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COVID-19’s Impact on Weingarten Realty Investors

HOUSTON – (Realty News Report) – Weingarten Realty Investors, a Houston-based shopping center REIT, has withdrawn its outlook guidance because of uncertainty stemming from the coronavirus pandemic.

Retailers have been shuttering stores temporarily or indefinitely as a response to the pandemic. Analysts say the COVID-19 outbreak will be extremely tough on restaurants, which may not be able to survive.

An estimated 40,000 stores and restaurants have been closed down in recent weeks following the coronavirus outbreak.

The coronavirus falls heavily on a retail industry which has been experiencing store closures attributed to the e-commerce competition.

Weingarten said its portfolio “is very strong and diversified with 170 shopping centers located in 16 states with 80% containing a grocery component. Additionally, approximately 75% of the average base rent of the portfolio comes from national and regional tenants.

“Through February 2020, operating results and rental payments are in-line with the company’s expectations. However, as we interface with our tenants it is clear that there is much uncertainty as to the economic impact of the COVID-19 pandemic to businesses. Although it is too early to know the extent of the impact, the company is withdrawing its previously provided 2020 guidance,” Weingarten said.

In Houston, the massive Galleria, a landmark Simon property, has been closed down until the COVID-19 threat subsides. Hundreds of malls around the nation have been shuttered in recent days.

“Shelter-in-place” edicts are being issued in Houston and other major markets as governmental officials restrict consumer activity and public gatherings in attempts to head-off the spread of the coronavirus.

“At Weingarten, our first priority is the safety and well-being of our associates, tenants, stakeholders and the broader community during these challenging times. We are carefully monitoring the current state of the pandemic and taking appropriate steps,” said Weingarten CEO Drew Alexander.

Weingarten’s portfolio includes a large number of grocery anchored centers and grocers remain open.

But Weingarten’s tenant roster also includes movie theaters and most theaters and similar entertainment spaces are closed as the nation practices “social distancing” to discourage a spread of the coronavirus.

Weingarten tenants include TJ Maxx, Marshall’s, Steinmart, Ross Dress for Less and other retailers that have been closed for the coronavirus.

Weingarten said its balance sheet “is among the strongest” in the shopping center sector. “However, given these perilous and difficult times, WRI has drawn down the remaining $482 million available under its $500 million Revolving Credit Facility to increase liquidity and preserve financial flexibility,” the company said.

Weingarten is not alone. Other publicly traded firms have withdrawn guidance because of these uncertain times.  Monday Weingarten’s shares closed at $13.05, after hitting its 52-week low of $12.61 last week.

March 24, 2020 Realty News Report Copyright 2020

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