INVESTOR PRESENTATION FIRST QUARTER 2018

Transcription

1 INVESTOR PRESENTATION FIRST QUARTER 2018

2 8000 Sunset Strip Shopping Center Los Angeles, CA FORWARD LOOKING STATEMENTS Statements included herein that state the Company s or Management s intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 which by their nature, involve known and unknown risks and uncertainties. The Company s actual results, performance or achievements could differ materially from those expressed or implied by such statements. Reference is made to the Company s regulatory filings with the Securities and Exchange Commission for information or factors that may impact the Company s performance. 2

3 COMPANY OVERVIEW As of 3/31/18 $5.6B Total Enterprise Value 79% Grocery Anchored 50% NOI in Top 5 Markets 5.1x Net Debt to EBITDAre No Significant Maturities until 2022 PROVEN RESULTS 3 Yr. Average SSNOI growth of 3.0%, including redevelopments BEST IN CLASS RETAILERS Most Diversified Tenancy amongst our Peers Top 5 Tenants Include: TJX, Kroger, Ross, Whole Foods, and H-E-B EXPERIENCED TEAM of Real Estate Professionals with a Best in Class Operating Platform Green Street Advisors says, Property management and leasing are Weingarten s key strengths. Same-property NOI growth has outpaced its closest peers as of late and the company boasts a solid redevelopment pipeline. 3

4 Hilltop Village Center Alexandria, VA HIGH QUALITY PORTFOLIO

5 STRATEGIC TARGET MARKETS - FOCUSED ON GROWTH STRONG DEMOGRAPHICS TARGET MARKETS REPRESENT 95% OF NOI Projected Household Growth Population College Education 6.3% Peer: 4.8% 119,000 Peer: 97,000 47% Peer: 46% Regional Office Target Market Target Markets with Strong Demographic Profiles Source: STI: Popstats, Evercore ISI Annual Demographic Update March 13, 2018 WRI demographics are for a 3 mile trade area and weighted by ABR. Q118 peer information includes DDR, KIM, BRX, RPAI, and REG. Solid job growth Pro business environment/low tax states Highly educated population Lower cost of living Benefiting from migration within the US Benefiting from immigration to the US 5

6 TOP 5 TARGET MARKETS OVER 50% OF TOTAL PORTFOLIO WRI properties are concentrated in densely populated submarkets, with high barriers to entry, in markets that are. Top 5 Markets by Average Base Rent Market # of Properties % of ABR TAP Score (a) Average HH Income (b) Average Population (b) Average Density (b) Houston % 78 $119, ,000 2,255 Southern California , ,000 1,987 Northern Florida ,000 88,000 1,374 Southern Florida , ,000 1,885 Phoenix ,000 83,000 1,259 Total Top Markets % 66 $94, ,000 1,800 Total WRI % 63 $91, ,000 1,700 (a) Third-party research (b) Demographics based upon a 3-mile trade area 6

7 BEST IN CLASS RETAILERS Top Tenants by ABR Credit Ratings (S&P/ Moody s) # Stores % ABR 1. TJ Maxx A+ / A % 2. Kroger BBB / Baa % 3. Ross A- / A % 4. Whole Foods Market A+ / Baa % 5. H-E-B N/A / N/A 8 1.7% 6. PetSmart CCC+ / B % 7. Albertsons N/A / N/A % 8. Bed Bath & Beyond BBB / Baa % Hour Fitness B / B % 10. The Home Depot A / A % Top % 11. Office Depot B / B % 12. Dollar Tree Stores BBB- / Baa % 13. Best Buy BBB / Baa % 14. Petco Animal Supplies B- / B % 15. Hobby Lobby Stores N/A / N/A 7 0.8% 16. Walmart Stores AA / Aa % 17. Starbucks A- / A % 18. Dick's Sporting Goods N/A / N/A 4 0.6% 19. Barnes & Noble N/A / N/A 6 0.6% 20. JPMorgan Chase Bank A+ / Aa % 21. Gap BB+ / Baa % 22. Michaels Stores N/A / Ba % 23. Nordstrom Rack BBB+ / Baa % 24. Party City B+ / Ba % 25. Ascena Retail Group B / Ba % Top % WRI s diversified tenant base has limited exposure to any single tenant. Diversification is especially important in today s changing retail market. TOP 10 - % OF ABR 17% 18% 18% 20% 20% 20% 26% WRI BRX RPAI REG ROIC KIM DDR 7

