Weingarten, Hines REIT Form $271M Venture

Weingarten Realty Investors and Hines Real Estate Investment Trust Inc. have formed a joint venture, in which a subsidiary of Hines REIT will acquire a 70 percent interest in a Weingarten portfolio of 12 supermarket-anchored shopping centers. The aggregate transaction price is approximately $271 million and the transaction will close on multiple dates. The initial closing occurred on Nov. 13 and included eight of the properties for approximately $205 million. The purchase of the remaining four properties will be closed upon finalization of their loan assumptions.The 12 properties consist of 1.5 million square feet and are located across five states. The centers are anchored by grocers including Kroger, Randall’s, H-E-B, Publix, B.J.’s Wholesale and Harris Teeter. Additional anchors include Marshall’s, Barnes and Noble, Palais Royal and Stein Mart.The supermarkets in these centers average sales of more than $450 per square foot and the portfolio is more than 96 percent leased. The joint venture has a commitment from a major life insurance company to provide a $100 million loan that is expected to close before the end of the year. Weingarten provided preferred equity in the amount of $134 million for the initial closing. The proceeds of the $100 million loan will be used to reduce the company’s preferred equity position upon closing. Weingarten will be responsible for the ongoing management and leasing of the properties and will receive property management, joint venture management and leasing fees, along with incentive distributions above certain return hurdles.”We are pleased to acquire an interest in a portfolio of quality supermarket-anchored shopping centers in locations with strong demographics,” Charles Hazen, president & CEO of Hines REIT, said in a release. “This is our first joint venture with WRI and we are very pleased with this new relationship.”The Dallas office of Holliday Fenoglio Fowler L.P. represented Weingarten in structuring the venture.