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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K
(Mark One)
☒    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2019
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                                          to                                         
Commission file number 1-9876
Weingarten Realty Investors
(Exact name of registrant as specified in its charter)
Texas
74-1464203
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
2600 Citadel Plaza Drive, Suite 125
 
Houston,
Texas
77008
(Address of principal executive offices)
(Zip Code)
(713)
866-6000
Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
 
Trading Symbol(s)
 
Name of Each Exchange on Which Registered
Common Shares of Beneficial Interest, $.03 par value
 
WRI
 
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.Yes☒No☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.Yes☐No☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒No☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☒No☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer
☒
 
Accelerated filer
☐
 
Non-accelerated filer
☐
 
Smaller reporting company
☐
 
 
 
 
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes☐No☒
The aggregate market value of the common shares of beneficial interest held by non-affiliates on June 28, 2019 (based upon the most recent closing sale price on the New York Stock Exchange as of such date of $27.42) was $3.3 billion.
As of February 21, 2020, there were 128,961,786 common shares of beneficial interest outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant’s Proxy Statement relating to its Annual Meeting of Shareholders to be held on April 29, 2020 have been incorporated by reference to Part III of this Form 10-K.

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TABLE OF CONTENTS
 
Item No.
 
Page
No.
 
 
 
 
 
 
 
 
1.
1A.
1B.
2.
3.
4.
 
 
 
 
 
 
 
 
5.
6.
7.
7A.
8.
9.
9A.
9B.
 
 
 
 
 
 
 
 
10.
11.
12.
13.
14.
 
 
 
 
 
 
 
 
15.
 
 
 
 

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Forward-Looking Statements
This annual report on Form 10-K, together with other statements and information publicly disseminated by us, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and include this statement for purposes of complying with those safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” or similar expressions. You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect actual results, performances or achievements. Factors which may cause actual results to differ materially from current expectations include, but are not limited to, (i) disruptions in financial markets, (ii) general economic and local real estate conditions, (iii) the inability of major tenants to continue paying their rent obligations due to bankruptcy, insolvency or general downturn in their business, (iv) financing risks, such as the inability to obtain equity, debt, or other sources of financing on favorable terms and changes in LIBOR availability, (v) changes in governmental laws and regulations, (vi) the level and volatility of interest rates, (vii) the availability of suitable acquisition opportunities, (viii) the ability to dispose of properties, (ix) changes in expected development activity, (x) increases in operating costs, (xi) tax matters, including the effect of changes in tax laws and the failure to qualify as a real estate investment trust, and (xii) investments through real estate joint ventures and partnerships, which involve risks not present in investments in which we are the sole investor. Accordingly, there is no assurance that our expectations will be realized. For further discussion of the factors that could materially affect the outcome of our forward-looking statements and our future results and financial condition, see Item 1A. "Risk Factors.”
PART I
ITEM 1. Business
General Development of Business.    Weingarten Realty Investors is a real estate investment trust (“REIT”) organized under the Texas Business Organizations Code. We, and our predecessor entity, began the ownership of shopping centers and other commercial real estate in 1948. Our primary business is leasing space to tenants in the shopping centers we own or lease. We also provide property management services for which we charge fees to either joint ventures where we are partners or other outside owners.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Item 7 and the Consolidated Financial Statements and Notes thereto included in Item 8 of this Annual Report on Form 10-K for the year ended December 31, 2019 for information on certain recent developments of the Company.
Narrative Description of Business.    We are in the business of owning, managing and developing retail shopping centers. These centers may be mixed-use properties that have both retail and residential components. At December 31, 2019, we owned or operated under long-term leases, either directly or through our interest in real estate joint ventures or partnerships, a total of 170 properties, which are located in 16 states spanning the country from coast to coast. The portfolio of properties contains approximately 32.5 million square feet of gross leasable area that is either owned by us or others. We also owned interests in 23 parcels of land held for development that totaled approximately 11.9 million square feet.
Investment and Operating Strategy.    Our goal is to remain a leader in owning and operating top-tier neighborhood and community shopping centers in certain markets of the United States ("U.S."). We expect to achieve this goal by:
•
raising net asset value and cash flows through quality acquisitions, redevelopments and new developments;
•
focusing on core operating fundamentals through our decentralized operating platform built on local expertise in leasing and property management;
•
disciplined growth from strategic acquisitions, redevelopments and new developments;
•
disposition of assets that no longer meet our ownership criteria, in which proceeds may be recycled by repaying debt, purchasing new assets or reinvesting in currently owned assets or for other corporate purposes; and
•
commitment to maintaining a conservatively leveraged balance sheet, strong liquidity, a well-staggered debt maturity schedule and strong credit agency ratings.

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We may either purchase, develop or lease income-producing properties in the future, and may also participate with other entities in property ownership through partnerships, joint ventures or similar types of co-ownership.
We may invest in mortgages; however, we have traditionally invested in first mortgages to real estate joint ventures or partnerships in which we own an equity interest or to obtain control over a real estate asset that we desire to own. We may also invest in securities of other issuers for the purpose, among others, of exercising control over such entities, subject to the gross income and asset tests necessary for REIT qualification.
In acquiring and developing properties, we attempt to accumulate enough properties in a geographic area to allow for the establishment of a regional office, which enables us to obtain in-depth knowledge of the market from a leasing perspective and to have easy access to the property and our tenants from a management viewpoint.
We expect to continue our focus on the future growth of the portfolio in neighborhood and community shopping centers in markets where we currently operate throughout the U.S. Our markets of interest reflect high income and job growth, as well as high barriers-to-entry. Our attention is also focused on high quality, supermarket-anchored and necessity-based centers, which may include mixed-use properties containing this type of retail component in addition to a residential component.
Diversification from both a geographic and tenancy perspective is a critical component of our operating strategy. Our largest markets are located in California, Florida and Texas, which represent 10.0%, 21.4% and 31.8%, respectively, of our total properties' gross leasable area. Total revenues generated by our centers located in Houston and its surrounding areas was 20.0% of total revenue for the year ended December 31, 2019, and an additional 9.3% of total revenue was generated in 2019 from centers that are located in other parts of Texas. An additional 19.8% and 17.9% of total revenue was generated in 2019 by our centers located in Florida and California, respectively. As of December 31, 2019, we also had 23 parcels of land held for development, five of which were located in Houston and its surrounding areas and 10 of which were located in other parts of Texas. Because of our investments in Texas, including Houston and its surrounding areas, Florida and California, changes in economic or real estate conditions in any of these areas could more significantly affect our business and operations than changes in other geographic areas.
With respect to tenant diversification, our two largest tenants, TJX Companies, Inc. and The Kroger Co., accounted for 2.6% and 2.5%, respectively, of our total base minimum rental revenues for the year ended December 31, 2019. No other tenant accounted for more than 1.8% of our total base minimum rental revenues. Our anchor tenants are supermarkets, value-oriented apparel/discount stores and other retailers or service providers who generally sell basic necessity-type goods and services. We believe the stability of our anchor tenants, combined with convenient locations, attractive and well-maintained properties, high quality retailers and a strong tenant mix, should ensure the long-term viability of our portfolio.
Strategically, we strive to finance our growth and working capital needs in a conservative manner, including managing our debt maturities. Our senior debt credit ratings were BBB with a projected stable outlook from Standard & Poors and Baa1 with a projected stable outlook from Moody’s Investor Services as of December 31, 2019. We intend to maintain a conservative approach to managing our balance sheet, which, in turn, should permit us to raise debt or equity capital when needed. At December 31, 2019 and 2018, our debt to total assets before depreciation ratio was 34.3% and 36.4%, respectively.
We have a $200 million share repurchase plan under which we may repurchase common shares of beneficial interest ("common shares") from time-to-time in open-market or privately negotiated purchases based on management's evaluation of market conditions and other factors. As of the date of this filing, $181.5 million of common shares remained available to be repurchased under the plan.
Our policies with respect to the investment and operating strategies discussed above are periodically reviewed by our Board of Trust Managers and may be modified without a vote of our shareholders.
Competition.    We compete with numerous other developers and real estate companies (both public and private), financial institutions and other investors engaged in the development, acquisition and operation of shopping centers and mixed-use properties in our geographical areas. This results in competition for the acquisition of both existing income-producing properties and prime development sites.

