WRI - Earnings call transcript Q2 2019 | Weingarten Realty Investors

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Operator

Good morning, and welcome to the Weingarten Realty Inc.

Second Quarter 2019 Earnings Call for August 1, 2019. My name is Brandon, and I’ll be your operator for today. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer. this being note, Please Instructions] conference recorded. is [Operator

it Michelle Wiggs. I will you to turn now And Michelle, over may begin.

Michelle Wiggs

welcome Good call. and to quarter second morning, XXXX our conference

Richter; Alexander Joining is and Joe Shafer. Johnny me Drew Hendrix; today Steve

projected As Private this within are of the and call in management’s to Reform information differ those uncertainty Litigation subject contained and certain Act. a materially of a are forward-looking are SEC to the current based Actual statements in about on company’s filings. is reminder, More forward-looking meaning could results such during course variety made the Securities changes statements circumstances. These factors in statements expectations factors. due the statements from of these

to or such funds operating these help understand our located certain under measures non-GAAP Also, website. results. the both conference our FFO, analysts information better is to package available during which this financial from Relations and as of reference call, we tab operations, Weingarten’s and Investor Reconciliation make management NAREIT, core to believe supplemental financial investors measures non-GAAP in may

I will call now Alexander. to turn Drew the over

Drew Alexander

our the our future the quality post WRI tenant for Thank a property of Michelle, as to quarter. to merchant us. for pleased overall I growth. the continued and metrics enabled same our announce our in of our with dispositions, X.X% best-in-class is investments estate The for operating profitable clear all strategic thanks much base, by lineup am diversification NOI solid Coupled sheet, you has you, of transformation and improved of acquisitions of through exhibited our joining well well-positioned across strength the portfolio The quarter. and good to as balance program redevelopment real growth of the Board. us

affluent in market on in quarter-end, anchored grocery-anchored highly property and purchase the Georgia. second Phoenix able While of to the a to Atlanta, we part were competitive, center closed the our we remains area acquisition grocery subsequent

cautiously during that we be able will our other portfolio balance to the the optimistic year. add to We’re of quality properties

dispositions, our we strongly to million properties the brings is our after the in of that property NAV. value to million. We second above of selling thing an to that bottom As when million our quarter, sold stock year-to-date additional $XXX at and believe $XXX total $XXX net portfolio quarter-end, to estimate at/or a at is of do discount significant priced right our asset the

also paid it’s dispositions, to in enhancing XXXX the XXXX dividend in likely pay a dividends special returns. last the expected our we further shareholder years, Given in addition special will that two

very a which we Consequently, large selling led Jess sell. We’re believe increase pleased an even offer it million, $XX above more asset more received very value, calls, Ranch, the even that’s of that challenges power guidance. with our when in discussed best markets. the applicable the was centers for decision. of and decided net the We We’ve sale disposition though long-term prior was in to to asset of tertiary reasonable we

from portfolio improvements XXXX. for Looking $XXX in return XXXX, expect to the around XXXX I’d ahead I’d portfolio we’ve and normalized dispositions given million the more of sales the to made the management, XXXX, in estimate quality and to

we available of strong HQX residential benefit and have close proximity a started At end market. the is the near the residential to should at in to strong is Oaks anchor, some nicely, Amazon, plan Central, Alex of Arlington, West to development to around these DC, open projects supermarket new construction River of Centro units we Both The this year. ahead year. Teeter Moving Virginia In Northern Driscoll Harris our their we at expect progressing at expect and activities. we and from begin end of mid-XXXX. pre-leasing the currently

pipeline the those in quarter. projects capital, redevelopment returns other great great work and with to provide that on a the many excellent we focus, will have invested continue on We

financials? the Steve,

Steve Richter

Thanks, Drew.

