SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR
15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 1-9876
WEINGARTEN REALTY INVESTORS
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TEXAS 74-1464203
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
2600 Citadel Plaza Drive
P.O. Box 924133
Houston, Texas 77292-4133
(Address of principal executive offices) (Zip Code)
(713) 866-6000
(Registrant's telephone number)
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
Title of Each Class Name of Each Exchange on Which Registered
- ----------------------------------------------------------------- ------------------------------------------
Common Shares of Beneficial Interest, $0.03 par value New York Stock Exchange
Series A Cumulative Redeemable Preferred Shares, $0.03 par value New York Stock Exchange
Series C Cumulative Redeemable Preferred Shares, $0.03 par value New York Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES [X] NO [ ].
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
The aggregate market value of the common shares held by non-affiliates
(based upon the closing sale price on the New York Stock Exchange) on February
26, 2002 was approximately $1,736,144,041. As of February 26, 2002 there were
34,385,899 common shares of beneficial interest, $.03 par value, outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Proxy Statement in connection with its Annual
Meeting of Shareholders to be held April 29, 2002 are incorporated by reference
in Part III.
TABLE OF CONTENTS
ITEM NO. PAGE NO.
- -------- --------
PART I
1. Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . 16
4. Submission of Matters to a Vote of Shareholders . . . . . . . . 16
PART II
5. Market for Registrant's Common Shares of Beneficial
Interest and Related Shareholder Matters. . . . . . . . . . . 17
6. Selected Financial Data . . . . . . . . . . . . . . . . . . . . 18
7. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . . 19
7A. Quantitative and Qualitative Disclosures About Market Risk. . . 25
8. Financial Statements and Supplementary Data . . . . . . . . . . 26
9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure . . . . . . . . . . . . . 45
PART III
10. Trust Managers and Executive Officers of the Registrant . . . . 46
11. Executive Compensation. . . . . . . . . . . . . . . . . . . . . 46
12. Security Ownership of Certain Beneficial Owners and
Management. . . . . . . . . . . . . . . . . . . . . . . . . . 46
13. Certain Relationships and Related Transactions. . . . . . . . . 46
PART IV
14. Exhibits, Financial Statement Schedules and Reports on Form 8-K 46
PART I
ITEM 1. BUSINESS
General. Weingarten Realty Investors, a real estate investment trust organized
under the Texas Real Estate Investment Trust Act, and its predecessor entity
began the ownership and development of shopping centers and other commercial
real estate in 1948. WRI is self-advised and self-managed. As of December 31,
2001, we owned or operated under long-term leases interests in 287 developed
income-producing real estate projects. We owned 228 shopping centers located in
the Houston metropolitan area and in other parts of Texas and in California,
Louisiana, Arizona, Nevada, Tennessee, Florida, Arkansas, New Mexico, Kansas,
Colorado, Oklahoma, Missouri, Illinois, North Carolina, Georgia, Mississippi and
Maine. We also owned 57 industrial projects located in Tennessee, Nevada,
Georgia, Florida and Houston, Austin and Dallas, Texas. Additionally, we owned
one multi-family residential project and one office building, which serves, in
part, as WRI's headquarters. Our interests in these projects aggregated
approximately 35.7 million square feet of building area and 135.7 million square
feet of land area. We also owned interests in 40 parcels of unimproved land
under development or held for future development that aggregated approximately
13.6 million square feet.
We currently employ 265 persons and our principal executive offices are
located at 2600 Citadel Plaza Drive, Houston, Texas 77008, and our phone number
is (713) 866-6000.
Investment and Operating Strategy. WRI's investment strategy is to increase
cash flow and the value of its portfolio through intensive, hands-on management
of its existing portfolio of assets, selective remerchandising and renovation of
properties and the acquisition and development of income-producing real estate
assets where the returns on such investments exceed our blended long-term cost
of capital. We will also pursue the disposition of selective non-core assets as
circumstances warrant, and we believe the sales proceeds can be effectively
redeployed into assets with higher growth potential.
At December 31, 2001, neighborhood and community shopping centers represented
87.3% of total revenue, including our share of revenue from unconsolidated joint
ventures and excluding our partners' share of revenue from consolidated joint
ventures, industrial properties accounted for 10.5% and the remainder relates to
one apartment complex and one office building, which serves in part as the
company's corporate headquarters. We expect to continue to focus the future
growth of the portfolio in neighborhood and community centers and bulk and
office/service industrial properties, generally in a ratio similar to our
current holdings. We expect this external growth to occur in the markets in
which we currently operate as well as other markets in the southern half of the
United States. While we do not anticipate investment in other classes of real
estate such as multi-family or office assets, we remain open to opportunistic
uses of our undeveloped land.
WRI 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 or indebtedness may be incurred in connection with acquiring
such investments.
WRI may invest in mortgages; however, we currently have only invested in first
mortgages to 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.
Our operating philosophy is based on 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.
Page 1
Diversification from both a geographic and tenancy perspective is a critical
component of our operating strategy. While over 60% of our properties are
located in the State of Texas, we continue to expand our holdings outside the
state. With respect to tenant diversification, our two largest merchants,
Kroger and Safeway, accounted for 3.8% and 3.0% of our total revenue including
our share of revenue from unconsolidated joint ventures and excluding our
partners' share of revenue from consolidated joint ventures, as of December 31,
2001, respectively. No other tenant accounted for more than 1.3% of our
total revenues.
We finance the growth and working capital needs of the company in a conservative
manner. With a credit rating of A/a3 from Standard & Poors and Moody's Investor
Services, respectively, we have the highest unsecured credit rating of any
public REIT. We intend to maintain this conservative approach to managing our
balance sheet, which, in turn, gives us many options to raising debt or equity
capital when needed. At December 31, 2001, our fixed charge coverage ratio was
2.6 to 1 and our debt to total market capitalization was 36%.
WRI's policies with respect to the investment and operating philosophies
discussed above are reviewed by our Board of Trust Managers periodically and may
be modified without a vote of our shareholders.
Location of Properties. Historically, WRI has emphasized investments in
properties located primarily in the Houston area. Since 1987, we began actively
acquiring properties outside Houston. Of our 327 properties that were owned
or operated under long-term leases as of December 31, 2001, 105 of our 287
developed properties and 12 of our 40 parcels of unimproved land were located in
the Houston metropolitan area. In addition to these properties, we owned 86
developed properties and nine parcels of unimproved land located in other parts
of Texas. Because of our investments in the Houston area, as well as in other
parts of Texas, the Houston and Texas economies affect, to a significant degree,
the business and operations of WRI.
Although the economies of Houston and Texas slowed in 2001, they continued to
outperform the national average. The economy of the entire southwest United
States, where we have our primary operations, also remained strong with respect
to the overall national average. The Houston economy is highly diversified,
with over 50% of base jobs in sectors that are affected marginally, if at all,
by changing energy prices. In 2001, Houston posted a positive job growth rate,
compared to a national net loss. Houston's growth is expected to continue in
2002, although at a more modest rate than previous years, despite instability in
the energy market. As the national and global economies rebound, Houston's
economy should regain momentum heading into 2003. Any downturn in the Houston or
Texas economies could adversely affect us. However, our centers are generally
anchored by supermarkets and drug stores, which deal in basic necessity-type
items and tend to be less affected by economic change.
Competition. WRI is among the five largest publicly-held owners and operators
of neighborhood and community shopping centers in the nation based on revenues,
number of properties and total market capitalization. There are 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 who compete with us in our
trade areas. This results in competition for both acquisitions of existing
income-producing properties and also for prime development sites. There is also
competition for tenants to occupy the space that WRI and its competitors
develop, acquire and manage.
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, our ability to provide a retailer with multiple locations
with anchor tenants and the practice of continuous maintenance and renovation of
our properties.
Financial Information. Additional financial information concerning WRI is
included in the Consolidated Financial Statements located on pages 27 through 45
herein.
Page 2
ITEM 2. PROPERTIES
At December 31, 2001, WRI's real estate properties consisted of 327 locations in
eighteen states. A complete listing of these properties, including the name,
location, building area and land area (in square feet), as applicable, is set
forth below:
SHOPPING CENTERS
Building
Name and Location Area Land Area
- -------------------------------------------------------------------- --------- ----------
HOUSTON AND HARRIS COUNTY, TOTAL. . . . . . . . . . . . . . . . . . 7,208,000 27,758,000
Alabama-Shepherd, S. Shepherd at W. Alabama . . . . . . . . . . . . 28,000 * 88,000 *
Almeda Road, Almeda at Southmore. . . . . . . . . . . . . . . . . . 17,000 37,000
Bayshore Plaza, Spencer Hwy. at Burke Rd. . . . . . . . . . . . . . 36,000 196,000
Bellaire Boulevard, Bellaire at S. Rice . . . . . . . . . . . . . . 35,000 137,000
Bellfort, Bellfort at Southbank . . . . . . . . . . . . . . . . . . 48,000 167,000
Bingle Square, U.S. Hwy. 290 at Bingle. . . . . . . . . . . . . . . 46,000 168,000
Braeswood Square, N. Braeswood at Chimney Rock. . . . . . . . . . . 103,000 422,000
Centre at Post Oak, Westheimer at Post Oak Blvd.. . . . . . . . . . 184,000 505,000
Champions Village, F.M. 1960 at Champions Forest Dr.. . . . . . . . 408,000 1,391,000
Copperfield Village, Hwy. 6 at F.M. 529 . . . . . . . . . . . . . . 163,000 712,000
Crestview, Bissonnet at Wilcrest. . . . . . . . . . . . . . . . . . 9,000 35,000
Crosby, F.M. 2100 at Kenning Road (61%) . . . . . . . . . . . . . . 36,000 * 124,000 *
Cullen Place, Cullen at Reed. . . . . . . . . . . . . . . . . . . . 7,000 30,000
Cullen Plaza, Cullen at Wilmington. . . . . . . . . . . . . . . . . 83,000 318,000
Cypress Pointe, F.M. 1960 at Cypress Station. . . . . . . . . . . . 191,000 737,000
Cypress Village, Louetta at Grant Road. . . . . . . . . . . . . . . 25,000 134,000
Eastpark, Mesa Rd. at Tidwell . . . . . . . . . . . . . . . . . . . 140,000 665,000
Edgebrook, Edgebrook at Gulf Fwy. . . . . . . . . . . . . . . . . . 78,000 360,000
Fiesta Village, Quitman at Fulton . . . . . . . . . . . . . . . . . 30,000 80,000
Fondren Southwest Village, Fondren at W. Bellfort . . . . . . . . . 337,000 1,416,000
Fondren/West Airport, Fondren at W. Airport . . . . . . . . . . . . 62,000 223,000
Glenbrook Square, Telephone Road. . . . . . . . . . . . . . . . . . 76,000 320,000
Griggs Road, Griggs at Cullen . . . . . . . . . . . . . . . . . . . 85,000 422,000
Harrisburg Plaza, Harrisburg at Wayside . . . . . . . . . . . . . . 95,000 334,000
Heights Plaza, 20th St. at Yale . . . . . . . . . . . . . . . . . . 72,000 228,000
Humblewood Shopping Plaza, Eastex Fwy. at F.M. 1960 . . . . . . . . 180,000 784,000
I-45/Telephone Rd. Center, I-45 at Maxwell Street . . . . . . . . . 178,000 819,000
Inwood Village, W. Little York at N. Houston-Rosslyn. . . . . . . . 68,000 305,000
Jacinto City, Market at Baca. . . . . . . . . . . . . . . . . . . . 24,000 * 67,000 *
Kingwood, Kingwood Dr. at Chestnut Ridge. . . . . . . . . . . . . . 155,000 648,000
Landmark, Gessner at Harwin . . . . . . . . . . . . . . . . . . . . 56,000 228,000
Lawndale, Lawndale at 75th St.. . . . . . . . . . . . . . . . . . . 53,000 177,000
Little York Plaza, Little York at E. Hardy. . . . . . . . . . . . . 118,000 483,000
Long Point, Long Point at Wirt (77%). . . . . . . . . . . . . . . . 68,000 * 261,000 *
Lyons Avenue, Lyons at Shotwell . . . . . . . . . . . . . . . . . . 68,000 179,000
Market at Westchase, Westheimer at Wilcrest . . . . . . . . . . . . 87,000 333,000
Miracle Corners, S. Shaver at Southmore . . . . . . . . . . . . . . 86,000 386,000
Northbrook, Northwest Fwy. at W. 34th . . . . . . . . . . . . . . . 175,000 656,000
Table continued on next page
Page 3
Building
Name and Location Area Land Area
- -------------------------------------------------------------------- --------- ----------
HOUSTON AND HARRIS COUNTY, (CONT'D.)
North Main Square, Pecore at N. Main. . . . . . . . . . . . . . . . 18,000 64,000
North Oaks, F.M. 1960 at Veterans Memorial. . . . . . . . . . . . . 322,000 1,246,000
North Triangle, I-45 at F.M. 1960 . . . . . . . . . . . . . . . . . 16,000 113,000
Northway, Northwest Fwy. at 34th. . . . . . . . . . . . . . . . . . 212,000 793,000
Northwest Crossing, N.W. Fwy. at Hollister (75%). . . . . . . . . . 135,000 * 671,000 *
Oak Forest, W. 43rd at Oak Forest . . . . . . . . . . . . . . . . . 164,000 541,000
Orchard Green, Gulfton at Renwick . . . . . . . . . . . . . . . . . 74,000 273,000
Randall's/Cypress Station, F.M. 1960 at I-45. . . . . . . . . . . . 141,000 618,000
Randall's/El Dorado, El Dorado at Hwy. 3. . . . . . . . . . . . . . 119,000 429,000
Randall's/Kings Crossing, Kingwood Dr. at Lake Houston Pkwy.. . . . 128,000 624,000
Randall's/Norchester, Grant at Jones. . . . . . . . . . . . . . . . 110,000 475,000
Richmond Square, Richmond Ave. at W. Loop 610 . . . . . . . . . . . 33,000 135,000
River Oaks, East, W. Gray at Woodhead . . . . . . . . . . . . . . . 71,000 206,000
River Oaks, West, W. Gray at S. Shepherd. . . . . . . . . . . . . . 235,000 609,000
Sheldon Forest, North, I-10 at Sheldon. . . . . . . . . . . . . . . 22,000 131,000
Sheldon Forest, South, I-10 at Sheldon. . . . . . . . . . . . . . . 38,000 * 164,000 *
Shops at Three Corners, S. Main at Old Spanish Trail (70%). . . . . 185,000 * 803,000 *
Southgate, W. Fuqua at Hiram Clark. . . . . . . . . . . . . . . . . 126,000 533,000
Spring Plaza, Hammerly at Campbell. . . . . . . . . . . . . . . . . 56,000 202,000
Steeplechase, Jones Rd. at F.M. 1960. . . . . . . . . . . . . . . . 193,000 849,000
Stella Link, North, Stella Link at S. Braeswood (77%) . . . . . . . 40,000 * 158,000 *
Stella Link, South, Stella Link at S. Braeswood . . . . . . . . . . 15,000 56,000
Studemont, Studewood at E. 14th St. . . . . . . . . . . . . . . . . 28,000 91,000
Ten Blalock Square, I-10 at Blalock . . . . . . . . . . . . . . . . 97,000 321,000
10/Federal, I-10 at Federal . . . . . . . . . . . . . . . . . . . . 132,000 474,000
University Plaza, Bay Area at Space Center. . . . . . . . . . . . . 96,000 424,000
The Village Arcade, University at Kirby . . . . . . . . . . . . . . 191,000 413,000
West Junction, Hwy. 6 at Keith Harrow Dr.. . . . . . . . . . . . . 67,000 264,000
Westbury Triangle, Chimney Rock at W. Bellfort. . . . . . . . . . . 67,000 257,000
Westchase, Westheimer at Wilcrest . . . . . . . . . . . . . . . . . 236,000 766,000
Westhill Village, Westheimer at Hillcroft . . . . . . . . . . . . . 131,000 480,000
TEXAS (EXCLUDING HOUSTON & HARRIS CO.), TOTAL . . . . . . . . . . . 6,553,000 28,129,000
McDermott Commons, McDermott at Custer Rd., Allen . . . . . . . . . 56,000 328,000
Bell Plaza, 45th Ave. at Bell St., Amarillo . . . . . . . . . . . . 129,000 682,000
Coronado, S.W. 34th St. at Wimberly Dr., Amarillo . . . . . . . . . 49,000 201,000
Grand Plaza, Interstate Hwy 40 at Grand Ave., Amarillo. . . . . . . 157,000 637,000
Puckett Plaza, Bell Road, Amarillo. . . . . . . . . . . . . . . . . 133,000 621,000
Spanish Crossroads, Bell St. at Atkinsen St., Amarillo. . . . . . . 72,000 275,000
Wolflin Village, Wolflin Ave. at Georgia St., Amarillo. . . . . . . 191,000 421,000
Brodie Oaks, South Lamar Blvd. at Loop 360, Austin. . . . . . . . . 245,000 1,050,000
Southridge Plaza, William Cannon Dr. at S. 1st St., Austin. . . . . 143,000 565,000
Baywood, State Hwy. 60 at Baywood Dr., Bay City . . . . . . . . . . 40,000 169,000
Table continued on next page
Page 4
Building
Name and Location Area Land Area
- -------------------------------------------------------------------- --------- ----------
TEXAS (EXCLUDING HOUSTON & HARRIS CO.), (CONT'D.)
Calder, Calder at 24th St., Beaumont . . . . . . . . . . . . . . . . 34,000 129,000
North Park Plaza, Eastex Fwy. at Dowlen, Beaumont. . . . . . . . . . 70,000 * 318,000 *
Phelan West, Phelan at 23rd St., Beaumont (67%). . . . . . . . . . . 16,000 * 59,000 *
Phelan, Phelan at 23rd St, Beaumont. . . . . . . . . . . . . . . . . 12,000 63,000
Southgate, Calder Ave. at 6th St., Beaumont. . . . . . . . . . . . . 34,000 118,000
Westmont, Dowlen at Phelan, Beaumont . . . . . . . . . . . . . . . . 98,000 507,000
Lone Star Pavilions, Texas at Lincoln Ave., College Station (30%). . 32,000 * 132,000 *
Parkway Square, Southwest Pkwy at Texas Ave., College Station. . . . 158,000 685,000
Montgomery Plaza, Loop 336 West at I-45, Conroe. . . . . . . . . . . 317,000 1,179,000
River Pointe, I-45 at Loop 336, Conroe . . . . . . . . . . . . . . . 46,000 329,000
Moore Plaza, S. Padre Island Dr. at Staples, Corpus Christi. . . . . 355,000 1,492,000
Portairs, Ayers St. at Horne Rd., Corpus Christi . . . . . . . . . . 118,000 416,000
Dickinson, I-45 at F.M. 517, Dickinson (72%) . . . . . . . . . . . . 55,000 * 225,000 *
Coronado Hills, Mesa at Balboa, El Paso. . . . . . . . . . . . . . . 127,000 575,000
Southcliff, I-20 at Grandbury Rd., Ft. Worth . . . . . . . . . . . . 116,000 568,000
Broadway, Broadway at 59th St., Galveston (77%). . . . . . . . . . . 58,000 * 170,000 *
Galveston Place, Central City Blvd. at 61st St., Galveston . . . . . 210,000 828,000
Food King Place, 25th St. at Avenue P, Galveston . . . . . . . . . . 28,000 78,000
Fiesta, Belt Line Rd. at Marshall Dr., Grand Prairie . . . . . . . . 32,000 236,000
Killeen Marketplace, 3200 E. Central Texas Expressway, Killeen . . . 115,000 512,000
Cedar Bayou, Bayou Rd., La Marque. . . . . . . . . . . . . . . . . . 15,000 51,000
Corum South, I-45 at F.M. 518, League City . . . . . . . . . . . . . 112,000 680,000
Caprock Center, 50th at Boston Ave., Lubbock . . . . . . . . . . . . 375,000 1,255,000
Central Plaza, Loop 289 at Slide Rd., Lubbock. . . . . . . . . . . . 152,000 529,000
Town & Country, 4th St. at University, Lubbock . . . . . . . . . . . 134,000 339,000
Angelina Village, Hwy. 59 at Loop 287, Lufkin. . . . . . . . . . . . 257,000 1,835,000
Independence Plaza, Town East Blvd., Mesquite. . . . . . . . . . . . 179,000 787,000
McKinney Centre, US Hwy 380 at U.S.Hwy 75, McKinney. . . . . . . . . 34,000 199,000
Murphy Crossing, F.M. 544 at Murphy Rd., Murphy. . . . . . . . . . . 33,000 158,000
University Park Plaza, University Dr. at E. Austin St., Nacogdoches. 78,000 283,000
Custer Park, SWC Custer Road at Parker Road, Plano . . . . . . . . . 119,000 376,000
Gillham Circle, Gillham Circle at Thomas, Port Arthur. . . . . . . . 33,000 94,000
Village, 9th Ave. at 25th St., Port Arthur (77%) . . . . . . . . . . 40,000 * 187,000 *
Porterwood, Eastex Fwy. at F.M. 1314, Porter . . . . . . . . . . . . 99,000 487,000
Rockwall, I-30 at Market Center Street, Rockwall (30%) . . . . . . . 66,000 * 280,000 *
Plaza, Ave. H at U.S. Hwy. 90A, Rosenberg. . . . . . . . . . . . . . 41,000 * 135,000 *
Rose-Rich, U.S. Hwy. 90A at Lane Dr., Rosenberg. . . . . . . . . . . 104,000 386,000
Bandera Village, Bandera at Hillcrest, San Antonio . . . . . . . . . 57,000 607,000
Oak Park Village, Nacogdoches at New Braunfels, San Antonio. . . . . 65,000 221,000
Parliament Square, W. Ave. at Blanco, San Antonio. . . . . . . . . . 65,000 260,000
San Pedro Court, San Pedro at Hwy. 281N., San Antonio. . . . . . . . 2,000 18,000
Valley View, West Ave. at Blanco Rd., San Antonio. . . . . . . . . . 90,000 341,000
Market at Town Center, Town Center Blvd., Sugar Land . . . . . . . . 392,000 1,732,000
Williams Trace, Hwy. 6 at Williams Trace, Sugar Land . . . . . . . . 263,000 1,187,000
New Boston Road, New Boston at Summerhill, Texarkana . . . . . . . . 97,000 335,000
Island Market Place, 6th St. at 9th Ave., Texas City . . . . . . . . 27,000 90,000
Table continued on next page
Page 5
Building
Name and Location Area Land Area
- ------------------------------------------------------------------------ --------- ----------
TEXAS (EXCLUDING HOUSTON & HARRIS CO.), (CONT'D.)
