WRI Weingarten Realty Investors

Weingarten Realty (NYSE: WRI) announced today the results of its third quarter ended September 30, 2010. The supplemental financial package with additional information can be found on the company’s website under the Investor Relations tab.

Operating and Financial Highlights

• Funds from Operations (“FFO”), excluding impairments, was $53.6 million or $0.44 per diluted share. Including the non-cash impairments of $4.9 million or $0.04 per diluted share, FFO for the quarter was $48.7 million or $0.40 per diluted share;
• Same Property Net Operating Income (“NOI”) increased by 1.2% over the same period a year ago, with retail properties up 2.0%; and
• Overall occupancy increased to 91.1% versus 90.8% during the second quarter. Retail occupancy remained steady ending the quarter at 92.6%, unchanged from the previous quarter and up 50 basis points from a year ago.

Financial Results

The Company reported net income attributable to common shareholders of $8.7 million or $0.07 per diluted share for the third quarter of 2010, as compared to a net loss of $9.4 million or $0.08 per share for the same period in 2009.

Funds from Operations (“FFO”), a widely accepted supplemental measurement of REIT performance, on a diluted per-share basis excluding the non-cash impairment for the quarter ended September 30, 2010, was $0.44 or $53.6 million. Compared to the same quarter last year, also excluding non-cash impairment charges and gains on the redemption of convertible senior unsecured notes, net of tax benefits, was $0.50 per share or $59.3 million. Including these adjustments, FFO was $48.7 million or $0.40 per share for the third quarter of 2010 compared to $29.7 million or $0.25 per share for 2009.

A reconciliation of net income attributable to common shareholders to funds from operations is included on page 5 of our supplemental package and a full reconciliation of adjusted FFO is listed on page 46 of the supplemental package.

Operating Results

Same Property Net Operating Income for the company increased by 1.2%, versus a year ago, with retail properties up 2%. These results are primarily driven by the year over year occupancy increases and the commencement of junior boxes leased over the last 12 months.

The Company produced strong leasing results again during the third quarter with 399 new leases and renewals, totaling 1.7 million square feet and representing $19.5 million of annual revenue. The 399 transactions were comprised of 189 new leases and 210 renewals, which represent annual revenues of $8.7 million and $10.8 million, respectively.

Retail occupancy was up 50 basis points over the third quarter 2009. Overall for the Company, occupancy increased to 91.1% compared to 90.8% during the second quarter.

“We are encouraged that our leasing velocity continues to be good, fallout is decreasing and Same Property NOI is at the top of our guidance. Our results prove that all of our associates are focused on improving shareholder value by executing the basics of leasing and managing our centers,” said Johnny Hendrix, Executive Vice President and Chief Operating Officer.

Acquisitions

During the quarter, the Company closed on two acquisitions which totaled $20.5 million and includes:

1. Hope Valley Commons, an 81,000 square foot retail shopping center that was recently developed and is anchored by Harris Teeter. The center is located in the heart of the Research Triangle in Durham, NC. Harris Teeter is the premier grocer in the area and income levels are some of the highest in the city. The center is currently 93% leased.
2. Jupiter Business Park, a 190,000 square foot warehouse facility in Plano, Texas, is 82% leased. Weingarten owns another distribution center that is currently 100% occupied directly across the street from this new acquisition. This demonstrates the potential upside and strength of the location.

Subsequent to quarter end, the Company closed on two additional acquisitions which totaled $40.7 million and includes:

1. Desert Village, a 102,000 square foot retail shopping center located in North Scottsdale, AZ which is anchored by AJ’s Fine Foods and is 95% leased. AJ’s is a boutique, high-end supermarket that owns thirteen locations within Arizona. Average household incomes are $168,000 in this area.
2. Stoneridge Shopping Center, a 178,000 square foot retail shopping center located in Moreno Valley, CA. This property is anchored by Best Buy and Office Max, was acquired through a joint venture and also includes a Super Target and Kohl’s, both of which own their facilities. This recently developed center is currently 88% leased and will be managed by Weingarten allowing for further upside as occupancy improves.

