UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
_________________________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): October 26, 2001
WEINGARTEN REALTY INVESTORS
---------------------------
(Exact name of registrant as specified in its charter)
------------------------------------------------------
1-9876
------------------------
(Commission File Number)
Texas 74-1464203
------------------------------------------ ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2600 Citadel Plaza Drive, Suite 300, Houston, Texas 77008
---------------------------------------------------------- ----------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 866-6000
--------------
------
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
During the period from January 1, 2001 through the date of this filing,
Weingarten Realty Investors acquired a portfolio of 19 retail centers (the
"Golden State Portfolio"), ten other retail centers and one industrial project.
Material factors considered in each of the acquisitions made by the Company
include historical and prospective financial performance of the center, credit
quality of the tenancy, local and regional demographics, location and
competition, ad valorem tax rates, condition of the property and the related
anticipated level of capital expenditures required. The total investment in
acquisitions during 2001 is $461 million. Audited financial statements and
unaudited pro forma financial information on these properties are submitted in
ITEM 7. below. Audited financial statements for the Golden State Portfolio were
previously filed under our Form 8-K dated June 23, 2001 and, accordingly, are
not included herein.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
The following financial statements, pro forma financial statements and
exhibits are filed as part of this report:
(a) Financial statements of businesses acquired:
Colonial Plaza Market Center
(i) Independent Auditors' Report
(ii) Statement of Revenue and Certain Expenses for the Year Ended
December 31, 2000
(iii) Notes to Statement of Revenue and Certain Expenses
(b) Pro Forma Condensed Financial Statements (unaudited) of Weingarten
Realty Investors, the Acquired Properties and Other Acquisitions
1. Pro Forma Condensed Statement of Consolidated Income for the
Six Months Ended June 30, 2001
2. Pro Forma Condensed Balance Sheet as of June 30, 2001
3. Notes and Significant Assumptions
(c) Exhibits:
Included herewith is Exhibit No. 23.1, the Consent of the
Independent Accountants
INDEPENDENT AUDITORS' REPORT
To the Board of Trust Managers and Shareholders of
Weingarten Realty Investors:
We have audited the accompanying statement of revenue and certain expenses of
the Colonial Plaza Market Center ("Colonial") for the year ended December 31,
2000. This statement of revenue and certain expenses is the responsibility
of the Colonial management. Our responsibility is to express an opinion
on the statement of revenue and certain expenses based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the statement of
revenue and certain expenses is free of material misstatement. An audit
includes examining on a test basis, evidence supporting the amounts and
disclosures in the statement. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall statement of revenue and certain expense presentation.
We believe that our audit provides a reasonable basis for our opinion.
The accompanying statement of revenue and certain expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission for inclusion in Form 8-K of Weingarten Realty Investors.
Certain expenses (described in Note 1) that would not be comparable to those
resulting from the proposed future operations of the property are excluded and
the statement is not intended to be a complete presentation of Colonial's
revenue and expenses.
In our opinion, the statement of revenue and certain expenses presents fairly,
in all material respects, the revenue and certain expenses, as defined above, of
the Colonial Plaza Market Center for the year ended December 31, 2000, in
conformity with accounting principles generally accepted in the United States of
America.
Deloitte & Touche LLP
Houston, Texas
September 13, 2001
COLONIAL PLAZA MARKET CENTER
STATEMENT OF REVENUE AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2000
REVENUE:
Rental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $5,021,523
Tenant reimbursements. . . . . . . . . . . . . . . . . . . . . . 1,746,738
----------
Total Revenue. . . . . . . . . . . . . . . . . . . . . 6,768,261
----------
CERTAIN EXPENSES:
Property operating and maintenance . . . . . . . . . . . . . . . 720,955
Real estate taxes and assessments. . . . . . . . . . . . . . . . 1,162,178
----------
Total Certain Expenses . . . . . . . . . . . . . . . . 1,883,133
----------
EXCESS OF REVENUE OVER CERTAIN EXPENSES. . . . . . . . . . . . . . . $4,885,128
==========
See accompanying notes to statement of revenue and certain expenses.