Mainland, Hwy. 1765 at Hwy. 3, Texas City. . . . . . . . . . . . . . . . 56,000 279,000
Palmer Plaza, F.M. 1764 at 34th St., Texas City. . . . . . . . . . . . . 97,000 367,000
Broadway, S. Broadway at W. 9th St., Tyler (77%) . . . . . . . . . . . . 46,000 * 200,000 *
Crossroads, I-10 at N. Main, Vidor . . . . . . . . . . . . . . . . . . . 116,000 516,000
Watauga Towne Center, Hwy. 377 at Bursey Rd., Watauga. . . . . . . . . . 63,000 347,000
CALIFORNIA, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,480,000 10,353,000
Centerwood Plaza, Lakewood Blvd. at Alondra Dr., Bellflower. . . . . . . 71,000 333,000
Southampton Center, IH-780 at Southampton Rd., Benecia . . . . . . . . . 162,000 596,000
580 Marketplace, E. Castro Valley at Hwy. I-580, Castro Valley . . . . . 102,000 444,000
Buena Vista Marketplace, Huntington Dr. at Buena Vista St., Duarte . . . 91,000 322,000
Fremont Gateway Plaza, Paseo Padre Pkwy. Walnut Ave., Fremont. . . . . . 195,000 650,000
Hallmark Town Center, W. Cleveland Ave. at Stephanie Ln., Madera . . . . 85,000 365,000
Menifee Town Center, Antelope Rd. at Newport Rd., Menifee. . . . . . . . 83,000 658,000
Prospectors Plaza, Missouri Flat Rd. at US Hwy. 50, Placerville. . . . . 219,000 873,000
Shasta Crossroads, Churn Creek Rd. at Dana Dr., Redding. . . . . . . . . 121,000 520,000
Ralph's Redondo, Hawthorne Blvd. at 182nd St., Redondo Beach . . . . . . 67,000 431,000
Arcade Square, Watt Ave. at Whitney Ave., Sacramento . . . . . . . . . . 76,000 234,000
Discovery Plaza, W. El Camino Ave. at Truxel Rd., Sacramento . . . . . . 93,000 417,000
Summerhill Plaza, Antelope Rd. at Lichen Dr., Sacramento . . . . . . . . 134,000 704,000
Silver Creek Plaza, E. Capital Expwy. at Silver Creek Rd., San Jose. . . 134,000 573,000
San Marcos Plaza, San Marcos Blvd. at Rancho Santa Fe Dr., San Marcos. . 36,000 116,000
Stony Point Plaza, Stony Point Rd. at Hwy, 12, Santa Rosa. . . . . . . . 199,000 619,000
Sunset Center, Sunset Avenue at State Hwy. 12, Suisun City . . . . . . . 85,000 359,000
Creekside Center, Alamo Dr. at Nut Creek Rd., Vacaville. . . . . . . . . 116,000 400,000
Westminster Center, Westminster Blvd. at Golden West St., Westminster. . 411,000 1,739,000
FLORIDA, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,796,000 7,668,000
Boca Lyons, Glades Rd. at Lyons Rd., Boca Raton. . . . . . . . . . . . . 117,000 545,000
Sunset Point 19, US Hwy. 19 at Sunset Pointe Rd., Clearwater . . . . . . 273,000 1,078,000
Argyle Village, Blanding at Argyle Forest Blvd., Jacksonville. . . . . . 305,000 1,329,000
Colonial Plaza, Colonial Dr. at Primrose Dr., Orlando. . . . . . . . . . 488,000 2,009,000
Market at Southside, Michigan Ave. at Delaney Ave., Orlando. . . . . . . 97,000 348,000
Pembroke Commons, University at Pines Blvd., Pembroke Pines. . . . . . . 316,000 1,394,000
Venice Pines Plaza, Center Rd. at Jacaranda Blvd., Venice. . . . . . . . 97,000 565,000
Winter Park Corners, Aloma Ave. at Lakemont Ave., Winter Park. . . . . . 103,000 400,000
NEVADA, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,610,000 7,322,000
Eastern Horizon, Eastern Ave. at Horizon Ridge Pkwy., Henderson . . . . 15,000 93,000
Francisco Centre, E. Desert Inn Rd. at S. Eastern Ave., Las Vegas. . . . 116,000 639,000
Mission Center, Flamingo Rd. at Maryland Pkwy, Las Vegas . . . . . . . . 152,000 570,000
Paradise Marketplace, Flamingo Rd. at Sandhill, Las Vegas. . . . . . . . 149,000 536,000
Rainbow Plaza, Rainbow Blvd. at Charleston Blvd., Las Vegas. . . . . . . 410,000 1,548,000
Rancho Towne & Country, Rancho Dr. at Charleston Blvd., Las Vegas. . . . 87,000 350,000
Tropicana Marketplace, Tropicana at Jones Blvd., Las Vegas . . . . . . . 143,000 519,000
Westland Fair, Charleston Blvd. At Decatur Blvd., Las Vegas. . . . . . . 374,000 2,346,000
College Park, E. Lake Mead Blvd. at Civic Ctr. Dr., North Las Vegas. . . 164,000 721,000
Table continued on next page
Page 6
Building
Name and Location Area Land Area
- -------------------------------------------------------------------- --------- ----------
LOUISIANA, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . 1,558,000 6,606,000
Siegen Plaza, Siegen Lane at Honore Lane, Baton Rouge . . . . . . . 30,000 179,000
Park Terrace, U.S. Hwy. 171 at Parish, DeRidder . . . . . . . . . . 137,000 520,000
Town & Country Plaza, U.S. Hwy. 190 West, Hammond . . . . . . . . . 215,000 915,000
Ambassador Plaza, Ambassador Caffery at W. Congress, Lafayette. . . 29,000 173,000
Westwood Village, W. Congress at Bertrand, Lafayette. . . . . . . . 141,000 942,000
Conn's Building, Ryan at 17th St., Lake Charles . . . . . . . . . . 23,000 36,000
East Town, 3rd Ave. at 1st St., Lake Charles. . . . . . . . . . . . 33,000 * 117,000 *
14/Park Plaza, Hwy. 14 at General Doolittle, Lake Charles . . . . . 207,000 654,000
Kmart Plaza, Ryan St., Lake Charles . . . . . . . . . . . . . . . . 105,000 * 406,000 *
Southgate, Ryan at Eddy, Lake Charles . . . . . . . . . . . . . . . 171,000 628,000
Danville Plaza, Louisville at 19th, Monroe. . . . . . . . . . . . . 143,000 539,000
Orleans Station, Paris, Robert E. Lee at Chatham, New Orleans . . . 5,000 31,000
Southgate, 70th at Mansfield, Shreveport t. . . . . . . . . . . . . 73,000 359,000
Westwood, Jewella at Greenwood, Shreveport. . . . . . . . . . . . . 113,000 393,000
University Place, 70th Street at Youree Dr., Shreveport . . . . . . 133,000 714,000
ARIZONA, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . 1,190,000 5,316,000
Palmilla Center, Dysart Rd. at McDowell Rd., Avondale . . . . . . . 45,000 226,000
University Plaza, Plaza Way at Milton Rd., Flagstaff. . . . . . . . 162,000 918,000
Val Vista Towne Center, Warner at Val Vista Rd., Gilbert. . . . . . 93,000 366,000
Arrowhead Festival, 75th Ave. at W. Bell Rd., Glendale. . . . . . . 26,000 157,000
Fry's Ellsworth Plaza, Broadway Rd. at Ellsworth Rd., Mesa. . . . . 5,000 22,000
Camelback Village Square, Camelback at 7th Avenue, Phoenix. . . . . 135,000 543,000
Squaw Peak Plaza, 16th Street at Glendale Ave., Phoenix . . . . . . 61,000 220,000
Rancho Encanto, 35th Avenue at Greenway Rd., Phoenix. . . . . . . . 71,000 259,000
Fountain Plaza, 77th St. at McDowell, Scottsdale. . . . . . . . . . 112,000 460,000
Broadway Marketplace, Broadway at Rural, Tempe. . . . . . . . . . . 83,000 347,000
Fry's Valley Plaza, S. McClintock at E. Southern, Tempe . . . . . . 145,000 570,000
Pueblo Anozira, McClintock Dr. at Guadalupe Rd., Tempe. . . . . . . 152,000 769,000
Desert Square Shopping Center, Golf Links at Kolb, Tucson . . . . . 100,000 459,000
NEW MEXICO, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . 952,000 4,024,000
Eastdale, Candelaria Rd. at Eubank Blvd., Albuquerque . . . . . . . 111,000 601,000
North Towne Plaza, Academy Rd. at Wyoming Blvd., Albuquerque. . . . 103,000 607,000
Pavilions at San Mateo, I-40 at San Mateo, Albuquerque (30%). . . . 59,000 * 237,000 *
Valle del Sol, Isleta Blvd. at Rio Bravo, Albuquerque . . . . . . . 106,000 475,000
Wyoming Mall, Academy Rd. at Northeastern, Albuquerque. . . . . . . 326,000 1,309,000
DeVargas, N. Guadalupe at Paseo de Peralta, Santa Fe. . . . . . . . 247,000 795,000
KANSAS, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . 784,000 3,418,000
West State Plaza, State Ave. at 78th St., Kansas City . . . . . . . 94,000 401,000
Regency Park, 93rd St. at Metcalf Ave., Overland Park . . . . . . . 202,000 742,000
Westbrooke Village, Quivira Rd. at 75th St., Shawnee. . . . . . . . 237,000 1,270,000
Shawnee Village, Shawnee Mission Pkwy. at Quivera Rd., Shawnee. . . 135,000 561,000
Kohl's, Wanamaker Rd. at S.W. 17th St., Topeka. . . . . . . . . . . 116,000 444,000
Table continued on next page
Page 7
Building
Name and Location Area Land Area
- -------------------------------------------------------------------- --------- ----------
OKLAHOMA, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . 702,000 3,173,000
Bryant Square, Bryant Ave. at 2nd St., Edmond. . . . . . . . . . . . 282,000 1,259,000
Market Boulevard, E. Reno Ave. at N. Douglas Ave., Midwest City. . . 36,000 142,000
Town & Country, Reno Ave at North Air Depot, Midwest City. . . . . . 138,000 540,000
Windsor Hills Center, Meridian at Windsor Place, Oklahoma City . . . 246,000 1,232,000
ARKANSAS, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . 597,000 2,568,000
Evelyn Hills, College Ave. at Abshier, Fayetteville. . . . . . . . . 125,000 750,000
Broadway Plaza, Broadway at W. Roosevelt, Little Rock. . . . . . . . 16,000 148,000
Geyer Springs, Geyer Springs at Baseline, Little Rock. . . . . . . . 153,000 414,000
Markham Square, W. Markham at John Barrow, Little Rock . . . . . . . 134,000 535,000
Markham West, 11400 W. Markham, Little Rock (67%). . . . . . . . . . 119,000 * 515,000 *
Westgate, Cantrell at Bryant, Little Rock. . . . . . . . . . . . . . 50,000 206,000
TENNESSEE, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . 520,000 2,089,000
Bartlett Towne Center, Bartlett Blvd. at Stage Rd., Bartlett . . . . 179,000 774,000
Commons at Dexter Lake, Dexter at N. Germantown, Memphis . . . . . . 167,000 671,000
Highland Square, Summer at Highland, Memphis . . . . . . . . . . . . 20,000 84,000
Summer Center, Summer Ave. at Waling Rd., Memphis. . . . . . . . . . 154,000 560,000
MISSOURI, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . 338,000 1,101,000
Ballwin Plaza, Manchester Rd. at Vlasis Dr., Ballwin . . . . . . . . 203,000 653,000
PineTree Plaza, U.S. Hwy. 50 at Hwy. 291, Lee's Summit . . . . . . . 135,000 448,000
COLORADO, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . 291,000 1,281,000
Bridges at Smoky Hill, Smoky Hill Rd. at S. Picadilly St., Aurora. . 6,000 * 28,000 *
Carefree, Academy Blvd. at N. Carefree Circle, Colorado Springs. . . 127,000 460,000
Academy Place, Academy Blvd. at Union Blvd., Colorado Springs. . . . 84,000 404,000
Gold Creek Center, Hwy. 86 at Elizabeth St., Elizabeth . . . . . . . 14,000 * 55,000 *
City Center Englewood, S. Santa Fe at Hampden Ave., Englewood. . . . 15,000 * 35,000 *
Crossing at Stonegate, Jordon Rd. at Lincoln Ave., Parker (37.5%). . 45,000 * 299,000 *
MAINE, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124,000 482,000
The Promenade, Essex at Summit, Lewiston . . . . . . . . . . . . . . 124,000 * 482,000 *
MISSISSIPPI, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . 117,000 581,000
Southaven Commons, Goodman Rd. at Swinnea Rd., Southaven . . . . . . 117,000 581,000
ILLINOIS, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . 103,000 503,000
Lincoln Place Centre, Hwy. 59, Fairview Heights. . . . . . . . . . . 103,000 503,000
NORTH CAROLINA, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . 80,000 461,000
Parkway Pointe, Cory Parkway and S. R. 1011, Cary. . . . . . . . . . 80,000 461,000
Table continued on next page
Page 8
Building
Name and Location Area Land Area
- ---------------------------------------------------------------------- --------- ---------
INDUSTRIAL
HOUSTON AND HARRIS COUNTY, TOTAL . . . . . . . . . . . . . . . . . . . 3,404,000 9,746,000
Beltway 8 Business Park, Beltway 8 at Petersham Dr.. . . . . . . . . . 158,000 499,000
Blankenship Building, Kempwood Drive . . . . . . . . . . . . . . . . . 59,000 175,000
Brookhollow Business Center, Dacoma at Directors Row . . . . . . . . . 133,000 405,000
Cannon/So. Loop Business Park, Cannon Street (20%) . . . . . . . . . . 59,000 * 96,000 *
Central Park North, W. Hardy Rd. at Kendrick Dr. . . . . . . . . . . . 155,000 466,000
Central Park Northwest VI, Central Pkwy. at Dacoma . . . . . . . . . . 175,000 518,000
Central Park Northwest VII, Central Pkwy. at Dacoma. . . . . . . . . . 103,000 283,000
Claywood Industrial Park, Clay at Hollister. . . . . . . . . . . . . . 330,000 1,761,000
Crosspoint Warehouse, Crosspoint . . . . . . . . . . . . . . . . . . . 73,000 179,000
Jester Plaza, West T.C. Jester . . . . . . . . . . . . . . . . . . . . 101,000 244,000
Kempwood Industrial, Kempwood Dr. at Blankenship Dr. . . . . . . . . . 113,000 327,000
Kempwood Industrial, Kempwood Dr. at Blankenship Dr. (20%) . . . . . . 42,000 * 106,000 *
Lathrop Warehouse, Lathrop St. at Larimer St. (20%). . . . . . . . . . 51,000 * 87,000 *
Levitz Furniture Warehouse, Loop 610 South . . . . . . . . . . . . . . 184,000 450,000
Navigation Business Park, Navigation at N. York (20%). . . . . . . . . 47,000 * 111,000 *
Northway Park II, Loop 610 East at Homestead (20%) . . . . . . . . . . 61,000 * 149,000 *
Park Southwest, Stancliff at Brooklet. . . . . . . . . . . . . . . . . 52,000 160,000
Railwood Industrial Park, Mesa at U.S. 90. . . . . . . . . . . . . . . 616,000 1,651,000
Railwood Industrial Park, Mesa at U.S. 90 (20%). . . . . . . . . . . . 99,000 * 213,000 *
South Loop Business Park, S. Loop at Long Dr.. . . . . . . . . . . . . 46,000 * 103,000 *
Southport Business Park 5, South Loop 610. . . . . . . . . . . . . . . 157,000 358,000
Southwest Park II, Rockley Road. . . . . . . . . . . . . . . . . . . . 68,000 216,000
Stonecrest Business Center, Wilcrest at Fallstone. . . . . . . . . . . 111,000 308,000
West-10 Business Center, Wirt Rd. at I-10. . . . . . . . . . . . . . . 141,000 331,000
West-10 Business Center II, Wirt Rd. at I-10 . . . . . . . . . . . . . 83,000 149,000
West Loop Commerce Center, W. Loop N. at I-10. . . . . . . . . . . . . 34,000 91,000
610 and 11th St. Warehouse, Loop 610 at 11th St. . . . . . . . . . . . 105,000 202,000
610 and 11th St. Warehouse, Loop 610 at 11th St. (20%) . . . . . . . . 48,000 * 108,000 *
TEXAS (EXCLUDING HOUSTON & HARRIS CO.), TOTAL. . . . . . . . . . . . . 2,783,000 6,999,000
Randol Mill Place, Randol Mill Road, Arlington . . . . . . . . . . . . 55,000 178,000
Braker 2 Business Center, Kramer Ln. at Metric Blvd., Austin . . . . . 27,000 93,000
Corporate Center I & II, Putnam Dr. at Research Blvd., Austin. . . . . 117,000 326,000
Oak Hills Industrial Park, Industrial Oaks Blvd., Austin . . . . . . . 90,000 340,000
Rutland 10 Business Center, Metric Blvd. At Centimeter Circle, Austin. 54,000 139,000
Southpark A,B,C., East St. Elmo Rd. at Woodward St., Austin. . . . . . 78,000 238,000
Southpoint Service Center, Burleson at Promontory Point Dr., Austin. . 54,000 234,000
Walnut Creek Office Park, Cameron Rd., Austin. . . . . . . . . . . . . 34,000 122,000
Wells Branch Corporate Center, Wells Branch Pkwy., Austin. . . . . . . 60,000 183,000
Midway Business Center, Midway at Boyington, Carrollton. . . . . . . . 142,000 309,000
Manana Office Center, I-35 at Manana, Dallas . . . . . . . . . . . . . 223,000 473,000
Newkirk Service Center, Newkirk near N.W. Hwy., Dallas . . . . . . . . 106,000 223,000
Table continued on next page
Page 9
Building
Name and Location Area Land Area
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INDUSTRIAL (CONT'D)
TEXAS (EXCLUDING HOUSTON & HARRIS CO.), (CONT'D.)
