less are considered cash equivalents. Cash and cash equivalents are primarily held at major financial institutions in the United States. We had cash and cash equivalents in certain financial institutions in excess of federally insured levels. We have diversified our cash and cash equivalents amongst several banking institutions in an attempt to minimize exposure to any one of these entities. We believe we are not exposed to any significant credit risk and regularly monitor the financial stability of these financial institutions.
Cash Flow Information
We issued common shares valued at $.7 million, $14.3 million and $2.3 million during 2010, 2009 and 2008, respectively, in exchange for interests in real estate joint ventures and partnerships, which had been formed to acquire properties. We also accrued $6.9 million, $10.7 million and $25.8 million at December 31, 2010, 2009 and 2008, respectively, associated with the construction of property. Cash payments for interest on debt, net of amounts capitalized, of $140.3 million, $156.5 million and $154.8 million were made during 2010, 2009 and 2008, respectively. Cash payments of $2.1 million, $3.1 million and $5.1 million for income taxes were made during 2010, 2009 and 2008, respectively.
In connection with the sale of an 80% interest in two properties during 2010, we retained a 20% unconsolidated investment of $9.8 million. In addition, this transaction resulted in the unconsolidated joint venture assuming debt totaling $28.1 million.
Effective April 1, 2010, two previously unconsolidated joint ventures were consolidated within our consolidated financial statements. The resulting non-cash investing and financing activities were as follows (in thousands):
Increase in other assets | $ | 148,255 | ||
Decrease in notes receivable from real estate joint ventures and partnerships | 123,912 | |||
Increase in debt, net | 101,741 | |||
Increase in property, net | 32,940 | |||
Decrease in other liabilities, net | 21,858 | |||
Decrease in noncontrolling interests | 18,573 |
Also, in April 2010, we acquired a partner’s noncontrolling interests in a consolidated real estate joint venture that reduced equity by $.9 million.
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In association with property acquisitions and investments in unconsolidated real estate joint ventures, the non-cash investing and financing activities were as follows (in thousands):
Year Ended December 31, | ||||||||||
2010 | 2009 | 2008 | ||||||||
Increase in debt, net | $ | 27,302 | ||||||||
Increase (decrease) in investment in property | 18,376 | $ | (15,414 | ) | ||||||
Increase in real estate joint ventures and partnerships - investments | 11,285 | |||||||||
Increase in notes receivable from real estate joint ventures and partnerships and other receivables - advances | 6,948 | |||||||||
Increase in noncontrolling interests | 634 | |||||||||
Increase in restricted deposits and mortgage escrows | 498 | 193 | ||||||||
Increase in other, net | 302 | 17 |
In connection with the sale of improved properties during 2009, we received notes receivable totaling $.2 million and a mortgage of $9.1 million was assumed by the purchaser. In connection with the sale of an 80% interest in four properties, we retained a 20% unconsolidated investment of $19.1 million. Also, our investment in real estate joint ventures and a non-cash contingent liability was reduced by $41 million as result of the cash settlement associated with a lawsuit in 2009.
In connection with the sale of improved properties during 2008, we received notes receivable totaling $6.0 million. Net assets and liabilities were reduced by $68.3 million during 2008 from the reorganization of four joint ventures, which were previously consolidated. In addition, we recorded a $41 million non-cash contingent liability as an increase to our investment in real estate joint ventures and partnerships and accrued $8.5 million for property damages associated with Hurricane Ike.
Accumulated Other Comprehensive Loss
As of December 31, 2010, the balance in accumulated other comprehensive loss relating to derivatives and our retirement liability was $11.7 million and $10.1 million, respectively. As of December 31, 2009, the balance in accumulated other comprehensive loss relating to derivatives and our retirement liability was $14.4 million and $9.6 million, respectively.
Reclassifications
The reclassification of prior years’ operating results for certain properties to discontinued operations was made to conform to the current year presentation. This reclassification had no impact on previously reported net income, earnings per share, the consolidated balance sheet or cash flows.
Note 2. Newly Issued Accounting Pronouncements
In June 2009, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2009-17 (“ASU 2009-17”), “Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities.” ASU 2009-17 updated Accounting Standards Codification (“ASC”) 810, “Consolidations” and was intended to improve an organization’s variable interest entity reporting. It required a change in the analysis used to determine whether an entity has a controlling financial interest in a variable interest entity, including the identification of the primary beneficiary of a variable interest entity. The holder of the variable interest is defined as the primary beneficiary if it has both the power to direct the entity’s significant economic activities and the obligation to absorb potentially significant losses or receive potentially significant benefits. ASU 2009-17 also requires additional disclosures about an entity’s variable interest entities. The update was effective for us on January 1, 2010. Implementation of ASU 2009-17 did not impact our previous determinations of primary beneficiary status, but it resulted in additional disclosures included on the face of the Consolidated Balance Sheets and in Note 3.
In January 2010, the FASB issued Accounting Standards Update No. 2010-06, “Improving Disclosures about Fair Value Measurements,” which provides for new disclosures, as well as clarification of existing disclosures on fair value measurements including employers’ disclosures about postretirement benefit plan assets. The update was effective for us beginning January 1, 2010, and its adoption did not materially impact our consolidated financial statements.
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In July 2010, the FASB issued Accounting Standards Update No. 2010-20, “Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses,” which provides for additional disclosures about the credit quality of an entity’s financing receivables, including loans and trade accounts receivables with contractual maturities exceeding one year and any related allowance for losses. The provisions of this update were effective for us at December 31, 2010, with the exception of disclosures related to activity occurring during a reporting period, which is effective for us in the first quarter of 2011. The adoption did not materially impact our consolidated financial statements nor do we anticipate the future adoption to materially impact our consolidated financial statements.
In December 2010, the FASB issued Accounting Standards Update No. 2010-29, “Disclosures of Supplementary Pro Forma Information for Business Combinations,” which clarifies that an entity should disclose revenue and earnings of the combined entity as though the business combination occurred during the current year as of the beginning of the comparable prior annual reporting period only. The update also expands disclosures on the supplemental pro forma. The update is effective for us beginning January 1, 2011; however, early adoption is permitted. We adopted this update as of December 31, 2010, and its adoption resulted in the disclosures included in Note 4.
Note 3. Variable Interest Entities
Management determines whether an entity is a variable interest entity (“VIE”) and, if so, determines which party is the primary beneficiary by analyzing if we have both the power to direct the entity’s significant economic activities and the obligation to absorb potentially significant losses or receive potentially significant benefits. Significant judgments and assumptions inherent in this analysis include the design of the entity structure, the nature of the entity’s operations, future cash flow projections, the entity’s financing and capital structure, and contractual relationships and terms. We consolidate a VIE when we have determined that we are the primary beneficiary.
Risks associated with our involvement with our VIEs include primarily the potential of funding the VIE’s debt obligations or making additional contributions to fund the VIE’s operations.
Consolidated VIEs:
Two of our real estate joint ventures whose activities principally consist of owning and operating 30 neighborhood/community shopping centers, of which 22 are located in Texas, three in Georgia, two each in Tennessee and Florida and one in North Carolina, were determined to be VIEs. These VIEs have financing agreements that are guaranteed solely by us for tax planning purposes. We have determined that we are the primary beneficiary and have consolidated these joint ventures. Our maximum exposure to loss associated with these joint ventures is primarily limited to our guaranties of the debt, which were approximately $157.4 million at December 31, 2010.
Assets held by our consolidated VIEs approximate $280.3 million and $291.6 million at December 31, 2010 and 2009, respectively. Of these assets, $253.6 million and $260.3 million at December 31, 2010 and 2009, respectively, are collateral for debt.
Restrictions on the use of these assets are significant because they are collateral for the VIEs’ debt, and we would be required to obtain our partners’ approval in accordance with the joint venture agreements on any major transactions. The impact of these transactions on our consolidated financial statements has been limited to changes in noncontrolling interests and reductions in debt from our partners’ contributions. We and our partners are subject to the provisions of the joint venture agreements which include provisions for when additional contributions may be required including operating cash shortfalls and unplanned capital expenditures. We have not provided any additional support as of December 31, 2010.
Unconsolidated VIEs:
We also have unconsolidated real estate joint ventures which engage in operating or developing real estate that have been determined to be VIEs due to agreements entered into by the joint ventures. We were not determined to be the primary beneficiary of the VIEs.
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An unconsolidated real estate joint venture was determined to be a VIE through the issuance of a secured loan since the lender has the ability to make decisions that could have a significant impact on the success of the entity. In addition, we have another unconsolidated real estate joint venture with an interest in an entity which is deemed to be a VIE since the unconsolidated joint venture provided a guaranty on debt obtained from its investment in a joint venture. A summary of our unconsolidated VIEs is as follows (in thousands):
Period | Investment in Real Estate Joint Ventures and Partnerships, net (1) | Maximum Risk of Loss (2) | ||||||
December 31, 2010 | $ | 11,581 | $ | 56,448 | ||||
December 31, 2009 | $ | 7,088 | $ | 58,061 |
(1) | The carrying amount of the investments represents our contributions to the real estate joint ventures net of any distributions made and our portion of the equity in earnings of the joint ventures. |
(2) | The maximum risk of loss has been determined to be limited to our debt exposure for each real estate joint venture. |
We and our partners are subject to the provisions of the joint venture agreements that specify conditions, including operating shortfalls and unplanned capital expenditures, under which additional contributions may be required.
Note 4. Business Combinations
Effective April 1, 2010, we assumed control of two 50%-owned unconsolidated joint ventures (“Sheridan”) related to a development project in Sheridan, Colorado, which resulted in the consolidation of these joint ventures within our shopping center segment that had previously been accounted for under the equity method. Control was assumed through a modification of the joint venture agreements in which we assumed all management, voting and approval rights without transferring consideration to our joint venture partner. Each partner’s percentage interest in the joint ventures remained unchanged. Management has determined that these transactions qualified as business combinations to be accounted for under the acquisition method. Accordingly, the assets and liabilities of the joint ventures were recorded on our consolidated balance sheet at their estimated fair values as of April 1, 2010, with our partner’s share of the resulting net deficit included in noncontrolling interests. Fair value of assets acquired, liabilities assumed and equity interests was estimated using market-based measurements, including cash flow and other valuation techniques. The fair value measurement is based on both significant inputs for similar assets and liabilities in active markets and significant inputs that are not observable in the markets in accordance with our fair value measurements accounting policy. Key assumptions include third-party broker valuation estimates, discount rates ranging from 8% to 17%, a terminal cap rate for similar properties, and factors that we believe market participants would consider in estimating fair value. The results of the joint ventures are included in our Statements of Consolidated Income and Comprehensive Income beginning April 1, 2010.
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The following table summarizes the transactions related to the business combinations, including the assets acquired and liabilities assumed as of April 1, 2010 (in thousands):
Fair value of our equity interests before business combinations | $ | (21,858 | ) | |
Amounts recognized for assets and liabilities assumed: | ||||
Assets: | ||||
Property | $ | 32,940 | ||
Unamortized Debt and Lease Costs | 5,182 | |||
Accrued Rent and Accounts Receivable | 213 | |||
Cash and Cash Equivalents | 1,522 | |||
Other, net (1) | 151,464 | |||
Liabilities: | ||||
Debt, net (2) | (101,741 | ) | ||
Accounts payable and accrued expenses | (647 | ) | ||
Other, net | (1,334 | ) | ||
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Total Net Assets | $ | 87,599 | ||
Noncontrolling interests of the real estate joint ventures | $ | (18,573 | ) |
(1) | Includes primarily a $97.0 million debt service guaranty asset, tax increment revenue bonds of $51.3 million and intangible and other assets. |
(2) | Excludes the effect of $123.9 million in intercompany debt that is eliminated upon consolidation. |
The fair value measurements are subject to change until our information is finalized, which will be no later than twelve months from the business combination date.
We recognized an impairment loss of $15.8 million as a result of revaluing our 50% equity interest held in the real estate joint ventures before the business combinations, which is reported as an impairment loss in the Statements of Consolidated Income and Comprehensive Income. For the year ended December 31, 2010, the impact of this consolidation increased revenues by $1.6 million and decreased net income attributable to common shareholders by $2.5 million.
The following table summarizes the pro forma impact of the real estate joint ventures as if Sheridan had been consolidated at January 1, 2009 as follows (in thousands, except per share amounts):
Year Ended December 31, | ||||||||
Pro Forma 2010 (1) | Pro Forma 2009 (1) | |||||||
Revenues | $ | 550,995 | $ | 569,213 | ||||
Net income | $ | 50,715 | $ | 169,575 | ||||
Net income attributable to common shareholders | $ | 10,522 | $ | 135,249 | ||||
Earnings per share - basic | $ | .09 | $ | 1.23 | ||||
Earnings per share - diluted | $ | .09 | $ | 1.23 |
(1) | There are no non-recurring pro forma adjustments included within or excluded from the amounts in the preceding table. |
Note 5. Derivatives and Hedging
Our policy is to manage interest cost using a mixture of fixed-rate and variable-rate debt. To manage our interest rate risk, we occasionally hedge the future cash flows of our debt transactions, as well as changes in the fair value of our debt instruments, principally through interest rate contracts with major financial institutions. Interest rate contracts that meet specific criteria are accounted for as either assets or liabilities as a fair value or cash flow hedge.
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Cash Flow Hedges of Interest Rate Risk:
Our objective in using interest rate contracts is to add stability to interest expense and to manage our exposure to interest rate movements. To accomplish this objective, we primarily use interest rate contracts as part of our interest rate risk management strategy. Interest rate contracts designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for us making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.
The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive loss and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. At December 31, 2010, we had two active cash flow hedges as described below.
During 2010, two interest rate contracts were designated as cash flow hedges with an aggregate notional amount of $11.8 million, which have maturities through September 2017, and fix interest rates at 2.3% and 2.4%. We have determined that these contracts are highly effective in offsetting future variable interest cash flows. As of December 31, 2010, the fair value of these derivatives was $.09 million and $.1 million and is included in net other assets and net other liabilities, respectively.
As of December 31, 2010 and 2009, the balance in accumulated other comprehensive loss relating to cash flow interest rate contracts was $11.7 million and $14.4 million, respectively, and will be reclassified to net interest expense as interest payments are made on our fixed-rate debt. Amounts reclassified from accumulated other comprehensive loss to net interest expense were $2.6 million in 2010, $2.5 million in 2009 and $2.1 million in 2008. Within the next 12 months, approximately $2.8 million of the balance in accumulated other comprehensive loss is expected to be amortized to net interest expense related to settled interest rate contracts.
Fair Value Hedges of Interest Rate Risk:
We are exposed to changes in the fair value of certain of our fixed-rate obligations due to changes in benchmark interest rates, such as LIBOR. We use interest rate contracts to manage our exposure to changes in fair value on these instruments attributable to changes in the benchmark interest rate. Interest rate contracts designated as fair value hedges involve the receipt of fixed-rate amounts from a counterparty in exchange for us making variable-rate payments over the life of the agreements without the exchange of the underlying notional amount. Changes in the fair value of interest rate contracts designated as fair value hedges, as well as changes in the fair value of the related debt being hedged, are recorded in earnings each reporting period.
In April 2010, we entered into two interest rate contracts with a total notional amount of $71.3 million that mature in October 2017, which convert fixed interest payments at rates of 7.5% to variable interest payments. These contracts were designated as fair value hedges, and we have determined that they are highly effective in limiting our risk of changes in the fair value of fixed-rate notes attributable to changes in variable interest rates.
In December 2009, we entered into 11 interest rate contracts with a total notional amount of $302.6 million, which had various maturities through February 2014. In February 2010, we settled $7.0 million of these interest rate contracts in conjunction with the repurchase of the related unsecured fixed-rate medium term notes, and a $.02 million gain was realized. In November 2010, the remaining $295.6 million of these interest rate contracts was settled for $8.9 million including accrued interest whereby net debt was increased by $8.2 million, and a gain of $.1 million was realized. The increase in net debt is being amortized to net interest expense over the remaining life of the original underlying debt instruments.
As of December 31, 2010, we had four interest rate contracts with an aggregate notional amount of $120.4 million that were designated as fair value hedges and convert fixed interest payments at rates from 4.2% to 7.5% to variable interest payments ranging from .3% to 4.4%. As of December 31, 2009, we had 13 interest rate contracts with an aggregate notional amount of $352.6 million, of which $352.6 million is designated as fair value hedges that convert fixed interest payments at rates ranging from 4.2% to 7.5% to variable interest payments ranging from .3% to 6.1%. We have determined that our fair value hedges are highly effective in limiting our risk of changes in the fair value of fixed-rate notes attributable to changes in interest rates.
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For the year ended December 31, 2010, 2009 and 2008, we recognized a net reduction in interest expense of $6.7 million, $2.1 million and $.8 million, respectively, related to our fair value hedges, which includes net settlements and any amortization adjustment of the basis in the hedged item. Also, for the year ended December 31, 2010, we recognized a gain of $1.0 million associated with hedge ineffectiveness with no such activity present in 2009 or 2008.
A summary of the changes in fair value of our interest rate contracts is as follows (in thousands):
Gain (Loss) on Contracts | Gain (Loss) on Borrowings | Gain (Loss) Recognized in Income | ||||||||||
Year Ended December 31, 2010: | ||||||||||||
Interest expense, net | $ | 17,511 | $ | (16,547 | ) | $ | 964 | |||||
Year Ended December 31, 2009: | ||||||||||||
Interest expense, net | $ | (6,659 | ) | $ | 6,659 | |||||||
Year Ended December 31, 2008: | ||||||||||||
Interest expense, net | $ | 4,987 | $ | (4,987 | ) |
Non-designated Hedges:
Derivatives not designated as hedges are not speculative and are used to manage our exposure to interest rate movements and other identified risks, but do not meet hedge accounting requirements. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in earnings. As of December 31, 2010 and 2009, we did not have any derivatives that were designated as hedges.
During the first quarter of 2010, the initial hedging relationship was terminated on three of our interest rate contracts with a total notional amount of $97.6 million. We simultaneously re-designated $90.0 million as fair value hedges. These hedges were terminated in November 2010 (see Fair Value Hedges of Interest Rate Risk above for additional details). The changes in the fair value of the undesignated portion of the interest rate contract was recorded directly to earnings and increased net interest expense by $.05 million during 2010.
Effective April 1, 2010, we assumed control of a previously unconsolidated real estate joint venture that had an interest rate contract, which sets interest rates at 2.45% on an aggregate notional amount of $5.2 million and expires in December 2015. Prior to consolidation, the interest rate contract was designated as a cash flow hedge; however, upon consolidation, the original hedging relationship could not continue, thus in June 2010 we recognized a loss of $.2 million associated with hedge ineffectiveness. In July 2010, we re-designated this interest rate contract as a cash flow hedge (see Cash Flow Hedges of Interest Rate Risk above).
On March 20, 2008, a cash flow hedge was terminated through the issuance of $154.3 million of fixed-rate long-term debt issued by a consolidated joint venture. A loss of $12.8 million was recorded in accumulated other comprehensive loss based on the fair value of the interest rate swap contracts on that date. On March 27, 2008, the interest rate swap contracts were settled resulting in a loss of $10.0 million. For the period between the termination of the cash flow hedge and the settlement of the swap contracts, a gain of $2.8 million was recognized as a reduction of net interest expense.
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The interest rate contracts at December 31, 2010 and 2009 were reported at their fair values as follows (in thousands):
Assets | Liabilities | |||||||||||
Period | Balance Sheet Location | Amount | Balance Sheet Location | Amount | ||||||||
Designated Hedges: | ||||||||||||
December 31, 2010 | Other Assets, net | $ | 7,192 | Other Liabilities, net | $ | 108 | ||||||
December 31, 2009 | Other Assets, net | $ | 2,601 | Other Liabilities, net | $ | 4,634 |
A summary of our derivatives is as follows (in thousands):
Derivatives Hedging Relationships | Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative (Effective Portion) | Location of Gain (Loss) from Accumulated Income | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion) | Location of Gain (Loss) | Amount of Gain (Loss) Recognized in Income on Derivative | Location of Gain (Loss) Portion and Excluded from | Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) | |||||||||||||||
Year Ended December 31, 2010: | ||||||||||||||||||||||
Cash Flow Interest Rate Contracts | $ | (96 | ) | Interest expense, net | $ | (2,566 | ) | Interest expense, net | $ | (27 | ) | |||||||||||
Fair Value Interest Rate Contracts | Interest expense, net | $ | 24,483 | Interest expense, net | $ | 964 | ||||||||||||||||
Year Ended December 31, 2009: | ||||||||||||||||||||||
Cash Flow Interest Rate Contracts | Interest expense, net | $ | (2,481 | ) | ||||||||||||||||||
Fair Value Interest Rate Contracts | Interest expense, net | $ | (4,528 | ) | ||||||||||||||||||
Year Ended December 31, 2008: | ||||||||||||||||||||||
Cash Flow Interest Rate Contracts | Interest expense, net | $ | (2,095 | ) | ||||||||||||||||||
Fair Value Interest Rate Contracts | Interest expense, net | $ | 5,819 |
Note 6. Debt
Our debt consists of the following (in thousands):
December 31, | December 31, | |||||||
2010 | 2009 | |||||||
Debt payable to 2038 at 2.9% to 8.8% | $ | 2,389,532 | $ | 2,506,069 | ||||
Debt service guaranty liability | 97,000 | |||||||
Unsecured notes payable under revolving credit facilities | 80,000 | |||||||
Obligations under capital leases | 21,000 | 23,115 | ||||||
Industrial revenue bonds payable to 2015 at 2.4% | 1,916 | 2,663 | ||||||
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Total | $ | 2,589,448 | $ | 2,531,847 | ||||
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The grouping of total debt between fixed and variable-rate as well as between secured and unsecured is summarized below (in thousands):
December 31, | December 31, | |||||||
2010 | 2009 | |||||||
As to interest rate (including the effects of interest rate contracts): | ||||||||
Fixed-rate debt | $ | 2,349,802 | $ | 2,146,133 | ||||
Variable-rate debt | 239,646 | 385,714 | ||||||
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Total | $ | 2,589,448 | $ | 2,531,847 | ||||
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As to collateralization: | ||||||||
Unsecured debt | $ | 1,450,148 | $ | 1,306,802 | ||||
Secured debt | 1,139,300 | 1,225,045 | ||||||
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Total | $ | 2,589,448 | $ | 2,531,847 | ||||
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Effective February 11, 2010, we entered into an amended and restated $500 million unsecured revolving credit facility. The facility expires in February 2013 and provides borrowing rates that float at a margin over LIBOR plus a facility fee. The borrowing margin and facility fee are priced off a grid that is tied to our senior unsecured credit ratings, which are currently 275.0 and 50.0 basis points, respectively. The facility also contains a competitive bid feature that will allow us to request bids for up to $250 million. Additionally, an accordion feature allows us to increase the new facility amount up to $700 million.