8 WELL BALANCED PORTFOLIO... COMMUNITY CENTERS 40% of ABR Leesville Towne Centre Raleigh, NC.Focused on Grocery and Necessity Based Goods and Services POWER CENTERS 35% of ABR The Palms at Town & Country Miami, FL The Palms at Town & Country Miami, FL Neighborhood 22% Community 40% NEIGHBORHOOD CENTERS 22% of ABR 580 Market Place Castro Valley, CA Other 3% Power with Grocer 28% Power 7% Categories based upon ICSC Definitions: Neighborhood Centers: K SF with 1+ anchor, typically a supermarket Community Centers: K SF with 2+ anchors (discount, supermarket, drug as examples) 80% of WRI s centers categorized as Power have a supermarket This is not your traditional power center. Power Center: K with 3+ anchors (home improvement, discount department or supermarket as examples) 8

9 HIGHLY PRODUCTIVE GROCERS High Volume Grocers highlight the strength and quality of our locations 79% of ABR Shopping Centers with a Grocer Component 32% 28% 18% $637 PSF 90,000 WRI Average Grocer Sales exceed National Average of $400 PSF Shoppers typically visit each of our grocers every month Grocer Types % of ABR Sales PSF Community Power Neighborhood Other 8% 7% 4% 2% 1% See definition of property types on the previous slide National 44% $599 Regional 23% $699 Specialty 12% $673 Independent <1% $324 Total 79% $637 9

10 WRI S TENANT BASE IS 77% INTERNET RESISTANT LOW INTERNET VULNERABILITY TENANT TYPE COMPOSITION BY ABR 77% POTENTIAL RISK 18% Quick Service & Full Service Restaurants 18% Services 16% Supermarkets 12% General Merchandise & Other Misc. Retail 9% 18% Some Apparel 5% Pet Stores & Services 3% Beauty Supplies 2% Drugstores 2% Sporting Goods 2% Recreation/Entertainment 7% 77% Footwear 1% Discount Apparel 6% Home Furnishings 5% 5% Liquor / Tobacco 1% Optical 1% Medical 4% Internet Resistant Potential Risk Internet Vulnerable Party Supplies 1% INTERNET VULNERABLE 5% Office 2% Electronics 2% Books 1% TOTAL 100% 10

11 SMALL SHOP LEASING Less than 10,000 square feet Service 57% General Merchandise 6% Home 4% Other 4% Restaurant (QSR and Full Service) 23% Apparel 6% Percentages based upon the number of leases for the 12 months ended March 31,

12 LIMITED EXPOSURE TO AT-RISK TENANTS As of 3/31/18 NO EXPOSURE At-Risk Tenants WRI Store Count % of ABR % % % % % % % % TOTAL % 12

13 PROVEN RESULTS LEASED OCCUPANCY SAME PROPERTY NOI (a) 96.0% 94.0% 93.0% 95.4% 95.1% 94.8% 94.3% 94.8%94.8% 93.7% 93.0%93.0% 5.0% 2.5% 0.0% 0.2% 0.4% 4.2% 4.2% 3.4% 3.1% 2.7% 2.2% 1.6% 92.0% 91.8% -2.5% -0.6% 90.0% Q % -3.8% Q118 ABR PSF RENT GROWTH $20.00 $18.00 $16.00 $14.00 $12.00 $13.16 $13.31 $13.60 $16.92 $16.24 $15.66 $15.14 $14.51 $18.69 $18.90 $ Q % 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% 12.5% 13.1% 11.0% 11.6% 10.1% 6.3% 5.8% 4.2% 2.0% -0.4% -2.5% Q118 WRI Peer Average Note: Q118 peer information includes DDR, KIM, BRX, REG, and RPAI. (a) Excludes redevelopment. 13

14 CORPORATE RESPONSIBILITY Weingarten Realty s principals in Corporate Responsibility embrace achieving success in ways that honor and respect people, communities and the environment. AWARDS AND ACKNOWLEDGEMENTS: Green Lease Leader Named a Green Lease Leader at the U.S. Dep. of Energy s (DOE) Better Buildings Summit GRESB Survey Participant Increased GRESB grade yearover-year. Record Year of Savings Record year for Energy Saved and Recycling (Energy - 3,656,902 kwh saved, Recycling 70,103 tons of materials recycled) People The Wellness Program promotes healthy lifestyles for associates and their families, thus building a strong and healthy workforce. Communities Weingarten s philanthropy campaigns support causes important to our associates and the communities we serve. Environment Environmental responsibility is both an obligation and an opportunity to benefit our patrons, tenants, investors, properties and associates. View our Annual Corporate Responsibility Report at gartenportfolio.com/pdfs/collate RAL/2018CRR/index.html 14