Northaven Business Center, Northaven Rd., Dallas . . . . . . . . . . 151,000 178,000
Northeast Crossing Off/Svc Ctr., East N.W. Hwy. at Shiloh, Dallas. . 79,000 199,000
Northwest Crossing Off/Svc Ctr., N.W. Hwy. at Walton Walker, Dallas. 127,000 290,000
Redbird Distribution Center, Joseph Hardin Drive, Dallas . . . . . . 111,000 234,000
Regal Distribution Center, Leston Avenue, Dallas . . . . . . . . . . 203,000 318,000
Space Center Industrial Park, Pulaski St. at Irving Blvd., Dallas. . 265,000 426,000
Walnut Trails Business Park, Walnut Hill Lane, Dallas. . . . . . . . 103,000 311,000
DFW-Port America, Port America Place, Grapevine. . . . . . . . . . . 46,000 110,000
Jupiter Service Center, Jupiter near Plano Pkwy., Plano. . . . . . . 78,000 234,000
Sherman Plaza Business Park, Sherman at Phillips, Richardson . . . . 100,000 312,000
Interwest Business Park, Alamo Downs Parkway, San Antonio. . . . . . 218,000 742,000
O'Connor Road Business Park, O'Connor Road, San Antonio. . . . . . . 150,000 459,000
Nasa One Business Center, Nasa Road One at Hwy. 3, Webster . . . . . 112,000 328,000
TENNESSEE, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . 1,086,000 2,684,000
Southwide Warehouse # 2, Federal Compress Ind. Pk., Memphis. . . . . 124,000 302,000
Southwide Warehouse # 3, Federal Compress Ind. Pk., Memphis. . . . . 112,000 209,000
Southwide Warehouse # 4, Federal Compress Ind. Pk., Memphis. . . . . 120,000 220,000
Thomas Street Warehouse, N. Thomas Street, Memphis . . . . . . . . . 164,000 423,000
Crowfarn Drive Warehouse, Crowfarn Dr. at Getwell Rd., Memphis . . . 159,000 316,000
Outland Business Center, Outland Center Dr., Memphis . . . . . . . . 407,000 1,214,000
FLORIDA, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . 600,000 1,535,000
Lakeland Industrial Ctr., I-4 at County Rd., Lakeland. . . . . . . . 600,000 1,535,000
GEORGIA, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . 363,000 965,000
6485 Crescent Dr., I-85 at Jimmy Carter Blvd., Norcross. . . . . . . 363,000 965,000
NEVADA, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . 66,000 162,000
East Sahara Off/Svc Ctr., E. Sahara Blvd., Las Vegas . . . . . . . . 66,000 162,000
OFFICE BUILDING
HOUSTON & HARRIS COUNTY, TOTAL . . . . . . . . . . . . . . . . . . . 121,000 171,000
Citadel Plaza, N. Loop 610 at Citadel Plaza Dr.. . . . . . . . . . . 121,000 171,000
MULTI-FAMILY RESIDENTIAL
TEXAS (EXCLUDING HOUSTON & HARRIS CO.), TOTAL. . . . . . . . . . . . 273,000 595,000
River Pointe Apartments, River Pointe Drive at I-45, Conroe. . . . . 273,000 595,000
Table continued on next page
Page 10
Building
Name and Location Area Land Area
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UNIMPROVED LAND
HOUSTON & HARRIS COUNTY, TOTAL . . . . . . . . . . . . . . . . . . . 3,158,000
Bissonnet at Wilcrest. . . . . . . . . . . . . . . . . . . . . . . . 773,000
Citadel Plaza at 610 N. Loop . . . . . . . . . . . . . . . . . . . . 137,000
East Orem. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122,000
Kirkwood at Dashwood Dr. . . . . . . . . . . . . . . . . . . . . . . 322,000
Lockwood at Navigation . . . . . . . . . . . . . . . . . . . . . . . 163,000
Mesa Rd. at Tidwell. . . . . . . . . . . . . . . . . . . . . . . . . 901,000
Mowery at Cullen . . . . . . . . . . . . . . . . . . . . . . . . . . 118,000
Northwest Fwy. at Gessner. . . . . . . . . . . . . . . . . . . . . . 422,000
Redman at W. Denham. . . . . . . . . . . . . . . . . . . . . . . . . 17,000
Sheldon at I-10. . . . . . . . . . . . . . . . . . . . . . . . . . . 19,000
W. Little York at N. Houston-Rosslyn . . . . . . . . . . . . . . . . 19,000
W. Loop N. at I-10 . . . . . . . . . . . . . . . . . . . . . . . . . 145,000
TEXAS (EXCLUDING HOUSTON & HARRIS CO.), TOTAL. . . . . . . . . . . . 1,785,000
McDermott Drive at Custer Rd., Allen . . . . . . . . . . . . . . . . 41,000
River Pointe Dr. at I-45, Conroe . . . . . . . . . . . . . . . . . . 186,000
Beach St. at Golden Triangle Blvd., Fort Worth . . . . . . . . . . . 340,000
US Hwy 380 (University Drive) and US Hwy 75, McKinney. . . . . . . . 135,000
F.M. 544 at Murphy Rd., Murphy . . . . . . . . . . . . . . . . . . . 206,000
Dalrock Rd. at Lakeview Parkway, Rowlett . . . . . . . . . . . . . . 346,000
Highway 287 at Bailey Boswell Rd., Saginaw . . . . . . . . . . . . . 176,000
Hillcrest, Sunshine at Quill, San Antonio. . . . . . . . . . . . . . 171,000
Hwy. 3 at Hwy. 1765, Texas City. . . . . . . . . . . . . . . . . . . 184,000
LOUISIANA, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . 5,276,000
Siegen Lane at Honore Ln., Baton Rouge . . . . . . . . . . . . . . . 821,000
U.S. Hwy. 171 at Parish, DeRidder. . . . . . . . . . . . . . . . . . 462,000
Ambassador Caffery Pkwy. at Congress St., Lafayette. . . . . . . . . 23,000
Ambassador Caffery Pkwy. at Kaliste Saloom Rd., Lafayette. . . . . . 1,031,000
Prien Lake Plaza, Lake Charles . . . . . . . . . . . . . . . . . . . 860,000
Manhattan Blvd. at Gretna Blvd., Harvey. . . . . . . . . . . . . . . 894,000
Woodland Hwy., Plaquemines Parish (5%) . . . . . . . . . . . . . . . 822,000 *
70th. St. at Youree Dr., Shreveport. . . . . . . . . . . . . . . . . 363,000
COLORADO, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . 2,183,000
E. Alameda at I-225, Aurora. . . . . . . . . . . . . . . . . . . . . 1,130,000 *
Smoky Hill Rd. at S. Picadilly St., Aurora . . . . . . . . . . . . . 108,000 *
2nd Ave. at Lowry Ave., Denver . . . . . . . . . . . . . . . . . . . 123,000 *
Hwy. 86 at Elizabeth St., Elizabeth. . . . . . . . . . . . . . . . . 24,000 *
Hampton at Santa Fe, Englewood . . . . . . . . . . . . . . . . . . . 192,000 *
Jordan Rd. at Lincoln Ave., Parker (38%) . . . . . . . . . . . . . . 28,000 *
120th at Washington, Thornton. . . . . . . . . . . . . . . . . . . . 578,000 *
Table continued on next page
Page 11
Building
Name and Location Area Land Area
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UNIMPROVED LAND (CONT'D)
ARIZONA, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . 735,000
Dysart Rd. at Rancho Santa Fe Blvd., Avondale. . . . . . . . . . . . 309,000
Broadway Rd. and Ellsworth Rd., Mesa . . . . . . . . . . . . . . . . 36,000
Power Rd. at McKellips Rd., Mesa . . . . . . . . . . . . . . . . . . 390,000
NEVADA, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . 508,000
Eastern Ave. at Horizon Ridge Pkwy., Henderson . . . . . . . . . . . 508,000
Table continued on next page
Page 12
Building
Name and Location Area Land Area
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ALL PROPERTIES-BY LOCATION
GRAND TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,699,000 149,335,000
Houston & Harris County . . . . . . . . . . . . . . . . . . . . . . 10,733,000 40,833,000
Texas (excluding Houston & Harris County) . . . . . . . . . . . . . 9,609,000 37,508,000
California. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,480,000 10,353,000
Florida . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,396,000 9,203,000
Nevada. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,676,000 7,992,000
Tennessee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,606,000 4,773,000
Louisiana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,558,000 11,882,000
Arizona . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,190,000 6,051,000
New Mexico. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 952,000 4,024,000
Kansas. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 784,000 3,418,000
Oklahoma. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 702,000 3,173,000
Arkansas. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 597,000 2,568,000
Georgia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 363,000 965,000
Missouri. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 338,000 1,101,000
Colorado. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 291,000 3,464,000
Maine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124,000 482,000
Mississippi . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117,000 581,000
Illinois. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103,000 503,000
North Carolina. . . . . . . . . . . . . . . . . . . . . . . . . . . 80,000 461,000
ALL PROPERTIES-BY CLASSIFICATION
GRAND TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,699,000 149,335,000
Shopping Centers. . . . . . . . . . . . . . . . . . . . . . . . . . 27,003,000 112,833,000
Industrial. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,302,000 22,091,000
Multi-Family Residential. . . . . . . . . . . . . . . . . . . . . . 273,000 595,000
Office Building . . . . . . . . . . . . . . . . . . . . . . . . . . 121,000 171,000
Unimproved Land . . . . . . . . . . . . . . . . . . . . . . . . . . 13,645,000
__________
<FN>
Note: Total square footage includes 7,847,000 square feet of land leased and
450,000 square feet of building leased from others.
* Denotes partial ownership. WRI's interest is 50% except where noted.
The square feet figures represent WRI's proportionate ownership of
the entire property.
Page 13
General. In 2001, no single property accounted for more than 2.7% of WRI's
total assets or 2.0% of gross revenues. Four properties, in the aggregate,
represented approximately 7.7% of our gross revenues for the year ended December
31, 2001; otherwise, none of the remaining properties accounted for more than
1.7% of our gross revenues during the same period. The weighted average
occupancy rate for all of our improved properties as of December 31, 2001 was
92.2%.
Substantially all of our properties are owned directly by WRI (subject in some
cases to mortgages), although our interests in some properties are held
indirectly through interests in 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.
Shopping Centers. As of December 31, 2001, WRI owned or operated under
long-term leases, either directly or through its interests in joint ventures,
228 shopping centers with approximately 27.0 million square feet of building
area. The shopping centers were located predominantly in Texas with other
locations in California, Louisiana, Arizona, Nevada, Arkansas, New Mexico,
Oklahoma, Tennessee, Kansas, Colorado, Missouri, Illinois, Florida, North
Carolina, Georgia, Mississippi and Maine.
WRI's shopping centers are primarily neighborhood and community shopping centers
that range in size from 100,000 to 400,000 square feet, as distinguished from
small strip centers, which generally contain 5,000 to 25,000 square feet, and
from large regional enclosed malls that generally contain over 500,000 square
feet. Most of the centers do not 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 5,200 separate leases with 4,100 different tenants,
including national and regional supermarket chains, drug stores, discount
department stores, junior department stores, other nationally or regionally
known stores and a great variety of other regional and local retailers. The
large number of locations offered by WRI and the types of traditional anchor
tenants help attract prospective new tenants. Some of the national and regional
supermarket chains, which are tenants in our centers, include Albertson's,
Fiesta, Smith's (Kroger), H.E.B., Kroger Company, Randall's Food Markets
(Safeway), Fry's Food Stores (Kroger), Ralph's (Kroger), Raley's, Publix, King
Soopers, Inc. (Kroger) and Safeway. In addition to these supermarket chains,
WRI's nationally and regionally known retail store tenants include Eckerd,
Walgreen and Osco (Albertson's) drugstores; Kmart discount stores; Bealls and
Palais Royal junior department stores; Kohl's, Marshall's, Office Depot, Office
Max, Staples, Babies 'R' Us, Ross, Stein Mart and T.J. Maxx off-price specialty
stores; Luby's, Piccadilly and Furr's cafeterias; Academy sporting goods;
CompUSA, Best Buy, Conn's and Circuit City electronics stores; FAO Schwarz toy
store; Cost Plus Imports; Linens 'N Things; Barnes & Noble bookstore; Border's
Books; Home Depot; Bed, Bath & Beyond; and the following restaurant chains:
Arby's, Burger King, Church's Fried Chicken, Dairy Queen, Domino's,
Jack-in-the-Box, CiCi Pizza, Long John Silver's, McDonald's, Olive Garden,
Outback Steakhouse, Pizza Hut, Shoney's, Steak & Ale, Taco Bell and Whataburger.
We also lease space in 3,000 to 20,000 square foot areas to national chains such
as the Limited Store, The Gap, One Price Stores, Old Navy, Eddie Bauer and Radio
Shack. Other merchants in our portfolio include Al's Formal Wear, Anna's
Linens, TGF Haircutters, Clothestime, Big Lots, Jason's Deli, Dollar General,
Dress Barn, Family Dollar, Shoe Cents, Fashion Bug, Cloth World, Fox Photo, GNC,
Goodyear Tire, Luther's Bar-B-Q, Mattress Firm, Fantastic Sam's, One Price
Clothing Stores, Paper Warehouse, Rent-A-Center, Sally Beauty, Souper Salad,
Black Eyed Pea, Men's Wearhouse and Tuesday Morning. The diversity of our
tenant base is also evidenced in the fact that our largest tenant (Kroger)
accounted for only 3.82% of rental revenue during 2001 including our share of
revenue from unconsolidated joint ventures and excluding our partners share of
revenue from consolidated joint ventures.
WRI's 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
Page 14
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 or for the 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 ad valorem 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, WRI makes the payments for the utilities and is reimbursed by the tenants
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 2001, WRI acquired 30 shopping centers for an aggregate purchase price
of $479.3 million, which added 4.6 million square feet to our portfolio.
In February, a community shopping center in Orlando, Florida was purchased for
$54 million. Strategically located near downtown Orlando, Colonial Plaza
contains 488,000 square feet of building area and is anchored by Barnes & Noble,
Old Navy, Stein Mart, Linens 'N Things, Marshall's, Babies 'R' Us, Rhodes,
Staples, Ross Dress For Less, Circuit City and Just For Feet.
In April, we completed the acquisition of 19 supermarket-anchored shopping
centers in California. Anchor merchants include the market's major supermarket
companies such as Ralph's (Kroger), Albertson's, Safeway, Raley's and Food 4
Less (Fleming Company). Additionally, the properties include other well-known
anchor retailers including Target, K-Mart, Home Depot and Walgreens. These
properties added nearly 2.5 million square feet to the portfolio.
In May, we acquired four supermarket-anchored shopping centers in the Memphis,
Tennessee market area. Three of the centers are anchored by Kroger and the
fourth is anchored by Seessel's (owned by Albertson's). Other anchor retailers
include Walgreens and Stein Mart. These properties total nearly 617,000 square
feet and were over 92% leased in the aggregate.
In June, we purchased the Venice Pines Shopping Center in Venice, Florida. This
97,000 square foot center is anchored by Kash N Karry Supermarket and is 91%
leased. Also in June, we purchased Parkway Pointe Shopping Center in Cary,
North Carolina, a suburb of Raleigh. Anchored by Food Lion, Eckerd Drugs and
Ace Hardware, the center was 95% leased upon acquisition.
In August, we acquired the Boca Lyons Shopping Center in Boca Raton, Florida.
This center is anchored by Ross Dress for Less and also includes Ethan Allen
Furniture, Sun Trust Bank and World Savings. This 113,000 square foot center
was 94% leased upon acquisition.
In September, we purchased Winter Park Corners in Winter Park, Florida. This
103,000 square foot center is anchored by Whole Foods and includes Bank of
America and Outback Steakhouse and is 100% leased.
In October, we purchased the Sunset Point 19 Shopping Center in Clearwater,
Florida. This 273,00 square foot shopping center is anchored by Publix, Bed,
Bath & Beyond, Barnes & Noble, The Sports Authority and Staples.
In November, Argyle Village, a 305,000 square foot shopping center was acquired
in Jacksonville, Florida. This center is currently 97% leased and is anchored
by Publix, JoAnn's Fabrics, T.J. Maxx and Baby Superstore, Inc.
Page 15
In 2001, WRI acquired land at seven separate locations for the development of
retail shopping centers. Two of these acquisitions were made in joint ventures
with our development partner in Denver. These joint ventures are included in
the consolidated financial statements of WRI as we exercise financial and
operating control. Total expenditures on these seven projects during 2001
totaled $30.4 million. At the beginning of 2002, we have 20 retail developments
underway which, upon completion, will represent an investment of approximately
$223 million and will add 1.8 million square feet to the portfolio. These
projects will come on-line beginning in early 2002 through mid 2003.
Industrial Properties. At December 31, 2001, WRI owned 57 industrial projects.
The acquisition of four industrial office service centers added 1.5 million
square feet to our industrial portfolio and represented an investment of $39.3
million. We purchased one office/service facility in Austin, Texas, which added
90,000 square feet to the portfolio. With this acquisition, we now have eight
industrial and two retail properties in Austin, comprising more than 902,000
square feet of building area. WRI also acquired three additional industrial
properties totaling 1.4 million square feet.
Office Building. We own a seven-story, 121,000 square foot masonry office
building with a detached, covered, three-level parking garage situated on
171,000 square feet of land fronting on North Loop 610 West in Houston. The
building serves as our headquarters. Other than WRI, the major tenant of the
building is Bank of America, which currently occupies 9% of the office space.
Multi-family Residential Properties. WRI completed development of a 300-unit
luxury apartment complex within a multi-use master-planned project we developed
in a suburb north of Houston. An unrelated Houston-based multi-family operator
manages the property on our behalf.
Unimproved Land. At December 31, 2001, WRI owned, directly or through its
interest in a joint venture, 40 parcels of unimproved land aggregating
approximately 13.6 million square feet of land area located in Texas, Louisiana,
Arizona, Colorado, Illinois and Nevada. These properties include approximately
6.5 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 7.1 million square feet of land, which may be used for new
development. Almost all of these unimproved properties are served by roads and
utilities and are ready for development. Most of these parcels are suitable for
development as shopping centers or industrial projects, and WRI intends to
emphasize the development of these parcels for such purpose.
ITEM 3. LEGAL PROCEEDINGS
WRI is involved in various matters of litigation arising in the normal course of
business. While WRI is unable to predict with certainty the amounts involved,
WRI's management and counsel are of the opinion that, when such litigation is
resolved, WRI's resulting liability, if any, will not have a material adverse
effect on WRI's consolidated financial statements.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS
None.