Effective May 2010, we entered into an agreement with a bank for an unsecured and uncommitted overnight facility totaling $99 million that we intend to maintain for cash management purposes. The facility provides for fixed interest rate loans at a 30 day LIBOR rate plus a borrowing margin based on market liquidity. Any amounts outstanding under this facility reduce the availability of our revolving credit facility.
At December 31, 2010 and 2009, no amounts under our revolving credit facility were outstanding. Letters of credit totaling $52.4 million and $7.2 million were outstanding under the revolving credit facility at December 31, 2010 and 2009, respectively. The balance outstanding under our unsecured and uncommitted overnight facility was $80.0 million at a variable interest rate of 1.8% at December 31, 2010. The available balance under our revolving credit facility was $447.6 million and $567.8 million at December 31, 2010 and 2009, respectively. During 2010, the maximum balance and weighted average balance outstanding under both facilities combined were $80.0 million and $12.2 million, respectively, at a weighted average interest rate of 1.8%. During 2009, the maximum balance and weighted average balance outstanding under the facility was $423.0 million and $168.7 million, respectively, at a weighted average interest rate of 1.5%.
We had a $575 million unsecured revolving credit facility held by a syndicate of banks, which was amended and restated in February 2010 as discussed above. Borrowing rates floated at a margin over LIBOR, plus a facility fee. The borrowing margin and facility fee were priced off a grid that was tied to our senior unsecured credit ratings, which were 50.0 and 15.0 basis points.
Effective April 1, 2010, we consolidated a real estate joint venture which includes our investment in a development project in Sheridan, Colorado. We, our joint venture partner and the joint venture have each provided a guaranty for the payment of any debt service shortfalls until a coverage rate of 1.4 is met on tax increment revenue bonds issued in connection with the project. The bonds are to be repaid with incremental sales and property taxes and a public improvement fee (“PIF”) to be assessed on current and future retail sales and, to the extent necessary, any amounts we may have to provide under a guaranty. The incremental taxes and PIF are to remain intact until the earlier of the bond liability has been paid in full or 2030 (unless such date is otherwise extended by the Sheridan Redevelopment Agency). Therefore, a debt service guaranty liability of $97.0 million was recorded by the joint venture equal to the fair value of the amounts funded under the bonds.
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At December 31, 2010 and 2009, respectively, we had $129.9 million and $135.2 million face value of 3.95% convertible senior unsecured notes outstanding due 2026. These bonds are recorded at a discount of $1.3 million and $3.4 million as of December 31, 2010 and 2009, respectively, which will be amortized through 2011 resulting in an effective interest rate for both periods of 5.75%. Interest is payable semi-annually in arrears on February 1 and August 1 of each year. The debentures are convertible under certain circumstances for our common shares at an initial conversion rate of 20.3770 common shares per $1,000 of principal amount of debentures (an initial conversion price of $49.075). In addition, the conversion rate may be adjusted if certain change in control transactions or other specified events occur on or prior to August 4, 2011. Upon the conversion of debentures, we will deliver cash for the principal return, as defined, and cash or common shares, at our option, for the excess of the conversion value, as defined, over the principal return. The debentures are redeemable for cash at our option beginning in 2011 for the principal amount plus accrued and unpaid interest. Holders of the debentures have the right to require us to repurchase their debentures for cash equal to the principal of the debentures plus accrued and unpaid interest in 2011, 2016 and 2021 and in the event of a change in control. Net interest expense associated with this debt for the year ended December 31, 2010, 2009 and 2008, totaled $8.0 million, $19.5 million and $33.3 million, respectively, which includes the amortization of the discount totaling $2.2 million, $5.0 million and $8.5 million, respectively. The carrying value of the equity component as of both December 31, 2010 and 2009 was $23.4 million.
In October 2009, we entered into a $26.6 million secured loan from a bank. The loan is for a four year term with a one year extension option at a floating interest rate of 375 basis points over LIBOR with a 1.50% LIBOR floor. This loan is collateralized by two properties.
In August 2009, we sold $100 million of unsecured senior notes with a coupon of 8.1% which will mature September 15, 2019. We may redeem the notes, in whole or in part, on or after September 15, 2014, at our option, at a redemption price equal to 100% of their principal amount, plus accrued and unpaid interest. The net proceeds of $97.5 million were used to reduce amounts outstanding under our revolving credit facility.
In July 2009, we entered into a $70.8 million secured loan from a life insurance company. The loan is for seven years at a fixed interest rate of 7.4% and is collateralized by five properties. In September 2009, we entered into a $57.5 million secured loan from a life insurance company. The loan is for 10 years at a fixed interest rate of 7.0% and is collateralized by 10 properties. The net proceeds received from both transactions were used to reduce amounts outstanding under our revolving credit facility.
In May 2009, we entered into a $103 million secured loan from a life insurance company. The loan is for approximately 8.5 years at a fixed interest rate of 7.49% and is collateralized by four properties. The net proceeds received were invested in short-term investments and subsequently used to settle the June tender offer discussed below.
In the second quarter of 2009, we repurchased and retired $82.3 million face value of our 3.95% convertible senior unsecured notes for $70.4 million, including accrued interest. Also in 2009, we completed a cash tender offer for $422.6 million face value on a series of unsecured notes and our convertible senior unsecured notes. We purchased at par $20.6 million of unsecured fixed-rate medium term notes, with a weighted average interest rate of 7.54% and a weighted average maturity of 1.6 years, and $82.3 million of 7% senior unsecured notes due in 2011. In addition, we purchased $319.7 million face value of our 3.95% convertible senior unsecured notes for $311.1 million, including accrued interest and expenses. During the year ended December 31, 2009, the repurchases of our 3.95% convertible senior unsecured notes resulted in gains of $25.3 million.
Various leases and properties, and current and future rentals from those lease and properties, collateralize certain debt. At December 31, 2010 and 2009, the carrying value of such property aggregated $1.8 billion and $2.0 billion, respectively.
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Scheduled principal payments on our debt (excluding $80.0 million due under our revolving credit facilities, $21.0 million of certain capital leases, $7.1 million fair value of interest rate contracts, $3.9 million net premium/(discount) on debt, $12.3 million of non-cash debt-related items, and $97.0 million debt service guaranty liability) are due during the following years (in thousands):
2011 | $ | 212,264 | ||
2012 | 307,598 | |||
2013 | 440,829 | |||
2014 | 387,547 | |||
2015 | 248,404 | |||
2016 | 209,209 | |||
2017 | 142,088 | |||
2018 | 64,411 | |||
2019 | 153,747 | |||
2020 | 3,772 | |||
Thereafter (1) | 198,177 | |||
|
| |||
Total | $ | 2,368,046 | ||
|
|
(1) | Includes $131.3 million of our 3.95% convertible senior unsecured notes outstanding due 2026; which have a call/put option feature beginning in 2011. |
Our various debt agreements contain restrictive covenants, including minimum interest and fixed charge coverage ratios, minimum unencumbered interest coverage ratios, minimum net worth requirements and maximum total debt levels. We believe we were in compliance with all restrictive covenants as of December 31, 2010.
Note 7. Preferred Shares
We issued $150 million and $200 million of depositary shares on June 6, 2008 and January 30, 2007, respectively. Each depositary share represents one-hundredth of a Series F Cumulative Redeemable Preferred Share. The depositary shares are redeemable, in whole or in part, on or after January 30, 2012 at our option, at a redemption price of $25 per depositary share, plus any accrued and unpaid dividends thereon. The depositary shares are not convertible or exchangeable for any of our other property or securities. The Series F Preferred Shares pay a 6.5% annual dividend and have a liquidation value of $2,500 per share. Series F Preferred Shares issued in June 2008 were issued at a discount, resulting in an effective rate of 8.25%.
In July 2004, we issued $72.5 million of depositary shares with each share representing one-hundredth of a Series E Cumulative Redeemable Preferred Share. The depositary shares are redeemable at our option, in whole or in part, for cash at a redemption price of $25 per depositary share, plus any accrued and unpaid dividends thereon. The depositary shares are not convertible or exchangeable for any of our other property or securities. The Series E preferred shares pay a 6.95% annual dividend and have a liquidation value of $2,500 per share.
In April 2003, we issued $75 million of depositary shares with each share representing one-thirtieth of a Series D Cumulative Redeemable Preferred Share. The depositary shares are currently redeemable at our option, in whole or in part, for cash at a redemption price of $25 per depositary share, plus any accrued and unpaid dividends thereon. The depositary shares are not convertible or exchangeable for any of our property or securities. The Series D preferred shares pay a 6.75% annual dividend and have a liquidation value of $750 per share.
Currently, we do not anticipate redeeming either the Series E or Series D preferred shares due to current market conditions; however, no assurance can be given if conditions change.
Note 8. Common Shares of Beneficial Interest
In May 2010, our shareholders approved an amendment to our declaration of trust increasing the number of our authorized common shares, $0.03 par value per share, from 150.0 million to 275.0 million.
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The dividend rate for our common shares for each quarter of 2010 was $.26. The quarterly dividend rate for our common shares was $.525 for the first quarter of 2009 and $.25 from the remaining quarters of 2009. Subsequent to December 31, 2010, our Board of Trust Managers approved an increase to our quarterly dividend rate to $.275 per share.
In April 2009, we issued 32.2 million common shares at $14.25 per share. Net proceeds from this offering were $439.1 million and were used to repay indebtedness outstanding under our revolving credit facilities and for other general corporate purposes.
Note 9. Property
Our property consisted of the following (in thousands):
December 31, | ||||||||
2010 | 2009 | |||||||
Land | $ | 925,497 | $ | 896,010 | ||||
Land held for development | 170,213 | 182,586 | ||||||
Land under development | 22,967 | 32,709 | ||||||
Buildings and improvements | 3,610,889 | 3,437,578 | ||||||
Construction in-progress | 48,228 | 109,513 | ||||||
|
|
|
| |||||
Total | $ | 4,777,794 | $ | 4,658,396 | ||||
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|
|
|
The following carrying charges were capitalized (in thousands):
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Interest | $ | 3,405 | $ | 8,716 | $ | 20,290 | ||||||
Real estate taxes | 344 | 1,428 | 2,730 | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 3,749 | $ | 10,144 | $ | 23,020 | ||||||
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|
|
|
|
Effective April 1, 2010, we assumed control of two 50%-owned unconsolidated joint ventures related to a development project in Sheridan, Colorado that we had previously accounted for under the equity method. This transaction resulted in the consolidation of the joint ventures, increasing property by $32.9 million.
During 2010, we invested $92.1 million in the acquisitions of operating properties and $19.6 million in new development projects. We sold two land parcels, a shopping center, and two retail buildings, with gross sales proceeds from these dispositions totaling $13.5 million. Also, we contributed the final two properties to an unconsolidated joint venture for $47.3 million, which included loan assumptions of $28.1 million.
Impairment charges, as described in Note 1, of $5.2 million, $38.8 million and $52.5 million were recognized for the year ended December 31, 2010, 2009 and 2008, respectively.
Note 10. Discontinued Operations
During 2010, we sold one shopping center located in Texas. During 2009, we sold 12 shopping centers and five industrial properties, of which 11 were located in Texas and two each in Arizona, New Mexico and North Carolina. The operating results of these properties, as well as any gains on the respective disposition, have been reclassified and reported as discontinued operations in the Statements of Consolidated Income and Comprehensive Income. Revenues recorded in operating income from discontinued operations totaled $.03 million in 2010, $17.0 million in 2009 and $30.1 million in 2008. Included in the Consolidated Balance Sheet at December 31, 2009 were $.3 million of property and $.2 million of accumulated depreciation related to the property sold during 2010.
In 2009, one sold property had outstanding debt of $9.1 million, which was assumed by the purchaser.
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We do not allocate other consolidated interest to discontinued operations because the interest savings to be realized from the proceeds of the sale of these operations was not material.
No impairment associated with discontinued operations was recognized for the year ended December 31, 2010 and 2008. For the year ended December 31, 2009, an impairment loss of $3.8 million was reported in discontinued operations.
During the six months ended June 30, 2011, we sold an industrial building located in Georgia and two shopping centers located in Kansas and Texas. The operating results of these properties have been reclassified and reported as discontinued operations in the Statements of Consolidated Income and Comprehensive Income. Included in the Consolidated Balance Sheet at December 31, 2010 were $40.6 million of property and $9.4 million of accumulated depreciation related to the properties sold during the six months ended June 30 2011. Revenues for the properties disposed of during the six months ended June 30, 2011 totaled $4.1 million in both 2010 and 2009, and $4.4 million in 2008.
The discontinued operations reported during the six months ended June 30, 2011 had no debt that was required to be repaid upon their disposition.
Note 11. Notes Receivable from Real Estate Joint Ventures and Partnerships
We have ownership interests in a number of real estate joint ventures and partnerships. Notes receivable from these entities bear interest ranging from 2.0% to 12.0% at December 31, 2010 and 2.1% to 12.0% at December 31, 2009. These notes are due at various dates through 2012 and are generally secured by real estate assets. We believe these notes are fully collectible, and no allowance has been recorded. We recognized interest income on these notes as follows, in millions: $4.3 in 2010, $4.8 in 2009 and $4.0 in 2008.
In December 2010, we issued a letter of default on a matured note receivable of $24.9 million. At year end, we were in negotiations to extend this note. Subsequent to year end, the default was remedied by an extension of the note.
Effective April 1, 2010, we assumed control of two 50%-owned unconsolidated joint ventures related to a development project in Sheridan, Colorado that we had previously accounted for under the equity method. This transaction resulted in the consolidation of the joint ventures, reducing notes receivable from real estate joint ventures and partnerships by $123.9 million.
Note 12. Related Parties
Through our management activities and transactions with our real estate joint venture and partnerships, we had accounts receivable of $2.7 million and $4.3 million outstanding as of December 31, 2010 and 2009, respectively. We also had accounts payable and accrued expenses of $9.6 million and $10.5 million outstanding as of December 31, 2010 and 2009, respectively. For the year ended December 31, 2010, 2009 and 2008, we recorded joint venture fee income of $5.8 million, $5.7 million and $5.9 million, respectively.
During 2010, we sold an unconsolidated real estate joint venture interest in a Texas property to our partner with gross sales proceeds totaling $1.4 million, which generated a gain of $1.3 million.
In October 2009, we entered into an agreement to contribute six retail properties located in Florida and Georgia, valued at approximately $160.8 million, to an unconsolidated real estate joint venture in which we will retain a 20% ownership interest. We closed on four properties with a total value of $114.3 million and received net proceeds of approximately $85.9 million. During the first quarter of 2010, we contributed the final two properties to this unconsolidated real estate joint venture for $47.3 million, which included loan assumptions of $28.1 million and the receipt of net proceeds totaling $14.0 million.
In April 2009, we sold an unconsolidated joint venture interest in a property located in Colorado to our partner with gross sales proceeds of approximately $15.0 million, which were reduced by the release of a debt obligation of $11.7 million and generated a gain of $4.0 million.
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Note 13. Investment in Real Estate Joint Ventures and Partnerships
We own interests in real estate joint ventures or limited partnerships and have tenancy-in-common interests in which we exercise significant influence, but do not have financial and operating control. We account for these investments using the equity method, and our interests range from 7.8% to 75%. Combined condensed financial information of these ventures (at 100%) is summarized as follows (in thousands):
December 31, | ||||||||
2010 | 2009 | |||||||
Combined Condensed Balance Sheets | ||||||||
Property | $ | 2,142,524 | $ | 2,082,316 | ||||
Accumulated depreciation | (247,996 | ) | (191,478 | ) | ||||
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| |||||
Property, net | 1,894,528 | 1,890,838 | ||||||
Other assets, net | 168,091 | 240,387 | ||||||
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|
| |||||
Total | $ | 2,062,619 | $ | 2,131,225 | ||||
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| |||||
Debt, net (primarily mortgages payable) | $ | 552,552 | $ | 505,462 | ||||
Amounts payable to Weingarten Realty Investors | 202,092 | 335,622 | ||||||
Other liabilities, net | 45,331 | 88,913 | ||||||
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|
|
| |||||
Total | 799,975 | 929,997 | ||||||
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|
| |||||
Accumulated equity | 1,262,644 | 1,201,228 | ||||||
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| |||||
Total | $ | 2,062,619 | $ | 2,131,225 | ||||
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Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Combined Condensed Statements of Income | ||||||||||||
Revenues, net | $ | 193,649 | $ | 174,595 | $ | 162,737 | ||||||
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| |||||||
Expenses: | ||||||||||||
Depreciation and amortization | 61,726 | 56,018 | 41,146 | |||||||||
Interest, net | 36,270 | 31,017 | 20,424 | |||||||||
Operating | 34,026 | 33,385 | 37,592 | |||||||||
Real estate taxes, net | 24,288 | 21,213 | 18,739 | |||||||||
General and administrative | 3,927 | 5,187 | 5,648 | |||||||||
Provision for income taxes | 237 | 170 | 407 | |||||||||
Impairment loss | 231 | 6,923 | 5,151 | |||||||||
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| |||||||
Total | 160,705 | 153,913 | 129,107 | |||||||||
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| |||||||
Gain on land and merchant development sales | 372 | 933 | ||||||||||
(Loss) gain on sale of property | (3 | ) | 11 | 13 | ||||||||
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| |||||||
Net income | $ | 33,313 | $ | 20,693 | $ | 34,576 | ||||||
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Our investment in real estate joint ventures and partnerships, as reported on our Consolidated Balance Sheets, differs from our proportionate share of the entities’ underlying net assets due to basis differentials, which arose upon the transfer of assets to the joint ventures. The net basis differentials, which totaled $8.8 million and $11.8 million at December 31, 2010 and 2009, respectively, are generally amortized over the useful lives of the related assets.
Our real estate joint ventures and partnerships determined that the carrying amount of certain properties was not recoverable and that the properties should be written down to fair value. For the year ended December 31, 2010, 2009 and 2008, our unconsolidated real estate joint ventures and partnerships recorded an impairment charge of $.2 million, $6.9 million and $5.2 million, respectively, related primarily to undeveloped land at new development properties.
Fees earned by us for the management of these real estate joint ventures and partnerships totaled $5.8 million in 2010, $5.7 million in 2009 and $5.9 million in 2008.
In November 2010, we sold an unconsolidated real estate joint venture interest in a property located in Houston, Texas to our partner with gross sales proceeds of approximately $1.4 million, which generated a gain of $1.3 million.
Effective April 1, 2010, we assumed control of two 50%-owned real estate unconsolidated joint ventures related to a development project in Sheridan, Colorado that we had previously accounted for under the equity method. This transaction resulted in the consolidation of the joint ventures in our consolidated financial statements.
During 2010, two unconsolidated joint ventures each sold a retail building located in California with aggregate gross sales proceeds totaling $4.4 million. Also, two unconsolidated real estate joint ventures each sold a land parcel located in Florida with gross sales proceeds of approximately $2.5 million.
Also, in 2010, we acquired a 67%-owned real estate unconsolidated joint venture interest in a retail shopping center located in Moreno Valley, California and we acquired a 58%-owned unconsolidated real estate joint venture interest in a retail shopping center located in Houston, Texas for approximately $35.8 million.
In October 2009, we entered into an agreement to contribute six retail properties located in Florida and Georgia, valued at approximately $160.8 million, to an unconsolidated joint venture in which we will retain a 20% ownership interest. In 2009, we closed on four properties with a total value of $114.3 million, and in December 2009, this joint venture entered into a $68.7 million secured loan. During the first quarter of 2010, we contributed the final two properties to this unconsolidated joint venture for $47.3 million, which included loan assumptions of $28.1 million.
In April 2009, we sold an unconsolidated joint venture interest in a property located in Colorado to our partner with gross sales proceeds of approximately $15.0 million, which were reduced by the release of a debt obligation of $11.7 million.
Note 14. Federal Income Tax Considerations
We qualify as a REIT under the provisions of the Internal Revenue Code, and therefore, no tax is imposed on our taxable income distributed to shareholders. To maintain our REIT status, we must distribute at least 90% of our ordinary taxable income to our shareholders and meet certain income source and investment restriction requirements. Our shareholders must report their share of income distributed in the form of dividends.
Taxable income differs from net income for financial reporting purposes principally because of differences in the timing of recognition of depreciation, rental revenue, compensation expense, impairment losses and gain from sales of property. As a result of these differences, the book value of our net fixed assets exceeds the tax basis by $38 million at December 31, 2010 and $119 million at December 31, 2009.
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The following table reconciles net income to REIT taxable income for the year ended December 31, 2010, 2009 and 2008 (in thousands):
2010 | 2009 | 2008 | ||||||||||
Net income adjusted for noncontrolling interests | $ | 46,206 | $ | 171,102 | $ | 145,652 | ||||||
Net loss of taxable REIT subsidiaries included above | 22,450 | 8,966 | 34,803 | |||||||||
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| |||||||
Net income from REIT operations | 68,656 | 180,068 | 180,455 | |||||||||
Book depreciation and amortization including discontinued operations | 151,108 | 151,888 | 157,893 | |||||||||
Tax depreciation and amortization | (95,848 | ) | (133,537 | ) | (144,816 | ) | ||||||
Book/tax difference on gains/losses from capital transactions | 1,233 | (6,137 | ) | 35,891 | ||||||||
Deferred/prepaid/above and below market rents, net | (5,076 | ) | (12,489 | ) | (20,113 | ) | ||||||
Impairment loss from REIT operations | 28,376 | 21,862 | 31,461 | |||||||||
Other book/tax differences, net | (22,785 | ) | 28,097 | (25,238 | ) | |||||||
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| |||||||
REIT taxable income | 125,664 | 229,752 | 215,533 | |||||||||
Dividends paid deduction | (125,664 | ) | (229,752 | ) | (215,533 | ) | ||||||
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Dividends paid in excess of taxable income | $ | — | $ | — | $ | — | ||||||
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The dividends paid deduction in 2010, 2009 and 2008 includes designated dividends of $3.8 million from 2011, $61.2 million from 2010 and $4.7 million from 2009, respectively.