remains debt XX.X%, maturity to by our strong no market XXXX. quarter-end, in a among schedule total capitalization Our EBITDA and balance well-laddered the supported sector. sheet strongest that a maturities At net was times to has significant X.XX until debt was

flexibility Our and liquidity significant long-term stability strong metrics provide great credit pursue future opportunities. and to

in lease is rents, the offset minimum activity, included bad We by The by property incremental per our the us for of the core and XXXX. which second partially was NOI, from in recoveries, to to in per same increases decrease share when $X.XX quarter income to for per the release. compared $X.XX expensed not to XXXX, is of of These we developments cost last driven compared per redevelopments. year, in but indirect leasing had base great primarily results. quarter share the prior-year. share debt quarter increased under FFO income FFO accounting Core same standard due share, new and $X.XX our reconciliation net disposition A new decreases and $X.XX were press primarily cost

to to As to disposition to gains guidance increasing to an a higher on and decreases Page growth Core sale of million. increasing the of $X.XX to on quarters results $XXX on net our range NOI our NAREIT Johnny? in per of included range This All due the guidance details $XXX are guidance to increase Based XX million share. and guidance for we both to guidance, same-property of first in two XXXX, of of in FFO we our supplemental. range a are X.X%. income our $X.XX guidance X.X% a the also strong are results

Johnny Hendrix

Thanks, Steve.

lease Georgia. X.X% same properties. acquired rose the increased over per rent strong supermarkets better. getting Atlanta, very great shopping and the $XXX strong today NOI results continue demonstrate in foot rent with sales. from Those great new centers portfolio a average square to we growth average We quality shopping of the was in of have The the reporting Scottsdale, our are centers Arizona XX%, keeps grocery-anchored to a base comes property and XX.X%, supermarket. two About we XX% Occupancy that

remains steady. production Leasing

We Clips Diner. shop for mostly demand like Pacific beauty fitness, tenants, and Silver medical Folks services, restaurants. and have Dental, Orangetheory Fitness, good Sports

to boxes, Lidl continue supermarkets we lease High fitness. our and We signed to the lease clothing Carolina. at North for As Raleigh, House with in first discount

they progress the will the six in expect great former "R" open made leasing space. Us Toys We We’ve next months.

We and $X have Burlington, Florida. Ross to Signature on a lease include rejected commitments rent two the all they Replacement bankruptcy. We Health the increased almost space tenants Below, South stores, spaces Five Furniture, Baptist annual by in those million.

shape also Kmart. in We’re good with

improvement from Also points and quarter in the contributing sold fallout May. large We to an where it XX.X%. of strong Shopping love had low it to the Prospector’s the one so Occupancy us Kmart the that rose basis likely it’s with most the back, XX we’re Oregon, Oak located Shopping outcome. a Most North pleased to with to sold During leaves good Kmart of of and property new end we only last Six of Portland, We Forks Grove Raleigh, Plaza but Carolina. in Center leasing. be vacancy. improvement get disposition combination a quarter, part California, we the a in closed is a very company. Center where This Kmart is will in Placerville, store, at user

next point basis in commenced signed still year that’s so. XXX feet square be should have XXX,XXX and or that leases, between spread we the Importantly, opening

before of for million We year-end. Good expect $X in balance the same-property year and rent fuel annual to for NOI the commence XXXX.

high mentioned, unusually As lot and X.X% X.X%. should unlikely. the of We’ve of list at trend we’re for had a this tenants, exposure to impact point, strong the is bankruptcy bad a balance fallout. also have benefited any from same-property watch guidance to from to NOI leasing we’re that downward X.X%. We don’t and to significant at recoveries Steve raising XXXX the low year. Year-to-date, growth We a solid debt

During very great and the Maxx. in second under Miller so towers rent purchased high a in market to volume and property rents strong Market Square. T.J. Farmers is over by This center, we Scottsdale, property densification a at and Arizona. time. Fashion for close of quarter, among Sprouts a Generally, heart rates multiple are anchored Plaza Scottsdale, Scottsdale the opportunity and rental an see we residential high-rise The growth Camelback is the good

share overall partnership This by Decatur affluent incomes North are household Atlanta. million mile an million. Whole demographics square at a The $XX,XXX Station mixed-use million. Foods at to XX,XXX three to company’s anchored with Weingarten college component $XX is in acquisitions the graduates share is in development. date purchased a and of $XX people, community is XXX,XXX This In Bouwinvest. in The the strong brings July, property North average $XX foot we year of Decatur with investment at XX%. retail XXXX a with

optimistic that other some year. on acquire working Drew? this acquisition other We’re strong we and are properties can opportunities

