SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): January 16, 2001
WEINGARTEN REALTY INVESTORS
(Exact name of Registrant as specified in its Charter)
Texas 1-9876 74-1464203
(State or other jurisdiction of (Commission file number) (I.R.S. Employer
incorporation or organization) Identification Number)
2600 Citadel Plaza Drive, Suite 300, Houston, Texas 77008
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 866-6000
Not applicable
(Former name or former address, if changed since last report)
Item 5. Other Events.
On January 17, 2001, Weingarten Realty Investors announced that it has
signed an agreement to purchase 19 supermarket-anchored shopping centers from
Burnham Pacific Properties, Inc. The purchase price is $277.5 million which
consists of $145.5 million in cash and the assumption by WRI of a loan with a
balance of approximately $132 million. The current net operating income
generated from the properties is approximately $28 million. The loan is a non-
recourse conduit instrument which bears interest at 8.33% and has a current
constant of 9.29%.
WRI estimates a return on investment in excess of 10% on these assets
during 2001, with additional upside of about 1% through contractual rent steps
and market increases as leases mature over the next several years. WRI believes
there is additional upside in the portfolio's net operating income through its
intensive management and leasing expertise and long-term focus.
After the closing of this transaction, if WRI were to prepay or default
under the loan (neither of which it intends to do), it would be required to
remit the then unamortized premium (currently approximately $12 million) which
the lender originally paid to buy up the interest rate. This will represent a
contingent obligation of WRI and will be appropriately disclosed in its
financial statements.
The 19 supermarket-anchored properties, which are over 96% leased, are all
located in California and aggregate approximately 2.5 million square feet with
an average size of 130,500 square feet. Specifically, the majority of the
centers (11) are located in the San Francisco Bay/Sacramento area while six are
in and around Los Angeles. The portfolio includes about 460 tenants of which
over 60% are national and/or regional retailers. The majority of the properties
are in markets which contain high barriers to entry that should minimize
additional future competition in such markets.
Anchor supermarkets include three Ralphs (Kroger), which represent 7% of
the revenue of this portfolio, five Raleys including one Bel Air Market (their
upscale concept), four Albertsons (including one non-owned), three Food-4-Less
(Fleming Companies), one Safeway and three regional chain stores. Kroger, WRI's
largest tenant currently, will represent 4.2% of WRI's revenue subsequent to
completion of this transaction. Supermarkets in this portfolio represent 33.8%
of the total square footage and 24.8% of base rents. On average, the 19
supermarkets generate sales of almost $500 per square foot.
Other anchor retailers include Home Depot, Kmart, Home Base, three Rite
Aids and two Targets which own their own stores. Both the Home Base and the Rite
Aid are noted to be weak operators; however, WRI believes these stores would be
easily released should WRI get these facilities back from the retailers.
WRI intends to initially utilize third party property management and
leasing services but expects to fully integrate the operations of the portfolio
into Weingarten's systems by the end of 2001. WRI will open regional offices in
Los Angeles and San Francisco with a possible additional office in the
Sacramento market.
A copy of the agreement of purchase and sale relating to this transaction
is filed as an exhibit to this Form 8-K.
Statements included herein that state WRI's or management's intentions,
hopes, beliefs, expectations or predictions of the future are "forward-looking"
statements within the meaning of the Private Securities Litigation Reform Act of
1995 which, by their nature, involve known and unknown risks and uncertainties.
WRI's actual results, performance or achievements could differ materially from
those expressed or implied by such statements. Reference is made to WRI's
regulatory filings with the Securities and Exchange Commission for information
or factors which may impact WRI's performance.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Exhibits
The following exhibits are filed with this report:
2.1 Agreement for Purchase and Sale between BPP/Golden State
Acquisitions, LLC and Weingarten GS, Inc. entered into as of
January 16, 2001.
99.1 Press release issued by Weingarten Realty Investors on January
17, 2001.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: January 22, 2001
WEINGARTEN REALTY INVESTORS
By: /s/ Stephen C. Richter
-----------------------------------------
Stephen C. Richter
Senior Vice President and Chief Financial
Officer
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INDEX TO EXHIBITS
2.1 Agreement for Purchase and Sale between BPP/Golden State
Acquisitions, LLC and Weingarten GS, Inc. entered into as of January
16, 2001.
99.1 Press release issued by Weingarten Realty Investors on January 17,
2001.
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