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We also compete for tenants to occupy the space that is developed, acquired and managed by our competitors. The principal competitive factors in attracting tenants to our properties are location, price, anchor tenants and maintenance of properties. We believe our key competitive advantages include the favorable locations of our properties, the strong demographics surrounding our centers, knowledge of markets and customer bases, our ability to provide a retailer with multiple locations with quality anchor tenants and the practice of continuous maintenance and renovation of our properties.
Qualification as a Real Estate Investment Trust.    As of December 31, 2019, we met the qualification requirements of a REIT under the Internal Revenue Code, as amended. As a result, we will not be subject to federal income tax to the extent we meet certain requirements of the Internal Revenue Code, with the exception of our taxable REIT subsidiary.
Employees.    At December 31, 2019, we employed 239 full-time persons; our principal executive offices are located at 2600 Citadel Plaza Drive, Houston, Texas 77008; and our phone number is (713) 866-6000. We also have nine regional offices located in various parts of the U.S. Management considers its relations with their personnel to be good.
Sustainability.    We believe sustainability to be in the best interest of our tenants, investors, employees and the communities we operate. We are committed to reducing our environmental impact and believe this commitment is not only the right thing to do, but also supports us in achieving key strategic objectives in operations and development. More information about our sustainability initiatives, performance and disclosures are available on our website at www.weingarten.com.
Environmental Exposure.    We are under various federal, state and local laws, ordinances and regulations that may cause us to be liable for costs and damages to remove or remediate certain hazardous or toxic substances as an operator and owner of real estate. For further information regarding our risks related to environmental exposure, see Item 1A. "Risk Factors."
Company Website and SEC Filings.    Our website may be accessed at www.weingarten.com. We use the Investors section of our website as a channel for routine distribution of important information, including news releases, analyst presentations and financial information. All of our filings with the Securities and Exchange Commission ("SEC") can be accessed, and we post filings as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC, including our annual, quarterly and current reports on Forms 10-K, 10-Q and 8-K, our proxy statements and any amendments to those reports or statements. All such postings and filings are available on our website free of charge. You may also view any materials we file with the SEC at the SEC’s Internet site at www.sec.gov.
Financial Information.    Additional financial information concerning us is included in the Consolidated Financial Statements located in Item 8 herein.
ITEM 1A. Risk Factors
The risks described below could materially and adversely affect our shareholders and our results of operations, financial condition, liquidity and cash flows. In addition to these risks, our operations may also be affected by additional factors not presently known or that we currently consider immaterial to our operations.
Disruptions in the financial markets could affect our liquidity and have other adverse effects on us and the market price of our common shares of beneficial interest.
The U.S. and global equity and credit markets may experience significant price volatility, dislocations and liquidity disruptions, which could cause market prices of many stocks to fluctuate substantially and the spreads on prospective debt financings to widen considerably. These circumstances could materially impact liquidity in the financial markets, making terms for certain financings less attractive, and in certain cases result in the unavailability of certain types of financing. Uncertainties in the equity and credit markets may negatively impact our ability to access additional financing at reasonable terms or at all, which may negatively affect our ability to complete dispositions, form joint ventures or refinance our debt. A prolonged downturn in the equity or credit markets could cause us to seek alternative sources of potentially less attractive financing, and require us to adjust our business plan accordingly. In addition, these factors may make it more difficult for us to sell properties or adversely affect the price we receive for properties that we do sell, as prospective buyers may experience increased costs of financing or difficulties in obtaining financing. These events in the equity and credit markets may make it more difficult or costly for us to raise capital through the issuance of our common shares or preferred shares. These disruptions in the financial markets also may have a material adverse effect on the market value of our common shares and other adverse effects on us or the economy generally. There can be no assurances that government responses to any disruptions in the financial markets would restore consumer confidence, maintain stabilized markets or provide the availability of equity or credit financing.