COLONIAL PLAZA MARKET CENTER
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2000
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - The accompanying statement of revenue and certain expenses
includes the operations of the Colonial Plaza Market Center ("Colonial").
Colonial was purchased by Weingarten Realty Investors (the "Company") on
February 28, 2001 from Cousins Properties Incorporated. This acquisition, which
represents the largest single asset purchase in the history of WRI, is a
480,000-square-foot power center in Orlando, Florida. The center was sold to
Weingarten Realty Investors for $54 million. Colonial Plaza Market Center is
located on 46 acres on East Colonial Drive (Highway 50) at Bumby Avenue two
miles from downtown Orlando. The center is anchored by Babies "R" Us, Barnes &
Noble, Circuit City, Just For Feet, Linens 'N Things, Marshalls, Old Navy,
Rhodes Furniture, Ross Dress For Less, Stein Mart and Staples. The Company is a
Texas real estate investment trust, which is primarily involved in the
acquisition, development, and management of real estate, consisting mostly of
neighborhood and community shopping centers and, to a lesser extent, industrial
properties.
Basis of Presentation - The accompanying statement was prepared to comply with
the rules and regulations of the Securities and Exchange Commission for
inclusion in Form 8-K of the Company.
The accompanying statement is not representative of the actual operations for
the period presented as certain expenses that may not be comparable to the
expenses expected to be incurred by the Company in the future operations of
Colonial have been excluded. Excluded expenses consist of interest,
depreciation and amortization, property expenses and general and administrative
costs not directly comparable to the future operations of Colonial.
Revenue Recognition - Rental revenue is generally recognized on a straight-line
basis over the life of the lease for operating leases. Tenant reimbursements
(payments for taxes, maintenance expenses and insurance by the lessees) are
estimated and accrued over the fiscal year.
Use of Estimates - The preparation of the financial statement requires
management to make use of estimates and assumptions that affect amounts reported
in the financial statement as well as certain disclosures. Actual results could
differ from those estimates.
2. RENTALS UNDER OPERATING LEASES
Future minimum rental income from non-cancelable operating leases at December
31, 2000 is:
2001 . . . . . . $ 5,126,443
2002 . . . . . . 4,696,840
2003 . . . . . . 4,524,048
2004 . . . . . . 4,311,204
2005 . . . . . . 4,139,088
Thereafter . . . $19,344,865
*****
Weingarten Realty Investors
Pro Forma Condensed Statement of Consolidated Income
Six Months Ended June 30, 2001
(Unaudited)
(in thousands, except per share amounts)
This unaudited Pro Forma Condensed Statement of Consolidated Income and Pro
Forma Condensed Balance Sheet are presented as if (A) the acquisitions of the
acquired properties and (B) the acquisition of other properties, as set forth
in the Notes and Significant Assumptions, had occurred as of January 1, 2001.
In management's opinion, all adjustments necessary to reflect the effects of
these transactions have been made. This unaudited Pro Forma Condensed Statement
of Consolidated Income is not necessarily indicative of what actual results of
operations would have been had these transactions occurred on January 1, 2001,
nor does it purport to represent the results of operations for future periods.
