Occupancy Decline Continuing Till Midyear: Weingarten Anticipates

HOUSTON – (Realty News Report) – Houston-based shopping center owner Weingarten Realty expects occupancy at its properties to bottom out by the middle of the year and then slowly recover as more people are vaccinated from COVID-19 and the economy inches toward improvement.

Houston, for example,  has regained about half of the jobs it lost at the start of the pandemic, the company said in a conference call with investors Tuesday morning to discuss earnings.

The real estate investment trust, which owns primarily grocery-anchored shopping centers in the southern and western United States, said occupancy, including recently signed leases, fell to 92.9 percent in the fourth quarter of 2020, down from 95.2 percent a year earlier.

“Our signed occupancy has never dropped below 90 percent in the history of the company. It didn’t in Texas in the middle and late ‘80s; it didn’t in the global financial crisis; and according to the business plan isn’t supposed to this year but it’ll be really close and right around that level,” Weingarten CEO Drew Alexander said on the call.

Weingarten and other owners of retail real estate have seen their earnings decline due to tenant fallouts, bad debt expenses and uncollected rent.

Weingarten posted fourth-quarter net income of $23.1 million, or 18 cents per share, down 69 percent from a year earlier when it was $75.2 million, or 58 cents per share.

Funds from operations for the quarter were $55.8 million, or 43 cents per share, compared with $69.2 million, or 53 cents per share in the same quarter of 2019.

For 2021, the company anticipates uncollected rent and bad debt expenses to fall from 2020 levels, but that the reduction will be largely offset by additional tenant fallout and terminations.

Weingarten, which is primarily a shopping center owner, also has several mixed-use developments in the works, including a luxury residential and retail property in Houston’s River Oaks area. Construction on that project — the Driscoll at River Oaks — is nearly complete and 47 percent leased.

The company was supposed to report fourth-quarter earnings on Feb.18 but delayed its release because of last week’s winter storm and widespread power outages in Texas. Alexander said the company’s properties in the state held up well and had minimal power and water outages.

Feb. 23, 2021 Realty News Report Copyright 2021

File: Occupancy Decline Continuing Till Midyear:Weingarten Realty Anticipates

File: (2) Weingarten Realty (WRI). Occupancy Decline Continuing Till Midyear. Pandemic Recovery. Retail REIT. Drew Alexander.

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