HOUSTON – (Realty News Report) – Weingarten Realty Investors, a Houston-based shopping center REIT, has withdrawn its 2020 outlook due to uncertainty caused by the coronavirus pandemic.
Retailers across the country have temporarily or indefinitely closed stores in response to the outbreak. Analysts warn that the COVID-19 crisis will be especially hard on restaurants, many of which may struggle to survive.
An estimated 40,000 stores and restaurants have closed in recent weeks as the virus has spread.
The pandemic comes at a difficult time for an industry already undergoing store closures driven by competition from e-commerce.
Weingarten noted its portfolio “is very strong and diversified,” comprising 170 shopping centers in 16 states, roughly 80% of which include a grocery component. Approximately 75% of the portfolio’s average base rent comes from national and regional tenants.
“Through February 2020, operating results and rental payments were in line with the company’s expectations. However, as we engage with our tenants, it is clear there is significant uncertainty about the economic impact of the COVID-19 pandemic on businesses. Although it is too early to know the full extent of the impact, the company is withdrawing its previously provided 2020 guidance,” Weingarten said.
In Houston, the Galleria, a landmark property owned by Simon, was closed until the COVID-19 threat subsides. Hundreds of malls nationwide have also shuttered in recent days.
Local governments have issued shelter-in-place orders in Houston and other major markets, restricting consumer activity and public gatherings as part of efforts to slow the virus’s spread.
“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 closely monitoring the pandemic and taking appropriate steps,” said Weingarten CEO Drew Alexander.
Many of Weingarten’s centers are grocery-anchored and grocers have generally remained open.
However, the tenant roster also includes movie theaters and other entertainment venues, most of which are closed as social distancing measures take effect nationwide.
Weingarten tenants include retailers such as T.J. Maxx, Marshalls, Stein Mart and Ross Dress for Less, some of which have temporarily closed due to the pandemic.
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.
Other publicly traded real estate firms have similarly withdrawn guidance amid the current uncertainty. On Monday, Weingarten’s shares closed at $13.05, after hitting a 52-week low of $12.61 the prior week.
March 24, 2020 Realty News Report Copyright 2020
Read the new book for the new year by Ralph Bivins, editor of Realty News Report
Houston 2020: America’s Boom Town – An Extreme Close Up
Available on Amazon