Adjustment Adjustment
for Acquired for Other Pro
Historical Properties(A) Acquisitions(B) Forma
---------- ------------- --------------- -----------
Revenue:
Rentals $ 143,511 $ 10,616 $ 7,289 $ 161,416
Interest 1,785 17 1,802
Other 2,485 27 (58) 2,454
---------- ------------- --------------- -----------
Total Revenue 147,781 10,643 7,248 165,672
---------- ------------- --------------- -----------
Expenses:
Operating 20,912 1,578 1,113 23,603
Ad Valorem Taxes 18,193 996 668 19,857
Depreciation & Amortization 32,466 1,540 1,149 35,155
Interest 25,395 5,159 3,318 33,872
General & Administrative 5,104 40 7 5,151
---------- ------------- --------------- -----------
Total Expenses 102,070 9,313 6,255 117,638
---------- ------------- --------------- -----------
Income from Operations 45,711 1,330 993 48,034
Minority Interest in Income of Partnerships (1,366) (1,366)
Gain on Sales of Property and Securities 4,984 4,984
Equity in Earnings of Joint Ventures 2,054 2,054
---------- ------------- --------------- -----------
Net Income $ 51,383 $ 1,330 $ 993 $ 53,706
========== ============= =============== ===========
Net Income Available to Common Shareholders:
Shareholders:
Basic $ 41,363 $ 1,330 $ 993 $ 43,686
========== ============= =============== ===========
Diluted $ 41,427 $ 1,330 $ 993 $ 43,750
========== ============= =============== ===========
Net Income per Common Share - Basic $ 1.33 $ 1.40
========== ===========
Net Income per Common Share - Diluted $ 1.33 $ 1.40
========== ===========
Weighted Average Number of Shares Outstanding:
Basic 31,105 31,105
========== ===========
Diluted 31,251 31,251
========== ===========
Weingarten Realty Investors
Pro Forma Condensed Balance Sheet
As of June 30, 2001
(Unaudited)
(in thousands)
Adjustment
for Pro
Historical Acquisitions Forma
------------ -------------- -----------
Assets:
Property $ 2,166,717 $ 63,287 $2,230,004
Accumulated Depreciation (388,117) (2,689) (390,806)
------------ -------------- -----------
Property - net 1,778,600 60,598 1,839,198
Investment in Real Estate Joint Ventures 27,458 27,458
------------ -------------- -----------
Total 1,806,058 60,598 1,866,656
Notes Receivable from Joint Ventures and
Partnerships 43,499 43,499
Unamortized Debt and Lease Costs 37,814 37,814
Accrued Rent and Accounts Receivable 20,998 20,998
Other 31,763 5,012 36,775
------------ -------------- -----------
Total $ 1,940,132 $ 65,610 $2,005,742
============ ============== ===========
Liabilities and Equity:
Debt $ 1,003,364 $ 63,287 $1,066,651
Accounts Payable and Accrued Expenses 59,815 59,815
Other 5,961 5,961
------------ -------------- -----------
Total 1,069,140 63,287 1,132,427
------------ -------------- -----------
Minority Interest 31,076 31,076
------------ -------------- -----------
Shareholders' Equity 839,916 2,323 842,239
------------ -------------- -----------
Total $ 1,940,132 $ 65,610 $2,005,742
============ ============== ===========
WEINGARTEN REALTY INVESTORS
NOTES AND SIGNIFICANT ASSUMPTIONS
SIX MONTHS ENDED JUNE 30, 2001
(Unaudited)
(A) ACQUIRED PROPERTIES
The aggregate purchase price for the acquisitions described below (the "Acquired
Properties") was $332.2 million and was allocated between land and buildings,
with the buildings being depreciated over a period of forty years. These
purchases were funded under the Company's revolving credit facility (average
rate of 5.50%) with the exception of a $131.9 million of debt (average rate of
8.33%) which was assumed by the Company. Pro forma revenue and expenses, other
than interest and depreciation, represent the historical amounts of the Acquired
Properties.
On April 2, 2001, WRI purchased 19 supermarket-anchored shopping centers,
aggregating 2.5 million square feet from Burnham Pacific Properties, Inc.
These properties (the "Golden State Portfolio") are over 96% leased and are
located in the Sacramento/San Francisco Bay area (13 properties) and in the
Los Angeles area (six properties).