Page 16
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON SHARES OF BENEFICIAL INTEREST AND
RELATED SHAREHOLDER MATTERS
WRI's common shares are listed and traded on the New York Stock Exchange under
the symbol "WRI". The number of holders of record of our common shares as of
February 26, 2002 was 3,313. The high and low sale prices per common share,
as reported on the New York Stock Exchange composite tape, and dividends per
share paid for the fiscal quarters indicated were as follows:
HIGH LOW DIVIDENDS
------- ------- ---------
2001:
Fourth . . . . . $ 50.40 $ 47.64 $ 0.79
Third. . . . . . 49.80 43.65 0.79
Second . . . . . 46.07 41.77 0.79
First. . . . . . 44.88 40.06 0.79
2000:
Fourth . . . . . $ 45.00 $ 40.13 $ 0.75
Third. . . . . . 43.00 40.06 0.75
Second . . . . . 42.50 36.56 0.75
First. . . . . . 40.75 34.56 0.75
Page 17
ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth selected consolidated financial data with respect
to WRI and should be read in conjunction with "Item 7. Management's Discussion
and Analysis of Financial Condition and Results of Operations," 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)
Years Ended December 31,
2001 2000 1999 1998 1997
----------- ----------- ----------- ----------- -----------
Revenues (primarily real estate rentals) . . . $ 314,892 $ 250,234 $ 224,095 $ 192,339 $ 167,856
----------- ----------- ----------- ----------- -----------
Expenses:
Depreciation and amortization. . . . . . . 68,316 54,597 48,668 41,051 36,995
Interest . . . . . . . . . . . . . . . . . 54,473 43,190 32,792 33,338 29,695
Other. . . . . . . . . . . . . . . . . . . 96,972 77,341 69,774 60,384 53,254
----------- ----------- ----------- ----------- -----------
Total. . . . . . . . . . . . . . . . . 219,761 175,128 151,234 134,773 119,944
----------- ----------- ----------- ----------- -----------
Income from operations . . . . . . . . . . . . 95,131 75,106 72,861 57,566 47,912
Equity in earnings of joint ventures . . . . . 5,547 4,143 3,654 4,469 4,249
Minority interest in income of partnerships. . (475) (630) (789) (606) (522)
Gain on sales of property and securities . . . 8,339 382 20,594 328 3,327
Extraordinary charge (190) (1,392)
----------- ----------- ----------- ----------- -----------
Net income . . . . . . . . . . . . . . . . . . $ 108,542 $ 79,001 $ 96,130 $ 60,365 $ 54,966
=========== =========== =========== =========== ===========
Net income available to common
shareholders . . . . . . . . . . . . . . . . $ 88,839 $ 58,961 $ 76,537 $ 54,484 $ 54,966
=========== =========== =========== =========== ===========
Cash flows from operations . . . . . . . . . . $ 146,659 $ 119,043 $ 113,351 $ 93,054 $ 85,846
=========== =========== =========== =========== ===========
Per share data - basic:
Income before extraordinary charge . . . . $ 2.77 $ 2.20 $ 2.88 $ 2.09 $ 2.06
Net income . . . . . . . . . . . . . . . . $ 2.77 $ 2.20 $ 2.87 $ 2.04 $ 2.06
Weighted average number of shares. . . . . 32,069 26,775 26,690 26,667 26,638
Per share data - diluted:
Income before extraordinary charge . . . . $ 2.76 $ 2.19 $ 2.86 $ 2.08 $ 2.05
Net income . . . . . . . . . . . . . . . . $ 2.76 $ 2.19 $ 2.85 $ 2.03 $ 2.05
Weighted average number of shares. . . . . 32,246 26,931 26,890 26,869 26,771
Cash dividends per common share. . . . . . . . $ 3.16 $ 3.00 $ 2.84 $ 2.68 $ 2.56
Property (at cost) . . . . . . . . . . . . . . $2,352,393 $1,728,414 $1,486,224 $1,278,466 $1,092,869
Total assets . . . . . . . . . . . . . . . . . $2,095,747 $1,498,477 $1,312,746 $1,107,077 $ 943,486
Debt . . . . . . . . . . . . . . . . . . . . . $1,070,835 $ 792,353 $ 592,978 $ 513,361 $ 503,287
Other data:
Funds from operations (1)
Net income available to common
shareholders . . . . . . . . . . . . . $ 88,839 $ 58,961 $ 76,537 $ 54,484 $ 54,966
Depreciation and amortization. . . . . . 67,803 55,344 49,256 41,580 37,544
Gain on sales of property
and securities . . . . . . . . . . . . (9,795) (382) (20,596) (885) (3,327)
Extraordinary charge . . . . . . . . . . 190 1,392
----------- ----------- ----------- ----------- -----------
Total. . . . . . . . . . . . . . . . . $ 146,847 $ 113,923 $ 105,387 $ 96,571 $ 89,183
=========== =========== =========== =========== ===========
__________
<FN>
(1) The Board of Governors of the National Association of Real Estate Investment Trusts defines funds
from operations as net income (loss) computed in accordance with generally accepted accounting
principles, excluding gains or losses from sales of property, plus real estate related depreciation
Page 18
and amortization, and after adjustments for unconsolidated partnerships and joint ventures. In
addition, NAREIT recommends that extraordinary items not be considered in arriving at FFO. We
calculate FFO in a manner consistent with the NAREIT definition. Most industry analysts and equity
REITs, including WRI, believe FFO is an alternative measure of performance relative to other REITs.
There can be no assurance that FFO presented by WRI 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 OPERATIONS
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. The results of operations and financial condition of the company,
as reflected in the accompanying statements and related footnotes, is subject to
managements' evaluation and interpretation of business conditions, retailer
performance, changing capital market conditions and other factors which could
affect the ongoing viability of the company's tenancy. Management believes the
most critical accounting policies in this regard are the estimation of an
allowance for doubtful receivables (more specifically the allowance for
straight-line receivables) and the determination of reserves for self-insured
general liability insurance. Both of these issues require management to make
judgments that are subjective in nature, however, management is able to consider
and assess a significant amount of historical data and current market data in
arriving at reasonable estimates.
Weingarten Realty Investors owned or operated under long-term leases, either
directly or through its interest in joint ventures, 228 shopping centers, 57
industrial properties, one multi-family residential project and one office
building at December 31, 2001. Of our 287 developed properties, 179 are located
in Texas (including 93 in Houston and Harris County). Our remaining properties
are located in California (19), Louisiana (15), Arizona (13), Nevada (10),
Florida (9), Tennessee (8), Arkansas (6), New Mexico (6), Colorado (6), Kansas
(5), Oklahoma (4), Missouri (2), Illinois (1), North Carolina (1), Georgia (1),
Mississippi (1) and Maine (1). WRI has nearly 5,200 leases and 4,100 different
tenants. Leases for our properties range from less than a year for smaller
spaces to over 25 years for larger tenants; leases generally include minimum
lease payments and reimbursements of property operating expenses and for an
amount based on a percentage of the tenants' sales. The majority of our anchor
tenants are supermarkets, drugstores, value-oriented apparel and discount stores
and other retailers, which generally sell basic necessity-type items.
CAPITAL RESOURCES AND LIQUIDITY
WRI anticipates that cash flows from operating activities will continue to
provide adequate capital for all dividend payments in accordance with REIT
requirements. Cash on hand, internally-generated cash flow, borrowings under
our existing credit facilities, issuance of unsecured debt and the use of
project financing, as well as other debt and equity alternatives, will provide
the necessary capital to maintain and operate our properties, refinance debt
maturities and achieve planned growth. Cash flow from operating activities as
reported in the Statements of Consolidated Cash Flows increased to $146.7
million in 2001 from $119.0 million in 2000 and $113.4 million for 1999.
During 2001, WRI invested $518.6 million through the acquisition of operating
properties. We acquired 30 shopping centers, adding 4.6 million square feet to
our portfolio and representing an investment of $479.3 million. The acquisition
of four industrial properties added 1.5 million square feet to our industrial
portfolio and represented an investment of $39.3 million.
In 2001, WRI acquired land at seven separate locations for the development of
retail shopping centers. Two of these acquisitions were made in joint ventures
with our development partner in Denver. These joint ventures are included in
the consolidated financial statements of WRI as we exercise financial and
operating control. We also had 13 projects which were under development at the
beginning of 2001. We invested $76.9 million in these projects during 2001. At
the beginning of 2002, we have 20 retail developments underway which, upon
completion, will represent an investment of approximately $223 million and will
add 1.8 million square feet to the portfolio. These projects will come on-line
beginning in early 2002 through mid 2003. We expect to invest approximately $89
million in these properties during 2002 and 2003.
Page 19
Capitalized expenditures for acquisitions, new development and additions to the
existing portfolio were, in millions, $632.2, $240.0 and $213.2 during 2001,
2000 and 1999, respectively. All of the acquisitions and new development during
2001 were either initially financed under WRI's revolving credit facilities or
funded with excess cash flow from our existing portfolio of properties. WRI's
share of capitalized expenditures for unconsolidated joint ventures or
partnerships, including the purchase of properties by newly-formed joint
ventures or partnerships, were, in millions: $.7, $20.2 and $11.1 during 2001,
2000 and 1999.
Common and preferred dividends increased to $123.0 million in 2001, compared to
$100.4 million in 2000 and $95.4 million in 1999. WRI satisfied its REIT
requirement of distributing at least 90% (95% in 2000 and 1999) of ordinary
taxable income for the year ended December 31, 2001. Our dividend payout ratio
on common equity for 2001, 2000 and 1999 approximated 70.4%, 70.5% and 71.9%,
respectively, based on funds from operations for the applicable year.
In January 2001, WRI sold 4.5 million common shares of beneficial interest in a
secondary public offering. In February, the underwriters exercised their
over-allotment option and purchased an additional 200,000 shares. Net proceeds
to WRI totaled $188.1 million based on a price of $42.19 per share. In May 2001,
we issued 690,000 common shares of beneficial interest in a secondary public
offering. Net proceeds totaled $27.9 million based on a price of $42.85 per
share. In November 2001, we issued 1.8 million common shares of beneficial
interest. Net proceeds totaled $86.0 million based on a price of $50.20 per
share. Proceeds from these offerings were used to pay down amounts outstanding
under our $350 million revolving credit facility.
In February 2002, we issued 198,098 common shares of beneficial interest. Net
proceeds to WRI totaled $9.5 million based on a price of $50.48 per share and
will be used to pay down amounts outstanding under our $350 million revolving
credit facility.
In February 2002, a three-for-two stock split was declared for shareholders of
record on April 1, 2002, payable April 15, 2002.
WRI has a $350 million unsecured revolving credit facility with a syndicate of
banks. This facility will mature in November of 2003 and contains a one-year
extension, at our sole option. The facility bears interest at a rate of LIBOR
plus 50 basis points. Additionally, the facility includes a competitive bid
option that allows WRI to hold auctions at lower pricing for short-term funds
for up to $175 million. WRI also has an unsecured and uncommitted overnight
credit facility totaling $20 million to be used for cash management purposes.
WRI has two interest rate swap contracts with an aggregate notional amount of
$20 million which expire in June 2004 and fix interest rates on a like amount of
the $350 million revolver at 7.7%. We have determined these swap agreements are
highly effective in offsetting future variable interest cash flows of the
revolving credit debt and, accordingly, they have been designated as cash flow
hedges. An additional interest rate swap contract with a notional amount of $20
million expired in May of 2001.
On July 5, 2001, we entered into a $50 million unsecured term loan with two
banks that also participate in our $350 million revolving credit facility. The
terms of the $50 million loan, including pricing, are substantially identical to
those of our $350 million revolving credit facility, and it matures on the same
date.
On July 12, 2001, we sold $200 million of unsecured notes with a coupon of 7%.
Net proceeds from the offering totaled $198.3 million and were used to pay down
amounts outstanding under our $350 revolving credit facility. Concurrent with
the sale of the 7% notes, we settled our $188.7 million forward-starting
interest rate swap contracts, resulting in a gain of $1.6 million. These swap
contracts, which we entered into on June 25, 2001, had been designated as a cash
flow hedge of forecasted interest payments for fixed-rate notes to be issued in
future periods, and accordingly, the gain is being amortized over the life of
the 7% notes.
In July 2000, the Company issued a two-year $25 million variable-rate, unsecured
medium term note that bears interest at 50 basis points over LIBOR and a
three-year $25 million variable-rate note that bears interest at 60 basis points
over LIBOR. At the time of issuance, the interest rates were 7.23% and 7.33%,
respectively. During November and December of 2000, we entered into interest
rate swap agreements which fixed the interest rates on these notes.
Page 20
On July 26, 2001, the Company entered into eleven interest rate swaps with an
aggregate notional amount of $107.5 million that convert fixed interest payments
at rates from 6.35% to 7.35% to variable interest payments. These interest rate
swaps have been designated as fair value hedges. We have determined that these
contracts will be highly effective in limiting our risk of changes in the fair
value of the fixed-rate notes attributable to changes in variable interest
rates.
Subsequent to year end, we completed two medium term note transactions totaling
$65 million which included a twelve-year $35 million note bearing interest at
6.7% and a twelve-year $30 million note bearing interest at 6.5%.
Total debt outstanding increased to $1.1 billion at December 31, 2001 from
$792.4 million at December 31, 2000, primarily to fund acquisitions and new
development. Total debt at December 31, 2001 includes $780.5 million on which
interest rates are fixed, including the net effect of our $177.5 million of
interest rate swaps, and $290.3 million which bears interest at variable rates.
Additionally, debt totaling $272.3 million is secured by operating properties
while the remaining $798.5 million is unsecured.
In conjunction with acquisitions completed during 2001, we assumed $165.0
million of non-recourse debt secured by the related properties. The weighted
average interest rate on this debt is 8.22%, and the average remaining life is
7.8 years. Additionally, non-recourse debt secured by retail properties held by
joint ventures in which we participate was issued during 2001, our share of
which totaled $5.4 million. The weighted average interest rate on our share of
this debt is 7.3%.
We have a $400 million shelf registration statement on file under which $18.0
million was available after the sale of $65 million medium term notes in early
2002. In March 2001, we filed a $500 million shelf registration statement, of
which $398.9 million is currently available.
WRI will continue to closely monitor both the debt and equity markets and
carefully consider its available alternatives, including both public and private
placements.
Numerous retailer bankruptcies across the country have been announced. WRI has
four Service Merchandise and seven Kmart stores. The communication and timing
of store closings varies by retailer, however, we believe the effect of these
bankruptcies and other known retailer failures will reduce our net operating
income in 2002 by approximately $1.7 million. With the significant
diversification of WRI's tenant base, we would not expect further retailer
bankruptcies to have a significant effect on the liquidity of our company.
RESULTS OF OPERATIONS
Rental revenues increased 27.0%, or $65.8 million, from $243.6 million in 2000
to $309.5 million in 2001 and by 10.5%, or $23.1 million, from $220.6 million in
1999. Of these increases, property acquisitions and new development contributed
$61.1 million in 2001 and $21.5 million in 2000. The remaining portion of these
increases is due to activity at our existing properties. Occupancy of our
shopping centers decreased to 92.8% at December 31, 2001 from 93.4% at the end
of 2000. Occupancy of our industrial portfolio decreased from 91.2% at the end
of 2000 to 90.1% at December 31, 2001, and occupancy of the total portfolio
decreased from 93.0% to 92.2% at year-end. In 2001, we completed 966 renewals
or new leases comprising 4.9 million square feet at an average rental rate
increase of 10.4%. Net of the amortized portion of capital costs for tenant
improvements, the increase averaged 7.8%. Occupancy of our total portfolio
increased from 91.3% at the end of 1999 to 93.0% at the end of 2000. In 2000, we
completed 1,008 renewals or new leases comprising 4.9 million square feet at an
average rental rate increase of 10.0%. Net of the amortized portion of capital
costs for tenant improvements, the increase averaged 6.4%.
Interest income totaled $1.2 million in 2001, $3.5 million in 2000 and $1.8
million in 1999. The increase in interest income from 1999 to 2000 was due to
the funding of interim loans to our unconsolidated joint ventures, pending the
completion of permanent financing with third parties. Interest income decreased
in 2001 as a significant amount of permanent financing was finalized during
2000.
Page 21
Direct costs and expenses of operating our properties (i.e., operating and ad
valorem tax expenses) increased to $87.4 million in 2001 from $69.1 million in
2000 and $62.3 million in 1999. These increases are primarily due to property
acquired and developed during these periods. Overall, direct operating costs
and expenses as a percentage of rental revenues were 28% in 2001, 2000 and 1999.
Bad debt expense increased from $.2 million in 1999 and $.9 million in 2000 to
$2.6 million in 2001 due to tenant bankruptcies in 2000 and 2001, primarily
Kmart, Service Merchandise, Weiners and Stage Stores. As a result of these
bankruptcies, the allowance for doubtful accounts increased from $1.9 million in
2000 to $2.9 million in 2001.
Depreciation and amortization have increased to $68.3 million in 2001 from $54.6
million in 2000 and $48.7 million in 1999, also as a result of the properties
acquired and developed during these periods. General and administrative expense
has increased to $9.6 million in 2001 from $8.2 million in 2000 and $7.5 million
in 1999. These increases are due to normal compensation increases as well as
increases in staffing necessitated by the growth in the portfolio.
Gross interest costs, before capitalization of interest to development projects,
increased from $47.4 million in 2000 to $64.2 million in 2001. This increase in
interest cost was due mainly to an increase in the average debt outstanding from
$652.9 million for 2000 to $927.6 million for 2001. The weighted-average
interest rate decreased from 7.23% in 2000 to 6.89% in 2001. Interest expense,
net of amounts capitalized, increased $11.3 million from 2000. The amount of
interest capitalized increased to $9.7 million in 2001 from $4.2 million in 2000
due to an increase in the amount of development activity during the year.
Comparing 2000 to 1999, gross interest costs increased from $35.8 million in
1999 to $47.4 million in 2000. This was due to an increase in the average debt
outstanding from $499.7 million in 1999 to $652.9 million in 2000. The
weighted-average interest rate increased between the two periods from 7.14% in
1999 to 7.23% in 2000. Interest expense, net of amounts capitalized, increased
$10.4 million from 1999. The amount of interest capitalized increased to $4.2
million in 2000 from $3.0 million in 1999 due to an increase in the amount of
development activity during the year.
The gain on sale of $8.3 million in 2001 was due primarily to the sale of nine
properties. The gain on sale of $20.6 million in 1999 was due primarily to the
sale of 28.5 acres of undeveloped land and an 80% interest in certain industrial
properties.
FUNDS FROM OPERATIONS
The Board of Governors of the National Association of Real Estate Investment
Trusts defines funds from operations as net income (loss) computed in accordance
with generally accepted accounting principles, excluding gains or losses from
sales of property, plus real estate related depreciation and amortization, and
after adjustments for unconsolidated partnerships and joint ventures. In
addition, NAREIT recommends that extraordinary items not be considered in
arriving at FFO. We calculate FFO in a manner consistent with the NAREIT
definition. Most industry analysts and equity REITs, including WRI, believe FFO
is an alternative measure of performance relative to other REITs. There can be
no assurance that FFO presented by WRI 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.
Page 22
Funds from operations is calculated as follows (in thousands):
2001 2000 1999
---------- ---------- ----------
Net income available to common shareholders . . . . . . . . . . . . . . . $ 88,839 $ 58,961 $ 76,537
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . 65,940 53,624 48,099
Depreciation and amortization of unconsolidated joint ventures. . . . . . 1,863 1,720 1,157
Gain on sales of property . . . . . . . . . . . . . . . . . . . . . . . . (8,368) (382) (20,594)
Gain on sales of property of unconsolidated joint ventures. . . . . . . . (1,427) (2)
Extraordinary charge - early retirement of debt . . . . . . . . . . . . . 190
---------- ---------- ----------
Funds from operations . . . . . . . . . . . . . . . . . . . 146,847 113,923 105,387
Funds from operations attributable to operating
partnership units . . . . . . . . . . . . . . . . . . . . . . . . . . . 180 305 318
---------- ---------- ----------
Funds from operations assuming conversion of OP units . . . $ 147,027 $ 114,228 $ 105,705
========== ========== ==========
Weighted average shares outstanding - basic . . . . . . . . . . . . . . . 32,069 26,775 26,690
Effect of dilutive securities:
Share options and awards. . . . . . . . . . . . . . . . . . . . . . 126 52 58
Operating partnership units . . . . . . . . . . . . . . . . . . . . 51 104 142
---------- ---------- ----------
Weighted average shares outstanding - diluted . . . . . . . . . . . . . . 32,246 26,931 26,890
========== ========== ==========
EFFECTS OF INFLATION
The rate of inflation was relatively unchanged in 2001. WRI has structured its
leases, however, in such a way as to remain largely unaffected should
significant inflation occur. Most of the leases contain percentage rent
provisions whereby WRI receives 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 WRI's leases are for terms
of less than ten years, which allows WRI to adjust rental rates to changing
market conditions when the leases expire. Most of WRI's leases require the
tenants to pay their proportionate share of operating expenses and ad valorem
taxes. As a result of these lease provisions, increases due to inflation, as
well as ad valorem tax rate increases, generally do not have a significant
adverse effect upon WRI's operating results.
