Weingarten Realty WRI provided the following update regarding the COVID-19 pandemic for the REITweek: 2020 Investors Conference. To view the Company's updated investor presentation, please visit the REITweek 2020 Investor Presentation on our Webcasts & Presentations page at www.weingarten.com.
"We wish the best to all the first line responders, including the many associates at our retailers and our sympathies go out to those affected by this crisis. The dedicated team at Weingarten continues to work closely with all of our tenants to successfully navigate the reopening of the businesses in our shopping centers. We are excited that many of our tenants, most of which provide basic goods and services, have reopened and expect the vast majority of our tenants to resume operations shortly. We have been pleased with our performance through the pandemic thus far, though significant challenges remain," said Drew Alexander, Chairman, President and Chief Executive Officer.
Positive Results
The Company's transformed portfolio, which is 80% supermarket anchored, is very strong and diversified with 167 shopping centers located in 16 states primarily in the south and western United States. Additionally, approximately 75% of the average base rent of the portfolio comes from national and regional tenants.
Cash collections to-date for April rent have now reached 70%, as compared to 64% as reported in our first quarter press release. Further the Company negotiated deferral agreements for an additional 11% of April rent. Currently, May cash collections total 62% of rents. In addition, there are 15% of finalized May rent deferrals. The decreased collection rate for May has been significantly impacted by the timing, as payments continue to be received going forward, as well as the completion of additional deferral agreements. As May activity is finalized, it is expected that total cash collections plus deferrals for May and April will be similar. The Company's collection rates for April were among the highest in the shopping center sector.
"It's nice to see increased traffic in our centers as more of our tenants begin to reopen their businesses and I am very proud of our team for the assistance they are providing our tenants in getting things up and running. We are very pleased with our May collections. Further, we are actively negotiating with numerous tenants and as more of our retailers open, we expect improvements going forward," said Johnny Hendrix, Executive Vice President and Chief Operating Officer.
Liquidity
The Company's balance sheet remains strong, even in light of the pandemic, supporting a solid Net Debt to EBITDAre of 6.1 times at March 31, 2020. Given the extreme uncertainty associated with the pandemic, the Company drew down the remaining $497 million available under its $500 million Revolving Credit Facility ("Revolver") in the first quarter of 2020 to increase liquidity and preserve financial flexibility. However, given the stability of the financial markets and the Company's access to other sources of liquidity, the Company paid down most of the Revolver in mid-May, while retaining $50 million of cash. The Company will carefully monitor cash flows, any new capital requirements, and overall liquidity as it moves into 2021 and further adjust the dividend as appropriate.
"Our fortress balance sheet provides us with adequate liquidity to deal with the financial hardship the pandemic has created for WRI. With the repayment of the majority of our revolver last month, we now have $438 million of Revolver capacity, $50 million of excess cash and access to numerous other sources of capital. We feel very comfortable with our targeted $70 million of dividends in 2020," said Steve Richter, Executive Vice President and Chief Financial Officer.
About Weingarten Realty Investors
Weingarten Realty Investors WRI is a shopping center owner, manager and developer. At March 31, 2020, the Company owned or operated under long-term leases, either directly or through its interest in real estate joint ventures or partnerships, a total of 167 properties which are located in 16 states spanning the country from coast to coast. These properties represent approximately 31.5 million square feet of which our interests in these properties aggregated approximately 21.3 million square feet of leasable area. To learn more about the Company's operations and growth strategies, please visit www.weingarten.com.
Forward-Looking Statements
Statements included herein that state the Company'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. The Company's actual results, performance or achievements could differ materially from those expressed or implied by such statements. These risks and uncertainties include those related to the COVID-19 pandemic, about which there are still many unknowns, including the duration of the pandemic and the extent of its impact, as well as those discussed in the Company's regulatory filings with the Securities and Exchange Commission, which include other information or factors that may impact the Company's performance.
Projections involve numerous assumptions such as rental income (including assumptions on percentage rent), interest rates, tenant defaults, occupancy rates, volume and pricing of properties held for disposition, volume and pricing of acquisitions, expenses (including salaries and employee costs), insurance costs and numerous other factors. Not all of these factors are determinable at this time and actual results may vary from the projected results, and may be above or below the ranges indicated. The above ranges represents management's estimate of results based upon these assumptions as of the date of this press release. Accordingly, there is no assurance that our projections will be realized.
Weingarten Realty Investors |
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COVID-19 Impact - Tenant Status |
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(at pro rata share) |
||
Tenant Type |
||
Percent of
|
May Rent Payments
|
|
 |
 |
|
| Essential | Â |
 |
| Supermarkets | 14% |
100% |
| Medical | 6% |
66% |
| Auto and Other Essentials | 5% |
78% |
| Pet Stores and Services | 4% |
92% |
| Bank / Financial Service | 4% |
100% |
| General Merchandise (Dollar Stores) | 2% |
80% |
| Home Improvement | 2% |
92% |
| Sporting Goods | 2% |
57% |
| Drugstores | 1% |
100% |
| Liquor and Wine | 1% |
94% |
| Electronics | 1% |
51% |
| Office | 1% |
95% |
Total Essential |
43% |
87% |
 |
 |
|
| Non-essential | Â |
 |
| Services | 10% |
53% |
| Discount Apparel | 8% |
46% |
| Home Furnishings | 4% |
27% |
| Health Club | 4% |
19% |
| Some Apparel | 4% |
10% |
| Craft | 2% |
83% |
| Beauty Supplies | 1% |
62% |
| Recreation/Entertainment | 1% |
28% |
| Movie Theaters | 1% |
23% |
| Footwear | 1% |
23% |
| Books | 1% |
4% |
| Party Supplies | 1% |
17% |
| Other | 0% |
63% |
Total Non - Essential |
38% |
40% |
 |
 |
|
| Restaurants | Â |
 |
| Full Service Restaurants | 10% |
45% |
| Quick Service Restaurants | 9% |
60% |
Total Restaurants |
19% |
52% |
 |
 |
|
100% |
62% |
|
| Â | ||
| Â | ||
Tenant Size |
||
Percent of
|
May Rent Payments
|
|
| Anchors (> 10K SF) | 45% |
67% |
| Mid Tier (5K - 10K SF) | 13% |
46% |
| National / Regional Small Shops (<5K SF) | 23% |
64% |
| Local Small Shops (<5K SF) | 19% |
57% |
100% |
62% |
|
| Â | ||
| Â | ||
Business Type (3) |
||
Percent of
|
May Rent Payments
|
|
| Essential (including Restaurants) | 62% |
77% |
| Non-essential | 38% |
40% |
100% |
62% |
|
| Â | ||
| Â | ||
| (1) Commenced occupancy as of March 31, 2020. | ||
| (2) Based upon information as of May 29, 2020. | ||
| (3) Definitions can vary by location. This represents the definition of a majority of the municipalities in which centers are located. | ||
| Â | ||
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View source version on businesswire.com: https://www.businesswire.com/news/home/20200601005651/en/
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