“Weingarten is excited to bring four high quality assets located in strategic markets into our portfolio at current returns of around 7%. Our relationships and expertise in the leasing and management of assets will create incremental shareholder value going forward,” said Drew Alexander, President and Chief Executive Officer.

Financing

The Company’s financial structure continues to remain solid. Over the course of the year, Weingarten has prudently utilized its excess cash for acquisitions and the retirement of debt. Going forward, the Company has its $500 million revolver available to fund growth opportunities.

Dividend

The Board of Trust Managers declared a common dividend of $0.26 per share during the third quarter of 2010. The dividend is payable in cash on December 15, 2010 to shareholders of record on December 8, 2010.

The Board of Trust Managers also declared dividends on the Company’s preferred shares. Dividends related to the 6.75% Series D Cumulative Redeemable Preferred Shares (NYSE:WRIPrD) are $0.421875 per share for the quarter. Dividends on the 6.95% Series E Cumulative Redeemable Preferred Shares (NYSE:WRIPrE) are $0.434375 per share for the same period. Dividends on the 6.50% Series F Cumulative Redeemable Preferred Shares (NYSE:WRIPrF) are $0.40625 per share for the quarter. All preferred dividends are also payable on December 15, 2010 to shareholders of record on December 8, 2010.

Outlook

The Company raised the range of full year FFO guidance from $1.58 to $1.70 per diluted share to $1.67 to $1.71, exclusive of the impairment. Including the non-cash impairments recorded year-to-date in 2010, FFO guidance would be in the range of $1.50 to $1.54 per share.

“Our performance through third quarter of 2010 reflects continued improvement. We strongly believe that Weingarten’s local focus, what we call our 'boots on the ground' approach has enabled us to achieve these results despite the stressed economic conditions and we anticipate continuing the momentum as we enter 2011,” said Drew Alexander.

Conference Call Information

The Company also announced that it will host a live webcast of its quarterly conference call on November 1, 2010 at 9:00 a.m. Central Time. The live webcast can be accessed via the Company’s website at www.weingarten.com. Alternatively, if you are not able to access the call on the web, you can listen live by phone by calling (877) 763-1324 (conference ID # 99097071). A replay and Podcast will be available through the Company’s website starting approximately two hours following the live call.

About Weingarten Realty Investors

Weingarten Realty Investors (NYSE: WRI) is a commercial real estate owner, manager and developer. At September 30, 2010, 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 378 developed income-producing properties and 10 properties under various stages of construction and development. The total number of properties includes 307 neighborhood and community shopping centers located in 22 states spanning the country from coast to coast. The company also owns 78 industrial projects located in California, Florida, Georgia, Tennessee, Texas and Virginia and three other operating properties located in Arizona and Texas. At September 30, 2010, the Company’s portfolio of properties was approximately 70.6 million square feet. 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. Reference is made to the Company’s regulatory filings with the Securities and Exchange Commission for information or factors that may impact the Company’s performance.

  Financial Statements Weingarten Realty Investors (in thousands, except per share amounts)           Three Months Ended Nine Months Ended September 30, September 30, CONDENSED CONSOLIDATED STATEMENTS OF INCOME 2010 2009 2010 2009 AND FUNDS FROM OPERATIONS (Unaudited) (Unaudited) Rentals, net $134,643 $138,175 $404,043 $417,560 Other Income 4,396   4,898   10,893   12,262   Total Revenues 139,039   143,073   414,936   429,822   Depreciation and Amortization 37,297 36,694 111,440 111,485 Operating Expense 25,456 25,506 77,154 75,310 Real Estate Taxes, net 15,653 18,100 48,976 54,472 Impairment Loss 4,941 32,774 21,002 32,774 General and Administrative Expense 6,443   6,178   19,103   19,198   Total Expenses 89,790   119,252   277,675   293,239   Operating Income 49,249 23,821 137,261 136,583 Interest Expense, net (36,679 ) (36,431 ) (111,762 ) (115,247 ) Interest and Other Income, net 3,070 3,596 6,905 8,504 Equity in Earnings (Loss) of Real Estate Joint Ventures and Partnerships, net 3,455 (4,763 ) 9,321 2,783 Gain (Loss) on Redemption of Convertible Senior Unsecured Notes 16,453 (135 ) 25,311 Gain on Land and Merchant Development Sales 491 18,619 Benefit (Provision) for Income Taxes 20   (4,332 ) (155 ) (7,039 ) Income (Loss) from Continuing Operations 19,115   (1,165 ) 41,435   69,514   Operating (Loss) Income from Discontinued Operations (722 ) 12 3,228 Gain on Sale of Property from Discontinued Operations   398   618   7,385   (Loss) Income from Discontinued Operations (324 ) 630 10,613 Gain on Sale of Property 126   994   968   12,374   Net Income (Loss) 19,241 (495 ) 43,033 92,501 Less:

 Net Income Attributable to Noncontrolling Interests

(1,712 ) (20 ) (3,093 ) (2,894 ) Net Income (Loss) Adjusted for Noncontrolling Interests 17,529 (515 ) 39,940 89,607 Less:

 Preferred Share Dividends

(8,869 ) (8,869 ) (26,607 ) (26,607 ) Net Income (Loss) Attributable to Common Shareholders--Basic $8,660   ($9,384 ) $13,333   $63,000   Earnings Per Common Share--Basic $0.07   ($0.08 ) $0.11   $0.59   Net Income (Loss) Attributable to Common Shareholders--Diluted $8,660   ($9,384 ) $13,333   $63,000   Earnings Per Common Share--Diluted $0.07   ($0.08 ) $0.11   $0.59     Funds from Operations: Net Income (Loss) Attributable to Common Shareholders $8,660 ($9,384 ) $13,333 $63,000 Depreciation and Amortization 35,261 35,646 105,449 109,446 Depreciation and Amortization of Unconsolidated Joint Ventures 4,850 4,850 14,795 13,415 Gain on Sale of Property (114 ) (1,383 ) (1,575 ) (19,736 ) Loss (Gain) on Sale of Property of Unconsolidated Joint Ventures     1   (4 ) Funds from Operations--Basic $48,657   $29,729   $132,003   $166,121   Funds from Operations Per Common Share--Basic $0.41   $0.25   $1.10   $1.56   Funds from Operations--Diluted $48,657   $29,729   $132,003   $166,121   Funds from Operations Per Common Share--Diluted $0.40   $0.25   $1.09   $1.56   Weighted Average Shares Outstanding--Basic 119,978   119,384   119,899   106,186   Weighted Average Shares Outstanding--Diluted 120,817   119,384   120,710   106,745     September 30, December 31, 2010 2009 CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Audited) Property $4,709,820 $4,658,396 Accumulated Depreciation (939,209 ) (856,281 ) Investment in Real Estate Joint Ventures and Partnerships, net 312,302 315,248 Notes Receivable from Real Estate Joint Ventures and Partnerships 187,594 317,838 Unamortized Debt and Lease Costs, net 109,498 103,396 Accrued Rent and Accounts Receivable, net 88,755 96,372 Cash and Cash Equivalents 31,814 153,584 Restricted Deposits and Mortgage Escrows 61,767 12,778 Other, net 247,740   89,054   Total Assets $4,810,081   $4,890,385     Debt, net $2,574,845 $2,531,847 Accounts Payable and Accrued Expenses 121,375 137,727 Other, net 103,231   114,155   Total Liabilities 2,799,451   2,783,729     Commitments and Contingencies     Preferred Shares of Beneficial Interest 8 8 Common Shares of Beneficial Interest 3,625 3,615 Accumulated Additional Paid-In Capital 1,966,882 1,958,975 Net Income Less Than Accumulated Dividends (117,850 ) (37,350 ) Accumulated Other Comprehensive Loss (22,273 ) (23,958 ) Shareholders' Equity 1,830,392 1,901,290 Noncontrolling Interests 180,238   205,366   Total Liabilities, Shareholders' Equity and Noncontrolling Interests $4,810,081   $4,890,385