For federal income tax purposes, the cash dividends distributed to common shareholders are characterized as follows:
2010 | 2009 | 2008 | ||||||||||
Ordinary income | 79.1 | % | 68.1 | % | 45.5 | % | ||||||
Capital gain distributions | 20.9 | % | 31.9 | % | 54.5 | % | ||||||
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| |||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | ||||||
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Our taxable REIT subsidiary is subject to federal, state and local income taxes. We have recorded a federal income tax (benefit) provision of $(1.2) million, $4.4 million and $(12.1) million for the year ended December 31, 2010, 2009 and 2008, respectively. We did not have a current tax obligation as of December 31, 2010 and 2009 in association with this tax; however, we had a current tax receivable of $2.8 million as of December 31, 2009.
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Our deferred tax assets and liabilities, including a valuation allowance, consisted of the following (in thousands):
December 31, | ||||||||
2010 | 2009 | |||||||
Deferred tax assets: | ||||||||
Impairment loss | $ | 13,584 | $ | 13,945 | ||||
Allowance on other assets | 1,423 | 1,428 | ||||||
Interest expense | 7,256 | 3,643 | ||||||
Net operating loss carryforward | 4,684 | 1,509 | ||||||
Other | 672 | 447 | ||||||
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| |||||
Total deferred tax assets | 27,619 | 20,972 | ||||||
Valuation allowance | (15,818 | ) | (9,605 | ) | ||||
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| |||||
Total deferred tax assets, net of allowance | $ | 11,801 | $ | 11,367 | ||||
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| |||||
Deferred tax liabilities: | ||||||||
Straight-line rentals | $ | 1,290 | $ | 506 | ||||
Book-tax basis differential | 4,708 | 6,346 | ||||||
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| |||||
Total deferred tax liabilities | $ | 5,998 | $ | 6,852 | ||||
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At December 31, 2010 and 2009, we have recorded a net deferred tax asset of $11.8 million and $11.4 million, respectively; including the benefit of $13.6 million and $13.9 million, respectively, of impairment losses, which will not be recognized until the related properties are sold. Realization is dependent on generating sufficient taxable income in the year the property is sold. Management believes it is more likely than not that a portion of these deferred tax assets, which primarily consists of impairment losses, will not be realized and established a valuation allowance totaling $15.8 million and $9.6 million as of December 31, 2010 and 2009, respectively. However, the amount of the deferred tax asset considered realizable could be reduced if estimates of future taxable income are reduced.
In addition, we are subject to the State of Texas business tax (“Texas Franchise Tax”), which is determined by applying a tax rate to a base that considers both revenues and expenses. Therefore, the Texas Franchise Tax is considered an income tax and is accounted for accordingly.
For the year ended December 31, 2010, 2009 and 2008, we recorded a provision for the Texas Franchise Tax of $1.4 million, $1.9 million and $2.2 million, respectively. The deferred tax assets associated with this tax each totaled $.1 million as of December 31, 2010 and 2009, and the deferred tax liabilities totaled $.2 million and $.1 million as of December 31, 2010 and 2009, respectively. Also, a current tax obligation of $1.6 million and $2.1 million has been recorded at December 31, 2010 and 2009, respectively, in association with this tax.
Note 15. Leasing Operations
The terms of our leases range from less than one year for smaller tenant spaces to over 25 years for larger tenant spaces. In addition to minimum lease payments, most of the leases provide for contingent rentals (payments for real estate taxes, maintenance and insurance by lessees and an amount based on a percentage of the tenants’ sales). Future minimum rental income from non-cancelable tenant leases at December 31, 2010, in millions, is: $401.2 in 2011; $346.4 in 2012; $283.7 in 2013; $222.2 in 2014; $166.6 in 2015; and $569.2 thereafter. The future minimum rental amounts do not include estimates for contingent rentals. Such contingent rentals, in millions, aggregated $115.5 in 2010, $119.5 in 2009 and $131.7 in 2008.
Note 16. Commitments and Contingencies
We are engaged in the operation of shopping centers, which are either owned or, with respect to certain shopping centers, operated under long-term ground leases. These ground leases expire at various dates through 2069, with renewal options. Space in our shopping centers is leased to tenants pursuant to agreements that provide for terms ranging generally from one month to 25 years and, in some cases, for annual rentals subject to upward adjustments based on operating expense levels, sales volume, or contractual increases as defined in the lease agreements.
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Scheduled minimum rental payments under the terms of all non-cancelable operating leases in which we are the lessee, principally for shopping center ground leases, for the subsequent five years and thereafter ending December 31, are as follows (in thousands):
2011 | $ | 3,570 | ||
2012 | 3,382 | |||
2013 | 3,352 | |||
2014 | 3,118 | |||
2015 | 2,891 | |||
Thereafter | 123,870 | |||
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| |||
Total | $ | 140,183 | ||
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Rental expense for operating leases was, in millions: $5.3 in 2010; $5.0 in 2009 and $4.0 in 2008.
The scheduled future minimum revenues under subleases, applicable to the ground lease rentals above, under the terms of all non-cancelable tenant leases, assuming no new or renegotiated leases or option extensions for the subsequent five years and thereafter ending December 31, are as follows (in thousands):
2011 | $ | 36,882 | ||
2012 | 33,538 | |||
2013 | 29,579 | |||
2014 | 23,836 | |||
2015 | 18,677 | |||
Thereafter | 86,066 | |||
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| |||
Total | $ | 228,578 | ||
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Property under capital leases that is included in buildings and improvements consisted of two shopping centers totaling $16.8 million at December 31, 2010 and three shopping centers totaling $19.1 million at December 31, 2009. Amortization of property under capital leases is included in depreciation and amortization expense, and the balance of accumulated depreciation associated with these capital leases at December 31, 2010 and 2009 was $9.8 million and $11.0 million, respectively. Future minimum lease payments under these capital leases total $35.5 million, with annual payments due, in millions, $1.7 in 2011, $1.8 in each of 2012, 2013, 2014 and 2015; and $26.6 thereafter. The amount of these total payments representing interest is $14.5 million. Accordingly, the present value of the net minimum lease payments was $21.0 million at December 31, 2010.
As of December 31, 2010, we participate in five real estate ventures structured as DownREIT partnerships that have properties in Arkansas, California, Georgia, North Carolina, Texas and Utah. As a general partner, we have operating and financial control over these ventures and consolidate them in our consolidated financial statements. These ventures allow the outside limited partners to put their interest to the partnership for our common shares or an equivalent amount in cash. We may acquire any limited partnership interests that are put to the partnership, and we have the option to redeem the interest in cash or a fixed number of our common shares, at our discretion. We also participate in a real estate venture that has a property in Texas that allows its outside partner to put operating partnership units to us. We have the option to redeem these units in cash or a fixed number of our common shares, at our discretion. In 2010 and 2009, we issued common shares valued at $.7 million and $14.3 million, respectively, in exchange for certain of these interests. The aggregate redemption value of these interests was approximately $39 million and $33 million as of December 31, 2010 and 2009, respectively.
In January 2007, we acquired two retail properties in Arizona. This purchase transaction includes an earnout provision of approximately $29 million that is contingent upon the subsequent development of space by the property seller. This contingency agreement expired in July 2010 and was settled for $6.4 million in January 2011. As of December 31, 2010 and 2009, the estimated obligation was $6.4 million and $4.7 million, respectively. Since inception of this obligation, $12.5 million had been paid through December 31, 2010. Amounts paid or accrued under such earnouts are treated as additional purchase price and capitalized to the related property.
67
We are subject to numerous federal, state and local environmental laws, ordinances and regulations in the areas where we own or operate properties. We are not aware of any material contamination which may have been caused by us or any of our tenants that would have a material adverse effect on our consolidated financial statements.
As part of our risk management activities, we have applied and been accepted into state sponsored environmental programs which will limit our expenses if contaminants need to be remediated. We also have an environmental insurance policy that covers us against third party liabilities and remediation costs.
While we believe that we do not have any material exposure to environmental remediation costs, we cannot give absolute assurance that changes in the law or new discoveries of contamination will not result in increased liabilities to us.
Related to our investment in a development project in Sheridan, Colorado that prior to April 1, 2010 was held in an unconsolidated real estate joint venture, we, our joint venture partner and the joint venture have each provided a guaranty for the payment of any debt service shortfalls on tax increment revenue bonds issued in connection with the project. The Sheridan Redevelopment Agency (“Agency”) issued $97 million of Series A bonds used for an urban renewal project. The bonds are to be repaid with incremental sales and property taxes and a PIF to be assessed on current and future retail sales, and, to the extent necessary, any amounts we may have to provide under a guaranty. The incremental taxes and PIF are to remain intact until the earlier of the bond liability has been paid in full or 2030 (unless such date is otherwise extended by the Agency).
In July 2009, we settled a lawsuit in connection with the above project. Among the obligations performed or to be performed by us under the terms of the settlement agreement was to cause the joint venture to purchase a portion of the bonds in the amount of $51.3 million at par, plus accrued and unpaid interest to the date of such purchase. We established a restricted cash collateral account of $47.6 million in lieu of a back-to-back letter of credit previously supporting additional bonds totaling $45.7 million. We replaced the restricted cash collateral account with a $46.3 million letter of credit in November 2010.
Also, in connection with the Sheridan, Colorado joint venture and the issuance of the related Series A bonds, we, our joint venture partner and the joint venture have also provided a performance guaranty on behalf of the Agency for the satisfaction of all obligations arising from two interest rate contracts for the combined notional amount of $97 million that matures in December 2029. We evaluated and determined that the fair value of the guaranty both at inception and December 31, 2010 was nominal.
We have evaluated the remaining outstanding guaranties and have determined that the fair value of these guaranties is nominal.
We are also involved in various matters of litigation arising in the normal course of business. While we are unable to predict with certainty the amounts involved, our management and counsel are of the opinion that, when such litigation is resolved, any additional liability, if any, will not have a material adverse effect on our consolidated financial statements.
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Note 17. Identified Intangible Assets and Liabilities
Identified intangible assets and liabilities associated with our property acquisitions are as follows (in thousands):
December 31, | ||||||||
2010 | 2009 | |||||||
Identified Intangible Assets: | ||||||||
Above-Market Leases (included in Other Assets, net) | $ | 16,825 | $ | 17,278 | ||||
Above-Market Leases – Accumulated Amortization | (10,507 | ) | (11,471 | ) | ||||
Below-Market Assumed Mortgages (included in Debt, net) | 5,722 | 2,072 | ||||||
Below-Market Assumed Mortgages – Accumulated Amortization | (1,157 | ) | (805 | ) | ||||
Valuation of In Place Leases (included in Unamortized Debt and Lease Cost, net) | 71,272 | 57,610 | ||||||
Valuation of In Place Leases – Accumulated Amortization | (35,984 | ) | (32,361 | ) | ||||
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| |||||
$ | 46,171 | $ | 32,323 | |||||
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| |||||
Identified Intangible Liabilities: | ||||||||
Below-Market Leases (included in Other Liabilities, net) | $ | 37,668 | $ | 36,951 | ||||
Below-Market Leases – Accumulated Amortization | (23,585 | ) | (21,794 | ) | ||||
Above-Market Assumed Mortgages (included in Debt, net) | 48,149 | 52,171 | ||||||
Above-Market Assumed Mortgages – Accumulated Amortization | (31,288 | ) | (31,329 | ) | ||||
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| |||||
$ | 30,944 | $ | 35,999 | |||||
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These identified intangible assets and liabilities are amortized over the applicable lease terms or the remaining lives of the assumed mortgages, as applicable.
The net amortization of above-market and below-market leases increased rental revenues by $1.7 million, $2.5 million and $3.5 million in 2010, 2009 and 2008, respectively. The estimated net amortization of these intangible assets and liabilities will increase rental revenues for each of the next five years as follows (in thousands):
2011 | $ | 1,314 | ||
2012 | 801 | |||
2013 | 714 | |||
2014 | 694 | |||
2015 | 676 |
The amortization of the in place lease intangible assets recorded in depreciation and amortization, was $5.9 million, $8.2 million and $8.5 million in 2010, 2009 and 2008, respectively. The estimated amortization of this intangible asset will increase depreciation and amortization for each of the next five years as follows (in thousands):
2011 | $ | 4,758 | ||
2012 | 3,962 | |||
2013 | 3,130 | |||
2014 | 2,619 | |||
2015 | 2,081 |
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The amortization of above-market and below-market assumed mortgages decreased net interest expense by $3.1 million, $4.4 million and $8.0 million in 2010, 2009 and 2008, respectively. The estimated amortization of these intangible assets and liabilities will decrease net interest expense for each of the next five years as follows (in thousands):
2011 | $ | 1,949 | ||
2012 | 916 | |||
2013 | 472 | |||
2014 | 500 | |||
2015 | 513 |
Note 18. Fair Value Measurements
Recurring Fair Value Measurements:
Investments held in grantor trusts
These assets are valued based on publicly quoted market prices for identical assets.
Tax Increment Revenue Bonds
These assets represent tax increment revenue bonds which were issued by the Agency in connection with our investment in a redevelopment project in Sheridan, Colorado.The senior tax increment revenue bonds are valued based on quoted prices for similar assets in an active market. As a result, we have determined that the senior tax increment revenue bonds are classified within Level 2 of the fair value hierarchy. The valuation of our subordinated tax increment revenue bonds is determined based on assumptions that management believes market participants would use in pricing using widely accepted valuation techniques including discounted cash flow analysis based on the expected future sales tax revenues of the redevelopment project. This analysis reflects the contractual terms of the bonds, including the period to maturity, and uses observable market-based inputs, such as market discount rates and unobservable market-based inputs, such as future growth and inflation rates. Since the majority of our inputs are unobservable, we have determined that the subordinate tax increment revenue bonds fall within the Level 3 classification of the fair value hierarchy. At December 31, 2010, the carrying value of these bonds is equal to its fair value.
Derivative instruments
We use interest rate contracts with major financial institutions to manage our interest rate risk. The valuation of these instruments is determined based on assumptions that management believes market participants would use in pricing, using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of our interest rate contracts have been determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves.
We incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counter-party’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral, thresholds and guarantees.
Although we have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by ourselves and our counter-parties. However, we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and have determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives. As a result, we have determined that the derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.
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Assets and liabilities measured at fair value on a recurring basis as of December 31, 2010 and 2009, aggregated by the level in the fair value hierarchy in which those measurements fall, are as follows (in thousands):
Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Fair Value at December 31, 2010 | |||||||||||||
Assets: | ||||||||||||||||
Investments in grantor trusts | $ | 15,055 | $ | 15,055 | ||||||||||||
Tax increment revenue bonds | $ | 51,255 | $ | 10,700 | 61,955 | |||||||||||
Derivative instruments: | ||||||||||||||||
Interest rate contracts | 7,192 | 7,192 | ||||||||||||||
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| |||||||||
Total | $ | 15,055 | $ | 58,447 | $ | 10,700 | $ | 84,202 | ||||||||
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| |||||||||
Liabilities: | ||||||||||||||||
Derivative instruments: | ||||||||||||||||
Interest rate contracts | $ | 108 | $ | 108 | ||||||||||||
Deferred compensation plan obligations | $ | 15,055 | 15,055 | |||||||||||||
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| |||||||||
Total | $ | 15,055 | $ | 108 | $ | 15,163 | ||||||||||
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Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Fair Value at December 31, 2009 | |||||||||||||
Assets: | ||||||||||||||||
Investments in grantor trusts | $ | 13,894 | $ | 13,894 | ||||||||||||
Derivative instruments: | ||||||||||||||||
Interest rate contracts | $ | 2,601 | 2,601 | |||||||||||||
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| |||||||||
Total | $ | 13,894 | $ | 2,601 | $ | 16,495 | ||||||||||
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| |||||||||
Liabilities: | ||||||||||||||||
Derivative instruments: | ||||||||||||||||
Interest rate contracts | $ | 4,634 | $ | 4,634 | ||||||||||||
Deferred compensation plan obligations | $ | 13,894 | 13,894 | |||||||||||||
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| |||||||||
Total | $ | 13,894 | $ | 4,634 | $ | 18,528 | ||||||||||
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A reconciliation of the outstanding balance of the subordinate tax increment revenue bonds using significant unobservable inputs (Level 3) is as follows:
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||||
Outstanding, January 1, 2010 | $ | — | ||
Additions (1) | 22,417 | |||
Loss included in earnings (2) | (11,717 | ) | ||
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| |||
Outstanding, December 31, 2010 | $ | 10,700 | ||
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(1) | Additions represent an investment including accrued interest in a subordinate tax increment revenue bond that was classified as available for sale on December 31, 2010. |
(2) | Represents the change in unrealized losses recognized in impairment loss in the Statement of Consolidated Income and Comprehensive Income for the year ended December 31, 2010. |
71
Nonrecurring Fair Value Measurements:
Property Impairments
Property is reviewed for impairment if events or changes in circumstances indicate that the carrying amount of the property, including any identifiable intangible assets, site costs and capitalized interest, may not be recoverable. In such an event, a comparison is made of the current and projected operating cash flows of each such property into the foreseeable future on an undiscounted basis to the carrying amount of such property. If we conclude that an impairment may have occurred, fair values are determined by management utilizing cash flow models, market capitalization rates and market discount rates, or by obtaining third-party broker valuation estimates, appraisals, bona fide purchase offers or the expected sales price of an executed sales agreement in accordance with our fair value measurements accounting policy.
Subordinate Tax Increment Revenue Bonds and Subordinate Tax Increment Revenue Note Impairments
Investments in tax increment revenue bonds and tax increment revenue notes are reviewed for impairment if changes in circumstances or forecasts indicate that the carrying amount may not be recoverable and in the case of the bonds, if it is uncertain if the investment will be held to maturity. In such an event, a comparison is made of the projected recoverability of cash flows from the tax increment revenue bonds and note to the carrying amount of each investment. If we conclude that an impairment may have occurred, fair values are determined by management utilizing third-party sales revenue projections until the maturity of the bonds and notes and discounted cash flow models.
Assets measured at fair value on a nonrecurring basis during 2010, aggregated by the level in the fair value hierarchy in which those measurements fall, are as follows (in thousands):
Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Fair Value | Total Gains (Losses) | ||||||||||||
Property | $ | 2,325 | $ | 2,325 | $ | (2,827 | ) | |||||||||
Subordinate tax increment revenue bonds | 10,700 | 10,700 | (11,717 | ) | ||||||||||||
Subordinate tax increment revenue note | (598 | ) | ||||||||||||||
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| |||||||||
Total | $ | 13,025 | $ | 13,025 | $ | (15,142 | ) | |||||||||
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In accordance with our policy of evaluating and recording impairments on the disposal of long-lived assets, a property with a total carrying amount of $5.1 million was written down to its fair value of $2.3 million, resulting in a loss of $2.8 million, which was included in earnings for the period. Management’s estimate of the fair value of this property was determined using third party broker valuations for the Level 3 inputs.
In addition, our subordinate tax increment revenue investments, the bonds issued by the Agency with a carrying value of $22.4 million, were written down to their fair value of $10.7 million as they are no longer classified as held to maturity. Also, our note with a carrying value of $.6 million was written down to its fair value of zero. Management’s estimates of the fair value of these investments were determined using third-party sales revenue projections and future growth and inflations rates for the Level 3 inputs.
Fair Value Disclosures:
Unless otherwise described below, short-term financial instruments and receivables are carried at amounts which approximate their fair values based on their highly-liquid nature, short-term maturities and/or expected interest rates for similar instruments.
Notes Receivable from Real Estate Joint Ventures and Partnerships
We estimated the fair value of our notes receivables from real estate joint ventures and partnerships based on quoted market prices for publicly-traded notes and on the discounted estimated future cash receipts. The discount rates used approximate current lending rates for a note or groups of notes with similar maturities and credit quality, assumes the note is outstanding through maturity and considers the note’s collateral (if applicable). We have utilized market information as available or present value techniques to estimate the amounts required to be disclosed. Since such amounts are estimates that are based on limited available market information for similar transactions, there can be no assurance that the disclosed value of any financial instrument could be realized by immediate settlement of the instrument. Notes with a carrying value of $184.8 million and $317.8 million at December 31, 2010 and 2009, respectively, have a fair value of approximately $188.0 million and $317.8 million, respectively.
72
Debt
We estimated the fair value of our debt based on quoted market prices for publicly-traded debt and on the discounted estimated future cash payments to be made for other debt. The discount rates used approximate current lending rates for loans or groups of loans with similar maturities and credit quality, assumes the debt is outstanding through maturity and considers the debt’s collateral (if applicable). We have utilized market information as available or present value techniques to estimate the amounts required to be disclosed. Since such amounts are estimates that are based on limited available market information for similar transactions, there can be no assurance that the disclosed value of any financial instrument could be realized by immediate settlement of the instrument. Fixed-rate debt with a carrying value of $2.3 billion and $2.1 billion at December 31, 2010 and 2009, respectively has a fair value of approximately $2.4 billion and $2.0 billion, respectively. Variable-rate debt with carrying values of $239.6 million and $385.7 million as of December 31, 2010 and 2009, respectively, has fair values of approximately $252.2 million and $373.4 million, respectively.
