Weingarten Realty Buys Austin Assets

Zacks

Weingarten Realty Investors (WRI), a retail real estate investment trust (:REIT), recently acquired an Austin, Texas-based power center – Mueller Regional Retail Center. The strategic move reflects the company’s effort to strengthen its overall portfolio and tenant base, through high-end assets buy-out.

As a matter of fact, with solid projections for growth in employment, population and rents in the next 5 years, Austin remains a preferred market for Weingarten Realty. Situated adjacent to Interstate 35, the power center spans 350,000 square feet and is anchored by a cluster of renowned tenants – such as The Home Depot, Inc. (HD), Marshalls, Bed Bath & Beyond Inc. (BBBY) and PetSmart, Inc. (PETM).

The property offers substantial growth potential with trade area population of 150,000 people and average daily traffic count of more than 240,000 vehicles. Notably, this property is part of the Mueller Regional Retail District, a 700 acre master planned community. After completion, this community will boast of 4 million square feet of commercial space and 4,600 residential units.

On the other hand, Weingarten Realty is disposing its non-core assets. During the third quarter, the company divested eight non-core properties and two land parcels. These asset disposition efforts have helped the company reap $116 million and $240 million, respectively, as its share of disposition proceeds for the quarter and year-to-date.   

We view the aforementioned acquisition as a significant achievement for Weingarten Realty, given its superior demographics with high household incomes, along with high barriers to entry. We expect it to increase rental revenues and thereby boost top-line growth in the future. On the other hand, the divestitures would help reposition its portfolio efficiently and ride on the growth curves.

Weingarten Realty currently carries a Zacks Rank #3 (Hold).

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