15 West Alex Alexandria, VA STRATEGIC GROWTH

16 CREATING VALUE THROUGH NEW / REDEVELOPMENT Developments and Redevelopments Under Construction ($MM) Cost Incurred To Date Estimated Final Est ROI% Developments and Large Redevelopments Under Construction The Whittaker / Seattle WA $27,401 $31,362 West Alex / Alexandria VA 89, ,897 Centro Arlington / Arlington VA 42, ,149 The Driscoll at River Oaks / Houston TX 4, ,000 $164,729 $513, % Redevelopments Under Construction $33,678 $78, % % The development pipeline is anchored by national grocers - Whole Foods and Harris Teeter (Kroger) The current redevelopment pipeline consists of 14 properties with stabilization over the next 24 months Future redevelopment pipeline over 5+ years over $500M of investment with returns in excess 10% Note: Redevelopment is defined where the building square footage is changed in a shopping center. 16

17 THE WHITTAKER SEATTLE, WA $31.4M Retail Investment ~7% Return 63,000 SF Ground Floor Retail 6 Story Mixed-Use Development 389 Residential Units Avg HHI 3-Mile $104,212 Population 3-Mile 87,061 Mixed-use development constructed by Lennar where WRI owns the retail component and 1 level of parking. The residential opened in The retail is 93% leased with Whole Foods anticipated opening in Total project is $130M with WRI s investment of $31.4M 17

18 WEST ALEX & CENTRO ARLINGTON We have two mixed-used developments under construction in the Washington DC market in close proximity to The Pentagon and related defense contractors. This submarket has little new residential product with an increasing demand. Both are served by numerous transit connections to the Pentagon, Pentagon City and Washington Metro stations. 18

19 WEST ALEX ALEXANDRIA, VA $197M Total Project Estimated Investment 278 Residential Units 100,000 SF Retail 23,000 SF Boutique Office Avg HHI 3-Mile $115,533 Population 3-Mile 291,160 Ground floor featuring 100,000 SF of retail anchored by Harris Teeter Demographics 3-Mile Radius 5-Mile Radius Population 291, ,683 Households 132, ,448 Avg HHI $115,533 $134,158 Median HHI $90,539 $104,245 % College Graduate 62.55% 67.82% This premier mixed-use development will feature retail, residential, boutique office space & 850 below-grade parking spaces. WRI plans to sell the residential component after stabilization. 134,000 daytime population within 3 miles Median Housing Value $560,640 $631,271 19

20 CENTRO ARLINGTON ARLINGTON, VA $135M Total Project Estimated Investment 6 Story Mixed-Use Development 366 Residential Units 65,000 SF Retail Avg HHI 3-Mile $129,093 Population 3-Mile 303,001 Ground floor featuring 72,000 SF of retail anchored by Harris Teeter Demographics 3-Mile Radius 5-Mile Radius Population 303, ,997 Households 143, ,285 Avg HHI $129,093 $141,103 Median HHI $101,096 $106,313 % College Graduate 68.44% 71.07% This property is owned in a joint venture with the developer, Orr Partners WRI intends to sell the residential component after stabilization. This will be a six-story structure with three floors of below-grade parking. Median Housing Value $618,034 $666,436 20

21 THE DRISCOLL AT RIVER OAKS HOUSTON, TX $150M Total Project Incremental Investment 30 Story Residential High Rise 318 Luxury Apartment Units 11,000 SF Ground Floor Retail 2018 Groundbreaking 2021 Delivery Date Avg HHI 3-Mile $156,306 5-Mile $133,005 Population 3-Mile 5-Mile 175, ,966 WRI is contracting with Hanover Company, a nationally recognized developer of high quality multi-family residential properties, for the development of a 30-story residential luxury high rise within River Oaks Shopping Center. This 320,000 sf shopping center features national, upscale brands serving the high-end River Oaks area and downtown Houston. 21