Note 19. Share Options and Awards
We have a Long-Term Incentive Plan for the issuance of options and share awards, of which .01 million is available for the future grant of options or awards at December 31, 2010. This plan expires in April 2011. The share options granted to non-officers vest over a three-year period beginning after the grant date, and share options and restricted shares for officers vest over a five-year period after the grant date. Restricted shares granted to trust managers and share options or awards granted to retirement eligible employees are expensed immediately.
In May 2010, our shareholders approved the adoption of the Amended and Restated 2010 Long-Term Incentive Plan, under which 3.0 million of our common shares were reserved for issuance, and 2.8 million is available for the future grant of options or awards at December 31, 2010. This plan expires in May 2020. Currently, these share options granted to non-officers vest ratably over a three-year period beginning after the grant date, and share options and restricted shares for officers vest ratably over a five-year period after the grant date. Restricted shares granted to trust managers and share options or awards granted to retirement eligible employees are expensed immediately. Restricted shares have the same rights of a shareholder, including the right to vote and receive dividends, except as otherwise provided by our Management Development and Executive Compensation Committee.
The grant price for both the Long-Term Incentive Plan and the Amended and Restated 2010 Long-Term Incentive Plan (collectively, the “Plans”) is calculated as an average of the high and low of the quoted fair value of our common shares on the date of grant. In the Plans, these options expire upon the earlier of termination of employment or 10 years from the date of grant, and restricted shares for officers and trust managers are granted at no purchase price. Our policy is to recognize compensation expense for equity awards ratably over the vesting period, except for retirement eligible amounts. Compensation expense, net of forfeitures, associated with share options and restricted shares totaled $4.9 million in 2010, $4.2 million in 2009 and $4.9 million in 2008, of which $1.2 million in both 2010 and 2009 and $1.3 million in 2008, was capitalized.
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The fair value of share options and restricted shares is estimated on the date of grant using the Black-Scholes option pricing method based on the expected weighted average assumptions in the following table. The dividend yield is an average of the historical yields at each record date over the estimated expected life. We estimate volatility using our historical volatility data for a period of 10 years, and the expected life is based on historical data from an option valuation model of employee exercises and terminations. The risk-free rate is based on the U.S. Treasury yield curve. The fair value and weighted average assumptions are as follows:
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Fair value per share option | $ | 5.42 | $ | 1.99 | $ | 3.07 | ||||||
Dividend yield | 5.3 | % | 5.2 | % | 5.1 | % | ||||||
Expected volatility | 38.8 | % | 31.3 | % | 18.8 | % | ||||||
Expected life (in years) | 6.2 | 6.2 | 6.2 | |||||||||
Risk-free interest rate | 2.9 | % | 1.7 | % | 2.8 | % |
Following is a summary of the option activity for the three years ended December 31, 2010:
Shares Under Option | Weighted Average Exercise Price | |||||||
Outstanding, January 1, 2008 | 2,840,290 | $ | 32.66 | |||||
Granted | 832,106 | 32.22 | ||||||
Forfeited or expired | (174,376 | ) | 35.85 | |||||
Exercised | (180,365 | ) | 21.99 | |||||
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Outstanding, December 31, 2008 | 3,317,655 | 32.96 | ||||||
Granted | 1,182,252 | 11.85 | ||||||
Forfeited or expired | (54,364 | ) | 26.90 | |||||
Exercised | (9,400 | ) | 18.05 | |||||
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Outstanding, December 31, 2009 | 4,436,143 | 27.44 | ||||||
Granted | 504,781 | 22.68 | ||||||
Forfeited or expired | (22,973 | ) | 21.29 | |||||
Exercised | (303,679 | ) | 17.32 | |||||
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Outstanding, December 31, 2010 | 4,614,272 | $ | 27.62 | |||||
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The total intrinsic value of options exercised was $1.8 million in 2010, $0.02 million in 2009 and $2.2 million in 2008. As of December 31, 2010 and 2009, there was approximately $3.8 million and $3.2 million, respectively, of total unrecognized compensation cost related to unvested share options, which is expected to be amortized over a weighted average of 2.5 years for both periods.
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The following table summarizes information about share options outstanding and exercisable at December 31, 2010:
Outstanding | Exercisable | |||||||||||||||||||||||||||||||
Weighted | Weighted | |||||||||||||||||||||||||||||||
Average | Weighted | Aggregate | Weighted | Average | Aggregate | |||||||||||||||||||||||||||
Remaining | Average | Intrinsic | Average | Remaining | Intrinsic | |||||||||||||||||||||||||||
Range of Exercise Prices | Number | Contractual Life | Exercise Price | Value (000’s) | Number | Exercise Price | Contractual Life | Value (000’s) | ||||||||||||||||||||||||
$11.85 - $17.78 | 1,076,520 | 8.2 years | $ | 11.85 | 243,529 | $ | 11.85 | 8.2 years | ||||||||||||||||||||||||
$17.79 - $26.69 | 1,143,273 | 5.0 years | $ | 23.03 | 640,585 | $ | 23.31 | 1.5 years | ||||||||||||||||||||||||
$26.70 - $40.05 | 1,914,766 | 5.3 years | $ | 34.25 | 1,486,801 | $ | 34.83 | 4.7 years | ||||||||||||||||||||||||
$40.06 - $49.62 | 479,713 | 5.9 years | $ | 47.46 | 395,837 | $ | 47.46 | 5.9 years | ||||||||||||||||||||||||
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Total | 4,614,272 | 5.9 years | $ | 27.62 | $ | — | 2,766,752 | $ | 31.95 | 4.4 years | $ | — | ||||||||||||||||||||
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A summary of the status of unvested restricted shares for the year ended December 31, 2010 is as follows:
Unvested | ||||||||
Restricted | Weighted | |||||||
Share | Average Grant | |||||||
Awards | Date Fair Value | |||||||
Outstanding, January 1, 2010 | 363,236 | $ | 19.40 | |||||
Granted | 160,353 | 22.93 | ||||||
Vested | (126,387 | ) | 24.14 | |||||
Forfeited | (405 | ) | 11.85 | |||||
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Outstanding, December 31, 2010 | 396,797 | $ | 19.32 | |||||
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As of December 31, 2010 and 2009, there was approximately $5.1 million and $4.6 million, respectively, of total unrecognized compensation cost related to unvested restricted shares, which is expected to be amortized over a weighted average of 2.8 years and 2.7 years, respectively.
Note 20. Employee Benefit Plans
Effective April 1, 2002, we converted a noncontributory pension plan to a noncontributory cash balance retirement plan (“Retirement Plan”) under which each participant received an actuarially determined opening balance. Annual additions to each participant’s account include a service credit ranging from 3-5% of compensation, depending on years of service, and an interest credit based on the ten-year US Treasury Bill rate not to be less than 2.05%. Vesting generally occurs after three years of service. Certain participants were grandfathered under the prior pension plan formula. In addition to the plan described above, effective September 1, 2002, we established two separate and independent nonqualified supplemental retirement plans (“SRP”) for certain employees. These unfunded plans provide benefits in excess of the statutory limits of our noncontributory cash balance retirement plan. Annual additions to each participant’s account include a service credit ranging from 3-5% of compensation, depending on years of service, and an interest credit of 7.5%. Vesting generally occurs after three years of service. We have elected to use the actuarial present value of the vested benefits to which the participant is entitled if the participant separates immediately from the SRP, as permitted by GAAP.
The estimated net loss, prior service cost, and transition obligation that will be amortized from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year are $720,000, ($117,000) and zero, respectively.
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The following tables summarize changes in the benefit obligation, the plan assets and the funded status of our pension plans as well as the components of net periodic benefit costs, including key assumptions. The measurement dates for plan assets and obligations were December 31, 2010 and 2009.
Fiscal Year End | ||||||||
2010 | 2009 | |||||||
Change in Projected Benefit Obligation: | ||||||||
Benefit obligation at beginning of year | $ | 51,333 | $ | 46,148 | ||||
Service cost | 3,325 | 3,571 | ||||||
Interest cost | 3,212 | 2,931 | ||||||
Actuarial loss | 1,769 | 422 | ||||||
Benefit payments | (1,764 | ) | (1,739 | ) | ||||
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Benefit obligation at end of year | $ | 57,875 | $ | 51,333 | ||||
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Change in Plan Assets: | ||||||||
Fair value of plan assets at beginning of year | $ | 23,509 | $ | 15,472 | ||||
Actual return on plan assets | 2,600 | 4,219 | ||||||
Employer contributions | 2,681 | 5,557 | ||||||
Benefit payments | (1,764 | ) | (1,739 | ) | ||||
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Fair value of plan assets at end of year | $ | 27,026 | $ | 23,509 | ||||
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Unfunded Status at End of Year: | $ | 30,849 | $ | 27,824 | ||||
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Accumulated benefit obligation | $ | 57,418 | $ | 50,732 | ||||
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Amounts recognized in accumulated other comprehensive loss consist of:
Net loss | $ | 10,296 | $ | 9,908 | ||||
Prior service credit | (235 | ) | (352 | ) | ||||
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Total amount recognized | $ | 10,061 | $ | 9,556 | ||||
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The following is the required information for other changes in plan assets and benefit obligations recognized in other comprehensive income:
2010 | 2009 | 2008 | ||||||||||
Net loss (gain) | $ | 1,132 | $ | (2,407 | ) | $ | 9,231 | |||||
Amortization of net gain | (744 | ) | (947 | ) | (256 | ) | ||||||
Amortization of prior service cost | 117 | 117 | 117 | |||||||||
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Total recognized in other comprehensive income | $ | 505 | $ | (3,237 | ) | $ | 9,092 | |||||
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Total recognized in net periodic benefit costs and other comprehensive income | $ | 5,704 | $ | 2,705 | $ | 12,093 | ||||||
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The following is the required information for plans with an accumulated benefit obligation in excess of plan assets at each year end:
2010 | 2009 | |||||||
Projected benefit obligation | $ | 57,875 | $ | 51,333 | ||||
Accumulated benefit obligation | 57,418 | 50,732 | ||||||
Fair value of plan assets | 27,026 | 23,509 |
76
At December 31, 2010 and 2009, the Retirement Plan was underfunded by $4.5 million and $4.6 million, respectively, and is included in accounts payable and accrued expenses. The SRP was underfunded by $26.3 million and $23.2 million, respectively, and is included in other net liabilities.
The components of net periodic benefit cost for both plans are as follows (in thousands):
2010 | 2009 | 2008 | ||||||||||
Service cost | $ | 3,325 | $ | 3,571 | $ | 2,414 | ||||||
Interest cost | 3,212 | 2,931 | 2,639 | |||||||||
Expected return on plan assets | (1,965 | ) | (1,391 | ) | (1,832 | ) | ||||||
Prior service cost | (117 | ) | (117 | ) | (117 | ) | ||||||
Recognized loss (gain) | 744 | 947 | (104 | ) | ||||||||
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Total | $ | 5,199 | $ | 5,941 | $ | 3,000 | ||||||
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The assumptions used to develop periodic expense for both plans are shown below:
2010 | 2009 | 2008 | ||||||||||
Discount rate – Retirement Plan and SRP | 5.82 | % | 6.00 | % | 6.25 | % | ||||||
Salary scale increases – Retirement Plan | 4.00 | % | 4.00 | % | 4.00 | % | ||||||
Salary scale increases – SRP | 5.00 | % | 5.00 | % | 5.00 | % | ||||||
Long-term rate of return on assets – Retirement Plan | 8.00 | % | 8.00 | % | 8.50 | % |
The selection of the discount rate is made annually after comparison to yields based on high quality fixed-income investments. The salary scale is the composite rate which reflects anticipated inflation, merit increases, and promotions for the group of covered participants. The long-term rate of return is a composite rate for the trust. It is derived as the sum of the percentages invested in each principal asset class included in the portfolio multiplied by their respective expected rates of return. We considered the historical returns and the future expectations for returns for each asset class, as well as the target asset allocation of the pension portfolio. This analysis resulted in the selection of 8.00% as the long-term rate of return assumption for 2010.
The assumptions used to develop the actuarial present value of the benefit obligations at year-end for both plans are shown below:
2010 | 2009 | 2008 | ||||||||||
Discount rate – Retirement Plan and SRP | 5.30 | % | 5.82 | % | 6.00 | % | ||||||
Salary scale increases – Retirement Plan | 4.00 | % | 4.00 | % | 4.00 | % | ||||||
Salary scale increases – SRP | 5.00 | % | 5.00 | % | 5.00 | % |
The expected contribution to be paid for the Retirement Plan by us during 2011 is approximately $2.3 million. The expected benefit payments for the next ten years for both plans are as follows, in millions: $1.9 in 2011, $4.6 in 2012; $2.1 in 2013; $2.8 in 2014, $4.8 in 2015 and $27.0 in 2016 through 2020.
The participant data used in determining the liabilities and costs for the Retirement Plan was collected as of January 1, 2010, and no significant changes have occurred through December 31, 2010. The participant data used in determining the liabilities and costs for the SRP was collected as of December 31, 2010.
Our investment policy for our plan assets has been to set forth to determine the objectives for structuring a retirement savings program suitable to the long-term needs and risk tolerances of participants, to select appropriate investments to be offered by the plan and to establish procedures for monitoring and evaluating the performance of the investments of the plan. Our overall plan objectives for selecting and monitoring investment options are to promote and optimize retirement wealth accumulation; to provide a full range of asset classes and investment options that are intended to help diversify the portfolio to maximize return within reasonable and prudent levels of risk; to control costs of administering the plan; and to manage the investments held by the plan.
77
The selection of investment options is determined using criteria based on the following characteristics: fund history, relative performance, investment style, portfolio structure, manager tenure, minimum assets, expenses and operation considerations. Investment options selected for use in the plan are reviewed on at least a semi-annual basis in order to evaluate material changes from the selection criteria. Asset allocation is used to determine how the investment portfolio should be split between stocks, bonds and cash. The asset allocation decision is influenced by time horizon; risk tolerance and investment return objectives. The primary factor for consideration of asset allocation is demographics of the plan, including, attained age and future service. The allocation is based on a broad market diversification model and the percentage allocation to each investment category will vary depending upon market conditions. Rebalancing of the allocation of plan assets occurs semi-annually.
At December 31, 2010, our investment asset allocation compared to our benchmarking allocation model was as follows:
Portfolio % | Benchmark % | |||||||
Cash | 7 | % | 4 | % | ||||
US Stocks | 40 | % | 54 | % | ||||
Non-US Stocks | 20 | % | 9 | % | ||||
Bonds | 32 | % | 33 | % | ||||
Other | 1 | % | ||||||
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Total | 100 | % | 100 | % | ||||
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The fair value of plan assets was determined based on publicly quoted market prices for identical assets which are classified as Level 1 observable inputs. The allocation of the fair value of plan assets was as follows (in thousands):
December 31, | ||||||||
2010 | 2009 | |||||||
Cash and short-term investments | 3 | % | 3 | % | ||||
Mutual funds – equity | 63 | % | 61 | % | ||||
Mutual funds – fixed income | 34 | % | 36 | % | ||||
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Total | 100 | % | 100 | % | ||||
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Concentrations of risk within our equity portfolio are investments classified within the financial services sector, the industrial materials sector, the healthcare sector and the consumer goods sector representing approximately 16%, 13%, 13% and 11%, of total equity investments, respectively.
We also have a deferred compensation plan for eligible employees allowing them to defer portions of their current cash salary or share-based compensation. Deferred amounts are deposited in a grantor trust, which are included in other net assets, and are reported as compensation expense in the year service is rendered. Cash deferrals are invested based on the employee’s investment selections from a mix of assets based on a broad market diversification model. Deferred share-based compensation cannot be diversified, and distributions from this plan are made in the same form as the original deferral. See Note 18 for the disclosures associated with the fair value of the deferred compensation plan.
Note 21. Segment Information
The reportable segments presented are the segments for which separate financial information is available, and for which operating performance is evaluated regularly by senior management in deciding how to allocate resources and in assessing performance. We evaluate the performance of the reportable segments based on net operating income, defined as total revenues less operating expenses and real estate taxes. Management does not consider the effect of gains or losses from the sale of property in evaluating segment operating performance.
78
The shopping center segment is engaged in the acquisition, development and management of real estate, primarily anchored neighborhood and community shopping centers located in Arizona, Arkansas, California, Colorado, Florida, Georgia, Illinois, Kansas, Kentucky, Louisiana, Maine, Missouri, Nevada, New Mexico, North Carolina, Oklahoma, Oregon, South Carolina, Tennessee, Texas, Utah and Washington. The customer base includes supermarkets, discount retailers, drugstores and other retailers who generally sell basic necessity-type commodities. The industrial segment is engaged in the acquisition, development and management of bulk warehouses and office/service centers. Its properties are located in California, Florida, Georgia, Tennessee, Texas and Virginia, and the customer base is diverse. Included in “Other” are corporate-related items, insignificant operations and costs that are not allocated to the reportable segments.