NEW ACCOUNTING PRONOUNCEMENTS
On January 1, 2001, WRI adopted SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," as amended. SFAS No. 133 establishes
accounting and reporting standards for derivative instruments. Specifically,
SFAS No. 133 requires an entity to recognize all derivatives as either assets or
liabilities in the statement of financial position and to measure those
instruments at fair value. Additionally, the fair value adjustments will affect
either shareholders' equity or net income depending on whether the derivative
instruments qualify as a hedge for accounting purposes and, if so, the nature of
the hedging activity.
WRI hedges the future cash flows of debt transactions principally through
interest rate swaps with major financial institutions. WRI has four interest
rate swap contracts with an aggregate notional amount of $70 million that
convert variable interest payments to fixed interest payments at rates from
6.80% to 7.87%. These swaps have been designated and qualify as cash flow
hedges. We have determined these swap agreements are highly effective in
offsetting future variable interest cash flows of the related debt instruments.
As of January 1, 2001, the adoption of the new standard resulted in a cumulative
transition adjustment of $1.9 million to accumulated other comprehensive loss, a
component of shareholders' equity, and a corresponding liability of the same
amount. For the year ended December 31, 2001, the decrease in fair market value
of our interest rate swaps was $2.6 million and was recorded in accumulated
other comprehensive loss and other liabilities.
Page 23
On June 25, 2001, WRI entered into two forward-starting interest rate swap
contracts with a notional amount of $188.7 million. These contracts were
designated as a cash flow hedge of forecasted interest payments for $200 million
of unsecured notes with a coupon of 7% that were sold on July 12, 2001.
Concurrent with the sale of the 7% notes, we settled our $188.7 million
forward-starting interest rate swap contracts, resulting in a gain of $1.6
million recorded in accumulated other comprehensive income. This $1.6 million
gain is being amortized to earnings over the life of the 7% notes.
On July 26, 2001, the Company entered into eleven interest rate swap contracts
with an aggregate notional amount of $107.5 million that convert fixed interest
payments at rates from 6.35% to 7.35% to variable interest payments. These
interest rate swaps have been designated as fair value hedges. We have
determined that these contracts will be highly effective in limiting our risk of
changes in the fair value of the fixed-rate notes attributable to changes in
variable interest rates. For the year ended December 31, 2001, the increase in
fair market value of the eleven interest rate swaps was $1.0 million and was
recorded in other assets and fixed-rate debt.
Within the next twelve months, the Company expects to reclassify to earnings as
interest expense approximately $2.6 million of the current balance held in
accumulated other comprehensive loss. With respect to fair value hedges, both
changes in fair market value of the derivative hedging instrument and changes in
the fair value of the hedged item will be recorded in earnings each reporting
period. These amounts should completely offset with no impact to earnings,
except for the portion of the hedge that proves to be ineffective, if any.
In July 2000, the Emerging Issues Task Force of the Financial Accounting
Standards Board reached a consensus on EITF Issue No. 00-1,"Investor Balance
Sheet and Income Statement Display under the Equity Method for Investments in
Certain Partnerships and Other Ventures." This consensus requires that the
proportionate share method of presenting balance sheet and income statement
information for partnerships and other ventures in which entities have joint
interest and control be discontinued, except in limited circumstances. WRI was
required to conform to the guidance provided in this Issue effective December
31, 2000. Accordingly, the consolidated financial statements for all periods
prior to December 31, 2000 presented in this Form 10-K have been restated to
conform to the revised presentation.
In June 2001, FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations", which is effective for fiscal years beginning after June 15, 2002.
SFAS No. 143 addresses financial accounting and reporting for obligations
associated with the retirement of tangible long-lived assets and the associated
asset retirement costs. The adoption of SFAS No. 143 will not have a material
impact on our financial position, results of operations, or cash flows.
In August 2001, FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets", which is effective for fiscal years beginning
after December 15, 2001. SFAS No. 144 addresses accounting and reporting for
the impairment or disposal of a segment of a business. The adoption of SFAS No.
144 will not have a material impact on our financial position, results of
operations, or cash flows.
FORWARD-LOOKING STATEMENTS
This Annual Report includes certain forward-looking statements reflecting WRI's
expectations in the near term that involve a number of risks and uncertainties;
however, many factors may materially affect the actual results, including demand
for our properties, changes in rental and occupancy rates, changes in property
operating costs, interest rate fluctuations, and changes in local and general
economic conditions. Accordingly, there is no assurance that WRI's expectations
will be realized.
Page 24
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
WRI uses fixed and floating-rate debt to finance its capital requirements.
These transactions expose WRI to market risk related to changes in interest
rates. Derivative financial instruments are used to manage a portion of this
risk, primarily interest rate swap agreements with major financial institutions.
These swap agreements expose WRI to credit risk in the event of non-performance
by the counter-parties to the swaps. We do not engage in the trading of
derivative financial instruments in the normal course of business. At December
31, 2001, WRI had fixed-rate debt of $780.5 million and variable-rate debt of
$290.3 million, after adjusting for the effect of interest rate swaps. We also
had variable-rate notes receivable from joint venture partners totaling $32.4
million at year-end. In the event interest rates were to increase 100 basis
points, net income, funds from operations and future cash flows would decrease
$2.9 million based upon the variable-rate debt and notes receivable outstanding
at December 31, 2001.
Page 25
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEPENDENT AUDITORS' REPORT
To the Board of Trust Managers and Shareholders of
Weingarten Realty Investors:
We have audited the accompanying consolidated balance sheets of Weingarten
Realty Investors (the "Company") as of December 31, 2001 and 2000, and the
related statements of consolidated income and comprehensive income,
shareholders' equity, and cash flows for each of the three years in the period
ended December 31, 2001. Our audits also included the financial statement
schedules listed in the Index at Item 14. 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 auditing standards generally
accepted in the United States of America. 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 at
December 31, 2001 and 2000, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 2001 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.
DELOITTE & TOUCHE LLP
Houston, Texas
March 1, 2002
Page 26
STATEMENTS OF CONSOLIDATED INCOME AND COMPREHENSIVE INCOME
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Years Ended December 31,
----------------------------------
2001 2000 1999
---------- ---------- ----------
Revenues:
Rentals. . . . . . . . . . . . . . . . . . . . . . . $ 309,457 $ 243,633 $ 220,552
Interest income .. . . . . . . . . . . . . . . . . . 1,167 3,538 1,776
Other. . . . . . . . . . . . . . . . . . . . . . . . 4,268 3,063 1,767
---------- ---------- ----------
Total. . . . . . . . . . . . . . . . . . 314,892 250,234 224,095
---------- ---------- ----------
Expenses:
Depreciation and amortization. . . . . . . . . . . . 68,316 54,597 48,668
Interest . . . . . . . . . . . . . . . . . . . . . . 54,473 43,190 32,792
Operating. . . . . . . . . . . . . . . . . . . . . . 48,459 37,689 34,480
Ad valorem taxes . . . . . . . . . . . . . . . . . . 38,943 31,439 27,781
General and administrative . . . . . . . . . . . . . 9,570 8,213 7,513
---------- ---------- ----------
Total. . . . . . . . . . . . . . . . . . 219,761 175,128 151,234
---------- ---------- ----------
Income Before Equity in Earnings of Joint Ventures,
Minority Interest in Income of Partnerships, Gain
on Sales of Property and Extraordinary Charge. . . 95,131 75,106 72,861
Equity in Earnings of Joint Ventures . . . . . . . . . 5,547 4,143 3,654
Minority Interest in Income of Partnerships. . . . . . (475) (630) (789)
Gain on Sales of Property. . . . . . . . . . . . . . . 8,339 382 20,594
---------- ---------- ----------
Income Before Extraordinary Charge . . . . . . . . . . 108,542 79,001 96,320
Extraordinary Charge (early retirement of debt). . . . (190)
---------- ---------- ----------
Net Income . . . . . . . . . . . . . . . . . . . . . . $ 108,542 $ 79,001 $ 96,130
========== ========== ==========
Net Income Available to Common Shareholders. . . . . . $ 88,839 $ 58,961 $ 76,537
========== ========== ==========
Net Income Per Common Share - Basic:
Income Before Extraordinary Charge . . . . . . . $ 2.77 $ 2.20 $ 2.88
Extraordinary Charge . . . . . . . . . . . . . . (.01)
---------- ---------- ----------
Net Income . . . . . . . . . . . . . . . . . . . $ 2.77 $ 2.20 $ 2.87
========== ========== ==========
Net Income Per Common Share - Diluted:
Income Before Extraordinary Charge . . . . . . . $ 2.76 $ 2.19 $ 2.86
Extraordinary Charge . . . . . . . . . . . . . . (.01)
---------- ---------- ----------
Net Income . . . . . . . . . . . . . . . . . . . $ 2.76 $ 2.19 $ 2.85
========== ========== ==========
Net Income . . . . . . . . . . . . . . . . . . . . . . $ 108,542 $ 79,001 $ 96,130
Other Comprehensive Loss:
Cumulative effect of change in accounting principle
(SFAS 133) on other comprehensive loss . . . . . . (1,877)
Unrealized derivative loss on interest rate swaps. . (2,579)
Unrealized derivative gain on forward-starting
interest rate swaps. . . . . . . . . . . . . . . . 1,520
---------- ---------- ----------
Other Comprehensive Loss . . . . . . . . . . . . . . . (2,936)
---------- ---------- ----------
Comprehensive Income . . . . . . . . . . . . . . . . . $ 105,606 $ 79,001 $ 96,130
========== ========== ==========
See Notes to Consolidated Financial Statements.
Page 27
CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
December 31,
------------- ------------
2001 2000
------------ ------------
ASSETS
Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,352,393 $ 1,728,414
Accumulated Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . (402,958) (362,267)
------------ ------------
Property - net. . . . . . . . . . . . . . . . . . . . . . . . . . . 1,949,435 1,366,147
Investment in Real Estate Joint Ventures. . . . . . . . . . . . . . . . . 25,742 26,848
------------ ------------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,975,177 1,392,995
------------ ------------
Notes Receivable from Real Estate Joint Ventures and Partnerships . . . . 6,068 15,772
Unamortized Debt and Lease Costs. . . . . . . . . . . . . . . . . . . . . 42,755 36,970
Accrued Rent and Accounts Receivable (net of allowance for doubtful
accounts of $2,926 in 2001 and $1,884 in 2000). . . . . . . . . . . . . 32,382 24,145
Cash and Cash Equivalents . . . . . . . . . . . . . . . . . . . . . . . . 12,434 7,321
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,931 21,274
------------ ------------
Total. . . . . . . . . . . . . . . . . . . . . $ 2,095,747 $ 1,498,477
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,070,835 $ 792,353
Accounts Payable and Accrued Expenses . . . . . . . . . . . . . . . . . . 80,412 63,742
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,542 8,146
------------ ------------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,170,789 864,241
------------ ------------
Minority Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,886 4,369
------------ ------------
Commitments and Contingencies
Shareholders' Equity:
Preferred Shares of Beneficial Interest - par value, $.03 per share;
shares authorized: 10,000
7.44% Series A cumulative redeemable preferred shares of
beneficial interest; 3,000 shares issued and outstanding;
liquidation preference $25 per share. . . . . . . . . . . . . . 90 90
7.125% Series B cumulative redeemable preferred shares of
beneficial interest; 3,600 shares issued and 3,526 and
3,552 shares outstanding in 2001 and 2000; liquidation
preference $25 per share. . . . . . . . . . . . . . . . . . . . 106 107
7.0% Series C cumulative redeemable preferred shares of
beneficial interest; 2,300 shares issued and 2,256 and
2,266 shares outstanding in 2001 and 2000; liquidation
preference $50 per share. . . . . . . . . . . . . . . . . . . . 67 68
Common Shares of Beneficial Interest - par value, $.03 per share;
shares authorized: 150,000; shares issued and outstanding:
34,347 in 2001 and 26,921 in 2000 . . . . . . . . . . . . . . . . . 1,029 807
Capital Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,066,757 758,363
Accumulated Dividends in Excess of Net Income . . . . . . . . . . . . (144,041) (129,568)
Accumulated Other Comprehensive Loss. . . . . . . . . . . . . . . . . (2,936)
------------ ------------
Shareholders' Equity. . . . . . . . . . . . . . . . . . . . . . . 921,072 629,867
------------ ------------
Total. . . . . . . . . . . . . . . . . . . . . $ 2,095,747 $ 1,498,477
============ ============
See Notes to Consolidated Financial Statements.
Page 28
STATEMENTS OF CONSOLIDATED CASH FLOWS
(AMOUNTS IN THOUSANDS)
Years Ended December 31,
----------------------------------
2001 2000 1999
---------- ---------- ----------
Cash Flows from Operating Activities:
Net income. . . . . . . . . . . . . . . . . . . . . . . . $ 108,542 $ 79,001 $ 96,130
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization . . . . . . . . . . . . 68,316 54,597 48,668
Equity in earnings of joint ventures. . . . . . . . . (5,547) (4,143) (3,654)
Minority interest in income of partnerships . . . . . 475 630 789
Gain on sales of property . . . . . . . . . . . . . . (8,339) (382) (20,594)
Extraordinary charge (early retirement of debt) . . . 190
Changes in accrued rent and accounts receivable . . . (12,680) (5,071) (4,265)
Changes in other assets . . . . . . . . . . . . . . . (22,869) (15,667) (13,076)
Changes in accounts payable and accrued expenses. . . 17,307 5,505 6,823
Other, net. . . . . . . . . . . . . . . . . . . . . . 1,454 4,573 2,340
---------- ---------- ----------
Net cash provided by operating activities . . 146,659 119,043 113,351
---------- ---------- ----------
Cash Flows from Investing Activities:
Investment in properties. . . . . . . . . . . . . . . . . (471,174) (228,068) (185,667)
Notes receivable:
Advances. . . . . . . . . . . . . . . . . . . . . . . (2,895) (37,818) (20,602)
Collections . . . . . . . . . . . . . . . . . . . . . 7,943 74,420 9,964
Proceeds from sales and disposition of property . . . . . 23,146 3,368 15,010
Proceeds from sales of marketable debt securities . . . . 15,000
Real estate joint ventures and partnerships:
Investments . . . . . . . . . . . . . . . . . . . . . (1,011) (12,475) (3,368)
Distributions . . . . . . . . . . . . . . . . . . . . 4,774 3,241 4,057
Other, net. . . . . . . . . . . . . . . . . . . . . . . . (514) (4)
---------- ---------- ----------
Net cash used in investing activities . . . . . . . . (439,217) (197,846) (165,610)
---------- ---------- ----------
Cash Flows from Financing Activities:
Proceeds from issuance of:
Debt. . . . . . . . . . . . . . . . . . . . . . . . . 442,650 211,804 125,898
Common shares of beneficial interest. . . . . . . . . 307,722 1,398 546
Preferred shares of beneficial interest . . . . . . . 111,263
Principal payments of debt. . . . . . . . . . . . . . . . (329,824) (28,161) (85,532)
Common and preferred dividends paid . . . . . . . . . . . (123,015) (100,376) (95,397)
Other, net. . . . . . . . . . . . . . . . . . . . . . . . 138 (3,144) (628)
---------- ---------- ----------
Net cash provided by financing activities . . . . . . 297,671 81,521 56,150
---------- ---------- ----------
Net increase in cash and cash equivalents . . . . . . . . . . 5,113 2,718 3,891
Cash and cash equivalents at January 1. . . . . . . . . . . . 7,321 4,603 712
---------- ---------- ----------
Cash and cash equivalents at December 31. . . . . . . . . . . $ 12,434 $ 7,321 $ 4,603
========== ========== ==========
See Notes to Consolidated Financial Statements.
Page 29
STATEMENTS OF CONSOLIDATED SHAREHOLDERS' EQUITY
(AMOUNTS IN THOUSANDS)
Years Ended December 31, 2001, 2000 and 1999
Preferred Common Accumulated Accumulated
Shares of Shares of Dividends in Deferred Other
Beneficial Beneficial Capital Excess of Compensation Comprehensive
Interest Interest Surplus Net Income Obligation Loss
------------ ----------- ----------- -------------- -------------- ---------------
Balance, January 1, 1999. . . . . . . . . $ 198 $ 800 $ 641,180 $ (108,926) $ (73)
Net income. . . . . . . . . . . . . . . 96,130
Issuance of Series C preferred shares . 69 111,119
Shares issued under benefit plans . . . 1 883
Dividends declared - common shares. . . (75,804)
Dividends declared - preferred shares . (19,593)
Redemption of Series C preferred shares (152)
Deferred compensation obligation. . . . 70
------------ ----------- ----------- -------------- -------------- ---------------
Balance, December 31, 1999. . . . . . . . 267 801 753,030 (108,193) (3)
Net income. . . . . . . . . . . . . . . 79,001
Shares issued under benefit plans . . . 2 1,783
Shares issued in exchange for interest
in limited partnerships. . . . . . . 2 3,554
Dividends declared - common shares. . . (80,336)
Dividends declared - preferred shares . (20,040)
Redemption of Series B preferred shares (1) 1 (2)
Redemption of Series C preferred shares (1) 1 (2)
Deferred compensation obligation. . . . 3
------------ ----------- ----------- -------------- -------------- ---------------
Balance, December 31, 2000. . . . . . . . 265 807 758,363 (129,568)
Net income. . . . . . . . . . . . . . . 108,542
Issuance of common stock. . . . . . . . 216 301,824
Shares issued under benefit plans . . . 4 6,571
Dividends declared - common shares. . . (103,312)
Dividends declared - preferred shares . (19,703)
Redemption of Series B preferred shares (1) 1
Redemption of Series C preferred shares (1) 1 (1)
Other Comprehensive Loss. . . . . . . . $ (2,936)
------------ ----------- ----------- -------------- -------------- ---------------
Balance, December 31, 2001. . . . . . . . $ 263 $ 1,029 $1,066,757 $ (144,041) $ - $ (2,936)
============ =========== =========== ============== ============== ===============
See Notes to Consolidated Financial Statements.
Page 30
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business
Weingarten Realty Investors, a Texas real estate investment trust, is engaged in
the acquisition, development and management of real estate, primarily anchored
neighborhood and community shopping centers and, to a lesser extent, industrial
properties. Over 60% of the square footage of WRI's portfolio is in Texas, with
the remainder located primarily in the southern half of the United States.
WRI's major tenants include supermarkets, discount retailers, drugstores and
other merchants who generally sell basic, necessity-type commodities. WRI
currently operates and intends to operate in the future as a real estate
investment trust.
Basis of Presentation
The consolidated financial statements include the accounts of WRI and its
subsidiaries, as well as 100% of the accounts of joint ventures and partnerships
over which WRI exercises financial and operating control and the related amounts
of minority interests. All significant intercompany balances and transactions
have been eliminated. Investments in joint ventures and partnerships where WRI
has the ability to exercise significant influence but does not exercise
financial and operating control are accounted for using the equity method. In
July 2000, the Emerging Issues Task Force of the Financial Accounting Standards
Board reached a consensus on EITF Issue No. 00-1, "Investor Balance Sheet and
Income Statement Display under the Equity Method for Investments in Certain
Partnerships and Other Ventures." This consensus requires that the
proportionate share method of presenting balance sheet and income statement
information for partnerships and other ventures in which entities have joint
interest and control be discontinued, except in limited circumstances. WRI was
required to conform with the guidance provided in this Issue effective December
31, 2000.
Revenue Recognition
Rental revenue is generally recognized on a straight-line basis over the life of
the lease. Revenue from tenant reimbursements of taxes, maintenance expenses
and insurance is recognized in the period the related expense is recorded.
Revenue based on a percentage of tenants' sales was estimated and accrued
ratably over the year in 1999. Beginning January 1, 2000, such revenue was
recognized only after the tenant exceeded their sales breakpoint, in accordance
with the SEC Staff Accounting Bulletin No. 101, "Revenue Recognition in
Financial Statements." Implementation of this bulletin reduced revenue by an
estimated $.6 million in 2000 and had no effect on 2001.
Property
Real estate assets are stated at cost less accumulated depreciation, which, in
the opinion of management, is not in excess of the individual property's
estimated undiscounted future cash flows, including estimated proceeds from
disposition. Depreciation is computed using the straight-line method, generally
over estimated useful lives of 18-50 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.
WRI's properties are reviewed for impairment if events or changes in
circumstances indicate that the carrying amount of the property 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. Such carrying
amount would be adjusted, if necessary, to estimated fair value to reflect an
impairment in the value of the asset.