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Among the market conditions that may affect the value of our common shares and access to the capital markets are the following:
•
The attractiveness of REIT securities as compared to other securities, including securities issued by other real estate companies, fixed income equity securities and debt securities;
•
Changes in revenues or earnings estimates or publication of research reports and recommendations by financial analysts or actions taken by rating agencies with respect to our securities or those of other REITs;
•
The degree of interest held by institutional investors;
•
The market's perception of the quality of our assets and our growth potential;
•
The ability of our tenants to pay rent to us and meet their other obligations to us under current lease terms;
•
Our ability to re-lease space as leases expire;
•
Our ability to refinance our indebtedness as it matures;
•
Actual or anticipated quarterly fluctuations in our operating results and financial condition;
•
Any changes in our dividend policy;
•
Any future issuances of equity securities;
•
Strategic actions by us or our competitors, such as acquisitions or restructurings;
•
General market conditions and, in particular, developments related to market conditions for the real estate industry; and
•
Domestic and international economic and political factors unrelated to our performance.
The volatility in the stock market can create price and volume fluctuations that may not necessarily be comparable to operating performance.
The economic performance and value of our shopping centers depend on many factors, each of which could have an adverse impact on our cash flows and operating results.
The economic performance and value of our properties can be affected by many factors, including the following:
•
Changes in the national, regional and local economic climate;
•
Changes in existing laws and regulations, including environmental regulatory requirements including, but not limited to, legislation on global warming, trade reform, health care reform, employment laws and immigration laws;
•
Local conditions such as an oversupply of space or a reduction in demand for real estate in the area;
•
The attractiveness of the properties to tenants;
•
Competition from other available space;
•
Competition for our tenants from Internet sales and shifts in consumer shopping patterns;
•
Our tenant's ability to anticipate or revise their marketing and/or sales approach to meet changes in consumer shopping patterns;
•
The ongoing disruption and/or consolidation of the retail sector;
•
Our ability to provide adequate management services and to maintain our properties;
•
Increased operating costs, if these costs cannot be passed through to tenants;
•
The cost of periodically renovating, repairing and releasing spaces;
•
The consequences of any armed conflict involving, or terrorist attack against, the U.S.;
•
Our ability to secure adequate insurance;
•
Fluctuations in interest rates;
•
Changes in real estate taxes and other expenses; and

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•
Availability of financing on acceptable terms or at all.
Our properties consist primarily of neighborhood and community shopping centers and, therefore, our performance is linked to general economic conditions in the market for retail space. The market for retail space has been and could in the future be adversely affected by weakness in the national, regional and local economies where our properties are located, the adverse financial condition of some large retail companies, the ongoing consolidation in the retail sector, the excess amount of retail space in a number of markets and increasing consumer purchases through the Internet. To the extent that any of these conditions exist, they are likely to affect market rents for retail space. In addition, we may face challenges in the management and maintenance of the properties or encounter increased operating costs, such as real estate taxes, insurance and utilities, which may make our properties unattractive to tenants. A significant decrease in rental revenue and an inability to replace such revenues may adversely affect our profitability, the ability to meet debt and other financial obligations and pay dividends to shareholders.
We have properties that are geographically concentrated, and adverse economic or other conditions in that area could have a material adverse effect on us.
We are particularly susceptible to adverse economic or other conditions in markets where our properties are concentrated, including California, Florida and Texas. These adverse conditions include increases in unemployment, industry slowdowns, including declining oil prices, business layoffs or downsizing, decreases in consumer confidence, relocations of businesses, changes in demographics, increases in real estate and other taxes, increases in regulations, severe weather conditions and natural disasters, any of which could have an increased material adverse effect on us than if our portfolio was more geographically diverse.
Our acquisition activities may not produce the cash flows that we expect and may be limited by competitive pressures or other factors.
We intend to acquire existing commercial properties to the extent that suitable acquisitions can be made on advantageous terms. Acquisitions of commercial properties involve risks such as:
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We may have difficulty identifying acquisition opportunities that fit our investment strategy;
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Our estimates on expected occupancy and rental rates may differ from actual conditions;
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Our estimates of the costs of any redevelopment or repositioning of acquired properties may prove to be inaccurate;
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We may be unable to operate successfully in new markets where acquired properties are located, due to a lack of market knowledge or understanding of local economies;
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We may be unable to successfully integrate new properties into our existing operations; or
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We may have difficulty obtaining financing on acceptable terms or paying the operating expenses and debt service associated with acquired properties prior to sufficient occupancy.
In addition, we may not be in a position or have the opportunity in the future to make suitable property acquisitions on advantageous terms due to competition for such properties with others engaged in real estate investment. Our inability to successfully acquire new properties may have an adverse effect on our results of operations.
Turmoil in capital markets could adversely impact acquisition activities and pricing of real estate assets.
Volatility in the capital markets could impact the availability of debt financing due to numerous factors, including the tightening of underwriting standards by lenders and credit rating agencies. These factors directly affect a lender’s ability to provide debt financing as well as increase the cost of available debt financing. As a result, we may not be able to obtain debt financing on favorable terms or at all. This may result in future acquisitions generating lower overall economic returns, which may adversely affect our results of operations and dividends paid to shareholders. Furthermore, any turmoil in the capital markets could adversely impact the overall amount of capital available to invest in real estate, which may result in price or value decreases of real estate assets.

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Our real estate assets may be subject to impairment charges.
Periodically, we assess whether there are any indicators that the value of our real estate assets, including any capitalized costs and any identifiable intangible assets, may be impaired. A property's value is impaired only if the estimate of the aggregate future undiscounted cash flows without interest charges to be generated by the property are less than the carrying value of the property. In estimating cash flows, we consider factors such as expected future income, trends and prospects, the effects of demand, competition and other factors. If we are evaluating the potential sale of an asset or development/redevelopment alternatives, the undiscounted future cash flows consider the most likely course of action at the balance sheet date based on current plans, intended holding periods and available market information. Determining whether a property is impaired and, if impaired, the amount of write-down to fair value requires a significant amount of judgment by management and is based on the best information available to management at the time of evaluation. If market conditions deteriorate or management’s plans for certain properties change, additional write-downs could be required in the future, and any future impairment could have a material adverse effect on our results of operations in the period in which the charge is taken.
Reduction of rental income would adversely affect our profitability, our ability to meet our debt obligations and our ability to pay dividends to our shareholders.
The substantial majority of our income is derived from rental income from real property. As a result, our performance depends on our ability to collect rent from tenants. Our income and funds to pay dividends would be negatively affected if a significant number of our tenants, or any of our major tenants (as discussed in more detail below):
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Delay lease commencements;
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Decline to extend or renew leases upon expiration;
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Fail to make rental payments when due; or
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Close stores or declare bankruptcy.
Any of these actions could result in the termination of the tenants’ lease and the loss of rental income attributable to the terminated leases. In addition, lease terminations by an anchor tenant or a failure by that anchor tenant to occupy the premises could also result in lease terminations or reductions in rent by other tenants in the same shopping center under the terms of some leases. In these events, we cannot be sure that any tenant whose lease expires will renew that lease or that we will be able to re-lease space on economically advantageous terms. Furthermore, certain costs remain fixed even though a property may not be fully occupied. The loss of rental revenues from a number of our tenants and our inability to replace such tenants, particularly in the case of a substantial tenant with leases in multiple locations, may adversely affect our profitability, our ability to meet debt and other financial obligations and our ability to pay dividends to the shareholders.
Adverse effects on the success and stability of our anchor tenants, could lead to reductions of rental income.
Our rental income could be adversely affected in the event of a downturn in the business, or the bankruptcy or insolvency of, any anchor store or anchor tenant. Anchor tenants generally occupy large amounts of square footage, pay a significant portion of the total rents at a property and contribute to the success of other tenants by drawing significant numbers of customers to a property. The closing of one or more anchor stores at a property could adversely affect that property and result in lease terminations or reductions in rent from other tenants, whose leases may permit termination or rent reduction in those circumstances or whose own operations may suffer as a result. Furthermore, tenant demand for certain of our anchor spaces may decrease, and as a result, we may see an increase in vacancy and/or a decrease in rents for those spaces, which could have a negative impact to our rental income.
Adverse effects resulting from a shift in retail shopping from brick and mortar stores to online shopping may impact our operating results.
Online sales for many retailers has become a fundamental part of their business in addition to operating brick and mortar stores. Additionally, online sales from companies without physical stores has increased significantly. Although many of the retailers operating in our properties sell groceries, value-oriented apparel and other necessity-based type goods or provide services, including entertainment and dining, the shift to online shopping may cause certain of our tenants to reduce the size or number of their retail locations in the future. As a result, this could negatively affect our ability to lease space and our operating results.