Information concerning our reportable segments is as follows (in thousands):
Shopping | ||||||||||||||||
Center | Industrial | Other | Total | |||||||||||||
Year Ended December 31, 2010: | ||||||||||||||||
Revenues | $ | 489,838 | $ | 51,919 | $ | 8,816 | $ | 550,573 | ||||||||
Net Operating Income | 345,096 | 35,594 | 619 | 381,309 | ||||||||||||
Equity in Earnings (Loss) of Real Estate Joint Ventures and Partnerships, net | 12,222 | 1,053 | (386 | ) | 12,889 | |||||||||||
Capital Expenditures | 144,196 | 23,892 | 27,411 | 195,499 | ||||||||||||
Year Ended December 31, 2009: | ||||||||||||||||
Revenues | $ | 507,305 | $ | 53,085 | $ | 7,497 | $ | 567,887 | ||||||||
Net Operating Income (Loss) | 359,267 | 36,895 | (598 | ) | 395,564 | |||||||||||
Equity in Earnings (Loss) of Real Estate Joint Ventures and Partnerships, net | 4,949 | 967 | (368 | ) | 5,548 | |||||||||||
Capital Expenditures | 84,252 | 9,388 | 3,917 | 97,557 | ||||||||||||
Year Ended December 31, 2008: | ||||||||||||||||
Revenues | $ | 525,351 | $ | 54,129 | $ | 8,806 | $ | 588,286 | ||||||||
Net Operating Income (Loss) | 367,341 | 38,438 | (143 | ) | 405,636 | |||||||||||
Equity in Earnings (Loss) of Real Estate Joint Ventures and Partnerships, net | 15,012 | 1,428 | (4,244 | ) | 12,196 | |||||||||||
Capital Expenditures | 247,723 | 22,315 | 29,052 | 299,090 | ||||||||||||
As of December 31, 2010: | ||||||||||||||||
Investment in Real Estate Joint Ventures and Partnerships, net | $ | 309,171 | $ | 38,355 | $ | — | $ | 347,526 | ||||||||
Total Assets | 3,469,694 | 363,153 | 975,008 | 4,807,855 | ||||||||||||
As of December 31, 2009: | ||||||||||||||||
Investment in Real Estate Joint Ventures and Partnerships, net | $ | 277,130 | $ | 38,118 | $ | — | $ | 315,248 | ||||||||
Total Assets | 3,335,198 | 353,736 | 1,201,451 | 4,890,385 |
79
Segment net operating income reconciles to income from continuing operations as shown on the Statements of Consolidated Income and Comprehensive Income as follows (in thousands):
2010 | 2009 | 2008 | ||||||||||
Total Segment Net Operating Income | $ | 381,309 | $ | 395,564 | $ | 405,636 | ||||||
Depreciation and Amortization | (149,882 | ) | (146,493 | ) | (148,607 | ) | ||||||
Impairment Loss | (33,317 | ) | (34,983 | ) | (52,539 | ) | ||||||
General and Administrative | (25,000 | ) | (25,930 | ) | (25,761 | ) | ||||||
Interest Expense, net | (148,330 | ) | (152,390 | ) | (155,405 | ) | ||||||
Interest and Other Income, net | 9,825 | 11,427 | 4,333 | |||||||||
(Loss) Gain on Redemption of Convertible Senior Unsecured Notes | (135 | ) | 25,311 | 12,961 | ||||||||
Equity in Earnings of Real Estate Joint Ventures and Partnerships, net | 12,889 | 5,548 | 12,196 | |||||||||
Gain on Land and Merchant Development Sales | 18,688 | 8,342 | ||||||||||
(Provision) Benefit for Income Taxes | (222 | ) | (6,313 | ) | 10,244 | |||||||
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Income from Continuing Operations | $ | 47,137 | $ | 90,429 | $ | 71,400 | ||||||
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Note 22. Noncontrolling Interests
The following table summarizes the effect of changes in our ownership interest in subsidiaries on the equity attributable to us as follows (in thousands):
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Net income adjusted for noncontrolling interests | $ | 46,206 | $ | 171,102 | $ | 145,652 | ||||||
Transfers from the noncontrolling interests: | ||||||||||||
Increase in equity for operating partnership units | 746 | 14,251 | 1,094 | |||||||||
Decrease in equity for the acquisition of noncontrolling interests | (879 | ) | ||||||||||
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Change from net income adjusted for noncontrolling interests and transfers from the noncontrolling interests | $ | 46,073 | $ | 185,353 | $ | 146,746 | ||||||
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Note 23. Quarterly Financial Data (Unaudited)
Summarized quarterly financial data is as follows (in thousands):
First | Second | Third | Fourth | |||||||||||||
2010: | ||||||||||||||||
Revenues (1) | $ | 136,092 | $ | 137,791 | $ | 137,994 | $ | 138,696 | ||||||||
Net income (loss) attributable to common shareholders | 10,239 | (5,566 | )(2) | 8,660 | (2,603 | )(2) | ||||||||||
Earnings per common share – basic | 0.09 | (0.05 | )(2) | 0.07 | (0.02 | )(2) | ||||||||||
Earnings per common share – diluted | 0.08 | (0.05 | )(2) | 0.07 | (0.02 | )(2) | ||||||||||
2009: | ||||||||||||||||
Revenues (1) | $ | 143,224 | $ | 141,375 | $ | 142,041 | $ | 141,247 | ||||||||
Net income (loss) attributable to common shareholders | 33,146 | 39,238 | (9,384 | )(2) | 72,626 | (3) | ||||||||||
Earnings per common share – basic | 0.38 | 0.35 | (0.08 | )(2) | 0.61 | (3) | ||||||||||
Earnings per common share – diluted | 0.38 | 0.35 | (0.08 | )(2) | 0.60 | (3) |
(1) | Revenues from operating properties that were disposed have been reclassified and reported in discontinued operations for all periods presented. |
(2) | The quarter results include significant impairment charges. |
(3) | The quarter results include significant gains on the sale of properties. |
* * * * *
80
Schedule II
WEINGARTEN REALTY INVESTORS
VALUATION AND QUALIFYING ACCOUNTS
December 31, 2010, 2009, and 2008
(Amounts in thousands)
Description | Balance at beginning of period | Charged to costs and expenses | Deductions (A) | Balance at end of period | ||||||||||||
2010 | ||||||||||||||||
Allowance for Doubtful Accounts | $ | 10,380 | $ | 6,105 | $ | 6,348 | $ | 10,137 | ||||||||
Tax Valuation Allowance | $ | 9,605 | $ | 8,570 | $ | 2,357 | $ | 15,818 | ||||||||
2009 | ||||||||||||||||
Allowance for Doubtful Accounts | $ | 12,412 | $ | 8,553 | $ | 10,585 | $ | 10,380 | ||||||||
Tax Valuation Allowance | $ | 9,605 | $ | 9,605 | ||||||||||||
2008 | ||||||||||||||||
Allowance for Doubtful Accounts | $ | 8,721 | $ | 11,441 | $ | 7,750 | $ | 12,412 |
Note | A - Write-offs of accounts receivable previously reserved. |
81
Schedule III
WEINGARTEN REALTY INVESTORS
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2010
(Amounts in thousands)
Initial Cost to Company | Gross Amounts at Close of Period | |||||||||||||||||||||||||||||||||||||||
Description | Land | Building and Improvements | Cost Capitalized Subsequent to Acquisition | Land | Building and Improvements | Total (B) | Accumulated Depreciation | Total Costs, Net of Accumulated Depreciation | Encumbrances (A) | Date of Acquisition / Construction | ||||||||||||||||||||||||||||||
Shopping Center: | ||||||||||||||||||||||||||||||||||||||||
10-Federal Shopping Center | $ | 1,791 | $ | 7,470 | $ | 351 | $ | 1,791 | $ | 7,821 | $ | 9,612 | $ | (5,651 | ) | $ | 3,961 | $ | (8,153 | ) | 03/20/2008 | |||||||||||||||||||
580 Market Place | 3,892 | 15,570 | 1,704 | 3,889 | 17,277 | 21,166 | (4,116 | ) | 17,050 | — | 04/02/2001 | |||||||||||||||||||||||||||||
Academy Place | 1,537 | 6,168 | 1,176 | 1,532 | 7,349 | 8,881 | (2,847 | ) | 6,034 | — | 10/22/1997 | |||||||||||||||||||||||||||||
Alabama Shepherd Shopping Ctr | 637 | 2,026 | 5,888 | 1,062 | 7,489 | 8,551 | (3,183 | ) | 5,368 | — | 04/30/2004 | |||||||||||||||||||||||||||||
Angelina Village | 200 | 1,777 | 9,912 | 1,127 | 10,762 | 11,889 | (5,687 | ) | 6,202 | — | 04/30/1991 | |||||||||||||||||||||||||||||
Arcade Square | 1,497 | 5,986 | 1,132 | 1,495 | 7,120 | 8,615 | (1,841 | ) | 6,774 | — | 04/02/2001 | |||||||||||||||||||||||||||||
Argyle Village Shopping Center | 4,524 | 18,103 | 1,619 | 4,526 | 19,720 | 24,246 | (4,922 | ) | 19,324 | — | 11/30/2001 | |||||||||||||||||||||||||||||
Arrow head Festival S/C | 1,294 | 154 | 2,874 | 1,366 | 2,956 | 4,322 | (1,089 | ) | 3,233 | — | 12/31/2000 | |||||||||||||||||||||||||||||
Avent Ferry Shopping Center | 1,952 | 7,814 | 1,062 | 1,952 | 8,876 | 10,828 | (2,379 | ) | 8,449 | (747 | ) | 04/04/2002 | ||||||||||||||||||||||||||||
Ballwin Plaza | 2,988 | 12,039 | 2,227 | 3,017 | 14,237 | 17,254 | (4,338 | ) | 12,916 | — | 10/01/1999 | |||||||||||||||||||||||||||||
Bartlett Towne Center | 3,479 | 14,210 | 908 | 3,443 | 15,154 | 18,597 | (4,179 | ) | 14,418 | (5,231 | ) | 05/15/2001 | ||||||||||||||||||||||||||||
Bashas Valley Plaza | 1,414 | 5,818 | 3,855 | 1,422 | 9,665 | 11,087 | (2,950 | ) | 8,137 | — | 12/31/1997 | |||||||||||||||||||||||||||||
Bayshore Plaza | 728 | 1,452 | 1,110 | 728 | 2,562 | 3,290 | (2,009 | ) | 1,281 | — | 08/21/1981 | |||||||||||||||||||||||||||||
Bell Plaza | 1,322 | 7,151 | 150 | 1,322 | 7,301 | 8,623 | (2,796 | ) | 5,827 | (7,503 | ) | 03/20/2008 | ||||||||||||||||||||||||||||
Bellaire Blvd Shopping Center | 124 | 37 | — | 124 | 37 | 161 | (37 | ) | 124 | (1,984 | ) | 11/13/2008 | ||||||||||||||||||||||||||||
Best in the West | 13,191 | 77,159 | 3,528 | 13,194 | 80,684 | 93,878 | (11,953 | ) | 81,925 | (34,984 | ) | 04/28/2005 | ||||||||||||||||||||||||||||
Boca Lyons Plaza | 3,676 | 14,706 | 529 | 3,651 | 15,260 | 18,911 | (3,665 | ) | 15,246 | — | 08/17/2001 | |||||||||||||||||||||||||||||
Boswell Towne Center | 1,488 | — | 1,775 | 615 | 2,648 | 3,263 | (1,202 | ) | 2,061 | — | 12/31/2003 | |||||||||||||||||||||||||||||
Boulevard Market Place | 340 | 1,430 | 465 | 340 | 1,895 | 2,235 | (1,043 | ) | 1,192 | — | 09/01/1990 | |||||||||||||||||||||||||||||
Braeswood Square Shopping Ctr | — | 1,421 | 1,162 | — | 2,583 | 2,583 | (2,133 | ) | 450 | — | 05/28/1969 | |||||||||||||||||||||||||||||
Broadway & Ellsworth | 152 | — | 1,149 | 356 | 945 | 1,301 | (395 | ) | 906 | — | 12/31/2002 | |||||||||||||||||||||||||||||
Broadway Marketplace | 898 | 3,637 | 859 | 906 | 4,488 | 5,394 | (2,108 | ) | 3,286 | — | 12/16/1993 | |||||||||||||||||||||||||||||
Broadway Shopping Center | 234 | 3,166 | 232 | 235 | 3,397 | 3,632 | (2,317 | ) | 1,315 | (2,942 | ) | 03/20/2008 | ||||||||||||||||||||||||||||
Brookwood Marketplace | 7,050 | 15,134 | 6,839 | 7,511 | 21,512 | 29,023 | (2,186 | ) | 26,837 | (19,225 | ) | 08/22/2006 | ||||||||||||||||||||||||||||
Brookwood Square Shopping Ctr | 4,008 | 19,753 | 986 | 4,008 | 20,739 | 24,747 | (3,823 | ) | 20,924 | — | 12/16/2003 | |||||||||||||||||||||||||||||
Brownsville Commons | 1,333 | 5,536 | 14 | 1,333 | 5,550 | 6,883 | (658 | ) | 6,225 | — | 05/22/2006 | |||||||||||||||||||||||||||||
Buena Vista Marketplace | 1,958 | 7,832 | 609 | 1,956 | 8,443 | 10,399 | (2,246 | ) | 8,153 | — | 04/02/2001 | |||||||||||||||||||||||||||||
Bull City Market | 930 | 6,651 | 44 | 930 | 6,695 | 7,625 | (929 | ) | 6,696 | — | 06/10/2005 | |||||||||||||||||||||||||||||
Burbank Station | 20,366 | 28,832 | 669 | 20,378 | 29,489 | 49,867 | (2,550 | ) | 47,317 | — | 07/03/2007 | |||||||||||||||||||||||||||||
Calder Shopping Center | 134 | 278 | 367 | 134 | 645 | 779 | (573 | ) | 206 | — | 03/31/1965 | |||||||||||||||||||||||||||||
Camelback Village Square | — | 8,720 | 525 | — | 9,245 | 9,245 | (3,883 | ) | 5,362 | — | 09/30/1994 | |||||||||||||||||||||||||||||
Camp Creek Mktpl II | 6,169 | 32,036 | 1,240 | 4,697 | 34,748 | 39,445 | (3,888 | ) | 35,557 | (21,977 | ) | 08/22/2006 | ||||||||||||||||||||||||||||
Capital Square | 1,852 | 7,406 | 1,086 | 1,852 | 8,492 | 10,344 | (2,123 | ) | 8,221 | — | 04/04/2002 | |||||||||||||||||||||||||||||
Cedar Bayou Shopping Center | 63 | 307 | 79 | 63 | 386 | 449 | (360 | ) | 89 | — | 09/20/1977 | |||||||||||||||||||||||||||||
Centerwood Plaza | 915 | 3,659 | 1,911 | 914 | 5,571 | 6,485 | (1,185 | ) | 5,300 | — | 04/02/2001 | |||||||||||||||||||||||||||||
Central Plaza | 1,710 | 6,900 | 2,349 | 1,710 | 9,249 | 10,959 | (3,625 | ) | 7,334 | (9,443 | ) | 03/03/1998 | ||||||||||||||||||||||||||||
Centre at Post Oak | 13,731 | 115 | 22,901 | 17,874 | 18,873 | 36,747 | (10,738 | ) | 26,009 | — | 12/31/1996 | |||||||||||||||||||||||||||||
Champions Village | 7,205 | 36,579 | 23 | 7,205 | 36,602 | 43,807 | (12,431 | ) | 31,376 | (33,391 | ) | 11/13/2008 | ||||||||||||||||||||||||||||
Charleston Commons SC | 23,230 | 36,877 | 1,295 | 23,210 | 38,192 | 61,402 | (4,020 | ) | 57,382 | (30,452 | ) | 12/20/2006 | ||||||||||||||||||||||||||||
Cherokee Plaza | 22,219 | 9,718 | 7 | 22,219 | 9,725 | 31,944 | (1,144 | ) | 30,800 | (15,071 | ) | 11/13/2008 | ||||||||||||||||||||||||||||
Chino Hills Marketplace | 7,218 | 28,872 | 9,410 | 7,234 | 38,266 | 45,500 | (9,898 | ) | 35,602 | (22,569 | ) | 08/20/2002 | ||||||||||||||||||||||||||||
College Park Shopping Center | 2,201 | 8,845 | 5,028 | 2,641 | 13,433 | 16,074 | (6,781 | ) | 9,293 | (11,004 | ) | 11/16/1998 | ||||||||||||||||||||||||||||
Colonial Landing | — | 16,390 | 12,097 | — | 28,487 | 28,487 | (4,995 | ) | 23,492 | — | 09/30/2008 | |||||||||||||||||||||||||||||
Colonial Plaza | 10,806 | 43,234 | 9,656 | 10,813 | 52,883 | 63,696 | (13,361 | ) | 50,335 | — | 02/21/2001 |
82
Schedule III
(Continued)
Initial Cost to Company | Gross Amounts at Close of Period | |||||||||||||||||||||||||||||||||||||||
Description | Land | Building and Improvements | Cost Capitalized Subsequent to Acquisition | Land | Building and Improvements | Total (B) | Accumulated Depreciation | Total Costs, Net of Accumulated Depreciation | Encumbrances (A) | Date of Acquisition / Construction | ||||||||||||||||||||||||||||||
Commons at Dexter Lake I | $ | 2,923 | $ | 12,007 | $ | 25 | $ | 2,923 | $ | 12,032 | $ | 14,955 | $ | (3,045 | ) | $ | 11,910 | $ | (9,743 | ) | 11/13/2008 | |||||||||||||||||||
Commons at Dexter Lake II | 2,023 | 6,940 | 67 | 2,023 | 7,007 | 9,030 | (927 | ) | 8,103 | (3,591 | ) | 11/13/2008 | ||||||||||||||||||||||||||||
Coronado Shopping Center | 246 | 1,009 | 650 | 246 | 1,659 | 1,905 | (1,063 | ) | 842 | — | 01/03/1992 | |||||||||||||||||||||||||||||
Countryside Centre | 13,908 | 26,387 | 633 | 13,943 | 26,985 | 40,928 | (2,402 | ) | 38,526 | (26,166 | ) | 07/06/2007 | ||||||||||||||||||||||||||||
Countryside Centre-Albertson’s | 1,616 | 3,432 | — | 1,616 | 3,432 | 5,048 | (300 | ) | 4,748 | — | 07/06/2007 | |||||||||||||||||||||||||||||
Creekside Center | 1,732 | 6,929 | 1,317 | 1,730 | 8,248 | 9,978 | (2,081 | ) | 7,897 | (8,110 | ) | 04/02/2001 | ||||||||||||||||||||||||||||
Crossroads Shopping Center | — | 2,083 | 1,428 | — | 3,511 | 3,511 | (3,256 | ) | 255 | — | 05/11/1972 | |||||||||||||||||||||||||||||
Cullen Place | — | — | 264 | — | 264 | 264 | (182 | ) | 82 | — | 02/17/1966 | |||||||||||||||||||||||||||||
Cullen Plaza Shopping Center | 106 | 2,841 | 272 | 106 | 3,113 | 3,219 | (2,502 | ) | 717 | (6,749 | ) | 03/20/2008 | ||||||||||||||||||||||||||||
Custer Park Shopping Center | 503 | 2,005 | 8,199 | 2,017 | 8,690 | 10,707 | (3,804 | ) | 6,903 | — | 03/31/2000 | |||||||||||||||||||||||||||||
Cypress Pointe | 3,468 | 8,700 | 1,279 | 3,468 | 9,979 | 13,447 | (5,095 | ) | 8,352 | — | 04/04/2002 | |||||||||||||||||||||||||||||
Cypress Station Square | 3,736 | 8,374 | 630 | 2,389 | 10,351 | 12,740 | (8,476 | ) | 4,264 | — | 12/06/1972 | |||||||||||||||||||||||||||||
Dallas Commons Shopping Center | 1,582 | 4,969 | 38 | 1,582 | 5,007 | 6,589 | (554 | ) | 6,035 | — | 09/14/2006 | |||||||||||||||||||||||||||||
Danville Plaza Shopping Center | — | 3,360 | 1,800 | — | 5,160 | 5,160 | (4,837 | ) | 323 | — | 09/30/1960 | |||||||||||||||||||||||||||||
Desert Village Shopping Center | 3,362 | 14,969 | 6 | 3,362 | 14,975 | 18,337 | (64 | ) | 18,273 | (10,970 | ) | 10/28/2010 | ||||||||||||||||||||||||||||
Discovery Plaza | 2,193 | 8,772 | 334 | 2,191 | 9,108 | 11,299 | (2,274 | ) | 9,025 | — | 04/02/2001 | |||||||||||||||||||||||||||||
Eastdale Shopping Center | 1,423 | 5,809 | 1,728 | 1,417 | 7,543 | 8,960 | (2,949 | ) | 6,011 | — | 12/31/1997 | |||||||||||||||||||||||||||||
Eastern Horizon | 10,282 | 16 | (473 | ) | 1,569 | 8,256 | 9,825 | (3,608 | ) | 6,217 | — | 12/31/2002 | ||||||||||||||||||||||||||||
Eastpark Shopping Center | 634 | 3,392 | (3,979 | ) | 47 | — | 47 | — | 47 | — | 12/31/1970 | |||||||||||||||||||||||||||||
Edgebrook Shopping Center | 183 | 1,914 | 119 | 183 | 2,033 | 2,216 | (1,656 | ) | 560 | (6,572 | ) | 03/20/2008 | ||||||||||||||||||||||||||||
Edgewater Marketplace | 4,821 | 11,225 | 11 | 4,821 | 11,236 | 16,057 | (25 | ) | 16,032 | (17,600 | ) | 11/19/2010 | ||||||||||||||||||||||||||||
El Camino Shopping Center | 4,431 | 20,557 | 4,013 | 4,429 | 24,572 | 29,001 | (3,837 | ) | 25,164 | (11,407 | ) | 05/21/2004 | ||||||||||||||||||||||||||||
Embassy Lakes Shopping Center | 2,803 | 11,268 | 242 | 2,803 | 11,510 | 14,313 | (2,376 | ) | 11,937 | — | 12/18/2002 | |||||||||||||||||||||||||||||
Entrada de Oro Plaza SC | 6,041 | 10,511 | 1,231 | 6,115 | 11,668 | 17,783 | (1,209 | ) | 16,574 | — | 01/22/2007 | |||||||||||||||||||||||||||||