22 SUNSET POINT 19 CLEARWATER, FL $23.1M Total Project Incremental Investment 12% Return On Incremental Investment 142,000 SF Under Construction BEFORE Located at one of Clearwater s busiest intersections The initial redevelopment included re-tenanting the former Sports Authority and adding an outparcel building. With the addition of Sprouts to the center, the scope has increased resulting in additional investment, a higher return and more value creation for shareholders. AFTER Former Sports Authority Former Bed Bath& Beyond Former Supermarket Former Staples Former Comp USA New building Possible future New Building Denotes redevelopment area 22

23 WINTER PARK CORNERS WINTER PARK, FL $12.1M Incremental Investment 10% Return On Incremental Investment 43,000 SF Under Construction Denotes redevelopment area Located in the high density Winter Park community in Northeast Orlando The redevelopment consists of adding a 30,000 SF Sprouts and two new shop space buildings with expected stabilization in

24 Northridge Shopping Center Oakland Park, FL FORTRESS BALANCE SHEET

25 FAVORABLE DEBT RATIO TRENDS VS PEERS NET DEBT + PREFERREDS TO EBITDA WRI s transformed balance sheet and low leverage positions the Company for all future opportunities including: Stock repurchase on a leverage neutral basis Strategic debt repurchase Acquisitions Re / New Development opportunities 7.5x 7.0x 6.5x 6.0x 5.5x 5.0x 4.5x 4.0x 3.5x 3.0x (a) Q118 WRI Peer Avg INVESTMENT GRADE CREDIT RATINGS Moody s Baa1 Stable S&P BBB Stable (a) WRI remaining Series F Preferreds were redeemed May 2015 Peer information includes DDR, KIM, BRX, RPAI, and REG. 25

26 BALANCE SHEET POSITIONED FOR GROWTH Village Plaza at Bunker Hill Houston, TX MATURITIES $350 $300 $250 $308 $307 $253 $295 $ % DEBT TO MARKET CAPITALIZATION $200 $150 $100 $50 $ $74 $59 $52 $ $ $83 83 $ % 38.0% 44.4% 42.0% Mortgage Debt Bonds 33.0% 28.0% 39.4% 37.2% 32.5% 30.2% 32.8% 33.7% 32.8% Weighted Average Remaining Life = 6.23 years (a) Weighted Average Interest Rate = 3.96% Debt Debt + Preferred (a) Last of WRI preferreds were redeemed May (b) Adjusted to reflect the pay off the $200M Term Loan subsequent to quarter end. 26

27 Westchase Shopping Center Houston, TX REDEFINING EXCELLENCE

28 TRANSFORMED PORTFOLIO GOODBYE KANSAS HELLO HOLLYWOOD!! + AQUISITIONS + High barrier-to-entry trade areas + Located in strong growth markets + Larger properties to drive efficiencies + Primarily supermarket anchored - DISPOSITIONS - Non-core markets and properties - Smaller Centers - Independent supermarkets - Limited growth prospects 8000 Sunset Strip SC Las Vegas, CA Shawnee Village SC Shawnee, KS Over the 8 years ( ), sold $2.3 Billion and acquired $1.3 Billion of property Properties that produce sustained growth in NOI RESULTING IN: Quality Properties that demand higher NAV per dollar of NOI Recession and internet resistant cash flow 28

29 TRANSFORMATION TIMELINE FFO Compound Annual Growth of 5.2% from 2011 to 2017 Announced Transformation Acquired $175M including Queen Anne Marketplace in Seattle, WA Hilltop Development anchored by Wegman's opens in Alexandria, VA Acquisitions of $512M including 2200 Westlake in Seattle, WA, Palms at Town & Country in Miami, FL and Deerfield Mall in Deerfield Beach, FL Sold Industrial Portfolio: Pure Play Retail REIT Sold $278M of Non-Core Assets Sold $387.4M of Non- Core Assets and reduced Net Debt to EBITDA to 5.8x Paid off remaining Preferred Shares Sold $223M on Non- Core assets and exited OK and SC Sold $444M of Non-Core Assets Sold $267M of Non-Core Assets, exited LA and paid off the $200M Term Loan IMPACT OF THE TRANSFORMATION 12/31/10 3/31/18 Change Number of Properties GLA SF 32.8 M 25.0 M Avg Base Rent PSF $13.60 $ % Average HH Income(a) $80,000 $91,000 14% Households(a) 39,000 48,000 23% College Graduates(a) 37.0% 47.0% 27% Queen Anne Marketplace Seattle, WA Grocer Sales PSF $460 $637 38% Net Debt + Preferreds to EBITDA 7.96x 5.10x -36% (a) Weighted By ABR 29