Capitalization
Carrying charges, principally interest and ad valorem taxes, on land under
development and buildings under construction are capitalized as part of land
under development and buildings and improvements.
Page 31
Deferred Charges
Debt and lease costs are amortized primarily on a straight-line basis over the
terms of the debt and over the lives of leases, respectively.
Use of Estimates
The preparation of financial statements requires management to make use of
estimates and assumptions that affect amounts reported in the financial
statements as well as certain disclosures. Actual results could differ from
those estimates.
Per Share Data
Net income per common share - basic is computed using net income available to
common shareholders and the weighted average shares outstanding. Net income per
common share - diluted includes the effect of potentially dilutive securities
for the periods indicated, as follows (in thousands):
2001 2000 1999
--------- --------- ---------
Numerator:
Net income available to common shareholders - basic. . . . . $ 88,839 $ 58,961 $ 76,537
Income attributable to operating partnership units . . . . . 83 131 141
--------- --------- ---------
Net income available to common shareholders - diluted. . . . $ 88,922 $ 59,092 $ 76,678
========= ========= =========
Denominator:
Weighted average shares outstanding - basic. . . . . . . . . 32,069 26,775 26,690
Effect of dilutive securities:
Share options and awards . . . . . . . . . . . . . . . . 126 52 58
Operating partnership units. . . . . . . . . . . . . . . 51 104 142
--------- --------- ---------
Weighted average shares outstanding - diluted. . . . . . . . 32,246 26,931 26,890
========= ========= =========
Options to purchase, in millions: .3, .9 and .6 common shares in 2001, 2000 and
1999, 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.
Statements of Cash Flows
WRI considers all highly liquid investments with original maturities of three
months or less as cash equivalents. WRI issued .1 million common shares of
beneficial interest in 2000 valued at $3.6 million in exchange for interests in
limited partnerships which had been formed to acquire operating properties. We
assumed debt and/or capital lease obligations totaling $165.0 million, $30.7
million and $39.1 million in connection with purchases of property during 2001,
2000 and 1999, respectively. In connection with the sale of improved properties
in 1999, we received notes receivable totaling $41.4 million.
Reclassifications
Certain reclassifications of prior years' amounts have been made to conform with
the current year presentation.
NOTE 2. NEWLY ADOPTED ACCOUNTING PRONOUNCEMENTS
On January 1, 2001, WRI adopted SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," as amended. SFAS No. 133 establishes
accounting and reporting standards for derivative instruments. Specifically,
SFAS No. 133 requires an entity to recognize all derivatives as either assets or
liabilities in the statement of financial position and to measure those
instruments at fair value. Additionally, the fair value adjustments will affect
either shareholders' equity or net income depending on whether the derivative
instruments qualifies as a hedge for accounting purposes and, if so, the nature
of the hedging activity.
Page 32
WRI hedges the future cash flows of debt transactions principally through
interest rate swaps with major financial institutions. WRI has four interest
rate swap contracts with an aggregate notional amount of $70 million, which are
designated as cash flow hedges, and eleven interest rate swap contracts with an
aggregate notional amount of $107.5 million, which are designated as fair value
hedges. As of January 1, 2001, the adoption of the new standard resulted in a
cumulative transition adjustment of $1.9 million to accumulated other
comprehensive loss, a component of shareholders' equity, and a corresponding
liability of the same amount for our interest rate swaps designated as cash flow
hedges. For the year ended December 31, 2001, the decrease in fair market value
of these interest rate swaps was $2.6 million and was recorded in accumulated
other comprehensive loss and other liabilities. For the year ended December 31,
2001, the increase in fair market value of the interest rate swaps designated as
fair value hedges was $1.0 million and was recorded in other assets and
fixed-rate debt.
Within the next twelve months, the Company expects to reclassify to earnings as
interest expense approximately $2.6 million of the current balance held in
accumulated other comprehensive loss. With respect to fair value hedges, both
changes in fair market value of the derivative hedging instrument and changes in
the fair value of the hedged item will be recorded in earnings each reporting
period. These amounts should completely offset with no impact to earnings,
except for the portion of the hedge that proves to be ineffective, if any.
In June 2001, FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations", which is effective for fiscal years beginning after June 15, 2002.
SFAS No. 143 addresses financial accounting and reporting for obligations
associated with the retirement of tangible long-lived assets and the associated
asset retirement costs. The adoption of SFAS No. 143 will not have a material
impact on our financial position, results of operations, or cash flows.
In August 2001, FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets", which is effective for fiscal years beginning
after December 15, 2001. SFAS No. 144 addresses accounting and reporting for
the impairment or disposal of a segment of a business. The adoption of SFAS No.
144 will not have a material impact on our financial position, results of
operations, or cash flows.
NOTE 3. DEBT
WRI's debt consists of the following (in thousands):
DECEMBER 31,
--------------------------
2001 2000
------------ ------------
Fixed-rate debt payable to 2015 at 6.0% to 8.75% . . . . . . . . . . $ 796,900 $ 472,271
Variable-rate unsecured notes payable. . . . . . . . . . . . . . . . 100,000 50,000
Unsecured notes payable under revolving credit agreements. . . . . . 134,500 230,100
Obligations under capital leases . . . . . . . . . . . . . . . . . . 33,554 33,467
Industrial revenue bonds payable to 2015 at 1.8% to 3.6% . . . . . . 5,868 6,010
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 505
------------ ------------
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,070,835 $ 792,353
============ ============
In November 2000, WRI entered into an unsecured $350 million revolving credit
agreement with a syndicate of banks. The agreement expires in November 2003,
but we can request a one-year extension of the agreement, solely at our option.
We also have an agreement for an unsecured and uncommitted overnight credit
facility totaling $20 million with a bank to be used for cash management
purposes. WRI also has letters of credit totaling $39.6 million outstanding
under the $350 million revolving credit facility at December 31, 2001. The
revolving credit agreements are subject to normal banking terms and conditions
and do not adversely restrict our operations or liquidity.
On July 5, 2001, we entered into a $50 million unsecured term loan with two
banks that also participate in our $350 million revolving credit facility. The
terms of the $50 million loan, including pricing, are substantially identical to
those of our $350 million revolving credit facility, and it also matures on the
same date.
Page 33
At December 31, 2001, the variable interest rate for notes payable under the $20
million revolving credit agreement was 2.04%. During 2001, the maximum balance
and weighted average balance outstanding under both revolving credit facilities
were $302.9 million and $149.5 million, respectively, at an average interest
rate of 5.16%. WRI made cash payments for interest on debt, net of amounts
capitalized, of $42.9 million in 2001, $40.8 million in 2000 and $31.9 million
in 1999.
Various leases and properties and current and future rentals from those leases
and properties collateralize certain debt. At December 31, 2001 and 2000, the
carrying value of such property aggregated $491.3 million and $221.6 million,
respectively.
On June 25, 2001, WRI entered into two forward-starting interest rate swap
contracts with a notional amount of $188.7 million. These contracts were
designated as a cash flow hedge of forecasted interest payments for $200 million
of unsecured notes with a coupon of 7% that were sold on July 12, 2001.
Concurrent with the sale of the 7% notes, we settled our $188.7 million
forward-starting interest rate swap contracts, resulting in a gain of $1.6
million recorded in accumulated other comprehensive income. This $1.6 million
gain is being amortized to earnings over the life of the 7% notes.
On July 26, 2001, the Company entered into eleven interest rate swaps with an
aggregate notional amount of $107.5 million that convert fixed interest payments
at rates from 6.35% to 7.35% to variable interest payments. These interest rate
swaps have been designated as fair value hedges. We have determined that these
contracts will be highly effective in limiting our risk of changes in the fair
value of the fixed-rate notes attributable to changes in variable interest
rates.
WRI has two interest rate swap contracts with an aggregate notional amount of
$20 million that serve as a hedge against changes in interest rates on a like
amount of our $350 million variable-rate revolving credit facility. Such
contracts, which expire in 2004, have been outstanding since their purchase in
1992 and fix the interest rate at 7.7%. We also entered into two additional
interest rate swaps for a notional amount of $25 million each which serve as
hedges against changes in interest rates on two separate $25 million
variable-rate medium term notes which mature in 2002 and 2003. These swaps fix
the interest rates on the medium term notes at 7.0% and 6.8% for the two-year
and three-year notes, respectively.
The interest rate swaps increased interest expense and decreased net income by
$.8 million in 2001, $.5 million in 2000 and $1.0 million in 1999. The interest
rate swaps increased the average rate for our debt by .1% for 2001 and 2000 and
.2% for 1999. WRI could be exposed to credit losses in the event of
non-performance by the counter-party; however, the likelihood of such
non-performance is remote.
In January 2000, WRI issued $10.5 million of ten-year 8.25% fixed-rate,
unsecured medium term notes. In connection with this debt issuance, we entered
into a ten-year interest rate swap agreement with a notional amount of $10.5
million to swap 8.25% fixed-rate interest for floating-rate interest. On
January 4, 2001, we terminated this swap with the counter-party, resulting in
the receipt of $.9 million. As the swap was accounted for as a hedge of the
medium term note, the gain is being amortized over the remaining life of the
note, which lowers the effective interest rate on the note to 7.4%.
In July 2000, the Company issued a two-year $25 million variable-rate, unsecured
medium term note that bears interest at 50 basis points over LIBOR and a
three-year $25 million variable-rate note that bears interest at 60 basis points
over LIBOR. At the time of issuance, the interest rates were 7.23% and 7.33%,
respectively. During November and December of 2000, we entered into interest
rate swap agreements which fix the interest rates on these notes.
In December 2000, we completed three fixed-rate medium term note transactions
totaling $36 million which included a twelve-year $11 million note bearing
interest at 7.5%, a ten-year $10 million note bearing interest at 7.4% and a
ten-year $15 million note bearing interest at 7.5%.
In conjunction with acquisitions completed during 2001, we assumed $165.0
million of non-recourse debt secured by the related properties. The weighted
average interest rate on this debt is 8.22%, and the average remaining life is
7.8 years. Additionally, ten-year non-recourse debt secured by retail
Page 34
properties held by joint ventures in which we participate was issued during
2001, our share of which totaled $5.4 million. The weighted average interest
rate on this debt is 7.3%.
In the third quarter of 1999, WRI filed a $400 million shelf registration
statement with the SEC, which allows for the issuance of debt or equity
securities or warrants. The unused portion of the shelf registration was $83.0
million at December 31, 2001 and $18.0 million following the issuance of $65
million medium term notes in early 2002.
In March 2001, we filed a $500 million shelf registration statement, of which
$398.9 million is currently available.
WRI's debt can be summarized as follows (in thousands):
DECEMBER 31,
--------------------------
2001 2000
------------ ------------
As to interest rate (including the effects of
interest rate swaps):
Fixed-rate debt . . . . . . . . . . . . . . . . .$ 780,500 $ 572,783
Variable-rate debt. . . . . . . . . . . . . . . . 290,335 219,570
------------ ------------
Total . . . . . . . . . . . . . . . .$ 1,070,835 $ 792,353
============ ============
As to collateralization:
Unsecured debt. . . . . . . . . . . . . . . . . .$ 798,524 $ 669,106
Secured debt. . . . . . . . . . . . . . . . . . . 272,311 123,247
------------ ------------
Total . . . . . . . . . . . . . . . .$ 1,070,835 $ 792,353
============ ============
Subsequent to year end, we completed two medium term note transactions totaling
$65 million which included a twelve-year $35 million note bearing interest at
6.7% and a twelve-year $30 million note bearing interest at 6.5%.
Scheduled principal payments on our debt (excluding $134.5 million due under our
revolving credit agreements, $50.0 million term loan, $21 million of capital
leases and $1.0 million market value of rate swaps) are due during the following
years (in thousands):
2002 . . . . . . $ 58,781
2003 . . . . . . 53,925
2004 . . . . . . 55,755
2005 . . . . . . 66,057
2006 . . . . . . 53,603
2007 . . . . . . 59,984
2008 . . . . . . 162,231
2009 . . . . . . 56,068
2010 . . . . . . 39,771
2011 . . . . . . 231,683
Thereafter . . . 26,365
Various debt agreements contain restrictive covenants, the most restrictive of
which requires WRI to maintain a pool of qualifying assets, as defined, of not
less than 185% of unsecured debt. Other restrictions include minimum interest
and fixed charge coverage ratios, minimum unencumbered interest coverage ratios,
minimum net worth requirements and both secured and unsecured debt to total
asset value measures. Management believes that WRI is in compliance with all
restrictive covenants.
Page 35
NOTE 4. PREFERRED SHARES
In February 1998, WRI issued $75 million of 7.44% Series A cumulative redeemable
preferred shares with a liquidation preference of $25 per share. The shares are
callable at WRI's option any time after March 31, 2003 and have no stated
maturity. In October 1998, WRI issued $90 million of 7.125% Series B cumulative
redeemable preferred shares with a liquidation preference of $25 per share and
no stated maturity. WRI can elect to redeem the shares anytime after October
20, 2003. The Series B shares are redeemable by the holder only upon their
death and are also redeemable in either cash or common shares at our option.
There are limitations on the number of shares per shareholder and in the
aggregate that may be redeemed per year. In January 1999, WRI issued $115
million of 7.0% Series C cumulative redeemable preferred shares with a
liquidation preference of $50 per share and no stated maturity. WRI can elect
to redeem these shares anytime after March 15, 2004. The redemption rights of
the shareholders and the related restrictions are effectively the same as for
the Series B preferred shares.
NOTE 5. COMMON SHARES
On January 29, 2001, we issued 4.5 million common shares of beneficial interest.
In February 2001, the underwriters exercised their over-allotment option and
purchased an additional 200,000 shares. Net proceeds to WRI totaled $188.1
million based on a price of $42.19 per share. In May 2001, we issued 690,000
common shares of beneficial interest. Net proceeds of $27.9 million were based
on a price of $42.85 per share. In November 2001, we issued 1.8 million common
shares of beneficial interest. Net proceeds of $86.0 million were based on a
price of $50.20 per share. Proceeds from these offerings were used to pay down
amounts outstanding under our $350 million revolving credit facility.
In February 2002, we issued 198,098 common shares of beneficial interest. Net
proceeds to WRI totaled $9.5 million based on a price of $50.48 per share and
will be used to pay down amounts outstanding under our $350 million revolving
credit facility.
In February 2002, a three-for-two stock split was declared for shareholders of
record on April 1, 2002, payable April 15, 2002.
NOTE 6. PROPERTY
WRI's property consists of the following (in thousands):
DECEMBER 31,
--------------------------
2001 2000
------------ ------------
Land . . . . . . . . . . . . . . $ 439,332 $ 329,082
Land held for development. . . . 24,131 23,924
Land under development . . . . . 56,414 38,181
Buildings and improvements . . . 1,750,059 1,303,595
Construction in-progress . . . . 82,457 33,632
------------ ------------
Total. . . . . . . . . $ 2,352,393 $ 1,728,414
============ ============
The following carrying charges were capitalized (in thousands):
DECEMBER 31,
-------------------------------
2001 2000 1999
--------- --------- ---------
Interest . . . . . . . . . . . . $ 9,698 $ 4,204 $ 3,037
Ad valorem taxes . . . . . . . . 383 333 326
--------- --------- ---------
Total. . . . . . . . . $ 10,081 $ 4,537 $ 3,363
========= ========= =========
Page 36
During 2001, WRI acquired 30 shopping centers and four industrial properties.
These transactions added 6.1 million square feet to our portfolio and represent
an investment of $518.6 million. In 2001, WRI acquired land at seven separate
locations for the development of retail shopping centers. During 2001, we
invested $76.9 million in new developments.
NOTE 7. INVESTMENTS IN REAL ESTATE JOINT VENTURES
WRI owns interests in 15 joint ventures or limited partnerships where we do not
exercise financial and operating control. These partnerships are accounted for
under the equity method since WRI exercises significant influence. Our
interests in these joint ventures and limited partnerships range from 20% to 75%
and, with the exception of one partnership which owns seven industrial
properties, each venture owns a single real estate asset. Combined condensed
financial information of these ventures is summarized as follows (in thousands):
DECEMBER 31,
----------------------
2001 2000
---------- ----------
Combined Balance Sheets
Property . . . . . . . . . . . . . . . $ 171,344 $ 176,247
Accumulated depreciation . . . . . . . (24,941) (21,755)
---------- ----------
Property - net. . . . . . . . . . 146,403 154,492
Other assets . . . . . . . . . . . . . 11,373 10,800
---------- ----------
Total . . . . . . . . . $ 157,776 $ 165,292
========== ==========
Debt . . . . . . . . . . . . . . . . . $ 76,635 $ 77,274
Amounts payable to WRI . . . . . . . . 9,270 16,622
Other liabilities. . . . . . . . . . . 4,705 5,359
Accumulated equity . . . . . . . . . . 67,166 66,037
---------- ----------
Total . . . . . . . . . $ 157,776 $ 165,292
========== ==========
YEARS ENDED DECEMBER 31,
----------------------------
2001 2000 1999
-------- -------- --------
Combined Statements of Income
Revenues. . . . . . . . . . . . . . . $ 25,548 $ 21,301 $ 10,960
-------- -------- --------
Expenses:
Interest. . . . . . . . . . . . . . 7,082 6,427 1,538
Depreciation and amortization . . . 4,519 3,924 1,991
Operating . . . . . . . . . . . . . 3,578 3,208 1,943
Ad valorem taxes. . . . . . . . . . 3,294 2,731 1,280
General and administrative. . . . . 46 18 16
-------- -------- --------
Total. . . . . . . . . . . . . 18,519 16,308 6,768
-------- -------- --------
Gain on sales of property . . . . . . 2,854 5
-------- -------- --------
Net income. . . . . . . . . . . . . . $ 9,883 $ 4,993 $ 4,197
======== ======== ========
Page 37
Our investment in real estate joint ventures, as reported on the balance sheets,
differs from our proportionate share of the joint ventures' underlying net
assets due to basis differentials which arose upon the transfer of assets from
WRI to the joint ventures. This basis differential which totaled $5.0 million
and $5.1 million at December 31, 2001 and 2000, respectively, is depreciated
over the useful lives of the related assets.
Fees earned by WRI for the management of these joint ventures totaled, in
millions, $.5 in 2001, $.4 in 2000 and $.1 in 1999.
In December 1999, WRI sold seven industrial properties totaling 2.0 million
square feet to a limited partnership in which we retained 20% ownership. WRI
serves as general partner. WRI loaned $41.4 million to the partnership until
August of 2000, at which time the loan was replaced with a ten-year non-recourse
third party mortgage with an interest rate of 8.1%.
Two shopping centers were acquired in June and one in August of 2000 in joint
ventures with an institutional investor. WRI loaned these three partnerships an
aggregate of $32.0 million which was replaced with ten-year non-recourse third
party mortgages with a weighted average interest rate of 7.8%.
In August of 2001, WRI sold its interests in two joint ventures which owned
mini-storage warehouses resulting in a gain of $2.9 million.
NOTE 8. RELATED PARTY TRANSACTIONS
WRI has mortgage bonds and notes receivable from WRI Holdings, Inc. of $4.0
million and $3.8 million, net of deferred gain of $3.0 million at December 31,
2001 and 2000, respectively. WRI and WRI Holdings share certain directors and
are under common management. Unimproved land and an investment in a joint
venture which owns a motor hotel collateralize these receivables. The bonds and
notes bear interest at rates of 16% and prime plus 1%, respectively. However,
due to WRI Holdings' poor financial condition, WRI has limited the recognition
of interest income for financial statement purposes to the amount of cash
payments received. WRI did not receive any interest payments in 2001 or 2000
and does not anticipate receiving such payments in the near term. No interest
income has been recognized for financial reporting purposes in the last three
years.
In December 1999, undeveloped land from WRI Holdings of 102.6 acres was sold and
the net proceeds of $8.1 million were used to pay down amounts outstanding under
mortgage bonds and notes payable to WRI.
WRI's unrecorded receivable for interest on the mortgage bonds and notes
receivable was $26.2 million and $23.6 million at December 31, 2001 and 2000,
respectively. Interest income not recognized by WRI for financial reporting
purposes aggregated, in millions, $2.5, $2.7 and $4.2 for 2001, 2000 and 1999,
respectively. WRI does not anticipate recovery of the unrecorded receivable in
the future.