Epic Village St. Augustine | 283 | 1,171 | 4,023 | 314 | 5,163 | 5,477 | (412 | ) | 5,065 | — | 09/30/2009 | |||||||||||||||||||||||||||||
Falls Pointe Shopping Center | 3,535 | 14,289 | 123 | 3,522 | 14,425 | 17,947 | (3,103 | ) | 14,844 | (10,610 | ) | 12/17/2002 | ||||||||||||||||||||||||||||
Festival on Jefferson Court | 5,041 | 13,983 | 2,339 | 5,022 | 16,341 | 21,363 | (2,755 | ) | 18,608 | — | 12/22/2004 | |||||||||||||||||||||||||||||
Fiesta Center | — | 4,730 | 1,906 | — | 6,636 | 6,636 | (3,366 | ) | 3,270 | — | 12/31/1990 | |||||||||||||||||||||||||||||
Fiesta Market Place | 137 | 429 | 8 | 137 | 437 | 574 | (429 | ) | 145 | (1,718 | ) | 03/20/2008 | ||||||||||||||||||||||||||||
Fiesta Trails | 8,825 | 32,790 | 2,204 | 8,825 | 34,994 | 43,819 | (7,034 | ) | 36,785 | (23,119 | ) | 09/30/2003 | ||||||||||||||||||||||||||||
Flamingo Pines Shopping Center | 10,403 | 35,014 | (18,514 | ) | 5,335 | 21,568 | 26,903 | (3,259 | ) | 23,644 | — | 01/28/2005 | ||||||||||||||||||||||||||||
Food King Place | 140 | 212 | 481 | 115 | 718 | 833 | (450 | ) | 383 | — | 06/01/1967 | |||||||||||||||||||||||||||||
Fountain Plaza | 1,319 | 5,276 | 632 | 1,095 | 6,132 | 7,227 | (2,722 | ) | 4,505 | — | 03/10/1994 | |||||||||||||||||||||||||||||
Francisco Center | 1,999 | 7,997 | 3,913 | 2,403 | 11,506 | 13,909 | (5,901 | ) | 8,008 | (9,996 | ) | 11/16/1998 | ||||||||||||||||||||||||||||
Freedom Centre | 2,929 | 15,302 | 4,774 | 6,944 | 16,061 | 23,005 | (2,058 | ) | 20,947 | (1,782 | ) | 06/23/2006 | ||||||||||||||||||||||||||||
Galleria Shopping Center | 10,795 | 10,339 | 8,181 | 10,805 | 18,510 | 29,315 | (1,897 | ) | 27,418 | (19,814 | ) | 12/11/2006 | ||||||||||||||||||||||||||||
Galveston Place | 2,713 | 5,522 | 5,804 | 3,279 | 10,760 | 14,039 | (7,365 | ) | 6,674 | (1,916 | ) | 11/30/1983 | ||||||||||||||||||||||||||||
Gateway Plaza | 4,812 | 19,249 | 2,053 | 4,808 | 21,306 | 26,114 | (5,267 | ) | 20,847 | (23,512 | ) | 04/02/2001 | ||||||||||||||||||||||||||||
Gateway Station | 1,622 | 3 | 8,860 | 1,921 | 8,564 | 10,485 | (821 | ) | 9,664 | — | 09/30/2009 | |||||||||||||||||||||||||||||
Gillham Circle | 36 | 201 | 236 | 36 | 437 | 473 | (358 | ) | 115 | — | 05/04/1948 | |||||||||||||||||||||||||||||
Glenbrook Square Shopping Ctr | 632 | 3,576 | 54 | 632 | 3,630 | 4,262 | (1,672 | ) | 2,590 | (5,698 | ) | 03/20/2008 | ||||||||||||||||||||||||||||
Grayson Commons | 3,180 | 9,023 | 81 | 3,163 | 9,121 | 12,284 | (1,417 | ) | 10,867 | (6,562 | ) | 11/09/2004 | ||||||||||||||||||||||||||||
Greenhouse Marketplace | 992 | 4,901 | 160 | 992 | 5,061 | 6,053 | (958 | ) | 5,095 | — | 01/28/2004 | |||||||||||||||||||||||||||||
Greenhouse Marketplace | 3,615 | 17,870 | 1,006 | 3,693 | 18,798 | 22,491 | (3,453 | ) | 19,038 | — | 01/28/2004 | |||||||||||||||||||||||||||||
Griggs Road Shopping Center | 257 | 2,303 | 84 | 257 | 2,387 | 2,644 | (2,151 | ) | 493 | (4,378 | ) | 03/20/2008 | ||||||||||||||||||||||||||||
Hallmark Town Center | 1,368 | 5,472 | 914 | 1,367 | 6,387 | 7,754 | (1,730 | ) | 6,024 | — | 04/02/2001 |
83
Schedule III
(Continued)
Initial Cost to Company | Gross Amounts at Close of Period | |||||||||||||||||||||||||||||||||||||||
Description | Land | Building and Improvements | Cost Capitalized Subsequent to Acquisition | Land | Building and Improvements | Total (B) | Accumulated Depreciation | Total Costs, Net of Accumulated Depreciation | Encumbrances (A) | Date of Acquisition / Construction | ||||||||||||||||||||||||||||||
Harrisburg Plaza | $ | 1,278 | $ | 3,924 | $ | 681 | $ | 1,278 | $ | 4,605 | $ | 5,883 | $ | (3,745 | ) | $ | 2,138 | $ | (11,742 | ) | 03/20/2008 | |||||||||||||||||||
Harrison Pointe Center | 8,230 | 13,493 | 1,091 | 8,210 | 14,604 | 22,814 | (2,882 | ) | 19,932 | — | 01/30/2004 | |||||||||||||||||||||||||||||
Heights Plaza Shopping Center | 58 | 699 | 1,861 | 612 | 2,006 | 2,618 | (1,122 | ) | 1,496 | — | 06/30/1995 | |||||||||||||||||||||||||||||
Heritage Station | 6,253 | 3,989 | (290 | ) | 6,139 | 3,813 | 9,952 | (727 | ) | 9,225 | (5,893 | ) | 12/15/2006 | |||||||||||||||||||||||||||
High House Crossing | 2,576 | 10,305 | 401 | 2,576 | 10,706 | 13,282 | (2,450 | ) | 10,832 | — | 04/04/2002 | |||||||||||||||||||||||||||||
Highland Square | — | — | 1,887 | — | 1,887 | 1,887 | (287 | ) | 1,600 | — | 10/06/1959 | |||||||||||||||||||||||||||||
Hope Valley Commons | 2,439 | 8,487 | 95 | 2,439 | 8,582 | 11,021 | (76 | ) | 10,945 | — | 08/31/2010 | |||||||||||||||||||||||||||||
Horne Street Market | 4,239 | 37 | 7,350 | 4,446 | 7,180 | 11,626 | (652 | ) | 10,974 | — | 06/30/2009 | |||||||||||||||||||||||||||||
Humblewood Shopping Center | 2,215 | 4,724 | 2,894 | 1,166 | 8,667 | 9,833 | (7,825 | ) | 2,008 | (13,333 | ) | 03/09/1977 | ||||||||||||||||||||||||||||
I45/Telephone Rd. | 678 | 11,182 | 593 | 678 | 11,775 | 12,453 | (4,344 | ) | 8,109 | (14,380 | ) | 03/20/2008 | ||||||||||||||||||||||||||||
Independence Plaza | 2,006 | 8,318 | 3,539 | 1,995 | 11,868 | 13,863 | (4,001 | ) | 9,862 | — | 12/31/1997 | |||||||||||||||||||||||||||||
Johnston Road Plaza | 3,671 | 11,829 | 149 | 3,673 | 11,976 | 15,649 | (1,673 | ) | 13,976 | (9,591 | ) | 06/10/2005 | ||||||||||||||||||||||||||||
Killeen Marketplace | 2,262 | 9,048 | 443 | 2,275 | 9,478 | 11,753 | (2,465 | ) | 9,288 | — | 12/21/2000 | |||||||||||||||||||||||||||||
Kohl’s Shopping Center | 2,298 | 9,193 | 550 | 2,298 | 9,743 | 12,041 | (2,523 | ) | 9,518 | (5,600 | ) | 04/24/2000 | ||||||||||||||||||||||||||||
Kroger/Fondren Square | 1,383 | 2,810 | 728 | 1,387 | 3,534 | 4,921 | (3,167 | ) | 1,754 | — | 09/30/1985 | |||||||||||||||||||||||||||||
Lake Pointe Market | 1,404 | — | 4,134 | 1,960 | 3,578 | 5,538 | (1,862 | ) | 3,676 | — | 12/31/2004 | |||||||||||||||||||||||||||||
Lake Washington Square | 1,232 | 4,928 | 834 | 1,235 | 5,759 | 6,994 | (1,282 | ) | 5,712 | — | 06/28/2002 | |||||||||||||||||||||||||||||
Lakeside Marketplace | 6,064 | 22,989 | 2,466 | 6,150 | 25,369 | 31,519 | (2,890 | ) | 28,629 | (18,159 | ) | 08/22/2006 | ||||||||||||||||||||||||||||
Largo Mall | 10,817 | 40,906 | 1,928 | 10,810 | 42,841 | 53,651 | (7,505 | ) | 46,146 | — | 03/01/2004 | |||||||||||||||||||||||||||||
Laveen Village Marketplace | 1,190 | — | 4,705 | 1,006 | 4,889 | 5,895 | (1,775 | ) | 4,120 | — | 08/15/2003 | |||||||||||||||||||||||||||||
Lawndale Shopping Center | 82 | 927 | 447 | 82 | 1,374 | 1,456 | (997 | ) | 459 | (4,098 | ) | 03/20/2008 | ||||||||||||||||||||||||||||
League City Plaza | 1,918 | 7,592 | 800 | 1,918 | 8,392 | 10,310 | (3,564 | ) | 6,746 | (11,367 | ) | 03/20/2008 | ||||||||||||||||||||||||||||
Leesville Towne Centre | 7,183 | 17,162 | 787 | 7,183 | 17,949 | 25,132 | (3,126 | ) | 22,006 | (9,718 | ) | 01/30/2004 | ||||||||||||||||||||||||||||
Little Brier Creek | 942 | 3,393 | 339 | 1,433 | 3,241 | 4,674 | (452 | ) | 4,222 | — | 07/10/2006 | |||||||||||||||||||||||||||||
Little York Plaza Shopping Ctr | 342 | 5,170 | 1,078 | 342 | 6,248 | 6,590 | (4,444 | ) | 2,146 | (4,956 | ) | 03/20/2008 | ||||||||||||||||||||||||||||
Lone Star Pavilion | 2,186 | 10,341 | 151 | 2,221 | 10,457 | 12,678 | (2,934 | ) | 9,744 | — | 04/30/2004 | |||||||||||||||||||||||||||||
Lyons Avenue Shopping Center | 249 | 1,183 | 34 | 249 | 1,217 | 1,466 | (1,015 | ) | 451 | (2,981 | ) | 03/20/2008 | ||||||||||||||||||||||||||||
Madera Village Shopping Center | 3,788 | 13,507 | 900 | 3,816 | 14,379 | 18,195 | (1,484 | ) | 16,711 | (9,495 | ) | 03/13/2007 | ||||||||||||||||||||||||||||
Manhattan Plaza | 4,645 | — | 18,143 | 4,009 | 18,779 | 22,788 | (6,665 | ) | 16,123 | — | 12/31/2004 | |||||||||||||||||||||||||||||
Market at Southside | 953 | 3,813 | 912 | 958 | 4,720 | 5,678 | (1,519 | ) | 4,159 | — | 08/28/2000 | |||||||||||||||||||||||||||||
Market at Town Center-Sgrlnd | 8,600 | 26,627 | 18,148 | 8,600 | 44,775 | 53,375 | (15,146 | ) | 38,229 | — | 12/23/1996 | |||||||||||||||||||||||||||||
Market at Westchase SC | 1,199 | 5,821 | 2,493 | 1,415 | 8,098 | 9,513 | (4,842 | ) | 4,671 | — | 02/15/1991 | |||||||||||||||||||||||||||||
Market Street Shopping Center | 424 | 1,271 | 1,327 | 424 | 2,598 | 3,022 | (1,545 | ) | 1,477 | — | 04/26/1978 | |||||||||||||||||||||||||||||
Marketplace at Seminole Towne | 15,067 | 53,743 | 2,914 | 21,734 | 49,990 | 71,724 | (5,355 | ) | 66,369 | (43,192 | ) | 08/21/2006 | ||||||||||||||||||||||||||||
Markham Square Shopping Center | 1,236 | 3,075 | 2,101 | 1,139 | 5,273 | 6,412 | (4,314 | ) | 2,098 | — | 06/18/1974 | |||||||||||||||||||||||||||||
Markham West Shopping Center | 2,694 | 10,777 | 3,887 | 2,696 | 14,662 | 17,358 | (5,223 | ) | 12,135 | — | 09/18/1998 | |||||||||||||||||||||||||||||
Marshall’s Plaza | 1,802 | 12,315 | 496 | 1,804 | 12,809 | 14,613 | (1,904 | ) | 12,709 | (6,344 | ) | 06/01/2005 | ||||||||||||||||||||||||||||
Mendenhall Commons | 2,655 | 9,165 | 359 | 2,655 | 9,524 | 12,179 | (1,137 | ) | 11,042 | (5,797 | ) | 11/13/2008 | ||||||||||||||||||||||||||||
Menifee Town Center | 1,827 | 7,307 | 4,447 | 1,824 | 11,757 | 13,581 | (2,717 | ) | 10,864 | — | 04/02/2001 | |||||||||||||||||||||||||||||
Millpond Center | 3,155 | 9,706 | 1,458 | 3,161 | 11,158 | 14,319 | (1,768 | ) | 12,551 | — | 07/28/2005 | |||||||||||||||||||||||||||||
Mineral Springs Village | 794 | 3,175 | 209 | 794 | 3,384 | 4,178 | (839 | ) | 3,339 | — | 04/04/2002 | |||||||||||||||||||||||||||||
Mission Center | 1,237 | 4,949 | 6,141 | 2,120 | 10,207 | 12,327 | (4,267 | ) | 8,060 | — | 12/18/1995 | |||||||||||||||||||||||||||||
Mktplace at Seminole Outparcel | 1,000 | — | 51 | 1,046 | 5 | 1,051 | — | 1,051 | — | 08/21/2006 | ||||||||||||||||||||||||||||||
Mohave Crossroads | 3,953 | 63 | 35,505 | 3,128 | 36,393 | 39,521 | (4,918 | ) | 34,603 | — | 12/31/2009 | |||||||||||||||||||||||||||||
Monte Vista Village Center | 1,485 | 58 | 4,900 | 755 | 5,688 | 6,443 | (2,372 | ) | 4,071 | — | 12/31/2004 | |||||||||||||||||||||||||||||
Montgomery Plaza Shopping Ctr | 2,500 | 9,961 | 9,765 | 2,884 | 19,342 | 22,226 | (8,981 | ) | 13,245 | — | 06/09/1993 |
84
Schedule III
(Continued)
Initial Cost to Company | Gross Amounts at Close of Period | |||||||||||||||||||||||||||||||||||||||
Description | Land | Building and Improvements | Cost Capitalized Subsequent to Acquisition | Land | Building and Improvements | Total (B) | Accumulated Depreciation | Total Costs, Net of Accumulated Depreciation | Encumbrances (A) | Date of Acquisition / Construction | ||||||||||||||||||||||||||||||
Moore Plaza | $ | 6,445 | $ | 26,140 | $ | 8,994 | $ | 6,487 | $ | 35,092 | $ | 41,579 | $ | (12,271 | ) | $ | 29,308 | $ | — | 03/20/1998 | ||||||||||||||||||||
North Creek Plaza | 6,915 | 25,625 | 1,748 | 6,954 | 27,334 | 34,288 | (4,464 | ) | 29,824 | — | 08/19/2004 | |||||||||||||||||||||||||||||
North Main Place | 68 | 53 | 522 | 68 | 575 | 643 | (323 | ) | 320 | — | 06/29/1976 | |||||||||||||||||||||||||||||
North Oaks Shopping Center | 3,644 | 22,040 | 2,875 | 3,644 | 24,915 | 28,559 | (17,213 | ) | 11,346 | (34,874 | ) | 03/20/2008 | ||||||||||||||||||||||||||||
North Towne Plaza | 960 | 3,928 | 6,003 | 879 | 10,012 | 10,891 | (6,016 | ) | 4,875 | (10,442 | ) | 02/15/1990 | ||||||||||||||||||||||||||||
North Triangle Shops | — | 431 | 261 | 15 | 677 | 692 | (418 | ) | 274 | — | 01/15/1977 | |||||||||||||||||||||||||||||
Northbrook Shopping Center | 1,629 | 4,489 | 3,011 | 1,713 | 7,416 | 9,129 | (6,481 | ) | 2,648 | (9,530 | ) | 11/06/1967 | ||||||||||||||||||||||||||||
Northwoods Shopping Center | 1,768 | 7,071 | 190 | 1,772 | 7,257 | 9,029 | (1,662 | ) | 7,367 | — | 04/04/2002 | |||||||||||||||||||||||||||||
Oak Forest Shopping Center | 760 | 2,726 | 4,805 | 748 | 7,543 | 8,291 | (4,484 | ) | 3,807 | — | 12/30/1976 | |||||||||||||||||||||||||||||
Oak Grove Market Center | 5,758 | 10,508 | (172 | ) | 5,861 | 10,233 | 16,094 | (1,010 | ) | 15,084 | (7,358 | ) | 06/15/2007 | |||||||||||||||||||||||||||
Oak Park Village | 678 | 3,332 | 25 | 678 | 3,357 | 4,035 | (1,500 | ) | 2,535 | (4,544 | ) | 11/13/2008 | ||||||||||||||||||||||||||||
Oracle Crossings | 4,614 | 18,274 | 26,698 | 10,582 | 39,004 | 49,586 | (3,223 | ) | 46,363 | — | 01/22/2007 | |||||||||||||||||||||||||||||
Oracle Wetmore Shopping Center | 24,686 | 26,878 | 3,839 | 13,813 | 41,590 | 55,403 | (3,619 | ) | 51,784 | — | 01/22/2007 | |||||||||||||||||||||||||||||
Orchard Green Shopping Center | 777 | 1,477 | 1,968 | 786 | 3,436 | 4,222 | (2,181 | ) | 2,041 | — | 10/11/1973 | |||||||||||||||||||||||||||||
Orleans Station | 165 | — | (9 | ) | 93 | 63 | 156 | (37 | ) | 119 | — | 06/29/1976 | ||||||||||||||||||||||||||||
Overton Park Plaza | 9,266 | 37,789 | 2,693 | 9,264 | 40,484 | 49,748 | (7,169 | ) | 42,579 | (21,000 | ) | 10/24/2003 | ||||||||||||||||||||||||||||
Palmer Plaza | 765 | 3,081 | 2,374 | 827 | 5,393 | 6,220 | (3,325 | ) | 2,895 | — | 07/31/1980 | |||||||||||||||||||||||||||||
Palmilla Center | 1,258 | — | 12,817 | 3,280 | 10,795 | 14,075 | (5,366 | ) | 8,709 | — | 12/31/2002 | |||||||||||||||||||||||||||||
Palms of Carrollwood | 3,995 | 16,390 | — | 3,995 | 16,390 | 20,385 | — | 20,385 | — | 12/23/2010 | ||||||||||||||||||||||||||||||
Paradise Marketplace | 2,153 | 8,612 | (2,138 | ) | 1,298 | 7,329 | 8,627 | (3,126 | ) | 5,501 | — | 07/20/1995 | ||||||||||||||||||||||||||||
Park Plaza Shopping Center | 257 | 7,815 | 1,092 | 314 | 8,850 | 9,164 | (8,150 | ) | 1,014 | — | 01/24/1975 | |||||||||||||||||||||||||||||
Parkway Pointe | 1,252 | 5,010 | 605 | 1,260 | 5,607 | 6,867 | (1,532 | ) | 5,335 | (1,088 | ) | 06/29/2001 | ||||||||||||||||||||||||||||
Parliament Square II | 2 | 10 | 1,175 | 3 | 1,184 | 1,187 | (347 | ) | 840 | — | 06/24/2005 | |||||||||||||||||||||||||||||
Parliament Square Shopping Ctr | 443 | 1,959 | 1,067 | 443 | 3,026 | 3,469 | (1,850 | ) | 1,619 | — | 03/18/1992 | |||||||||||||||||||||||||||||
Pavilions at San Mateo | 3,272 | 26,215 | 2,020 | 5,181 | 26,326 | 31,507 | (6,783 | ) | 24,724 | — | 04/30/2004 | |||||||||||||||||||||||||||||
Perimeter Village | 29,701 | 42,337 | (1,577 | ) | 34,404 | 36,057 | 70,461 | (3,479 | ) | 66,982 | (27,345 | ) | 07/03/2007 | |||||||||||||||||||||||||||
Phelan West Shopping Center | 401 | — | 1,216 | 414 | 1,203 | 1,617 | (589 | ) | 1,028 | — | 06/03/1998 | |||||||||||||||||||||||||||||
Phillips Crossing | — | 1 | 27,353 | 872 | 26,482 | 27,354 | (3,025 | ) | 24,329 | — | 09/30/2009 | |||||||||||||||||||||||||||||
Phillips Landing | 1,521 | 1,625 | 10,331 | 1,819 | 11,658 | 13,477 | (1,720 | ) | 11,757 | — | 09/30/2009 | |||||||||||||||||||||||||||||
Pinecrest Plaza Shopping Ctr | 5,837 | 19,166 | 962 | 5,837 | 20,128 | 25,965 | (3,119 | ) | 22,846 | (10,562 | ) | 04/06/2005 | ||||||||||||||||||||||||||||
Pitman Corners | 2,686 | 10,745 | 1,986 | 2,693 | 12,724 | 15,417 | (3,320 | ) | 12,097 | — | 04/08/2002 | |||||||||||||||||||||||||||||
Plantation Centre | 3,463 | 14,821 | 382 | 3,471 | 15,195 | 18,666 | (2,468 | ) | 16,198 | (3,160 | ) | 08/19/2004 | ||||||||||||||||||||||||||||
Prien Lake Plaza | 63 | 960 | 159 | 41 | 1,141 | 1,182 | (176 | ) | 1,006 | — | 07/26/2007 | |||||||||||||||||||||||||||||
Promenade Shopping Center | 1,058 | 4,248 | 652 | 941 | 5,017 | 5,958 | (1,387 | ) | 4,571 | (3,580 | ) | 03/18/2004 | ||||||||||||||||||||||||||||
Prospector’s Plaza | 3,746 | 14,985 | 962 | 3,716 | 15,977 | 19,693 | (4,001 | ) | 15,692 | — | 04/02/2001 | |||||||||||||||||||||||||||||
Publix at Laguna Isles | 2,913 | 9,554 | 107 | 2,914 | 9,660 | 12,574 | (1,788 | ) | 10,786 | (7,530 | ) | 10/31/2003 | ||||||||||||||||||||||||||||
Pueblo Anozira Shopping Center | 2,750 | 11,000 | 4,136 | 2,768 | 15,118 | 17,886 | (6,386 | ) | 11,500 | (11,573 | ) | 06/16/1994 | ||||||||||||||||||||||||||||
Rainbow Plaza | 6,059 | 24,234 | 1,485 | 6,081 | 25,697 | 31,778 | (8,994 | ) | 22,784 | — | 10/22/1997 | |||||||||||||||||||||||||||||
Rainbow Plaza I | 3,883 | 15,540 | 531 | 3,896 | 16,058 | 19,954 | (4,200 | ) | 15,754 | — | 12/28/2000 | |||||||||||||||||||||||||||||
Raintree Ranch Center | 11,442 | 595 | 16,827 | 10,983 | 17,881 | 28,864 | (3,524 | ) | 25,340 | — | 03/31/2008 | |||||||||||||||||||||||||||||
Rancho Encanto | 957 | 3,829 | 4,848 | 962 | 8,672 | 9,634 | (2,543 | ) | 7,091 | — | 04/28/1997 | |||||||||||||||||||||||||||||
Rancho San Marcos Village | 3,533 | 14,138 | 3,754 | 3,887 | 17,538 | 21,425 | (3,799 | ) | 17,626 | — | 02/26/2003 | |||||||||||||||||||||||||||||
Rancho Towne & Country | 1,161 | 4,647 | 364 | 1,166 | 5,006 | 6,172 | (2,061 | ) | 4,111 | — | 10/16/1995 | |||||||||||||||||||||||||||||
Randalls Center/Kings Crossing | 3,570 | 8,147 | 91 | 3,570 | 8,238 | 11,808 | (4,329 | ) | 7,479 | (12,058 | ) | 11/13/2008 | ||||||||||||||||||||||||||||