30 TRANSFORMATION MAP States Exited States Entered Target Market Acquired Properties x Disposed Properties (a) Weighted by ABR ACQUISITIONS DISPOSITIONS Change Number of Properties GLA SF 6.1 M 12.9 M ABR PSF $22.25 $ % Avg HH Income (a) $99,000 $75,000 32% Households (a) 59,000 37,000 59% Population (a) 138,000 98,000 41% College Grads (a) 60.3% 35.6% 69% Grocer Sales PSF $893 $ % Volume $1.3 Billion $2.6 Billion 152 Disposed Properties 32 Acquired Properties 30

31 WRI IN HOUSTON - TRANSFORMED PORTFOLIO As of 3/31/18 Nearly 70% of WRI s Houston NOI is within 5 miles of The Galleria The retail per capita space in the trade area around our centers has declined over the past 5 years Sam Houston Pkwy Humble Kingwood WRI Centers have higher AHHI and % college grads than the Houston CBSA TOTAL HOUSTON PORTFOLIO TODAY Average HH Income (a) $122,000 vs. $92,000 Houston CBSA Baytown Population (a) Westheimer Rd 156,000 Pasadena ABR PSF Sugar Land Richmond First Colony LEGEND Rosenberg Super Zip WRI Center Sold in whole or part Sam Houston Pkwy Pearland Friendswood Clear Lake League City $19.98 (a) Weighted By ABR Note: Demographics For 3 Mile Trade Area. 31

32 Oracle Crossings Tucson, AZ 2018 AND BEYOND

33 GUIDANCE 2018 GUIDANCE Original Guidance Revised Guidance Net income attributable to common shareholders $ $2.34 $ $2.34 Depreciation and amortization (Gain) on sale of property and interests in RE equity investments (1.19) (1.25) (1.19) (1.25) Non-controlling interests NAREIT FFO - Basic Income attributable to operating partnership units NAREIT FFO Per Common Share - Diluted $ $2.33 $ $2.35 (Gain) on extinguishment of debt (0.01) (0.01) (0.03) (0.03) Other Core FFO Per Common Share - Diluted $ $2.33 $ $2.33 Portfolio Activity Acquisitions $50 - $150 M $50 - $150 M Re / New Development $125 - $175 M $125 - $175 M Dispositions $250 - $450 M $250 - $450 M Operating Information Same Property Net Operating Income with redevelopments +2.5% to +3.5% +2.5% to +3.5% Same Property Net Operating Income without redevelopments +2.0% to +3.0% +2.0% to +3.0% Denotes change to guidance 33

34 SAME PROPERTY NOI GROWTH - STABILIZED Contractual Rent Steps Average annual rent steps of 1-3% 1.00% % Rent Growth 15% of the portfolio GLA turns in a typical year Rent growth of 10-15% results in SPNOI impact of 1.35% % 1.35% % Misc Other items including percentage rent and ancillary income account for 0.4% - 0.5% to SPNOI annually 0.40% % STABILIZED SPNOI GROWTH 2.75% % 34

35 RELATIVE PEER FFO MULTIPLES Core FFO* Stock Price (as of 5/29/18) REG ROIC WRI RPAI KIM BRX DDR $3.52 $1.18 $2.30 $1.00 $1.44 $2.00 $0** $58.00 $17.91 $28.91 $11.93 $15.12 $15.39 $14.81 *Midpoint of 2018 Guidance **DDR to announce updated guidance closer to its new spinoff expected in midyear

36 PROVEN DIVIDEND GROWTH $2.50 $2.00 $0.75 $1.50 $0.25 $1.00 $0.50 $1.10 $1.16 $1.22 $1.30 $1.38 $1.46 $1.54 $1.58 $ Regular Dividend Special Dividend Note: Special dividend results from gains on sales of properties. Any special dividend for 2018 will be determined late in the year. 36

37 WRI KEY POINTS TRANSFORMED PORTFOLIO of High Quality, Grocery Anchored Shopping Centers 95% NOI in Target Markets STRONG BALANCE SHEET with Great Laddering of Debt Maturities 5.1X Net Debt to EBITDAre POSITIONED FOR FUTURE OPPORTUNITIES EXPERIENCED TEAM of Real Estate Professionals with a Best in Class Operating Platform 37