Drew Alexander

portfolio special growth. through a great better people, and forward. with to and rental and acquired post We’ve XXXX. development of dividends, half improved equals centers for and Same-property first demographics greater enhance results. returns X.X% like good our our it Great properties, greatly continue these quite to great of a growth is increased. provides operating been successfully metrics and transformation stability NOI projects possible great good, financial makes new great It’s Johnny. our significant at The Thanks, and opportunities future three grocery-anchored shareholders occupancy move great platform

questions. the I joining Operator, all Weingarten. and in take we’d call for be to for interest thank continued of today, your you happy

Operator

go ahead. From session. We’ll Drew. have question-and-answer [Operator Thanks, And Scotiabank, now begin we Please Instructions] McGinniss. Greg the

Greg McGinniss

afternoon. good not I’m Drew mistaken. if Hey,

I million at increased in think years, around this set was you’ve or XXXX. this fourth two and now disposition guidance of dispositions bogey last the third the in $XXX

this another like transaction Just surprise have investors curious expectation we more what and confidence give Jess that will should won’t Ranch? stick

Drew Alexander

tertiary it’s are more compelling in case remarks, oriented as believe take public question Ranch, private very Greg. It’s look the more in trading of the capital we it it’s we is a sell of multiple prepared above when that something day, And NAV. thought we mentioned, that allocation Good such to our in disparity Jess proper between to the was box, NAV and challenging market. power addressed to center to I a And offer, that a we of it’s and advantage markets. a fair I discount think good our

no right upon guarantees, reserve companies change their to think certainly people and there’s So based the I that factors how change. and direction

What how ago, retail time this I look I and I forward. was different you years world I could do was today, than and a do change and what back in call, is If comfortable totally know is, feel know we the over in it call-in time going couple we’ve at certainly what are don’t things saying at the where we moving around a that do that given this years, normal are time it’s portfolio to early. very we’d But we $XXX sold of our estimate with million. at this comfortable last and that’s estimate feel and we’d more three

acquisition more some are also mentioned opportunities. starting see, We to as you

being at capital looking making there. the will have developments new progress know we’re coming So on and more revenue neutral, online good

So, capital we not the normal good appreciate likewise that it’s development long-term likes. online. call-in But we do call think on allocation comes decision. it’s everybody we feel something more pipeline the XXXX the we about and as that But right

Greg McGinniss

All right. Thanks. Drew.

Drew Alexander

you. Thank

Greg McGinniss

Johnny. question you, And – for Johnny, same-store

to So reasons fallout same-store Is mentioned reduction back quantify then occupancy bad NOI you move some half items? in expected rest the to? you know seems growth down. impact? what’s that same-store of the in related shift just XXX the other I the debt the And this of guidance basis imply growth nearly or expected year. Could point of one as

Johnny Hendrix

sorry. morning, Yes. Good Greg. I’m

debt results that half overall, and anticipate that the stepped think higher proud of was we’ve don’t you. a in XXXX, recoveries I I little the normal But on first I we’re think, Bad bit we of produced. than continuing. very

at for results So the part back we’re it’s really recovering at sometimes the of bad year, and takes of of and that business, doesn’t the debt and pretty it’s think happen good we’re disciplined part the that overall work of I just half adjusting years, that.

of first have at debt year X.X%. would recoveries the bad about For without half the been

Greg McGinniss

move then, And that down? what’s rest the the is drags move Or the other occupancy that expected you of of out? piece

Johnny Hendrix

occupancy some move be out. will There

for three pretty, is pretty I think the around good. at looking year

Greg McGinniss

you. Thank Okay.