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We face significant competition in the leasing market, which may decrease or prevent increases in the occupancy and rental rates of our properties.
We compete with numerous developers, owners and operators of retail properties, many of which own properties similar to, and in the same market sectors as, our properties. If our competitors offer space at rental rates below current market rates, or below the rental rates we currently charge our tenants, we may lose existing or potential tenants, or we may be forced to reduce rental rates in order to attract new tenants and retain existing tenants when their leases expire.
Also, if our competitors develop additional retail properties in locations near our properties, there may be increased competition for customer traffic and creditworthy tenants, which may result in fewer tenants or decreased cash flows from tenants, or both, and may require us to make capital improvements to properties that we would not have otherwise made. Our tenants also face increasing competition from other forms of marketing of goods, such as direct mail and Internet marketing, which may decrease cash flow from such tenants. As a result, our financial condition and our ability to pay dividends to our shareholders may be adversely affected.
We may be unable to collect balances due from tenants in bankruptcy.
A tenant that files for bankruptcy protection may not continue to pay us rent. A bankruptcy filing by or relating to one of our tenants or a lease guarantor would bar all efforts by us to collect pre-bankruptcy debts from the tenant or the lease guarantor, or their property, unless the bankruptcy court permits us to do so. A tenant or lease guarantor bankruptcy could delay our efforts to collect past due balances under the relevant leases and could ultimately preclude collection of these sums. If a lease is rejected by a tenant in bankruptcy, we would have only a general unsecured claim for damages. As a result, it is likely that we would recover substantially less than the full value of any unsecured claims it holds, if at all.
Our development, redevelopment and construction activities could adversely affect our operating results.
We intend to continue the selective development, redevelopment and construction of retail and/or mixed-use properties in accordance with our development and underwriting policies as opportunities arise. Our development, redevelopment and construction activities include risks that:
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We may abandon development opportunities after expending resources to determine feasibility;
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Construction costs of a project may exceed our original estimates;
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Occupancy rates and rents at a newly completed or redeveloped property may not be sufficient to make the property profitable;
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Rental rates could be less than projected;
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Delivery of multi-family units into uncertain residential environments may result in lower rents, sale price or take longer periods of time to reach economic stabilization;
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Project completion may be delayed because of a number of factors, including weather, labor disruptions, construction delays or delays in receipt of zoning or other regulatory approvals, adverse economic conditions, acts of terror or other acts of violence, or acts of God (such as fires, earthquakes or floods);
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Financing may not be available to us on favorable terms for development or redevelopment of a property; and
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We may not complete construction and lease-up on schedule, resulting in increased debt service expense and construction costs.
Additionally, the time frame required for development, redevelopment, construction and lease-up of these properties means that we may have to wait years for a significant cash return. If any of the above events occur, the development and redevelopment of properties may hinder our growth and have an adverse effect on our results of operations, including additional impairment charges. Also, new development activities, regardless of whether or not they are ultimately successful, typically require substantial time and attention from management.

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There is a lack of operating history with respect to any recent acquisitions and redevelopment or development of properties, and we may not succeed in the integration or management of additional properties.
These properties may have characteristics or deficiencies currently unknown to us that affect their value or revenue potential. It is also possible that the operating performance of these properties may decline under our management. We also may not have the experience in developing and managing mixed-use properties and may need to rely on external resources which may not perform as we expected. As we acquire additional properties, we will be subject to risks associated with managing new properties, including lease-up and tenant retention. In addition, our ability to manage our growth effectively will require us to successfully integrate any new acquisitions into our existing management structure. We may not succeed with this integration or effectively manage additional properties. Also, newly acquired properties may not perform as expected.
Real estate property investments are illiquid, and therefore, we may not be able to dispose of properties when desirable or on favorable terms.
Real estate property investments generally cannot be disposed of quickly. In addition, the Internal Revenue Code imposes restrictions on the ability of a REIT to dispose of properties that are not applicable to other types of real estate companies. Our ability to dispose of properties on advantageous terms depends on factors beyond our control, including competition from other sellers and the availability of attractive financing for potential buyers of our properties. We cannot predict the various market conditions affecting real estate investments that will exist at any particular time in the future. Therefore, we may not be able to quickly vary our portfolio in response to economic or other conditions promptly or on favorable terms, which could cause us to incur extended losses and reduce our cash flows and adversely affect dividends paid to shareholders.
As part of our capital recycling program, we intend to sell our non-core assets and may not be able to recover our investments, which may result in losses to us.
There can be no assurance that we will be able to recover the current carrying amount of all of our owned and partially owned non-core properties and investments in the future. Our failure to do so would require us to recognize impairment charges in the period in which we reached that conclusion, which could adversely affect our business, financial condition, operating results and cash flows.
Credit ratings may not reflect all the risks of an investment in our debt or equity securities and rating changes could adversely effect our revolving credit facility.
Our credit ratings are an assessment by rating agencies of our ability to pay our debts when due. Consequently, real or anticipated changes in our credit ratings will generally affect the market value of our debt. Credit ratings may be revised or withdrawn at any time by the rating agency at its sole discretion. Additionally, our revolving credit facility fees are based on our credit ratings. We do not undertake any obligation to maintain the ratings or to advise holders of our debt of any change in ratings. Each agency's rating should be evaluated independently of any other agency's rating.
There can be no assurance that we will be able to maintain our current credit ratings. Adverse changes in our credit ratings could impair our ability to obtain additional debt and equity financing on favorable terms, if at all, and could significantly reduce the market price of our publicly-traded securities.
Our cash flows and operating results could be adversely affected by required payments of debt or related interest and other risks of our debt financing.
We are generally subject to risks associated with debt financing. These risks include:
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Our cash flow may not satisfy required payments of principal and interest;
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We may not be able to refinance existing indebtedness on our properties as necessary or the terms of the refinancing may be less favorable to us than the terms of existing debt;
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Required debt payments are not reduced if the economic performance of any property declines;
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Debt service obligations could reduce funds available for dividends to our shareholders and funds available for capital investment;
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Any default on our indebtedness could result in acceleration of those obligations and possible loss of property to foreclosure; and

