WEINGARTEN, HINES REIT FORM $271 MILLION JOINT VENTURE
HOUSTON — Houston-based REITs Weingarten Realty Investors and Hines Real Estate Investment Trust, Inc. (Hines REIT) have formed a $271 million joint venture, in which a subsidiary of Hines REIT will acquire a 70 percent interest in a portfolio of 12 supermarket-anchored shopping centers owned by Weingarten.
The transaction will close on multiple dates. The first closing, comprising eight of the shopping centers and totaling approximately $205 million, occurred on November 13.
The portfolio, which is more than 96 percent leased, totals 1.5 million square feet. The shopping centers are located in Texas, Georgia, Tennessee, Florida and North Carolina. Their trade areas have average populations exceeding 100,000 people and average household incomes of more than $80,000. The shopping centers are anchored by supermarkets tenants that include Kroger, Randall’s (Safeway), H-E-B, Publix, BJ’s Wholesale and Harris Teeter. Other anchors at the properties include Marshall’s, Barnes & Noble, Palais Royal and Stein Mart.
“We announced in 2006 an effort to further our joint venture program,” says Gary Greenberg, senior vice president, capital markets, for Weingarten Realty Investors. “This is a continuation of that program, and it will bring us close to $2 billion in transactions since 2006.”
The joint venture has a commitment from an undisclosed life insurance company to provide a $100 million loan for the transaction that is expected to close before the end of the year. Weingarten is providing $134 million in preferred equity for the initial closing.
Weingarten also will be responsible for the ongoing management and leasing of the properties. In a time when retail sales are down, the investment in these 12 properties speaks to the strength of the centers and their respective markets.
“We have been in business for 60 years and have a track record of successfully operating properties in all business cycles,” Greenberg says.
The Dallas office of Holliday Fenoglio Fowler represented Weingarten in the joint venture transaction.