Drew Alexander

you. Thank

Operator

From Citi, Please McElroy. ahead. go we have Christy

Christy McElroy

good to morning Hey, guys. you

$X the the is there expected what’s about a component before talked sounds you like of offsetting But to that. a move annual out Johnny, rents of bit year-end. you of It in? that. of QX. QX million on follow-up cadence a little does what’s amount just Just lead so that the commence to in sort commence And the $X factoring where that and lease the at that year-end – all will spread hit or that move-in, and of actually said million sort

Johnny Hendrix

about the Christy. even the quarter, the balance morning. Hey, It’s Good throughout pretty the of about half year, quarter. in fourth half third in

construction finish of pretty for pretty get accurately but and is timing we we when comfortable the on we that course, that. exact depending Of the can that tenants feel budgeted open,

Christy McElroy

to an And you your then with your that’s little bit dilution balance give that right, are the you use can What assumptions you earning special that. should And a more alluding inherent dispositions, a of maybe associated on than All on us for in just cash it originally on continue substantial thought? proceeds to like dividend helpful. Okay. Will you’re cash seems up? tick today? maybe update of

Drew Alexander

Drew, I it’s it’s afternoon guess Christy, good to you. So,

adjusting still are moved back normal We slot. our since call hour from our an we

So this Coast. East we the afternoon do appreciate and on

So good afternoon to you.

a of piece, I if then bit Steve little And So in. let miss that. me chime a take can

or think thereabouts earning we’re And cash. I X.XX so in

many is many, really, we’re perspectives. a As likely hard mentioned, to dividend have XXXX. pick it Exactly in to think we we up from what really special the guidance that and

done some working. As some got others we’ve we’ve mentioned, acquisitions,

possible, look So when gain. the would tax do defer we to it’s and certainly XXXX

I’ve as a don’t see just to we before, tremendously also XXXX. for properties But overpaying said do

while some started the So is to it’s to working certainly diligence have deals and do closed premature some and we’ve deals we’re things going that cases some there just on, – in think happen. working that

lot a variables of So there.

comes finish. say would of pipeline seeing it that variety have of a to development I to table proceeds, acquisition when the issues do are – some Then some use we opportunities on are

a much Always a at of lot but new, opportunities, not so appropriate, Looking would be capital interest there could consider soon. some large, and to that buying working of we so wouldn’t some we were new it it’s the to and be early, stock. on if projects there development anytime seeing us small both really whole all capital a couple stock is And get there. pipeline point redevelopment thought to back the it certainly

put the sold. different year, it’s So sold opportunities no a of But positioned really XXXX given it’s specifics I dividend are some that’s number acquisitions working. potential special well and to around as dealer different number well as think we’re in any a of a estate for very in things hard real until early

Christy McElroy

you. Yes, helpful dilution there. some thank is during math. variability still guess really Thanks, Okay, I there But it’s the guys. in doing

Drew Alexander

a a good is we’re in and situation. lot There

gains. properties, are when generally think money, we selling I making we are have we

our of seem to making don’t Some always be property. they’re selling when money peers

So better make I it is view to money.

Christy McElroy

Thanks.

Operator

go From ahead. Bank of Schmidt. America Craig we Please have

Craig Schmidt

your sales? productivity reporting on how Johnny, many the to $XXX foot per Yes. grocers; are square of grocers

Steve Richter

the say I with don’t have have an is probably and pretty most strong exact number, but range, to we also all XX% I in somewhere would communications of them.

what reporting So even understanding we sales, sales a their if have of they’re good not officially are. very

Craig Schmidt

in with Great. mentioned the years acquired versus at center in say you ago? the that And the any of grocers know call heavy investment now you then in just looking two terms let’s a than area, grocery are you Lidl? e-commerce differently the and I

Johnny Hendrix

two would Yes, is purchased that in – direction – Foods. you center we the regional Well, a to a I that, since national space ago, purchased couple centers shopping the a you. would of call actually shopping years. leased a Lidl that Whole in to tell we that a and the owned and for a was head. toward was tell consistent we’ve We really vacant a I moved Sprouts years toward we and grocers, bias that continue we last

XX% believe we to the to So continue regional our deliveries. it’s grocers with curbside, of or capital strategy. some this deliver of supermarket winning omni-channel, going and is a take able to be to which pick-up have be to sort operator national going Today

here. direction we to absolutely go the think So is from that

Craig Schmidt

for Thanks the color. Great.