WRI owns interests in several joint ventures and partnerships. Notes receivable
from these entities bear interest at 4.25% to 10% at December 31, 2001, are due
at various dates through 2028 and are generally secured by real estate assets.
WRI recognized interest income on these notes as follows, in millions: $.6 in
2001; $3.1 in 2000 and $1.0 in 1999.
JPMorgan Chase Bank is a significant participant in and the agent for the banks
that provide WRI's $350 million revolving credit agreement and is a
counter-party in 13 interest rate swap agreements with WRI. An executive
officer of J.P. Morgan Chase & Co. serves on the WRI Board of Trustees.
NOTE 9. FEDERAL INCOME TAX CONSIDERATIONS
Federal income taxes are not provided because WRI believes it qualifies as a
REIT under the provisions of the Internal Revenue Code. Shareholders of WRI
include their proportionate taxable income in their individual tax returns. As
a REIT, we must distribute at least 90% (95% in 2000 and 1999) of our ordinary
taxable income to our shareholders and meet certain income source and investment
restriction requirements.
Page 38
Taxable income differs from net income for financial reporting purposes
principally because of differences in the timing of recognition of interest, ad
valorem taxes, depreciation, rental revenue and pension expense. As a result of
these differences, the tax basis of our net assets exceeds the book value by
$1.4 million at December 31, 2001.
For federal income tax purposes, the cash dividends distributed to common
shareholders are characterized as follows:
2001 2000 1999
-------- -------- --------
Ordinary income . . . . . . . . . . . . . . . . . 92.2% 87.1% 84.2%
Return of capital (generally non-taxable) . . . . 6.2 12.7 4.0
Capital gain distributions. . . . . . . . . . . . 1.6 .2 11.8
-------- -------- --------
Total . . . . . . . . . . . . . . . . 100.0% 100.0% 100.0%
======== ======== ========
NOTE 10. LEASING OPERATIONS
WRI's lease terms range from less than one year for smaller tenant spaces to
over twenty-five years for larger tenant spaces. In addition to minimum lease
payments, most of the leases provide for contingent rentals (payments for taxes,
maintenance and insurance by lessees and for an amount based on a percentage of
the tenants' sales). Future minimum rental income from non-cancelable tenant
leases at December 31, 2001, in millions, is: $248.9 in 2002; $220.9 in 2003;
$190.0 in 2004; $158.1 in 2005; $125.1 in 2006 and $644.8 thereafter. The
future minimum rental amounts do not include estimates for contingent rentals.
Such contingent rentals, in millions, aggregated $64.0 in 2001, $50.3 in 2000
and $44.5 in 1999.
NOTE 11. COMMITMENTS AND CONTINGENCIES
WRI leases land from the owners and then subleases these properties to other
parties. Future minimum rental payments under these operating leases, in
millions, are: $1.5 in 2002; $1.4 in 2003; $1.2 in 2004; $1.0 in 2005, $1.0 in
2006; and $19.1 thereafter. Future minimum rental payments on these leases have
not been reduced by future minimum sublease rentals aggregating $21.4 million
through 2036 that are due under various non-cancelable subleases. Rental
expense (including insignificant amounts for contingent rentals) for operating
leases aggregated, in millions: $2.8 in 2001, $2.5 in 2000 and $3.8 in 1999.
Sublease rental revenue (excluding amounts for improvements constructed by WRI
on the leased land) from these leased properties was as follows, in millions:
$3.0 in 2001, $3.1 in 2000 and $2.9 in 1999.
Property under capital leases, consisting of four shopping centers, aggregated
$29.1 million at December 31, 2001 and 2000, respectively, and is included in
buildings and improvements. Amortization of property under capital leases is
included in depreciation and amortization expense. Future minimum lease
payments under these capital leases total $65.4 million, with annual payments
due, in millions, of $1.8 in 2002; $1.9 in each of 2003, 2004 and 2005; $2.0 in
2006 and $55.9 thereafter. The amount of these total payments representing
interest is $31.8 million. Accordingly, the present value of the net minimum
lease payments is $33.6 million at December 31, 2001.
In 1998 and 1997, WRI formed limited partnerships to acquire certain property.
WRI exercises operating and financial control of the partnerships and
consolidates their operations in the accompanying consolidated financial
statements. The partnership agreements allow for the outside limited partners
to put their interests to the partnership for the original consideration of $5.7
million payable in cash or WRI common shares at the option of WRI. In 2000, WRI
issued .1 million common shares of beneficial interest valued at $3.6 million in
exchange for certain of these limited partnership interests.
WRI is involved in various matters of litigation arising in the normal course of
business. While WRI is unable to predict with certainty the amounts involved,
WRI's management and counsel are of the opinion that, when such litigation is
resolved, WRI's resulting liability, if any, will not have a material effect on
WRI's consolidated financial statements.
Page 39
NOTE 12. FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value of WRI's financial instruments was determined using available
market information and appropriate valuation methodologies as of December 31,
2001. Unless otherwise described below, all other financial instruments are
carried at amounts which approximate their fair values.
Based on rates currently available to WRI for debt with similar terms and
average maturities, fixed-rate debt with carrying values of $780.5 million and
$572.8 million have fair values of approximately $816.9 million and $575.9
million at December 31, 2001 and 2000, respectively. The fair value of WRI's
variable-rate debt approximates its carrying values of $290.3 million and $219.6
million at year-end 2001 and 2000, respectively.
NOTE 13. SHARE OPTIONS AND AWARDS
WRI had an incentive share option plan, which provided for the issuance of
options and share awards up to a maximum of 700,000 common shares that expired
in December 1997. Options granted under this plan become exercisable in equal
increments over a three-year period. WRI has an additional share option plan,
which grants 100 share options to every employee of WRI, excluding officers,
upon completion of each five-year interval of service. This plan, which expires
in 2002, provides options for a maximum of 100,000 common shares. Options
granted under this plan are exercisable immediately. For both of these share
option plans, options are granted to employees of WRI at an exercise price equal
to the quoted fair market value of the common shares on the date the options are
granted and expire upon termination of employment or ten years from the date of
grant.
In 2001, WRI granted .3 million share options under a compensatory incentive
share plan. This plan, which expires in 2002, provides for the issuance of up
to 1,750,000 shares, either in the form of restricted shares or share options.
Prior to 2000, the restricted shares generally vested over a ten-year period,
with potential acceleration of vesting due to appreciation in the market value
of our common shares. Beginning in 2000, the vesting period is five years. The
share options granted to non-officers vest over a three-year period beginning
one year after the date of grant and over a seven-year period beginning two
years after the date of grant for officers. Share options were granted at the
quoted fair market value on the date of grant. Restricted shares are issued at
no cost to the employee, and as such we recognized compensation expense relating
to restricted shares as follows, in millions: $.8 in 2001 and $.3 in 2000 and
1999.
In April 2001, the Company adopted the 2001 Long Term Incentive Plan for the
issuance of options and share awards up to a maximum of one million common
shares. The plan expires in April 2011.
WRI does not recognize compensation cost for share options when the option
exercise price equals or exceeds the quoted fair market value on the date of the
grant. Had we determined compensation cost for our share option and award plans
based on the fair value of the options granted at the grant dates, our proforma
net income available to common shareholders would have been as follows, in
millions: $88.3, $58.7 and $75.9 in 2001, 2000 and 1999, respectively. Proforma
net income per common share - basic would have been $2.75, $2.19 and $2.84 in
2001, 2000 and 1999, respectively.
The fair value of each option grant was estimated on the date of grant using the
Black-Scholes option-pricing method with the following weighted-average
assumptions in 2001, 2000 and 1999, respectively: dividend yield of 6.6%, 6.9%
and 7.3%; expected volatility of 15.3%, 15.4% and 18.1%; expected lives of 7.4,
7.4 and 6.9 and risk-free interest rates of 5.1%, 5.1% and 6.6%.
Page 40
Following is a summary of the option activity for the three years ended December
31, 2001:
SHARES WEIGHTED
UNDER AVERAGE
OPTION EXERCISE PRICE
----------- --------------
Outstanding, January 1, 1999 . . . . . 1,152,779 $ 37.99
Granted. . . . . . . . . . . . . . . . 17,900 41.29
Canceled . . . . . . . . . . . . . . . (14,800) 40.23
Exercised. . . . . . . . . . . . . . . (39,089) 32.95
-----------
Outstanding, December 31, 1999 . . . . 1,116,790 38.19
Granted. . . . . . . . . . . . . . . . 371,801 42.17
Canceled . . . . . . . . . . . . . . . (27,800) 42.17
Exercised. . . . . . . . . . . . . . . (45,000) 34.40
-----------
Outstanding, December 31, 2000 . . . . 1,415,791 39.28
Granted. . . . . . . . . . . . . . . . 351,640 46.59
Canceled . . . . . . . . . . . . . . . (110,900) 37.79
Exercised. . . . . . . . . . . . . . . (286,434) 36.76
-----------
Outstanding, December 31, 2001 . . . . 1,370,097 $ 41.80
===========
The number of share options exercisable at December 31, 2001, 2000 and 1999 was,
in millions: .7, .9 and .7, respectively. Options exercisable at year-end 2001
had a weighted average exercise price of $38.94. The weighted average fair
value per share of options granted during 2001, 2000 and 1999 was $3.64, $2.92
and $4.25, respectively. Share options outstanding at December 31, 2001 had
exercise prices ranging from $25.00 to $49.04 and a weighted average remaining
contractual life of 6.6 years. Approximately 98% of the options outstanding at
year-end 2001 have exercise prices between $37.00 and $49.04 and a weighted
average contractual life of 6.6 years. There were 1.4 million common shares
available for the future grant of options or awards at December 31, 2001.
NOTE 14. EMPLOYEE BENEFIT PLANS
WRI has a Savings and Investment Plan to which eligible employees may elect to
contribute from 1% of their salaries to the maximum amount established annually
by the Internal Revenue Service. Employee contributions are matched by WRI at
the rate of $.50 per $1.00 for the first 6% of the employee's salary. The
employees vest in the employer contributions ratably over a six-year period.
Compensation expense related to the plan was $.4 million in 2001 and $.3 million
in 2000 and 1999.
Effective April 1, 1999, WRI adopted an Employee Share Purchase Plan under which
250,000 WRI common shares have been authorized. These shares, as well as common
shares purchased by WRI on the open market, are made available for sale to
employees at a discount of 15%. Shares purchased by the employee under the plan
are restricted from being sold for two years from the date of purchase or until
termination of employment with WRI. A total of 10,574 and 9,759 shares were
purchased by employees at an average price of $38.76 and $37.73 during 2001 and
2000, respectively.
WRI has a defined benefit pension plan covering substantially all of its
employees. The benefits are based on years of service and the employee's
compensation during the last five years of service. Our funding policy is to
make annual contributions as required by applicable regulations; however, we
Page 42
have not been required to make contributions for any of the past three years.
Reconciliation of the benefit obligation, plan assets at fair value and the
funded status of the plan are as follows (in thousands):
2001 2000
--------- ---------
Benefit obligation at beginning of year . . . . . . . . $ 11,129 $ 10,703
Service cost. . . . . . . . . . . . . . . . . . . . . . 556 539
Interest cost . . . . . . . . . . . . . . . . . . . . . 825 746
Actuarial gain. . . . . . . . . . . . . . . . . . . . . (19) (640)
Benefit payments. . . . . . . . . . . . . . . . . . . . (294) (219)
--------- ---------
Benefit obligation at end of year . . . . . . . . . . . $ 12,197 $ 11,129
========= =========
Fair value of plan assets at beginning of year. . . . . $ 12,243 $ 12,057
Actual return on plan assets. . . . . . . . . . . . . . (1,095) 405
Benefit payments. . . . . . . . . . . . . . . . . . . . (322) (219)
--------- ---------
Fair value of plan assets at end of year. . . . . . . . $ 10,826 $ 12,243
========= =========
Plan assets at fair value less benefit obligation . . . $ (1,371) $ 1,114
Unrecognized gain . . . . . . . . . . . . . . . . . . . (432) (2,785)
--------- ---------
Pension liability . . . . . . . . . . . . . . . . . . . $ (1,803) $ (1,671)
========= =========
The components of net periodic pension cost are as follows (in thousands):
2001 2000 1999
-------- -------- --------
Service cost . . . . . . . . . . . . . . . . . $ 556 $ 539 $ 533
Interest cost. . . . . . . . . . . . . . . . . 825 746 729
Expected return on plan assets . . . . . . . . (1,092) (1,075) (950)
Prior service cost . . . . . . . . . . . . . . 8
Recognized gains . . . . . . . . . . . . . . . (158) (281) (59)
-------- -------- --------
Total . . . . . . . . . . . . . $ 131 $ (71) $ 261
======== ======== ========
Assumptions used to develop periodic expense and the actuarial present value of
the benefit obligations were:
2001 2000 1999
------ ------ ------
Weighted average discount rate. . . . . . . . . . . . . . . 7.5% 7.5% 7.5%
Expected long-term rate of return on plan assets. . . . . . 9.0% 9.0% 9.0%
Rate of increase in compensation levels . . . . . . . . . . 5.0% 5.0% 5.0%
In December of 2001, WRI informed the participants that their accrual of
benefits under this plan would cease effective December 31, 2001, but would be
replaced by another plan. We do not anticipate any gain or loss relating to
this change.
WRI also has a non-qualified supplemental retirement plan for officers of WRI,
which provides for benefits in excess of the statutory limits of its defined
benefit pension plan. The obligation is funded in a grantor trust with our
common shares. We recognized expense as follows, in millions: $.4 in 2001 and
$.3 in 2000 and 1999.
Page 42
NOTE 15. SEGMENT INFORMATION
The operating segments presented are the segments of WRI for which separate
financial information is available, and operating performance is evaluated
regularly by senior management in deciding how to allocate resources and in
assessing performance. WRI evaluates the performance of its operating segments
based on net operating income that is defined as total revenues less operating
expenses and ad valorem taxes. Management does not consider the effect of gains
or losses from the sale of property in evaluating ongoing operating performance.
The shopping center segment is engaged in the acquisition, development and
management of real estate, primarily anchored neighborhood and community
shopping centers located in Texas, California, Louisiana, Arizona, Nevada,
Arkansas, New Mexico, Oklahoma, Tennessee, Kansas, Colorado, Missouri, Illinois,
Florida, North Carolina, Mississippi and Maine. 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 Texas, Nevada, Georgia, Florida and
Tennessee, 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 WRI's reportable segments is as follows (in thousands):
SHOPPING
CENTER INDUSTRIAL OTHER TOTAL
----------- ------------ --------- ------------
2001
Revenues . . . . . . . . . . . . . . . . . . $ 277,647 $ 32,148 $ 5,097 $ 314,892
Net operating income . . . . . . . . . . . . 200,372 22,256 4,862 227,490
Equity in earnings of joint ventures . . . . 3,696 1,909 (58) 5,547
Investment in real estate joint ventures . . 25,094 648 25,742
Total assets . . . . . . . . . . . . . . . . 1,775,131 222,005 98,611 2,095,747
Capital expenditures . . . . . . . . . . . . 615,144 44,083 3,306 662,533
2000:
Revenues . . . . . . . . . . . . . . . . . . $ 215,780 $ 27,500 $ 6,954 $ 250,234
Net operating income . . . . . . . . . . . . 155,003 18,826 7,277 181,106
Equity in earnings of joint ventures . . . . 3,410 907 (174) 4,143
Investment in real estate joint ventures . . 25,802 1,046 26,848
Total assets . . . . . . . . . . . . . . . . 1,229,340 185,938 83,199 1,498,477
Capital expenditures . . . . . . . . . . . . 237,071 22,532 594 260,197
1999:
Revenues . . . . . . . . . . . . . . . . . . $ 193,163 $ 27,556 $ 3,376 $ 224,095
Net operating income . . . . . . . . . . . . 137,315 19,653 4,866 161,834
Equity in earnings of joint ventures . . . . 3,277 398 (21) 3,654
Investment in real estate joint ventures . . 17,197 481 17,678
Total assets . . . . . . . . . . . . . . . . 1,048,408 159,464 104,874 1,312,746
Capital expenditures . . . . . . . . . . . . 184,323 49,469 11,095 244,887
Page 43
Net operating income reconciles to income before extraordinary charge as shown
on the Statements of Consolidated Income and Comprehensive Income as follows (in
thousands):
----------------------------------
2001 2000 1999
---------- ---------- ----------
Total segment net operating income . . . . . . . $ 227,490 $ 181,106 $ 161,834
Less:
Depreciation and amortization. . . . . . . . 68,316 54,597 48,668
Interest. . . . . . . . . . . . . .. . . . . 54,473 43,190 32,792
General and administrative. . . . .. . . . . 9,570 8,213 7,513
Minority interest in partnerships .. . . . . 475 630 789
Equity in earnings of joint ventures . . . . (5,547) (4,143) (3,654)
Gain on sales of property . . . . .. . . . . (8,339) (382) (20,594)
---------- ---------- ----------
Income before extraordinary charge.. . . . . . . $ 108,542 $ 79,001 $ 96,320
========== ========== ==========
NOTE 16. BANKRUPTCY REMOTE PROPERTIES
On April 2, 2001, we purchased 19 supermarket-anchored shopping centers,
aggregating 2.5 million square feet, in California. The purchase price for the
properties was $277.5 million, including the assumption of approximately $132
million in debt secured by all 19 properties.
These 19 properties, having a net book value of approximately $275.1 million at
December 31, 2001 (collectively the "Bankruptcy Remote Properties", and each a
"Bankruptcy Remote Property"), are wholly owned by various "Bankruptcy Remote
Entities". Each Bankruptcy Remote Entity is an indirect subsidiary of the
Company. The assets of each Bankruptcy Remote Entity, including the respective
Bankruptcy Remote Property or Properties owned by each, are owned by that
Bankruptcy Remote Entity alone and are not available to satisfy claims that any
creditor may have against the Company, its affiliates, or any other person or
entity. No Bankruptcy Remote Entity has agreed to pay or make its assets
available to pay creditors of the Company, any of its affiliates, or any other
person or entity. Neither the Company nor any of its affiliates has agreed to
pay or make its assets available to pay creditors of any Bankruptcy Remote
Entity (other than any agreement by a Bankruptcy Remote Entity to pay its own
creditors). No affiliate of any Bankruptcy Remote Entity has agreed to pay or
make its assets available to pay creditors of any Bankruptcy Remote Entity.
The accounts of the Bankruptcy Remote Entities are included in WRI's
consolidated financial statements, as WRI owns, indirectly, 100% of each of the
entities. Additionally, WRI, through its wholly owned subsidiaries, makes all
day-to-day operating and financial decisions with respect to these properties,
subject to approval by the loan servicing agent for the certain significant
transactions. WRI has the right to prepay the loan, subject to prepayment
penalties, at any time, which would eliminate all encumbrances and restrictions.
NOTE 17. PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
During the year ended December 31, 2001, WRI acquired 30 retail centers and four
industrial projects totaling $518.6 million. The pro forma financial
information for the years ended December 31, 2001 and 2000 is based on the
historical statements of WRI after giving effect to the acquisitions as if such
acquisitions took place on January 1, 2001 and 2000, respectively.
Page 44
The pro forma financial information shown below is presented for informational
purposes only and may not be indicative of results that would have actually
occurred if the acquisitions had been in effect at the dates indicated, nor does
it purport to be indicative of the results that may be achieved in the future
(in thousands, except per share amounts).