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The risk that capital expenditures necessary for purposes such as re-leasing space cannot be financed on favorable terms.
If a property is mortgaged to secure payment of indebtedness and we cannot make the mortgage payments, we may have to surrender the property to the lender with a consequent loss of any prospective income and equity value from such property. Any of these risks can place strains on our cash flows, reduce our ability to grow and adversely affect our results of operations.
We may be adversely affected by changes in LIBOR reporting practices or the method in which LIBOR is determined.
As of December 31, 2019, we had $17.4 million of secured debt and $0 outstanding debt on our $500 million unsecured revolving credit facility, expiring in March 2024, which bears interest at a floating rate based on the London Interbank Offered Rate (“LIBOR”) plus an applicable margin. We may incur additional debt indexed to LIBOR in the future. Central banks around the world, including the Federal Reserve, have commissioned working groups of market participants and official sector representatives with the goal of finding suitable replacements for LIBOR based on observable market transactions. It is expected that a transition away from the widespread use of LIBOR to alternative rates will occur over the course of the next few years. The United Kingdom Financial Conduct Authority (the authority that regulates LIBOR) announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021.
Accordingly, there is considerable uncertainty regarding the publication of such rates beyond 2021. The Federal Reserve Bank of New York and various other authorities have commenced the publication of reforms and actions relating to alternatives to U.S. dollar LIBOR (“USD-LIBOR”). The Alternative Reference Rates Committee ("ARRC") has proposed that the Secured Overnight Financing Rate ("SOFR") is the rate that represents best practice in the U.S. as the alternative to LIBOR for use in derivatives and other financial contracts that are currently indexed to USD-LIBOR. ARRC has proposed a paced market transition plan to SOFR from LIBOR. We are not able to predict when LIBOR will cease to be available or if SOFR, or another alternative reference rate, attains market traction as a LIBOR replacement. If LIBOR ceases to exist, we will need to agree upon a benchmark replacement index with the bank, and as such the interest rate on our revolving credit facility and certain secured debt may change. The new rate may not be as favorable as those in effect prior to any LIBOR phase-out. Furthermore, the transition process may result in delays in funding, higher interest expense, additional expenses, and increased volatility in markets for instruments that currently rely on LIBOR. Although the full impact of such reforms and actions, together with any transition away from LIBOR, including the potential or actual discontinuance of LIBOR publication, remains unclear and may span several reporting periods, these changes may have a material adverse impact on the availability of financing, including LIBOR-based loans, and on our financing costs.
Rising interest rates could increase our borrowing costs, thereby adversely affecting our cash flows and the amounts available for dividends to our shareholders, and decrease our share price, if investors seek higher yields through other investments.
We have indebtedness with interest rates that vary depending on market indices. Also, our credit facilities bear interest at variable rates. We may incur variable-rate debt in the future. Increases in interest rates on variable-rate debt would increase our interest expense, which would negatively affect net income and cash available for payment of our debt obligations and dividends to shareholders. In addition, an increase in interest rates could adversely affect the market value of our outstanding debt, as well as increase the cost of refinancing and the issuance of new debt or securities. An environment of rising interest rates could also lead holders of our securities to seek higher yields through other investments, which could adversely affect the market price of our shares. One of the factors which may influence the price of our shares in public markets is the annual dividend rate we pay as compared with the yields on alternative investments.
Our financial condition could be adversely affected by financial covenants.
Our credit facilities and public debt indentures under which our indebtedness is, or may be, issued contain certain financial and operating covenants, including, among other things, certain coverage ratios, as well as limitations on our ability to incur secured and unsecured indebtedness, restrictions on our ability to sell all or substantially all of our assets and engage in mergers and consolidations and certain acquisitions. These covenants could limit our ability to obtain additional funds needed to address cash shortfalls or pursue growth opportunities or transactions that would provide substantial return to our shareholders. In addition, a breach of these covenants could cause a default under or accelerate some or all of our indebtedness, which could have a material adverse effect on our financial condition.

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Property ownership through real estate partnerships and joint ventures could limit our control of those investments and reduce our expected return.
Real estate partnership or joint venture investments may involve risks not otherwise present for investments made solely by us, including the possibility that our partner or co-venturer might become bankrupt, that our partner or co-venturer might at any time have different interests or goals than us, and that our partner or co-venturer may take action contrary to our instructions, requests, policies or objectives. Other risks of joint venture investments could include impasse on decisions, such as a sale or refinance, because neither our partner or co-venturer nor we would have full control over the partnership or joint venture. These factors could limit the return that we receive from those investments or cause our cash flows to be lower than our estimates.
Volatility in market and economic conditions may impact our partners’ ability to perform in accordance with our real estate joint venture and partnership agreements resulting in a change in control or the liquidation plans of its underlying properties.
Changes in control of our investments could result if any reconsideration events occur, such as amendments to our real estate joint venture and partnership agreements, changes in debt guarantees or changes in ownership due to required capital contributions. Any changes in control will result in the revaluation of our investments to fair value, which could lead to an impairment. We are unable to predict whether, or to what extent, a change in control may result or the impact of adverse market and economic conditions may have to our partners.
If we fail to qualify as a REIT in any taxable year, we will be subject to U.S. federal income tax as a regular corporation and could have significant tax liability.
We intend to operate in a manner that allows us to qualify as a REIT for U.S. federal income tax purposes. However, REIT qualification requires us to satisfy numerous requirements (some on an annual or quarterly basis) established under highly technical and complex provisions of the Internal Revenue Code, for which there are a limited number of judicial or administrative interpretations. Our status as a REIT requires an analysis of various factual matters and circumstances that are not entirely within our control. Accordingly, it is not certain we will be able to qualify and remain qualified as a REIT for U.S. federal income tax purposes. Even a technical or inadvertent violation of the REIT requirements could jeopardize our REIT qualification. If we fail to qualify as a REIT in any tax year, then:
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We would be taxed as a regular domestic corporation, which, among other things, means that we would be unable to deduct dividends paid to our shareholders in computing our taxable income and would be subject to U.S. federal income tax on our taxable income at regular corporate rates;
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Any resulting tax liability could be substantial and would reduce the amount of cash available for dividends to shareholders, and could force us to liquidate assets or take other actions that could have a detrimental effect on our operating results; and
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Unless we were entitled to relief under applicable statutory provisions, we would be disqualified from treatment as a REIT for the four taxable years following the year during which we lost our qualification, and our cash available for dividends to our shareholders would, therefore, be reduced for each of the years in which we do not qualify as a REIT.
Even if we remain qualified as a REIT, we may face other tax liabilities that reduce our cash flow. We may also be subject to certain U.S. federal, state and local taxes on our income and property either directly or at the level of our subsidiaries. Any of these taxes would decrease cash available for dividends to our shareholders.
Tax laws have changed and may continue to change at any time, and any such legislative or other actions could have a negative effect on us.
Tax laws remain under constant review by persons involved in the legislative process, at the Internal Revenue Service ("IRS") and the U.S. Department of the Treasury, and by various state and local tax authorities. Changes to tax laws, regulations, or administrative interpretations, which may be applied retroactively, could adversely affect us in a number of ways, including making it more difficult or more costly for us to qualify as a REIT or decreasing real estate values generally.
We cannot predict whether, when, in what forms, or with what effective dates, the tax laws, regulations, and administrative interpretations applicable to us or our shareholders may be further changed.