Randall’s/Norchester Village | 1,852 | 4,510 | 1,416 | 1,904 | 5,874 | 7,778 | (4,090 | ) | 3,688 | — | 09/30/1991 | |||||||||||||||||||||||||||||
Ravenstone Commons | 2,616 | 7,986 | (174 | ) | 2,580 | 7,848 | 10,428 | (1,157 | ) | 9,271 | (5,832 | ) | 03/22/2005 |
85
Schedule III
(Continued)
Initial Cost to Company | Gross Amounts at Close of Period | |||||||||||||||||||||||||||||||||||||||
Description | Land | Building and Improvements | Cost Capitalized Subsequent to Acquisition | Land | Building and Improvements | Total (B) | Accumulated Depreciation | Total Costs, Net of Accumulated Depreciation | Encumbrances (A) | Date of Acquisition / Construction | ||||||||||||||||||||||||||||||
Red Mountain Gateway | $ | 2,166 | $ | 89 | $ | 9,399 | $ | 2,737 | $ | 8,917 | $ | 11,654 | $ | (3,379 | ) | $ | 8,275 | $ | — | 12/31/2003 | ||||||||||||||||||||
Regency Centre | 3,791 | 15,390 | 839 | 2,180 | 17,840 | 20,020 | (2,214 | ) | 17,806 | — | 07/28/2006 | |||||||||||||||||||||||||||||
Regency Panera Tract | 1,825 | 3,126 | 65 | 1,400 | 3,616 | 5,016 | (399 | ) | 4,617 | — | 07/28/2006 | |||||||||||||||||||||||||||||
Reynolds Crossing | 4,276 | 9,186 | 71 | 4,276 | 9,257 | 13,533 | (1,038 | ) | 12,495 | — | 09/14/2006 | |||||||||||||||||||||||||||||
Richmond Square | 1,993 | 953 | 1,776 | 2,966 | 1,756 | 4,722 | (1,029 | ) | 3,693 | — | 12/31/1996 | |||||||||||||||||||||||||||||
River Oaks Shopping Center | 1,354 | 1,946 | 378 | 1,363 | 2,315 | 3,678 | (1,924 | ) | 1,754 | — | 12/04/1992 | |||||||||||||||||||||||||||||
River Oaks Shopping Center | 3,534 | 17,741 | 31,476 | 4,207 | 48,544 | 52,751 | (16,077 | ) | 36,674 | — | 12/04/1992 | |||||||||||||||||||||||||||||
Rockwall Market Center | 5,344 | 22,700 | 1,282 | 5,341 | 23,985 | 29,326 | (5,959 | ) | 23,367 | — | 04/30/2004 | |||||||||||||||||||||||||||||
Rose-Rich Shopping Center | 502 | 2,738 | 2,851 | 486 | 5,605 | 6,091 | (4,956 | ) | 1,135 | — | 03/01/1982 | |||||||||||||||||||||||||||||
Roswell Corners | 5,835 | 20,465 | 928 | 5,835 | 21,393 | 27,228 | (3,771 | ) | 23,457 | (9,534 | ) | 06/24/2004 | ||||||||||||||||||||||||||||
Roswell Corners | 301 | 982 | — | 301 | 982 | 1,283 | (167 | ) | 1,116 | — | 06/24/2004 | |||||||||||||||||||||||||||||
San Marcos Plaza | 1,360 | 5,439 | 242 | 1,358 | 5,683 | 7,041 | (1,449 | ) | 5,592 | — | 04/02/2001 | |||||||||||||||||||||||||||||
Sandy Plains Exchange | 2,468 | 7,549 | 247 | 2,469 | 7,795 | 10,264 | (1,514 | ) | 8,750 | (5,705 | ) | 10/17/2003 | ||||||||||||||||||||||||||||
Scottsdale Horizon | — | 3,241 | 268 | 1 | 3,508 | 3,509 | (322 | ) | 3,187 | — | 01/22/2007 | |||||||||||||||||||||||||||||
Shasta Crossroads | 2,844 | 11,377 | 624 | 2,842 | 12,003 | 14,845 | (2,940 | ) | 11,905 | — | 04/02/2001 | |||||||||||||||||||||||||||||
Shawnee Village S/C | 1,470 | 5,881 | 1,827 | 1,247 | 7,931 | 9,178 | (3,226 | ) | 5,952 | — | 04/19/1996 | |||||||||||||||||||||||||||||
Sheldon Forest Shopping Center | 374 | 635 | 330 | 354 | 985 | 1,339 | (777 | ) | 562 | — | 05/14/1970 | |||||||||||||||||||||||||||||
Sheldon Forest Shopping Center | 629 | 1,955 | 851 | 629 | 2,806 | 3,435 | (2,622 | ) | 813 | — | 05/14/1970 | |||||||||||||||||||||||||||||
Shoppes at Bears Path | 3,252 | 5,503 | 753 | 3,290 | 6,218 | 9,508 | (633 | ) | 8,875 | (3,265 | ) | 03/13/2007 | ||||||||||||||||||||||||||||
Shoppes of Parkland | 5,413 | 16,726 | 935 | 9,506 | 13,568 | 23,074 | (1,714 | ) | 21,360 | (15,183 | ) | 05/31/2006 | ||||||||||||||||||||||||||||
Shoppes of South Semoran | 4,283 | 9,785 | 109 | 5,508 | 8,669 | 14,177 | (797 | ) | 13,380 | (9,563 | ) | 08/31/2007 | ||||||||||||||||||||||||||||
Shops at Kirby Drive | 1,201 | 945 | 185 | 1,202 | 1,129 | 2,331 | (79 | ) | 2,252 | — | 05/27/2008 | |||||||||||||||||||||||||||||
Shops at Three Corners | 6,215 | 9,303 | 5,349 | 6,224 | 14,643 | 20,867 | (7,708 | ) | 13,159 | — | 12/31/1989 | |||||||||||||||||||||||||||||
Silver Creek Plaza | 3,231 | 12,924 | 2,914 | 3,228 | 15,841 | 19,069 | (4,317 | ) | 14,752 | — | 04/02/2001 | |||||||||||||||||||||||||||||
Six Forks Shopping Center | 6,678 | 26,759 | 3,260 | 6,728 | 29,969 | 36,697 | (7,224 | ) | 29,473 | — | 04/04/2002 | |||||||||||||||||||||||||||||
South Semoran - Pad | 1,056 | — | 21 | 1,077 | — | 1,077 | — | 1,077 | — | 09/06/2007 | ||||||||||||||||||||||||||||||
Southampton Center | 4,337 | 17,349 | 1,921 | 4,333 | 19,274 | 23,607 | (4,728 | ) | 18,879 | (21,102 | ) | 04/02/2001 | ||||||||||||||||||||||||||||
Southgate Shopping Center | 571 | 3,402 | 5,208 | 852 | 8,329 | 9,181 | (6,381 | ) | 2,800 | — | 03/26/1958 | |||||||||||||||||||||||||||||
Southgate Shopping Center | 232 | 8,389 | 330 | 232 | 8,719 | 8,951 | (5,061 | ) | 3,890 | (7,668 | ) | 03/20/2008 | ||||||||||||||||||||||||||||
Spring Plaza Shopping Center | 863 | 2,288 | 502 | 863 | 2,790 | 3,653 | (2,176 | ) | 1,477 | (3,114 | ) | 03/20/2008 | ||||||||||||||||||||||||||||
Squaw Peak Plaza | 816 | 3,266 | 1,201 | 818 | 4,465 | 5,283 | (1,669 | ) | 3,614 | — | 12/20/1994 | |||||||||||||||||||||||||||||
Steele Creek Crossing | 310 | 11,774 | 3,245 | 3,281 | 12,048 | 15,329 | (1,840 | ) | 13,489 | (7,467 | ) | 06/10/2005 | ||||||||||||||||||||||||||||
Stella Link Shopping Center | 227 | 423 | 1,501 | 294 | 1,857 | 2,151 | (1,550 | ) | 601 | — | 07/10/1970 | |||||||||||||||||||||||||||||
Stella Link Shopping Center | 2,602 | 1,418 | (101 | ) | 2,602 | 1,317 | 3,919 | (1,226 | ) | 2,693 | — | 08/21/2007 | ||||||||||||||||||||||||||||
Stonehenge Market | 4,740 | 19,001 | 1,130 | 4,740 | 20,131 | 24,871 | (4,913 | ) | 19,958 | (6,407 | ) | 04/04/2002 | ||||||||||||||||||||||||||||
Stony Point Plaza | 3,489 | 13,957 | 1,504 | 3,453 | 15,497 | 18,950 | (3,783 | ) | 15,167 | — | 04/02/2001 | |||||||||||||||||||||||||||||
Studewood Shopping Center | 261 | 552 | — | 261 | 552 | 813 | (552 | ) | 261 | — | 05/25/1984 | |||||||||||||||||||||||||||||
Summer Center | 2,379 | 8,343 | 3,780 | 2,396 | 12,106 | 14,502 | (3,411 | ) | 11,091 | — | 05/15/2001 | |||||||||||||||||||||||||||||
Summerhill Plaza | 1,945 | 7,781 | 1,755 | 1,943 | 9,538 | 11,481 | (2,809 | ) | 8,672 | — | 04/02/2001 | |||||||||||||||||||||||||||||
Sunset 19 Shopping Center | 5,519 | 22,076 | 1,190 | 5,547 | 23,238 | 28,785 | (5,285 | ) | 23,500 | — | 10/29/2001 | |||||||||||||||||||||||||||||
Sunset Shopping Center | 1,121 | 4,484 | 1,170 | 1,120 | 5,655 | 6,775 | (1,581 | ) | 5,194 | — | 04/02/2001 | |||||||||||||||||||||||||||||
Tates Creek Centre | 4,802 | 25,366 | 315 | 5,766 | 24,717 | 30,483 | (4,433 | ) | 26,050 | — | 03/01/2004 | |||||||||||||||||||||||||||||
Taylorsville Town Center | 2,179 | 9,718 | 652 | 2,180 | 10,369 | 12,549 | (2,062 | ) | 10,487 | — | 12/19/2003 | |||||||||||||||||||||||||||||
Texas City Plaza | 143 | 117 | (115 | ) | 143 | 2 | 145 | — | 145 | — | 05/04/1948 | |||||||||||||||||||||||||||||
The Shoppes at Parkwood Ranch | 4,369 | 52 | 9,705 | 2,347 | 11,779 | 14,126 | (1,475 | ) | 12,651 | — | 12/31/2009 | |||||||||||||||||||||||||||||
The Village Arcade | — | 6,657 | 600 | — | 7,257 | 7,257 | (4,463 | ) | 2,794 | — | 12/31/1992 |
86
Schedule III
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Initial Cost to Company | Gross Amounts at Close of Period | |||||||||||||||||||||||||||||||||||||||
Description | Land | Building and Improvements | Cost Capitalized Subsequent to Acquisition | Land | Building and Improvements | Total (B) | Accumulated Depreciation | Total Costs, Net of Accumulated Depreciation | Encumbrances (A) | Date of Acquisition / Construction | ||||||||||||||||||||||||||||||
Thompson Bridge Commons | $ | 3,650 | $ | 9,264 | $ | 4,185 | $ | 3,541 | $ | 13,558 | $ | 17,099 | $ | (1,793 | ) | $ | 15,306 | $ | (6,142 | ) | 04/26/2005 | |||||||||||||||||||
Thousand Oaks Shopping Center | 2,973 | 13,142 | 71 | 2,973 | 13,213 | 16,186 | (2,760 | ) | 13,426 | (15,409 | ) | 03/20/2008 | ||||||||||||||||||||||||||||
TJ Maxx Plaza | 3,400 | 19,283 | 1,286 | 3,430 | 20,539 | 23,969 | (3,637 | ) | 20,332 | — | 03/01/2004 | |||||||||||||||||||||||||||||
Town & Country Shopping Center | — | 3,891 | 4,889 | — | 8,780 | 8,780 | (4,482 | ) | 4,298 | — | 01/31/1989 | |||||||||||||||||||||||||||||
Town and Country - Hammond, LA | 1,030 | 7,404 | 945 | 1,029 | 8,350 | 9,379 | (4,175 | ) | 5,204 | — | 12/30/1997 | |||||||||||||||||||||||||||||
Tropicana Beltway Center | 13,947 | 42,186 | 101 | 13,949 | 42,285 | 56,234 | (7,170 | ) | 49,064 | (33,943 | ) | 11/20/2007 | ||||||||||||||||||||||||||||
Tropicana Marketplace | 2,118 | 8,477 | (2,063 | ) | 1,266 | 7,266 | 8,532 | (3,102 | ) | 5,430 | — | 07/24/1995 | ||||||||||||||||||||||||||||
Tyler Shopping Center | 5 | 21 | 3,663 | 300 | 3,389 | 3,689 | (1,933 | ) | 1,756 | — | 12/31/2002 | |||||||||||||||||||||||||||||
Uintah Gardens | 2,209 | 13,051 | 2,169 | 2,205 | 15,224 | 17,429 | (2,378 | ) | 15,051 | — | 12/22/2005 | |||||||||||||||||||||||||||||
University Palms Shopping Ctr | 2,765 | 10,181 | 136 | 2,765 | 10,317 | 13,082 | (1,959 | ) | 11,123 | (8,116 | ) | 11/13/2008 | ||||||||||||||||||||||||||||
University Place | 500 | 85 | 789 | 500 | 874 | 1,374 | (142 | ) | 1,232 | — | 02/08/2008 | |||||||||||||||||||||||||||||
Valley Shopping Center | 4,293 | 13,736 | 690 | 8,170 | 10,549 | 18,719 | (1,308 | ) | 17,411 | — | 04/07/2006 | |||||||||||||||||||||||||||||
Valley View Shopping Center | 1,006 | 3,980 | 2,373 | 1,006 | 6,353 | 7,359 | (2,614 | ) | 4,745 | — | 11/20/1996 | |||||||||||||||||||||||||||||
Venice Pines Shopping Center | 1,432 | 5,730 | (52 | ) | 1,077 | 6,033 | 7,110 | (1,565 | ) | 5,545 | — | 06/06/2001 | ||||||||||||||||||||||||||||
Village Arcade II Phase III | — | 16 | 15,407 | — | 15,423 | 15,423 | (7,721 | ) | 7,702 | — | 12/31/1996 | |||||||||||||||||||||||||||||
Village Arcade-Phase II | — | 787 | 244 | — | 1,031 | 1,031 | (591 | ) | 440 | — | 12/31/1992 | |||||||||||||||||||||||||||||
Vizcaya Square Shopping Center | 3,044 | 12,226 | 252 | 3,044 | 12,478 | 15,522 | (2,601 | ) | 12,921 | — | 12/18/2002 | |||||||||||||||||||||||||||||
West Jordan Town Center | 4,306 | 17,776 | 1,726 | 4,308 | 19,500 | 23,808 | (3,477 | ) | 20,331 | (13,700 | ) | 12/19/2003 | ||||||||||||||||||||||||||||
Westchase Shopping Center | 3,085 | 7,920 | 6,216 | 3,189 | 14,032 | 17,221 | (11,270 | ) | 5,951 | (10,384 | ) | 08/29/1978 | ||||||||||||||||||||||||||||
Westgate Shopping Center | 245 | 1,425 | 409 | 245 | 1,834 | 2,079 | (1,630 | ) | 449 | — | 07/02/1965 | |||||||||||||||||||||||||||||
Westhill Village Shopping Ctr. | 408 | 3,002 | 4,482 | 437 | 7,455 | 7,892 | (4,829 | ) | 3,063 | — | 05/01/1958 | |||||||||||||||||||||||||||||
Westland Fair | 6,715 | 10,506 | 438 | 4,357 | 13,302 | 17,659 | (4,353 | ) | 13,306 | — | 12/29/2000 | |||||||||||||||||||||||||||||
Westland Fair | 20,847 | — | (10,578 | ) | 7,863 | 2,406 | 10,269 | (1,375 | ) | 8,894 | — | 12/29/2000 | ||||||||||||||||||||||||||||
Westland Terrace Plaza | 1,649 | 6,768 | 2,597 | 2,322 | 8,692 | 11,014 | (1,323 | ) | 9,691 | — | 10/22/2003 | |||||||||||||||||||||||||||||
Westminster Center | 11,215 | 44,871 | 5,460 | 11,204 | 50,342 | 61,546 | (12,859 | ) | 48,687 | (45,580 | ) | 04/02/2001 | ||||||||||||||||||||||||||||
Westminster Plaza | 1,759 | 7,036 | 445 | 1,759 | 7,481 | 9,240 | (1,633 | ) | 7,607 | (6,646 | ) | 06/21/2002 | ||||||||||||||||||||||||||||
Westwood Village Shopping Ctr. | — | 6,968 | 2,522 | — | 9,490 | 9,490 | (7,172 | ) | 2,318 | — | 08/25/1978 | |||||||||||||||||||||||||||||
Whitehall Commons | 2,529 | 6,901 | 177 | 2,522 | 7,085 | 9,607 | (988 | ) | 8,619 | (4,597 | ) | 10/06/2005 | ||||||||||||||||||||||||||||
Winter Park Corners | 2,159 | 8,636 | 389 | 2,159 | 9,025 | 11,184 | (2,201 | ) | 8,983 | — | 09/06/2001 | |||||||||||||||||||||||||||||
Wyoming Mall | 1,919 | 7,678 | 2,481 | 598 | 11,480 | 12,078 | (1,726 | ) | 10,352 | — | 03/31/1995 | |||||||||||||||||||||||||||||
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827,564 | 2,451,670 | 636,385 | 828,164 | 3,087,455 | 3,915,619 | (833,223 | ) | 3,082,396 | (1,015,336 | ) | ||||||||||||||||||||||||||||||
Industrial: | ||||||||||||||||||||||||||||||||||||||||
1625 Diplomat Drive | 506 | 3,107 | 122 | 508 | 3,227 | 3,735 | (426 | ) | 3,309 | — | 12/22/2005 | |||||||||||||||||||||||||||||
1801 Massaro | 865 | 3,461 | (55 | ) | 671 | 3,600 | 4,271 | (698 | ) | 3,573 | — | 04/24/2003 | ||||||||||||||||||||||||||||
3500 Atlanta Industrial Pkwy | 770 | 795 | 286 | 770 | 1,081 | 1,851 | (137 | ) | 1,714 | — | 10/14/2004 | |||||||||||||||||||||||||||||
3550 Southside Industrial Pkwy | 449 | 1,666 | — | 449 | 1,666 | 2,115 | (285 | ) | 1,830 | — | 05/04/2004 | |||||||||||||||||||||||||||||
Atlanta Industrial Park | 1,946 | 7,785 | 1,940 | 2,078 | 9,593 | 11,671 | (2,150 | ) | 9,521 | — | 02/19/2003 | |||||||||||||||||||||||||||||
Atlanta Industrial Park | 657 | 2,626 | 230 | 479 | 3,034 | 3,513 | (724 | ) | 2,789 | — | 02/19/2003 | |||||||||||||||||||||||||||||
Beltway 8 at West Bellfort | 674 | — | 8,748 | 784 | 8,638 | 9,422 | (4,613 | ) | 4,809 | — | 12/31/2001 | |||||||||||||||||||||||||||||
Blankenship Distribution Cntr. | 271 | 1,097 | 636 | 273 | 1,731 | 2,004 | (767 | ) | 1,237 | — | 08/07/1998 | |||||||||||||||||||||||||||||
Braker 2 Business Center | 394 | 1,574 | 465 | 394 | 2,039 | 2,433 | (678 | ) | 1,755 | — | 09/28/2000 | |||||||||||||||||||||||||||||
Brookhollow Business Center | 734 | 2,938 | 2,555 | 736 | 5,491 | 6,227 | (2,682 | ) | 3,545 | — | 07/27/1995 | |||||||||||||||||||||||||||||
Central Plano Business Park | 1,343 | 5,578 | 885 | 1,344 | 6,462 | 7,806 | (1,106 | ) | 6,700 | — | 09/28/2005 | |||||||||||||||||||||||||||||
ClayPoint Distribution Park | 2,413 | 3,117 | 13,605 | 1,433 | 17,702 | 19,135 | (3,295 | ) | 15,840 | — | 12/31/2010 |
87
Schedule III
(Continued)
Initial Cost to Company | Gross Amounts at Close of Period | |||||||||||||||||||||||||||||||||||||||
Description | Land | Building and Improvements | Cost Capitalized Subsequent to Acquisition | Land | Building and Improvements | Total (B) | Accumulated Depreciation | Total Costs, Net of Accumulated Depreciation | Encumbrances (A) | Date of Acquisition / Construction | ||||||||||||||||||||||||||||||
Corporate Center Park | $ | 1,027 | $ | 4,114 | $ | 2,901 | $ | 1,027 | $ | 7,015 | $ | 8,042 | $ | (3,123 | ) | $ | 4,919 | $ | — | 05/23/1997 | ||||||||||||||||||||
Crestview | 7,424 | 555 | (7,132 | ) | 206 | 641 | 847 | (549 | ) | 298 | — | 11/10/1980 | ||||||||||||||||||||||||||||
Crosspoint Warehouse | 441 | 1,762 | 195 | 441 | 1,957 | 2,398 | (615 | ) | 1,783 | — | 12/23/1998 | |||||||||||||||||||||||||||||
Crosswinds C&D | 650 | 5,980 | 86 | 650 | 6,066 | 6,716 | (106 | ) | 6,610 | — | 05/26/2010 | |||||||||||||||||||||||||||||
Enterchange at Northlake A | 4,051 | 7,804 | 99 | 1,624 | 10,330 | 11,954 | (1,001 | ) | 10,953 | (5,449 | ) | 04/20/2007 | ||||||||||||||||||||||||||||
Enterchange at Walthall D | 3,190 | 7,618 | 7,330 | 2,374 | 15,764 | 18,138 | (1,883 | ) | 16,255 | (6,670 | ) | 04/20/2007 | ||||||||||||||||||||||||||||
Freeport Business Center | 3,196 | 10,032 | 1,425 | 3,203 | 11,450 | 14,653 | (1,700 | ) | 12,953 | (7,119 | ) | 07/22/2005 | ||||||||||||||||||||||||||||
Freeport Commerce Center | 598 | 2,918 | 698 | 1,536 | 2,678 | 4,214 | (517 | ) | 3,697 | — | 11/29/2006 | |||||||||||||||||||||||||||||
Hopewell Industrial Center | 926 | 8,074 | 331 | 2,740 | 6,591 | 9,331 | (677 | ) | 8,654 | (3,845 | ) | 11/03/2006 | ||||||||||||||||||||||||||||
Houston Cold Storage Warehouse | 1,087 | 4,347 | 1,974 | 1,072 | 6,336 | 7,408 | (2,243 | ) | 5,165 | — | 06/12/1998 | |||||||||||||||||||||||||||||
Interwest Business Park | 1,449 | 5,795 | 1,556 | 1,461 | 7,339 | 8,800 | (2,420 | ) | 6,380 | — | 12/22/2000 | |||||||||||||||||||||||||||||
ISOM Business Center | 2,661 | 6,699 | 746 | 2,662 | 7,444 | 10,106 | (1,185 | ) | 8,921 | — | 10/24/2005 | |||||||||||||||||||||||||||||
Jupiter Business Center | 588 | 2,353 | 934 | 588 | 3,287 | 3,875 | (1,403 | ) | 2,472 | — | 07/27/1999 | |||||||||||||||||||||||||||||
Jupiter Business Park | 2,684 | 6,097 | 89 | 2,684 | 6,186 | 8,870 | (71 | ) | 8,799 | — | 08/10/2010 | |||||||||||||||||||||||||||||
Kempwood Industrial Park | 734 | 3,044 | 67 | 129 | 3,716 | 3,845 | (1,380 | ) | 2,465 | (2,510 | ) | 08/27/1996 | ||||||||||||||||||||||||||||
Kennesaw 75 | 3,012 | 7,659 | 451 | 3,007 | 8,115 | 11,122 | (1,293 | ) | 9,829 | (5,286 | ) | 02/23/2005 | ||||||||||||||||||||||||||||
Lakeland Industrial Center | 3,265 | 13,059 | 1,831 | 3,266 | 14,889 | 18,155 | (4,446 | ) | 13,709 | (12,534 | ) | 12/06/2001 | ||||||||||||||||||||||||||||