DECEMBER 31,
----------------------
2001 2000
---------- ----------
Pro forma revenues . . . . . . . . . . . . . . . . . . . . $ 341,471 $ 319,709
========== ==========
Pro forma net income available to common shareholders. . . $ 92,931 $ 61,883
========== ==========
Pro forma net income per common share - basic. . . . . . . $ 2.90 $ 2.31
========== ==========
Pro forma net income per common share - diluted. . . . . . $ 2.89 $ 2.31
========== ==========
NOTE 18. QUARTERLY FINANCIAL DATA (UNAUDITED)
Summarized quarterly financial data is as follows (in thousands, except per
share amounts):
FIRST SECOND THIRD FOURTH
--------- --------- --------- ---------
2001:
Revenues. . . . . . . . . . . . . .. . . . . . . $ 67,625 $ 78,979 $ 82,460 $ 85,828
Net income available to common shareholders. . . 20,392 20,971 22,379 25,097 (1)
Net income per common share - basic. . . . . . . 0.68 0.65 0.69 0.75 (1)
Net income per common share - diluted. . . . . . 0.68 0.65 0.69 0.74 (1)
2000:
Revenues. . . . . . . . . . . . . .. . . . . . . $ 59,302 $ 61,566 $ 63,676 $ 65,690
Net income available to common shareholders. . . 14,441 14,968 14,852 14,700
Net income per common share - basic. . . . . . . 0.54 0.56 0.55 0.55
Net income per common share - diluted. . . . . . 0.54 0.56 0.55 0.54
<FN>
(1) Increase is primarily the result of a gains on the sale of
property during the quarter.
****
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
Page 45
PART III
ITEM 10. TRUST MANAGERS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information with respect to WRI's Trust Managers and executive officers is
incorporated herein by reference to the "Election of Trust Managers" and
"Executive Officers" sections of WRI's definitive Proxy Statement for the Annual
Meeting of Shareholders to be held April 29, 2002.
ITEM 11. EXECUTIVE COMPENSATION
Incorporated herein by reference to the "Executive Compensation" section of
WRI's definitive Proxy Statement for the Annual Meeting of Shareholders to be
held April 29, 2002.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Incorporated herein by reference to the "Share Ownership of Certain
Beneficial Owners" section of WRI's definitive Proxy Statement for the Annual
Meeting of Shareholders to be held April 29, 2002.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Incorporated herein by reference to the "Compensation Committee Interlocks
and Insider Participation" section of WRI's definitive Proxy Statement for the
Annual Meeting of Shareholders to be held April 29, 2002.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Financial Statements and Financial Statement Schedules: PAGE
----
(1) (A) Independent Auditors' Report. . . . . . . . . . . . . . . 26
(B) Financial Statements
(i) Statements of Consolidated Income and
Comprehensive Income for the years ended
December 31, 2001, 2000 and 1999. . . . . . . . 27
(ii) Consolidated Balance Sheets as of
December 31, 2001 and 2000 . . . . . . . . . . . 28
(iii) Statements of Consolidated Cash Flows for the
years ended December 31, 2001, 2000 and 1999. . 29
(iv) Statements of Consolidated Shareholders'
Equity for the years ended
ended December 31, 2001, 2000 and 1999 . . . 30
(v) Notes to Consolidated Financial Statements. . . . 31
(2) Financial Statement Schedules:
SCHEDULE PAGE
-------- ----
II Valuation and Qualifying Accounts . . . . . . . . 51
III Real Estate and Accumulated Depreciation. . . . . 52
IV Mortgage Loans on Real Estate . . . . . . . . . . 54
All other schedules are omitted since the required information is not present or
is not present in amounts sufficient to require submission of the schedule or
because the information required is included in the consolidated financial
statements and notes hereto.
Page 46
(b) Reports on Form 8-K
Form 8-K, dated October 26, 2001, was filed to report significant
acquisitions in response to Item 2., Acquisition or Disposition
of Assets and Item 7., Financial Statements, Pro Forma Financial
Information and Exhibits.
A Form 8-K/A, dated October 29, 2001, was filed to supplement
information previously filed on October 26, 2001 in response to
Item 2., Acquisition or Disposition of Assets and Item 7.,
Financial Statements, Pro Forma Financial Information and
Exhibits.
Form 8-K, dated October 29, 2001, was filed to report an event in
response to Item 5., Other Events and Item 7., Financial
Statements, Pro Forma Financial Information and Exhibits.
Form 8-K, dated November 29, 2001, was filed to report an event
in response to Item 5., Other Events and Item 7., Financial
Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits:
3.1 - Restated Declaration of Trust (filed as Exhibit 3.1 to WRI's
Registration Statement on Form 8-A dated January 19, 1999 and
incorporated herein by reference).
3.2 - Amendment of the Restated Declaration of Trust (filed as
Exhibit 3.2 to WRI's Registration Statement on Form 8-A dated
January 19, 1999 and incorporated herein by reference).
3.3 - Second Amendment of the Restated Declaration of Trust (filed
as Exhibit 3.3 to WRI's Registration Statement on Form 8-A
dated January 19, 1999 and incorporated herein by reference).
3.4 - Third Amendment of the Restated Declaration of Trust (filed
as Exhibit 3.4 to WRI's Registration Statement on Form 8-A
dated January 19, 1999 and incorporated herein by reference).
3.5* - Fourth Amendment of the Restated Declaration of Trust dated
April 28, 1999.
3.6* - Fifth Amendment of the Restated Declaration of Trust dated
April 20, 2001.
3.7 - Amended and Restated Bylaws of WRI (filed as Exhibit 99.2 to
WRI's Registration Statement on Form 8-A dated February 23,
1998 and incorporated herein by reference).
4.1 - Third Amended Promissory Note, as restated, effective as of
January 1, 1992, executed by WRI Holdings, Inc., pursuant to
which it may borrow up to the principal sum of $40,000,000
from WRI (filed as Exhibit 10.8 to WRI's Annual Report on
Form 10-K for the year ended December 31, 1997 and
incorporated herein by reference).
4.2 - Master Promissory Note in the amount of $20,000,000 between
WRI, as payee, and Chase Bank of Texas, National Association
(formerly, Texas Commerce Bank National Association), as
maker, effective December 30, 1998 (filed as Exhibit 4.15 to
WRI's Annual Report on Form 10-K for the year ended December
31, 1999 and incorporated herein by reference).
4.3 - Senior Indenture dated as of May 1, 1995 between WRI and
Chase Bank of Texas, National Association (formerly, Texas
Commerce Bank National Association), as trustee (filed as
Exhibit 4(a) to WRI's Registration Statement on Form S-3 (No.
33-57659) and incorporated herein by reference).
4.4 - Subordinated Indenture dated as of May 1, 1995 between WRI
and Chase Bank of Texas, National Association (formerly,
Texas Commerce Bank National Association) (filed as Exhibit
4(b) to WRI's Registration Statement on Form S-3 (No.
33-57659) and incorporated herein by reference).
4.5 - Form of Fixed Rate Senior Medium Term Note (filed as Exhibit
4.19 to WRI's Annual Report on Form 10-K for the year ended
December 31, 1998 and incorporated herein by reference).
Page 47
4.6 - Form of Floating Rate Senior Medium Term Note (filed as
Exhibit 4.20 to WRI's Annual Report on Form 10-K for the year
ended December 31, 1998 and incorporated herein by
reference).
4.7 - Form of Fixed Rate Subordinated Medium Term Note (filed as
Exhibit 4.21 to WRI's Annual Report on Form 10-K for the year
ended December 31, 1998 and incorporated herein by
reference).
4.8 - Form of Floating Rate Subordinated Medium Term Note (filed as
Exhibit 4.22 to WRI's Annual Report on Form 10-K for the year
ended December 31, 1998 and incorporated herein by
reference).
4.9 - Statement of Designation of 7.44% Series A Cumulative
Redeemable Preferred Shares (filed as Exhibit 99.3 to WRI's
Current Report on Form 8-A dated February 23, 1998 and
incorporated herein by reference).
4.10 - Statement of Designation of 7.125% Series B Cumulative
Redeemable Preferred Shares (filed as Exhibit 4.2 to WRI's
Current Report on Form 8-K dated October 28, 1998 and
incorporated herein by reference).
4.11 - Statement of Designation of 7.00% Series C Cumulative
Redeemable Preferred Shares (filed as Exhibit 4.1 to WRI's
Registration Statement on Form 8-A dated January 19, 1999 and
incorporated herein by reference).
4.12 - 7.44% Series A Cumulative Redeemable Preferred Share
Certificate (filed as Exhibit 4 to WRI's Current Report on
Form 8-K dated February 23, 1998 and incorporated herein by
reference).
4.13 - 7.125% Series B Cumulative Redeemable Preferred Share
Certificate (filed as Exhibit 4.1 to WRI's Current Report on
Form 8-K dated October 28, 1998 and incorporated herein by
reference).
4.14 - 7.00% Series C Cumulative Redeemable Preferred Share
Certificate (filed as Exhibit 4.2 to WRI's Registration
Statement on Form 8-A dated January 19, 1999 and incorporated
herein by reference).
4.15 - Credit Agreement dated November 21, 2000 among WRI, the
Lenders Party Hereto and the Chase Manhattan Bank as
Administrative Agent (filed as Exhibit 4.25 to WRI's Annual
Report on Form 10-K for the year ended December 31, 2000 and
incorporated herein by reference).
4.16* - Credit Agreement dated July 5, 2001 among WRI, the Lenders
Party Hereto and Commerzbank AG, as Administrative Agent.
4.17* - Form of 7% Notes due 2011.
10.1 - 1988 Share Option Plan of WRI, as amended (filed as Exhibit
10.1 to WRI's Annual Report on Form 10-K for the year ended
December 31, 1990 and incorporated herein by reference).
10.2 - Weingarten Realty Investors Supplemental Retirement Account
Plan, as amended and restated (filed as Exhibit 10.26 to
WRI's Annual Report on Form 10-K for the year ended December
31, 1992 and incorporated herein by reference).
10.3 - The Savings and Investment Plan for Employees of WRI, as
amended (filed as Exhibit 4.1 to WRI's Registration Statement
on Form S-8 (No. 33-25581) and incorporated herein by
reference).
10.4 - The Fifth Amendment to Savings and Investment Plan for
Employees of WRI (filed as Exhibit 4.1.1 to WRI's
Post-Effective Amendment No. 1 to Registration Statement on
Form S-8 (No. 33-25581) and incorporated herein by
reference).
10.5 - The 1993 Incentive Share Plan of WRI (filed as Exhibit 4.1
to WRI's Registration Statement on Form S-8 (No. 33-52473)
and incorporated herein by reference).
10.6 - 1999 WRI Employee Share Purchase Plan (filed as Exhibit 10.6
to WRI's Annual Report on Form 10-K for the year ended
December 31, 1999 and incorporated herein by reference).
10.7* - 2001 Long Term Incentive Plan.
12.1* - Computation of Fixed Charges Ratios.
21.1* - Subsidiaries of the Registrant.
23.1* - Consent of Deloitte & Touche LLP.
24.1* - Power of Attorney (included on first signature page).
* Filed with this report.
Page 48
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
WEINGARTEN REALTY INVESTORS
By: /s/ Andrew M. Alexander
------------------------
Andrew M. Alexander
Chief Executive Officer
Date: March 19, 2002
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each of Weingarten Realty Investors, a real
estate investment trust organized under the Texas Real Estate Investment Trust
Act, and the undersigned trust managers and officers of Weingarten Realty
Investors hereby constitutes and appoints Andrew M. Alexander, Stanford
Alexander, Martin Debrovner, Stephen C. Richter and Joe D. Shafer, or any one of
them, its or his true and lawful attorney-in-fact and agent, for it or him and
in its or his name, place and stead, in any and all capacities, with full power
to act alone, to sign any and all amendments to this Report, and to file each
such amendment to the Report, with all exhibits thereto, and any and all other
documents in connection therewith, with the Securities and Exchange Commission,
hereby granting unto said attorney-in-fact and agent full power and authority to
do and perform any and all acts and things requisite and necessary to be done in
and about the premises as fully to all intents and purposes as it or he might or
could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirement of the Securities and Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
SIGNATURE TITLE DATE
--------- ----- ----
By: /s/ Stanford Alexander Chairman March 19, 2002
-------------------------
Stanford Alexander and Trust Manager
By: /s/ Andrew M. Alexander Chief Executive Officer, March 19, 2002
-------------------------
Andrew M. Alexander President and Trust Manager
By: /s/ James W. Crownover Trust Manager March 19, 2002
-------------------------
James W. Crownover
By: /s/ Robert J. Cruikshank Trust Manager March 19, 2002
-------------------------
Robert J. Cruikshank
By: /s/ Martin Debrovner Vice Chairman March 19, 2002
-------------------------
Martin Debrovner and Trust Manager
By: /s/ Melvin Dow Trust Manager March 19, 2002
-------------------------
Melvin Dow
Page 49
By: /s/ Stephen A. Lasher Trust Manager March 19, 2002
-------------------------
Stephen A. Lasher
By: /s/ Stephen C. Richter Sr. Vice President and March 19, 2002
-------------------------
Stephen C. Richter Chief Financial Officer
By: /s/ Douglas W. Schnitzer Trust Manager March 19, 2002
-------------------------
Douglas W. Schnitzer
By: /s/ Marc J. Shapiro Trust Manager March 19, 2002
-------------------------
Marc J. Shapiro
By: /s/ Joe D. Shafer Vice President/Controller March 19, 2002
-------------------------
Joe D. Shafer (Principal Accounting Officer)
Page 50
SCHEDULE II
WEINGARTEN REALTY INVESTORS
VALUATION AND QUALIFYING ACCOUNTS
DECEMBER 31, 2001, 2000 AND 1999
(AMOUNTS IN THOUSANDS)
CHARGED
BALANCE AT TO COSTS CHARGED BALANCE
BEGINNING AND TO OTHER DEDUCTIONS AT END OF
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS (A) PERIOD
- --------------------------------------------- ---------- -------- -------- ---------- ---------
2001:
Allowance for Doubtful Accounts. . . . . . $ 1,884 $ 3,764 $ 2,722 $ 2,926
2000:
Allowance for Doubtful Accounts. . . . . . $ 909 $ 1,667 $ 692 $ 1,884
1999:
Allowance for Doubtful Accounts. . . . . . $ 887 $ 1,043 $ 1,021 $ 909
<FN>
- ---------
Note A - Write-offs of accounts receivable previously reserved.
Page 51
SCHEDULE III
WEINGARTEN REALTY INVESTORS
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2001
(AMOUNTS IN THOUSANDS)
Total Cost
---------------------------------------
Buildings Projects
and Under Total Accumulated Encumbrances
Land Improvements Development Cost Depreciation (A)
----------- ------------- ------------ ---------- ------------- ------------
SHOPPING CENTERS:
Texas. . . . . . . . . . . . . $ 167,882 $ 668,938 $ 836,820 $ 262,767 $ 18,727
Other States . . . . . . . . . 227,757 823,382 1,051,139 90,839 203,553
----------- ------------- ------------ ---------- ------------- ------------
Total Shopping Centers . . 395,639 1,492,320 1,887,959 353,606 222,280
INDUSTRIAL:
Texas. . . . . . . . . . . . . 31,813 148,621 180,434 32,756
Other States . . . . . . . . . 9,070 37,100 46,170 996
----------- ------------- ------------ ---------- ------------- ------------
Total Industrial . . . . . 40,883 185,721 226,604 33,752
OFFICE BUILDING:
Texas. . . . . . . . . . . . . 534 9,306 9,840 6,409
----------- ------------- ------------ ---------- ------------- ------------
MULTI-FAMILY
RESIDENTIAL:
Texas. . . . . . . . . . . . . 2,276 14,705 16,981 1,529
----------- ------------- ------------ ---------- ------------- ------------
Total Improved
Properties. . . . . . . 439,332 1,702,052 2,141,384 395,296 222,280
----------- ------------- ------------ ---------- ------------- ------------
LAND UNDER DEVELOPMENT
OR HELD FOR
DEVELOPMENT:
Texas. . . . . . . . . . . . . $ 32,640 32,640
Other States . . . . . . . . . 47,905 47,905
----------- ------------- ------------ ---------- ------------- ------------
Total Land Under
Development or Held
for Development . . . . 80,545 80,545
----------- ------------- ------------ ---------- ------------- ------------
LEASED PROPERTY
(SHOPPING CENTER)
UNDER CAPITAL LEASE:
Texas. . . . . . . . . . . . . 18,953 18,953 513
Other States . . . . . . . . . 29,054 29,054 7,149 5,857
----------- ------------- ------------ ---------- ------------- ------------
Total Leased Property
Under Capital Lease . . 48,007 48,007 7,662 5,857
----------- ------------- ------------ ---------- ------------- ------------
CONSTRUCTION IN
PROGRESS:
Texas. . . . . . . . . . . . . 9,972 9,972
Other States . . . . . . . . . 72,485 72,485
----------- ------------- ------------ ---------- ------------- ------------
Total Construction in
Progress. . . . . . . . 82,457 82,457
----------- ------------- ------------ ---------- ------------- ------------
TOTAL OF ALL
PROPERTIES. . . . . . . . $ 439,332 $ 1,750,059 $ 163,002 $2,352,393 $ 402,958 $ 228,137
=========== ============= ============ ========== ============= ============
__________
<FN>
Note A - Encumbrances do not include $23.5 million outstanding under a $30 million 20-year term loan, payable
to a group of insurance companies secured by a property collateral pool including all or part of
three shopping centers.
Page 52
SCHEDULE III
(CONTINUED)
The changes in total cost of the properties for the years ended December
31, 2001, 2000 and 1999 were as follows:
2001 2000 1999
------------ ------------ ------------
Balance at beginning of year . . . . $ 1,728,414 $ 1,486,224 $ 1,278,466
Additions at cost. . . . . . . . . . 662,533 260,197 244,887
Retirements or sales . . . . . . . . (38,554) (18,007) (37,129)
------------ ------------ ------------
Balance at end of year . . . . . . . $ 2,352,393 $ 1,728,414 $ 1,486,224
============ ============ ============
The changes in accumulated depreciation for the years ended December 31,
2001, 2000 and 1999 were as follows:
2001 2000 1999
---------- ---------- ----------
Balance at beginning of year . . . . $ 362,267 $ 319,276 $ 291,080
Additions at cost. . . . . . . . . . 58,297 47,208 42,882
Retirements or sales . . . . . . . . (17,606) (4,217) (14,686)
---------- ---------- ----------
Balance at end of year . . . . . . . $ 402,958 $ 362,267 $ 319,276
========== ========== ==========
Page 53
SCHEDULE IV
WEINGARTEN REALTY INVESTORS
MORTGAGE LOANS ON REAL ESTATE
DECEMBER 31, 2001
(AMOUNTS IN THOUSANDS)
FINAL PERIODIC FACE CARRYING
INTEREST MATURITY PAYMENT AMOUNT OF AMOUNT OF
RATE DATE TERMS MORTGAGES MORTGAGES(A)
-------- --------- ------------------ ---------- -------------
SHOPPING CENTERS:
FIRST MORTGAGES:
Eastex Venture
Beaumont, TX
(Note D). . . . . . . . 8% 10-31-09 $ 335 Annual P & I $ 2,300 $ 2,012
Main/O.S.T., Ltd.
Houston, TX
(Note D). . . . . . . . 9.3% 02-01-20 $ 476 Annual P & I 4,800 4,397
($1,241 balloon)
INDUSTRIAL:
FIRST MORTGAGES:
South Loop Business Park
Houston, TX
(Note D). . . . . . . . 9.25% 11-01-07 $ 74 Annual P & I 439 331
($1,241 balloon)
UNIMPROVED LAND:
SECOND MORTGAGE:
River Pointe, Conroe,TX
(Notes B and D) . . . . Prime 12-01-02 Varying 12,000 3,887
+1% ($3,887 balloon)
---------- -------------
TOTAL MORTGAGE LOANS ON
REAL ESTATE (Note D) . . . . $ 19,539 $ 10,627
========== =============
_________
<FN>
Note A - The aggregate cost at December 31, 2001 for federal income tax purposes is $10,627.
Note B - Principal payments are due monthly to the extent of cash flow generated by the underlying
property.
Note C - Changes in mortgage loans for the years ended December 31, 2001, 2000 and 1999 are
summarized below.
Note D - Represents WRI share of mortgage loans to joint ventures.
-------------------------------
2001 2000 1999
--------- --------- ---------
Balance, Beginning of Year . . . . .$ 14,327 $ 47,828 $ 28,359
New Mortgage Loans . . . . . . . . . 33,588
Additions to Existing Loans. . . . . 205 380 1,773
Collections of Principal . . . . . . (3,905) (33,881) (15,892)
--------- --------- ---------
Balance, End of Year . . . . . . . .$ 10,627 $ 14,327 $ 47,828
========= ========= =========
Page 54