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Compliance with REIT requirements may negatively affect our operating decisions.
To maintain our status as a REIT for U.S. federal income tax purposes, we must meet certain requirements, on an ongoing basis, including requirements regarding our sources of income, the nature and diversification of our assets, the amounts we distribute to our shareholders and the ownership of our common shares. We may also be required to pay dividends to our shareholders when we do not have funds readily available for distribution or at times when our funds are otherwise needed to fund capital expenditures or debt service obligations.
As a REIT, we must distribute at least 90% of our annual net taxable income (excluding net capital gains) to our shareholders. To the extent that we satisfy this distribution requirement, but distribute less than 100% of our net taxable income, we will be subject to U.S. federal corporate income tax on our undistributed taxable income. From time to time, we may generate taxable income greater than our income for financial reporting purposes, or our net taxable income may be greater than our cash flow available for distribution to our shareholders. If we do not have other funds available in these situations, we could be required to borrow funds, sell a portion of our securities at unfavorable prices or find other sources of funds in order to meet the REIT distribution requirements.
Our common shares dividend policy may change in the future.
The timing, amount and composition of any future dividends to our common shareholders will be at the sole discretion of our Board of Trust Managers and will depend upon a variety of factors as to which no assurance can be given. Our ability to make dividends to our common shareholders depends, in part, upon our operating results, overall financial condition, the performance of our portfolio (including occupancy levels and rental rates), our capital requirements, access to capital, our ability to qualify for taxation as a REIT and general business and market conditions. Any change in our dividend policy could have an adverse effect on the market price of our common shares.
Our declaration of trust contains certain limitations associated with share ownership.
To maintain our status as a REIT, our declaration of trust prohibits any individual from owning more than 9.8% of our outstanding common shares. This restriction is likely to discourage third parties from acquiring control without the consent of our Board of Trust Managers, even if a change in control were in the best interests of our shareholders.
Also, our declaration of trust requires the approval of the holders of 80% of our outstanding common shares and the approval by not less than 50% of the outstanding common shares not owned by any related person (a person owning more than 50% of our common shares) to consummate a business transaction such as a merger. There are certain exceptions to this requirement; however, the 80% approval requirement could make it difficult for us to consummate a business transaction even if it is in the best interests of our shareholders.
There may be future dilution of our common shares.
Our declaration of trust authorizes our Board of Trust Managers to, among other things, issue additional common or preferred shares or securities convertible or exchangeable into equity securities, without shareholder approval. We may issue such additional equity or convertible securities to raise additional capital. The issuance of any additional common or preferred shares or convertible securities could be substantially dilutive to holders of our common shares. Moreover, to the extent that we issue restricted shares, options, or warrants to purchase our common shares in the future and those options or warrants are exercised or the restricted shares vest, our shareholders may experience further dilution. Holders of our common shares have no preemptive rights that entitle them to purchase a pro rata share of any offering of shares of any class or series and, therefore, such sales or offerings could result in increased dilution to our shareholders.
We may issue debt and equity securities or securities convertible into equity securities, any of which may be senior to our common shares as to distributions and in liquidation, which could negatively affect the value of our common shares.

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In the future, we may attempt to increase our capital resources by entering into unsecured or secured debt or debt-like financings, or by issuing additional debt or equity securities, which could include issuances of medium-term notes, senior notes, subordinated notes, secured debt, guarantees, preferred shares, hybrid securities, or securities convertible into or exchangeable for equity securities. In the event of our liquidation, our lenders and holders of our debt and, if any, preferred securities would receive distributions of our available assets before distributions to the holders of our common shares. Because any decision to incur debt and issue securities in future offerings may be influenced by market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing, or nature of our future financings. Further, market conditions could require us to accept less favorable terms for the issuance of our securities in the future.
Our declaration of trust contains certain limitations that make removal of our Trust Managers difficult, which could limit our shareholders ability to effect changes to our management.
Our declaration of trust provides that a Trust Manager may only be removed for cause upon the affirmative vote of holders of two-thirds of the total votes authorized to be cast by shares outstanding and entitled to be voted. Vacancies may be filled by either a majority of the remaining Trust Managers or elected by the vote of holders of at least two-thirds of the outstanding shares at the Annual Meeting or a special meeting of the shareholders. These requirements provide limitations to make changes in our management by removing and replacing Trust Managers and may prevent a change of control that is in the best interests of our shareholders.
Loss of our key personnel could adversely affect the value of our common shares and operations.
We are dependent on the efforts of our key executive personnel. A significant number of persons in our management group are eligible for retirement. Although we believe qualified replacements could be found for these key executives and other members of our management group, the loss of their services could adversely affect the value of our common shares and operations.
Changes in accounting standards may adversely impact our reported financial condition and results of operations.
The Financial Accounting Standards Board (“FASB”), in conjunction with the SEC, continually engages in projects to evaluate additions or changes to current accounting standards which could impact how we currently account for our material transactions. We believe that these and other potential proposals could have varying degrees of impact on us ranging from minimal to material. At this time, we are unable to predict with certainty which, if any, proposals may be passed or what level of impact any such proposal could have on us, except as disclosed in Item 8.
We could be subject to litigation that may negatively impact our cash flows, financial condition and results of operations.
From time to time, we may be a defendant in lawsuits and regulatory proceedings relating to our business. Due to the inherent uncertainties of litigation and regulatory proceedings, we cannot accurately predict the ultimate outcome of any such litigation or proceedings. We could experience a negative impact to our cash flows, financial condition and results of operations due to an unfavorable outcome.
Compliance with certain laws and governmental rules and regulations may require us to make unintended expenditures that adversely affect our cash flows.
All of our properties are required to comply with certain laws and governmental rules and regulations, including the Americans with Disabilities Act, fire and safety regulations, building codes and other land use regulations, as they may be in effect or adopted by governmental agencies and bodies and become applicable to our properties. We may be required to make substantial capital expenditures to comply with those requirements, and these expenditures could have a material adverse effect on our ability to meet the financial obligations and pay dividends to our shareholders.

