November 14, 2008
Weingarten Realty Investors Announces $271 Million Joint Venture With Hines REIT
HOUSTON, Nov. 14 /PRNewswire-FirstCall/ -- Weingarten Realty Investors and Hines Real Estate Investment Trust, Inc. ("Hines REIT") announced the formation of a joint venture transaction in which a subsidiary of Hines REIT will acquire a 70% interest in a WRI portfolio of 12 high-volume supermarket-anchored shopping centers. The aggregate transaction price is approximately $271 million and the transaction will close on multiple dates. The initial closing occurred on November 13, 2008 and included eight of the properties for approximately $205 million, and the purchase of the remaining four properties will be closed upon finalization of their loan assumptions.
The twelve properties consist of 1.5 million square feet and are located in areas across five states that have very strong demographics with average trade area populations exceeding 100,000 people and average household income exceeding $80,000. These centers are anchored by a diversified mix of leading grocers including Kroger, Randall's (Safeway), H-E-B, Publix, B.J.'s Wholesale and Harris Teeter. Additional anchors include Marshall's, Barnes and Noble, Palais Royal and Stein Mart.
The supermarkets in these centers average sales of more than $450 per square foot and the portfolio is more than 96% leased. The Joint Venture has a commitment from a major life insurance company to provide a $100 million loan that is expected to close before the end of the year. WRI provided preferred equity in the amount of $134 million for the initial closing. The proceeds of the $100 million loan will be used to reduce WRI's preferred equity position upon closing. WRI will be responsible for the ongoing management and leasing of the properties and will receive property management, joint venture management, and leasing fees along with incentive distributions above certain return hurdles.
"WRI is extremely pleased to become partners with a world-class organization that also has its deep roots in our wonderful city -- Houston. We believe this transaction will provide stable and growing returns to the joint venture while also meeting our objective of recycling capital and building our assets under management," stated Drew Alexander, President and CEO of WRI.
"We are pleased to acquire an interest in a portfolio of quality supermarket-anchored shopping centers in locations with strong demographics," said Charles Hazen, President and CEO of Hines REIT. "This is our first joint venture with WRI and we are very pleased with this new relationship."
The Dallas office of HFF represented WRI's interest in structuring the venture.
Hines REIT is a Houston-based public real estate investment trust sponsored by Hines. Hines REIT commenced operations in November 2004 and primarily invests in institutional-quality office properties located in the United States. Excluding this acquisition, Hines REIT currently owns interests in 46 properties. These properties consist of 43 office properties located throughout the United States, one mixed-use office and retail property in Toronto, Ontario, one industrial property in Dallas, Texas and an interest in an industrial property in Rio de Janeiro, Brazil. For additional information about Hines REIT, please see http://www.hinesreit.com/.
Hines is a fully integrated real estate investment and management firm that has been investing in real estate and providing acquisition, development, financing, property management, leasing and disposition services for over 50 years. With offices in more than 100 cities in 16 countries, and controlled assets valued at approximately $25.6 billion, Hines is one of the largest real estate organizations in the world. Access http://www.hines.com/ for more information on Hines.
HFF operates out of 18 offices nationwide and is a leading provider of commercial real estate and capital markets services to the U.S. commercial real estate industry. HFF offers clients a fully integrated national capital markets platform including debt placement, investment sales, structured finance, private equity, note sales and note sale advisory services and commercial loan servicing.
As one of the largest real estate investment trusts listed on the New York Stock Exchange, Weingarten Realty is celebrating its 60th anniversary as a commercial real estate owner, manager and developer, formed in 1948. Focused on delivering solid returns to shareholders, Weingarten is actively developing, acquiring, and intensively managing properties in 23 states that span the United States from coast-to-coast. The Company's portfolio of 409 properties includes 329 neighborhood and community shopping centers and 80 industrial properties. Including tenant-owned square footage, the Company's portfolio currently totals approximately 74 million square feet under management. Weingarten has one of the most diversified tenant bases of any major REIT in its sector, with the largest of its 5,400 tenants comprising less than 3% of its rental revenues. To learn more about the Company's operations and growth strategies, please visit http://www.weingarten.com/.
Weingarten Realty Investors
CONTACT: Richard Summers, VP|Director of Investor Relations ofWeingarten Realty Investors, +1-713-866-6050
Web site: http://www.weingarten.com/http://www.hinesreit.com/