Operator

ahead. Advisors, [Operator go we Vince Tibone. Instructions] Street have From Green Please

Vince Tibone

yes, mentioned the could good near-term potentially? densification You Miller Plaza, start opportunities? and be color that development Camelback provide a additional on Could that you Hey, morning. then, some

Drew Alexander

a shopping is I rise able you. next though, the development with of – be the of – sell guess do could purchased recapture Vince. pieces years. be a and this of wouldn’t part a could we shopping anything the different Hey, doing that. couple to it opportunity we on short-term. be long-term, multi-family. morning it space. We’ll is basis, build high some Yes, good shopping or have have actually before reconfigure center On the great of anticipate either in kind to could a in clearly We and off center to long-term We center the

Vince Tibone

Got multifamily or it. through? go Is to the need today you it entitled that’s for process

Drew Alexander

a multifamily be development that through, would is are they need process It we encouraging to would go the part redevelopment but area of and entire a the by there. city zone

Vince Tibone

from color And weren’t kind helpful. seems you’re Jess on kind you on of little Ranch. of about. one markets, the came if curious, if release, centers. particularly really then the like press I based any transaction a yielding me. noteworthy And how more the It provide marketing the could higher non-core, seeing you in was that’s language actively it, trends the shopping deal in then, just for Got

Drew Alexander

morning, Good Vince. It’s Drew.

on So it prepared including as I said that. and many market, have our have and you call, remarks, we the the in but we did discussed, as on

over approaching always $XX the million most sold over are sold Assets not $XXX liquid.

while kind for cetera. level traction it of it’s things, on more fast had marketing So a we the while, et not as smaller, those dense as been

couple than and we and something wasn’t but it worked better fortuitous lots we it – along what situation happens of in through business days. credible buyer business here happens, in a and of came that different closed was it last scenarios put do our what issues if plan, So that lots plan this if the our of different got nice us at when and that the

that but we more it’s there center. associated situation as combination it pretty with they public we what’s And market a buy good it’s got for a a might in good expression preparation then appreciate. were stable team of and is likewise, a opportunity, perspective, some luck a a well. prepared, more but it, think good, and pleased with fortunate But from the we’re good it’s the good market’s that So were of responded, it’s our We think us.

Vince Tibone

Makes deal? the sense. individual able Are rate you cap to on that disclose

Drew Alexander

deals the haven’t rate. as No, that, cap have with gotten post it two that but quarter, into looked sevens we high sold folks was we

people So expect. neighborhood is that the in it would

done, to the is market was – fortunate, market. pleased but it it have is the we’re So it

I conversations note as plan that’s in quality, under move in sales than supplemental, will these will which better X% we thought something is mid-Xs, of folks which our Xs also a is and to quarter-to-quarter high little deals the our shows are that So good some around better deal. but year-to-date business two the where think more very of were and

still now. the is number, all to it But in we happens down right middle low in Xs mix comes of the the little though what even than trending move better a to around. year that a So – a for good bit are can quarter, especially it

Vince Tibone

you. thank Great,

Drew Alexander

you. Thank

Operator

no are remarks. time. questions final this at back for will there turn you further And Drew, to it

Drew Alexander

you, Well, conferences company. I around other questions. the there so thank summer. in I if really in much. Have are know everybody We are us. any anytime thank appreciate Brandon. coming aren’t there And I Weingarten. interest But we appreciate soon. for the around joining interest your a great Thanks

Operator

concludes for and Thank you. Thank joining. conference. ladies gentlemen, And you today’s this

You may now disconnect.

Michelle Wiggs	Vice President-Investor Relations
Drew Alexander	Chairman, President and Chief Executive Officer
Steve Richter	Executive Vice President, Chief Financial Officer
Johnny Hendrix	Executive Vice President, Chief Operating Officer
Greg McGinniss	Scotiabank
Christy McElroy	Citi
Craig Schmidt	Bank of America
Vince Tibone	Green Street Advisors

Weingarten Realty Investors (WRI) 2 Aug 192019 Q2 Earnings call transcript