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An uninsured loss or a loss that exceeds the policies on our properties could subject us to lost capital or revenue on those properties.
Under the terms and conditions of the leases currently in force on our properties, tenants generally are required to indemnify and hold us harmless from liabilities resulting from injury to persons, air, water, land or property, on or off the premises, due to activities conducted on the properties, except for claims arising from our negligence or intentional misconduct or that of our agents. Tenants are generally required, at the tenant’s expense, to obtain and keep in full force during the term of the lease, liability and tenant's property damage insurance policies. We have obtained comprehensive liability, casualty, property, flood, earthquake, environmental and rental loss insurance policies on our properties. All of these policies may involve substantial deductibles and certain exclusions. In addition, we cannot assure the shareholders that the tenants will properly maintain their insurance policies or have the ability to pay the deductibles. Should a loss occur that is uninsured or in an amount exceeding the combined aggregate limits for the policies noted above, or in the event of a loss that is subject to a substantial deductible under an insurance policy, we could lose all or part of our capital invested in, and anticipated revenue from, one or more of the properties, which could have a material adverse effect on our operating results and financial condition, as well as our ability to pay dividends to the shareholders.
We may be subject to liability under environmental laws, ordinances and regulations.
Under various federal, state and local laws, ordinances and regulations, we may be considered an owner or operator of real property or have arranged for the disposal or treatment of hazardous or toxic substances. As a result, we may become liable for the costs of disposal or treatment of hazardous or toxic substances released on or in our property. We may also be liable for certain other potential costs that could relate to hazardous or toxic substances (including governmental fines and injuries to persons and property). We may incur such liability whether or not we knew of, or were responsible for, the presence of such hazardous or toxic substances.
Natural disasters and severe weather conditions could have an adverse effect on our cash flow and operating results.
Changing weather patterns and climatic conditions, such as global warming, may have added to the unpredictability and frequency of natural disasters in some parts of the world and created additional uncertainty as to future trends and exposures. Our operations are located in many areas that have experienced and may in the future experience natural disasters and severe weather conditions such as hurricanes, tornadoes, earthquakes, droughts, floods and fires. The occurrence of natural disasters or severe weather conditions can delay new development and redevelopment projects, increase investment costs to repair or replace damaged properties, increase future property insurance costs, and negatively impact the tenant demand for lease space. Additionally, these weather conditions may also disrupt our tenants' businesses, which could affect the ability of some tenants to pay rent and may reduce the willingness of tenants to remain in or move to the affected area. Intense weather conditions during the last decade, among other factors, have caused our cost of property insurance to increase significantly. If insurance is unavailable to us or is unavailable on acceptable terms, or if our insurance is not adequate to cover business interruption or losses from these events, our earnings, liquidity or capital resources could be adversely affected.
Our business and operations would suffer in the event of system failures.
Despite the implementation of security measures and the existence of a disaster recovery and business continuity plans for our internal information technology systems, our systems are vulnerable to damages from any number of sources, including computer viruses, unauthorized access, energy blackouts, natural disasters, terrorism, war and telecommunication failures. Any system failure or accident that causes interruptions in our operations could result in a material disruption to our business. We may also incur additional costs to remedy damages caused by such disruptions.

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We face risks relating to cybersecurity attacks, loss of confidential information and other business disruptions.
Our business is at risk from and may be impacted by cybersecurity attacks, including attempts to gain unauthorized access to our confidential data and other electronic security breaches. Such cybersecurity attacks can range from individual attempts to gain unauthorized access to our information technology systems to more sophisticated security threats. In addition to our own information technology systems, third parties have been engaged to provide information technology services relating to several key business functions, such as payroll, human resources, electronic communications and certain finance functions. While we and such third parties employ a number of measures to prevent, detect and mitigate these threats including a defense in depth strategy of firewalls, intrusion sensors, malware detection, password protection, backup servers, user training and periodic penetration testing, there is no guarantee such efforts will be successful in preventing a cybersecurity attack. As our reliance on technology has increased, so have the risks posed to our systems, both internal and those we have outsourced. Cybersecurity incidents could compromise the confidential information of our tenants, employees and third-party vendors and disrupt and affect the efficiency of our business operations.
ITEM 1B. Unresolved Staff Comments
None.
ITEM 2. Properties
At December 31, 2019, we owned or operated under long-term leases, either directly or through our interest in real estate joint ventures or partnerships, a total of 170 centers, primarily neighborhood, community and power shopping centers, which are located in 16 states spanning the country from coast to coast with approximately 32.5 million square feet of gross leasable area. Our centers are located principally in the South, West Coast and Southeast Coast of the U.S. with concentrations in California, Florida, and Texas. We also owned interests in 23 parcels of land held for development that totaled approximately 11.9 million square feet at December 31, 2019, of which approximately 11.7 million square feet may be used for new development or sold, and the remaining of which is adjacent to our existing operating centers may be used for expansion of those centers.
In 2019, no single center accounted for more than 7.1% of our total assets or 4.3% of base minimum rental revenues. The five largest centers, in the aggregate, represented approximately 13.4% of our base minimum rental revenues for the year ended December 31, 2019; otherwise, none of the remaining centers accounted for more than 2% of our base minimum rental revenues during the same period.
Our centers are designed to attract local area customers and are typically anchored by a supermarket or other national tenants (such as Kroger, HEB or T.J. Maxx). The centers are primarily neighborhood and community shopping centers that often include discounters, value-oriented retailers and specialty grocers as additional anchors or tenants, and typically range in size from 50,000 to 600,000 square feet of building area. Very few of the centers have climate-controlled common areas, but are designed to allow retail customers to park their automobiles in close proximity to any retailer in the center. Our centers are customarily constructed of masonry, steel and glass, and all have lighted, paved parking areas, which are typically landscaped with berms, trees and shrubs. They are generally located at major intersections in close proximity to neighborhoods that have existing populations sufficient to support retail activities of the types conducted in our centers.
We actively embrace various initiatives that support the future of environmentally friendly shopping centers. Our primary areas of focus include energy efficiency, waste recycling, water conservation and construction/development best practices. We recognize there are economic, environmental and social implications associated with the full range of our sustainability efforts, and that a commitment to incorporating sustainable practices should add long-term value to our centers.
As of December 31, 2019, the weighted average occupancy rate for our centers was 95.2% compared to 94.4% as of December 31, 2018. The average base rent per square foot was approximately $19.87 in 2019, $19.35 in 2018, $18.69 in 2017, $17.93 in 2016 and $16.92 in 2015 for our centers.
We have approximately 3,800 separate leases with 2,900 different tenants. Included among our top revenue-producing tenants are: TJX Companies, Inc., The Kroger Co., Whole Foods Market, Inc., H-E-B Grocery Company, LP, Ross Stores, Inc., Albertsons Companies, Inc., Home Depot, Inc., PetSmart, Inc., 24 Hour Fitness Worldwide, Inc., and Bed, Bath & Beyond Inc. The diversity of our tenant base is also evidenced by the fact that our largest tenant, TJX Companies, Inc., accounted for only 2.6% of base minimum rental revenues during 2019.

