Weingarten Realty Investors Executive Insights: NOI Growth Guidance, Spread Number

On Wednesday, Weingarten Realty Investors (NYSE:WRI) reported its first quarter earnings and discussed the following topics in its earnings conference call. Here’s what executives shared.

NOI Growth Guidance

Jeffrey Donnelly – Wells Fargo Securities: First question I think is maybe split between Steve and Johnny. Are you guys able to quantify for us the portion of the growth behind your 2012 NOI growth guidance as signed but not commenced versus I will call it not signed and those not commenced? I am just trying to figure out how much of your future growth might be in the bag if you will?

Andrew M. Alexander – President and CEO: We have about $3 million that is not signed and not commenced that needs to be completed in order to achieve the goal that gives you a sense of it. So that’s a relatively small percentage of the overall.

Jeffrey Donnelly – Wells Fargo Securities: May be just for you Johnny, I mean its two parts. But we are seeing renewed demand from small retailers. The shop occupancy gains in the quarter are outpacing the broader reach of portfolio. I guess first what do you think is triggering that resurgence? Is it higher confidence from retailers in adding stores or has there been some change may be in some of the incentives you guys are providing versus 12 to 24 months ago? Secondarily is there some like different type of tenant that you’re seeing today versus two years ago, are they more national, regional or even more sort of local mom-and-pop type?

Johnny Hendrix – EVP and COO: Let me actually get to the first – the second question first and I would say generally speaking, we are seeing many more national and regional in mom-and-pop. There is not a lot of new creation of what I would consider to be mom-and-pop businesses today. Most of the space that we’re leasing today is national and regional tenants. I would tell you that the techniques and the discipline that we are using to lease the space today is the same as we have for the last many years and I think we are probably have increased a little bit the number of folks that we have had over the last couple of years. But other than that we are not really adding any incentives that are special.

Spread Number

James Sullivan – Cowen and Company: Question I guess for Johnny and/or Steve. In your revised guidance, you raised your signed occupancy number and kept the same property NOI number the same. The spread number remains the same negative one to two. You had a pretty good quarter on spreads. I wonder if you can just talk about why you weren’t able to raise that spread number a little bit number one? And number two, just thinking, I don’t want to get too far ahead here. But thinking about the progression of your same-store NOI in the last cycle, you were at its peak you were getting spreads in the 10% to 15% range. I just wonder if you have a feel for when you might be able to think about numbers like that looking forward?

Johnny Hendrix – EVP and COO: Again, let me answer second question first, I think it’s coming, I’m not totally certain when it is and I will tell you that we are remain very focused on occupancy. I’m hopeful that by the beginning of next year, we could start seeing spreads like that. So that’s kind of where I think we are. In terms of the occupancy guidance and why we didn’t raise it more. I think that the issue you kind of got to look at is the industry portfolio is only 10% of the NOI, but it certainly significantly more than that on square footage basis. So the effect of that kind of offsets the total guidance that we can have and this was retail occupancy from the very beginning and pretty much so far this year we have been moving forward according to plan. I think both the fallout in the leasing and the commencement of leases has been pretty consistent with the plan that we initially outlined.

James Sullivan – Cowen and Company: Just to be clear, when you use the word fall out, you are referring to tenants who are closing stores prior to the expiration of the lease as opposed to just tenants who don’t renew.

Andrew M. Alexander – President and CEO: This would include both tenants who just don’t renew and tenants who close their store before, these are tenants that are leaving the space for one reason or another. And not paying rent.