Lakeland Interstate Bus. Park | 1,526 | 9,077 | (271 | ) | 547 | 9,785 | 10,332 | (1,051 | ) | 9,281 | (5,047 | ) | 01/11/2007 | |||||||||||||||||||||||||||
Manana / 35 Business Center | 1,323 | 5,293 | 2,802 | 1,315 | 8,103 | 9,418 | (2,912 | ) | 6,506 | — | 07/27/1999 | |||||||||||||||||||||||||||||
McGraw Hill Distribution Ctr | 3,155 | 18,906 | 2 | 3,157 | 18,906 | 22,063 | (2,324 | ) | 19,739 | — | 02/14/2006 | |||||||||||||||||||||||||||||
Midpoint I-20 Distrib. Center | 1,254 | 7,070 | 5,219 | 2,820 | 10,723 | 13,543 | (1,295 | ) | 12,248 | — | 10/13/2006 | |||||||||||||||||||||||||||||
Midway Business Center | 1,078 | 4,313 | 1,995 | 1,078 | 6,308 | 7,386 | (2,624 | ) | 4,762 | — | 07/27/1999 | |||||||||||||||||||||||||||||
Newkirk Business Center | 686 | 2,745 | 865 | 686 | 3,610 | 4,296 | (1,363 | ) | 2,933 | — | 07/27/1999 | |||||||||||||||||||||||||||||
Northeast Crossing | 392 | 1,568 | 1,268 | 350 | 2,878 | 3,228 | (1,288 | ) | 1,940 | — | 07/27/1999 | |||||||||||||||||||||||||||||
Oak Hill Business Park | 1,294 | 5,279 | 1,172 | 1,299 | 6,446 | 7,745 | (2,160 | ) | 5,585 | — | 10/18/2001 | |||||||||||||||||||||||||||||
O’Connor Road Business Park | 1,028 | 4,110 | 1,218 | 1,029 | 5,327 | 6,356 | (1,657 | ) | 4,699 | — | 12/22/2000 | |||||||||||||||||||||||||||||
Railwood | 7,072 | 7,965 | (1,382 | ) | 2,870 | 10,785 | 13,655 | (4,540 | ) | 9,115 | (6,373 | ) | 12/31/1975 | |||||||||||||||||||||||||||
Randol Mill Place | 371 | 1,513 | 717 | 372 | 2,229 | 2,601 | (1,030 | ) | 1,571 | — | 12/31/1998 | |||||||||||||||||||||||||||||
Red Bird | 406 | 1,622 | 232 | 406 | 1,854 | 2,260 | (697 | ) | 1,563 | — | 09/29/1998 | |||||||||||||||||||||||||||||
Regal Distribution Center | 801 | 3,208 | 1,491 | 806 | 4,694 | 5,500 | (1,527 | ) | 3,973 | — | 04/17/1998 | |||||||||||||||||||||||||||||
Riverview Distribution Center | 1,518 | 9,613 | 257 | 1,521 | 9,867 | 11,388 | (935 | ) | 10,453 | (3,271 | ) | 08/10/2007 | ||||||||||||||||||||||||||||
Rutland 10 Business Center | 738 | 2,951 | 551 | 739 | 3,501 | 4,240 | (1,083 | ) | 3,157 | — | 09/28/2000 | |||||||||||||||||||||||||||||
Sherman Plaza Business Park | 705 | 2,829 | 2,145 | 710 | 4,969 | 5,679 | (2,466 | ) | 3,213 | — | 04/01/1999 | |||||||||||||||||||||||||||||
Southpark 3075 | 1,251 | 8,385 | (31 | ) | 1,213 | 8,392 | 9,605 | (704 | ) | 8,901 | — | 10/03/2007 | ||||||||||||||||||||||||||||
Southpark A, B, C | 1,079 | 4,375 | 797 | 1,080 | 5,171 | 6,251 | (1,610 | ) | 4,641 | — | 09/28/2000 | |||||||||||||||||||||||||||||
Southpoint | 4,167 | 10,967 | 1,353 | 4,168 | 12,319 | 16,487 | (1,625 | ) | 14,862 | — | 12/29/2005 | |||||||||||||||||||||||||||||
Southpoint Business Center | 597 | 2,392 | 1,070 | 600 | 3,459 | 4,059 | (1,307 | ) | 2,752 | — | 05/20/1999 | |||||||||||||||||||||||||||||
Southport Business Park 5 | 562 | 2,172 | 1,402 | 562 | 3,574 | 4,136 | (1,284 | ) | 2,852 | (2,613 | ) | 12/23/1998 | ||||||||||||||||||||||||||||
Space Center Industrial Park | 1,036 | 4,143 | 1,487 | 1,025 | 5,641 | 6,666 | (2,067 | ) | 4,599 | — | 05/29/1998 | |||||||||||||||||||||||||||||
Stonecrest Business Center | 601 | 2,439 | 1,807 | 601 | 4,246 | 4,847 | (1,987 | ) | 2,860 | — | 06/03/1997 | |||||||||||||||||||||||||||||
Tampa East Ind. Portfolio | 5,424 | 18,155 | 1,313 | 5,409 | 19,483 | 24,892 | (2,739 | ) | 22,153 | — | 11/21/2005 | |||||||||||||||||||||||||||||
Town and Country Commerce Ctr | 4,188 | 9,628 | (539 | ) | 4,311 | 8,966 | 13,277 | (763 | ) | 12,514 | (4,990 | ) | 06/29/2007 | |||||||||||||||||||||||||||
West Loop Bus Park - Freezer | 253 | 3,593 | (793 | ) | 76 | 2,977 | 3,053 | (2,044 | ) | 1,009 | — | 09/13/1974 | ||||||||||||||||||||||||||||
West Loop Commerce Center | 2,203 | 1,672 | (821 | ) | 536 | 2,518 | 3,054 | (2,415 | ) | 639 | — | 12/14/1981 | ||||||||||||||||||||||||||||
West-10 Business Center | — | 3,125 | 2,174 | — | 5,299 | 5,299 | (4,098 | ) | 1,201 | — | 08/28/1992 | |||||||||||||||||||||||||||||
West-10 Business Center II | 414 | 1,662 | 731 | 389 | 2,418 | 2,807 | (1,295 | ) | 1,512 | — | 08/20/1997 |
88
Schedule III
(Continued)
Initial Cost to Company | Gross Amounts at Close of Period | |||||||||||||||||||||||||||||||||||||||
Description | Land | Building and Improvements | Cost Capitalized Subsequent to Acquisition | Land | Building and Improvements | Total (B) | Accumulated Depreciation | Total Costs, Net of Accumulated Depreciation | Encumbrances (A) | Date of Acquisition / Construction | ||||||||||||||||||||||||||||||
Westgate Business Center | $ | 1,472 | $ | 3,471 | $ | 2,121 | $ | 1,470 | $ | 5,594 | $ | 7,064 | $ | (1,793 | ) | $ | 5,271 | $ | — | 12/12/2003 | ||||||||||||||||||||
Westlake 125 | 1,174 | 6,630 | 219 | 1,066 | 6,957 | 8,023 | (617 | ) | 7,406 | — | 10/03/2007 | |||||||||||||||||||||||||||||
Wirt Road & I10 | 1,003 | — | 45 | 1,048 | — | 1,048 | — | 1,048 | — | 05/24/2007 | ||||||||||||||||||||||||||||||
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96,776 | 302,525 | 73,614 | 81,848 | 391,067 | 472,915 | (97,473 | ) | 375,442 | (65,707 | ) | ||||||||||||||||||||||||||||||
Other: | ||||||||||||||||||||||||||||||||||||||||
1919 North Loop West | 1,334 | 8,451 | 10,785 | 1,337 | 19,233 | 20,570 | (3,504 | ) | 17,066 | — | 12/05/2006 | |||||||||||||||||||||||||||||
Citadel Building | 3,236 | 6,168 | 7,327 | 534 | 16,197 | 16,731 | (12,442 | ) | 4,289 | — | 12/30/1975 | |||||||||||||||||||||||||||||
Phoenix Office Building | 1,696 | 3,255 | 963 | 1,773 | 4,141 | 5,914 | (547 | ) | 5,367 | — | 01/31/2007 | |||||||||||||||||||||||||||||
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6,266 | 17,874 | 19,075 | 3,644 | 39,571 | 43,215 | (16,493 | ) | 26,722 | — | |||||||||||||||||||||||||||||||
Land Held/Under Development: | ||||||||||||||||||||||||||||||||||||||||
Ambassador Parcel D | 98 | — | — | 98 | — | 98 | — | 98 | — | 10/26/2007 | ||||||||||||||||||||||||||||||
Citadel Drive at Loop 610 | 3,747 | — | (239 | ) | 3,508 | — | 3,508 | — | 3,508 | — | 12/30/1975 | |||||||||||||||||||||||||||||
Crabtree Towne Center | 18,810 | 54 | (8,783 | ) | 10,072 | 9 | 10,081 | — | 10,081 | — | 01/31/2007 | |||||||||||||||||||||||||||||
Cullen Blvd. at East Orem | 172 | — | 3 | 175 | — | 175 | — | 175 | — | 02/24/1975 | ||||||||||||||||||||||||||||||
Curry Ford Road | 1,878 | 7 | (14 | ) | 1,870 | 1 | 1,871 | — | 1,871 | — | 10/05/2007 | |||||||||||||||||||||||||||||
Decatur 215 | 32,525 | 8,200 | (21,414 | ) | 17,526 | 1,785 | 19,311 | — | 19,311 | — | 12/26/2007 | |||||||||||||||||||||||||||||
Epic Village St. Augustine | 1,980 | — | 1,128 | 2,963 | 145 | 3,108 | — | 3,108 | — | 04/09/2008 | ||||||||||||||||||||||||||||||
Festival Plaza | 751 | 6 | 130 | 886 | 1 | 887 | — | 887 | — | 12/08/2006 | ||||||||||||||||||||||||||||||
Gladden Farms | 1,619 | 4 | 357 | 1,869 | 111 | 1,980 | — | 1,980 | — | 08/21/2007 | ||||||||||||||||||||||||||||||
Mainland Mall-Tracts 1 & 2 | 321 | — | 69 | 390 | — | 390 | — | 390 | — | 11/29/1967 | ||||||||||||||||||||||||||||||
Mohave Crossroads | 1,080 | — | 1,246 | 2,136 | 190 | 2,326 | — | 2,326 | — | 06/12/2007 | ||||||||||||||||||||||||||||||
North Towne Plaza | 6,646 | 99 | 7,895 | 9,925 | 4,715 | 14,640 | (84 | ) | 14,556 | — | 12/27/2006 | |||||||||||||||||||||||||||||
NW Freeway at Gessner | 5,052 | — | (3,809 | ) | 1,243 | — | 1,243 | — | 1,243 | — | 11/16/1972 | |||||||||||||||||||||||||||||
Palm Coast Landing Outparcels | 1,302 | 149 | (251 | ) | 811 | 389 | 1,200 | — | 1,200 | — | 04/30/2008 | |||||||||||||||||||||||||||||
Ridgeway Trace | 26,629 | 544 | 13,357 | 16,389 | 24,141 | 40,530 | (674 | ) | 39,856 | — | 11/09/2006 | |||||||||||||||||||||||||||||
River Point at Sheridan | 28,898 | 4,042 | 799 | 15,664 | 18,075 | 33,739 | (641 | ) | 33,098 | (6,720 | ) | 04/01/2010 | ||||||||||||||||||||||||||||
River Pointe Venture | 2,874 | — | (2,063 | ) | 811 | — | 811 | — | 811 | — | 08/04/2004 | |||||||||||||||||||||||||||||
Rock Prairie Marketplace | 2,364 | — | (976 | ) | 1,388 | — | 1,388 | — | 1,388 | — | 05/15/2006 | |||||||||||||||||||||||||||||
Shreveport | 356 | — | 130 | 486 | — | 486 | — | 486 | — | 05/22/1973 | ||||||||||||||||||||||||||||||
South Fulton Crossing | 14,373 | 154 | (7,380 | ) | 6,226 | 921 | 7,147 | (1 | ) | 7,146 | — | 01/10/2007 | ||||||||||||||||||||||||||||
Southern Pines Place | 8,046 | 73 | (1,873 | ) | 6,229 | 17 | 6,246 | — | 6,246 | — | 02/09/2007 | |||||||||||||||||||||||||||||
Stanford Court | 693 | — | 21 | 714 | — | 714 | — | 714 | — | 04/20/1981 | ||||||||||||||||||||||||||||||
Stevens Ranch | 36,939 | 46 | 873 | 37,853 | 5 | 37,858 | — | 37,858 | — | 05/16/2007 | ||||||||||||||||||||||||||||||
Surf City Crossing | 3,220 | 52 | 7,152 | 7,170 | 3,254 | 10,424 | — | 10,424 | — | 12/06/2006 | ||||||||||||||||||||||||||||||
The Shoppes @ Wilderness Oaks | 11,081 | 50 | 1,456 | 12,581 | 6 | 12,587 | — | 12,587 | — | 06/19/2008 | ||||||||||||||||||||||||||||||
The Shoppes at Caveness Farms | 7,235 | 135 | 1,235 | 8,373 | 232 | 8,605 | — | 8,605 | — | 01/17/2006 | ||||||||||||||||||||||||||||||
The Shoppes at Parkwood Ranch | 1,236 | — | 196 | 1,401 | 31 | 1,432 | — | 1,432 | — | 01/02/2007 | ||||||||||||||||||||||||||||||
Tomball Marketplace | 9,616 | 262 | 15,124 | 11,820 | 13,182 | 25,002 | (946 | ) | 24,056 | — | 04/12/2006 | |||||||||||||||||||||||||||||
Village Shopping Center | 64 | 714 | (689 | ) | 89 | — | 89 | — | 89 | — | 12/31/2002 | |||||||||||||||||||||||||||||
West 11th @ Loop 610 | 1,667 | — | 8 | 1,675 | — | 1,675 | — | 1,675 | — | 12/14/1981 | ||||||||||||||||||||||||||||||
Westover Square | 4,435 | 20 | (648 | ) | 3,807 | — | 3,807 | — | 3,807 | — | 08/01/2006 | |||||||||||||||||||||||||||||
Westwood Center | 10,497 | 36 | 6,345 | 5,919 | 10,959 | 16,878 | (550 | ) | 16,328 | — | 01/26/2007 |
89
Schedule III
(Continued)
Initial Cost to Company | Gross Amounts at Close of Period | |||||||||||||||||||||||||||||||||||||||
Description | Land | Building and Improvements | Cost Capitalized Subsequent to Acquisition | Land | Building and Improvements | Total (B) | Accumulated Depreciation | Total Costs, Net of Accumulated Depreciation | Encumbrances (A) | Date of Acquisition / Construction | ||||||||||||||||||||||||||||||
Wilcrest/Bissonnet-Alief Tr1-4 | $ | 7,228 | $ | — | $ | (6,771 | ) | $ | 457 | $ | — | $ | 457 | $ | — | $ | 457 | $ | — | 11/10/1980 | ||||||||||||||||||||
Waterford Village | 5,830 | — | 9,906 | 6,207 | 9,529 | 15,736 | (1,328 | ) | 14,408 | — | 06/11/2004 | |||||||||||||||||||||||||||||
York Plaza | 162 | — | (45 | ) | 117 | — | 117 | — | 117 | — | 08/28/1972 | |||||||||||||||||||||||||||||
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259,424 | 14,647 | 12,475 | 198,848 | 87,698 | 286,546 | (4,224 | ) | 282,322 | (6,720 | ) | ||||||||||||||||||||||||||||||
Balance of Portfolio (not to exceed 5% of total) | 320 | 10 | 59,169 | 6,173 | 53,326 | 59,499 | (19,836 | ) | 39,663 | — | ||||||||||||||||||||||||||||||
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Total of Portfolio | $ | 1,190,350 | $ | 2,786,726 | $ | 800,718 | $ | 1,118,677 | $ | 3,659,117 | $ | 4,777,794 | $ | (971,249 | ) | $ | 3,806,545 | $ | (1,087,763 | ) | ||||||||||||||||||||
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Depreciation is computed using the straight-line method, generally over estimated useful lives of 18-40 years for buildings and 10-20 years for parking lot surfacing and equipment. Tenant and leasehold improvements are depreciated over the remaining life of the lease or the useful life whichever is shorter.
Note A - | Encumbrances do not include $39.2 million outstanding under fixed-rate mortgage debt associated with five properties each held in a tenancy-in-common arrangement and $12.3 million of non-cash debt related items. | |
Note B - | The book value of our net fixed asset exceeds the tax basis by approximately $38 million at December 31, 2010. |
The changes in total cost of the properties for the year ended December 31, 2010, 2009 and 2008 were as follows:
$4,658,39600 | $4,658,39600 | $4,658,39600 | ||||||||||
2010 | 2009 | 2008 | ||||||||||
Balance at beginning of year | $ | 4,658,396 | $ | 4,915,472 | $ | 4,972,344 | ||||||
Additions at cost | 195,499 | 97,557 | 299,090 | |||||||||
Retirements or sales | (70,924 | ) | (316,910 | ) | (303,423 | ) | ||||||
Impairment loss | (5,177 | ) | (37,723 | ) | (52,539 | ) | ||||||
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Balance at end of year | $ | 4,777,794 | $ | 4,658,396 | $ | 4,915,472 | ||||||
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The changes in accumulated depreciation for the year ended December 31, 2010, 2009 and 2008 were as follows:
$4,658,39600 | $4,658,39600 | $4,658,39600 | ||||||||||
2010 | 2009 | 2008 | ||||||||||
Balance at beginning of year | $ | 856,281 | $ | 812,323 | $ | 774,321 | ||||||
Additions at cost | 127,238 | 123,062 | 118,160 | |||||||||
Retirements or sales | (12,270 | ) | (79,104 | ) | (80,158 | ) | ||||||
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Balance at end of year | $ | 971,249 | $ | 856,281 | $ | 812,323 | ||||||
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90
Schedule IV
WEINGARTEN REALTY INVESTORS
MORTGAGE LOANS ON REAL ESTATE
DECEMBER 31, 2010
(Amounts in thousands)
State | Interest Rate | Final Maturity Date | Periodic Payment Terms | Face Amount of Mortgages | Carrying Amount of Mortgages (1) | Principal Amount of Loans Subject to Delinquent Principal or Interest | ||||||||||||||||||||
SHOPPING CENTERS: | ||||||||||||||||||||||||||
FIRST MORTGAGES: | ||||||||||||||||||||||||||
363-410 Burma, LLC | TN | 6.50 | % | 06-01-11 | $213 Annual P&I | $ | 2,393 | $ | 2,393 | |||||||||||||||||
WRI-SRP Cole Park Plaza, LLC | NC | 5.66 | % | 02-01-12 | At Maturity | 6,200 | 6,200 | |||||||||||||||||||
College Park Realty Company | NV | 7.00 | % | 10-31-53 | At Maturity | 3,410 | 3,410 | |||||||||||||||||||
American National Insurance Company | TX | 5.95 | % | 01-01-14 | $136 Annual P&I | 1,502 | 1,502 | |||||||||||||||||||
SHOPPING CENTERS: | ||||||||||||||||||||||||||
CONSTRUCTION LOANS: | ||||||||||||||||||||||||||
Palm Coast Center, LLC | FL | 2.01 | % | 04-13-11 | At Maturity | 22,449 | 22,449 | |||||||||||||||||||
WRI Alliance Riley Venture-Tranche A | CA | 10.50 | % | 11-20-10 | At Maturity | 24,606 | 24,606 | $ | 24,606 | |||||||||||||||||
WRI Alliance Riley Venture-Tranche B | CA | 12.00 | % | 11-20-10 | At Maturity | 259 | 259 | 259 | ||||||||||||||||||
WRI Alliance Riley Venture III | CA | 2.55 | % | 05-20-11 | At Maturity | 32,898 | 32,898 | |||||||||||||||||||
Weingarten I-4 Clermont Landing, LLC | FL | 2.75 | % | 06-14-11 | At Maturity | 21,941 | 21,941 | |||||||||||||||||||
Weingarten Miller Buckingham, LLC | CO | 2.75 | % | 07-09-11 | At Maturity | 17,327 | 17,327 | |||||||||||||||||||
Weingarten Miller Equiwest Salt Lake, LLC | UT | 2.75 | % | 03-24-12 | At Maturity | 15,849 | 15,849 | |||||||||||||||||||
Weingarten Miller MDH Buckingham, LLC | CO | 2.75 | % | 07-09-11 | At Maturity | 43,258 | 43,258 | |||||||||||||||||||
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TOTAL MORTGAGE LOANS ON REAL ESTATE | $ | 192,092 | $ | 192,092 | $ | 24,865 | ||||||||||||||||||||
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(1) | The aggregate cost at December 31, 2010 for federal income tax purposes is $192,092, and there are no prior liens to be disclosed. |
Changes in mortgage loans for the year ended December 31, 2010, 2009 and 2008 are summarized below:
2010 | 2009 | 2008 | ||||||||||
Balance, Beginning of Year | $ | 267,222 | $ | 236,743 | $ | 79,898 | ||||||
New Loans | 4,912 | |||||||||||
Additions to Existing Loans (1) | 11,961 | 54,007 | 201,803 | |||||||||
Collections/Reductions of Principal | (20,124 | ) | (23,528 | ) | (44,958 | ) | ||||||
Reduction of Principal due to Business Combination (2) | (71,879 | ) | ||||||||||
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Balance, End of Year | $ | 192,092 | $ | 267,222 | $ | 236,743 | ||||||
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(1) | The caption above, “Additions to Existing Loans” also includes accrued interest. |
(2) | Effective April 1, 2010, we assumed control of two 50%-owned unconsolidated real estate joint ventures related to a development project in Sheridan, Colorado, which had previously been accounted for under the equity method. This transaction resulted in the consolidation of the real estate joint ventures and is reported as a reduction in the preceding table for the year ended December 31, 2010. |
91