On February 28, 2001, WRI purchased a 480,000-square-foot center in Orlando,
Florida. Colonial Plaza Market Center is located on 46 acres on East Colonial
Drive (Highway 50) at Bumby Avenue two miles from downtown Orlando. The center
is anchored by Babies "R" Us, Barnes & Noble, Circuit City, Just For Feet,
Linens 'N Things, Marshalls, Old Navy, Rhodes Furniture, Ross Dress For Less,
Stein Mart and Staples.
B) OTHER ACQUISITIONS
The aggregate purchase price for the acquisitions described below (the "Other
Acquisitions") totaled $128.9 million. The purchase price is allocated between
land and buildings, with the buildings being depreciated over a period of forty
years. These purchases were or will be funded under the Company's revolving
credit facility (average rate of 5.50%) with the exception of $15,091 of debt
(average interest rate of 8.12%) which was assumed by the Company. Pro forma
revenue and expenses, other than interest and depreciation, represent the
historical amounts of the Other Acquisitions.
On May 15, we acquired four supermarket-anchored shopping centers in the
Memphis, Tennessee market area. Three of the centers are anchored by Kroger and
the fourth is anchored by Seessel's (owned by Albertson's). Other anchor
retailers include Walgreen Drugs and Stein Mart. These properties total nearly
617,000 square feet and were over 92% leased in the aggregate.
On June 6, we purchased the Venice Pines Shopping Center in Venice, Florida, our
fourth property in the state of Florida. This 97,000 square foot center is
anchored by Kash N Karry Supermarket and is 91% leased.
On June 29, we purchased Parkway Pointe Shopping Center in Cary, North Carolina,
a suburb of Raleigh. Anchored by Food Lion, Eckerd Drugs and Ace Hardware, the
center was 95% leased upon acquisition.
In August, we acquired the Boca Lyons Shopping Center in Boca Raton, Florida.
This center is anchored by Ross Dress for Less, Ethan Allen Furniture, Sun Trust
Bank and World Savings. This 113,000 square foot center was 94% leased upon
acquisition.
In September, we purchased Winter Park Corners in Winter Park, Florida. This
103,000 square foot center is anchored by Whole Foods and the Orange County
Courthouse and was 100% leased at the date of purchase.
On October 18, 2001, we purchased Oak Hill Industrial Park (I and II). This
property is located in southwest Austin on Industrial Oaks Blvd., just north of
I-71. It consists of two buildings constructed in two phases, in 1982 and 1984.
On October 25, 2001, we purchased Sunset Point Shopping Center in Clearwater,
Florida. This 236,000 square foot center is anchored by Publix, Old Navy,
Barnes & Noble and Eckerds.
WEINGARTEN REALTY INVESTORS
STATEMENT OF ESTIMATED TAXABLE OPERATING RESULTS
AND CASH TO BE MADE AVAILABLE BY OPERATIONS
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2001
(Unaudited)
(in thousands)
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . $30,169
Expenses:
Operating . . . . . . . . . . . . . . . . . . . . . 4,124
Ad Valorem Taxes. . . . . . . . . . . . . . . . . . 2,941
Depreciation & Amortization . . . . . . . . . . . . 4,611
Interest. . . . . . . . . . . . . . . . . . . . . . 14,726
--------
Total Expenses. . . . . . . . . . . . . . . . . 26,402
--------
Estimated Taxable Operating Gain. . . . . . . . . . . . . 3,767
Add back depreciation & amortization. . . . . . . . . . . 4,611
--------
Estimated Cash to be Made Available from Operations . . . $ 8,378
========
Note: This statement of estimated taxable operating results and estimated cash
to be made available from operations is an estimate of operating results
for all properties acquired by WRI during the six months ended June 30,
2001 and does not purport to reflect actual results for any period.
(c) Exhibits
Exhibit Number Description
--------------- -----------
23.1 Consent of Deloitte & Touche LLP
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WEINGARTEN REALTY INVESTORS
-----------------------------
(Registrant)
BY: /s/ Joe D. Shafer
-------------------------
Joe D. Shafer
Vice President/Controller
(Principal Accounting Officer)
DATE: October 26, 2001