14
Table of Contents

Tenant Lease Expirations
As of December 31, 2019, lease expirations for the next 10 years, assuming tenants do not exercise renewal options, are as follows:
 
 
 
 
 
 
 
 
Annual Rent of Expiring Leases
Year
 
Number of
Expiring
Leases
 
Square Feet
of Expiring
Leases
(000’s)
 
Percentage of
Leasable
Square Feet
 
Total
(000’s)
 
Per Square
Foot
 
Percentage of
Total Annual
Net Rent
2020
 
449

 
1,754

 
5.39
%
 
$
35,652

 
$
20.33

 
10.38
%
2021
 
525

 
2,553

 
7.84
%
 
49,827

 
19.52

 
14.50
%
2022
 
517

 
2,921

 
8.97
%
 
56,190

 
19.24

 
16.35
%
2023
 
413

 
2,408

 
7.40
%
 
43,818

 
18.20

 
12.75
%
2024
 
384

 
2,652

 
8.15
%
 
45,994

 
17.34

 
13.39
%
2025
 
156

 
1,265

 
3.89
%
 
22,974

 
18.16

 
6.69
%
2026
 
93

 
650

 
2.00
%
 
14,667

 
22.56

 
4.27
%
2027
 
80

 
857

 
2.63
%
 
15,129

 
17.65

 
4.40
%
2028
 
95

 
1,323

 
4.06
%
 
21,119

 
15.96

 
6.15
%
2029
 
87

 
818

 
2.51
%
 
13,748

 
16.81

 
4.00
%
New Development/Redevelopment
At December 31, 2019, we had three projects in various stages of construction that were partially or wholly owned. We have funded $368.4 million through December 31, 2019 on these projects. We estimate our aggregate net investment upon completion to be $485.0 million. These projects are forecasted to have an average stabilized return on investment of approximately 5.5% when completed.
Upon completion, the estimated costs and square footage to be added to the portfolio for the three projects are as follows:
Project
 
City, State
 
Project Type
 
Retail
Square Feet
(000’s)
 
Residential Units
 
Net Estimated
Costs (1)
(000's)
 
Estimated
Year of
Completion
West Alex
 
Alexandria, Virginia
 
Mixed-Use
 
127
 
278
 
$200,000
 
2022
Centro Arlington (2)
 
Arlington, Virginia
 
Mixed-Use
 
72
 
366
 
135,000
 
2020
The Driscoll at River Oaks
 
Houston, Texas
 
Mixed-Use
 
11
 
318
 
150,000
 
2022
___________________
(1)
Current net estimated costs represents WRI's share of capital expenditures net of any forecasted sales of land pads.
(2)
Represents an unconsolidated joint venture where we have funded $121.1 million as of December 31, 2019, and we anticipate funding an additional $9 million through 2020.

15
Table of Contents

Property Listing
The following table is a list of centers, summarized by state and includes our share of both consolidated and unconsolidated real estate partnerships and joint ventures as of December 31, 2019:

ALL PROPERTIES BY STATE
 
Number of
Properties
 
Gross
Leasable
Area (GLA)
 
% of
Total GLA
Arizona
 
19

 
2,863,083

 
8.8
%
California
 
18

 
3,249,876

 
10.0
%
Colorado
 
5

 
1,710,705

 
5.3
%
Florida
 
28

 
6,953,434

 
21.4
%
Georgia
 
11

 
1,987,551

 
6.1
%
Kentucky
 
1

 
218,107

 
0.7
%
Maryland
 
1

 
80,841

 
0.2
%
Nevada
 
4

 
872,819

 
2.7
%
New Mexico
 
1

 
145,851

 
0.4
%
North Carolina
 
11

 
1,857,435

 
5.7
%
Oregon
 
2

 
179,746

 
0.5
%
Tennessee
 
4

 
654,550

 
2.0
%
Texas
 
54

 
10,339,646

 
31.8
%
Utah
 
1

 
304,899

 
0.9
%
Virginia
 
3

 
323,105

 
1.0
%
Washington
 
7

 
808,264

 
2.5
%
Total
 
170

 
32,549,912

 
100
%
___________________
GLA includes 4.5 million square feet of our partners’ ownership interest in these properties and 6.5 million square feet not owned or managed by us. Additionally, encumbrances on our properties total $263.4 million. See Schedule III for additional information.
The following table is a detailed list of centers by state and includes our share of both consolidated and unconsolidated real estate partnerships and joint ventures as of December 31, 2019:
Center
 
CBSA (7)
 
Owned %
 
Foot
Notes  
 
GLA
 
Grocer Anchor
( ) indicates owned
by others
 
Other Anchors
( ) indicates owned by others
Operating Properties
 
 
 
 
 
 
 
 
 
 
Arizona
 
 
 
 
 
 
 
 
 
 
 
 
Broadway Marketplace
 
Phoenix-Mesa-Scottsdale, AZ
100.0
%
 
 
 
87,379

 
 
 
Office Max, Ace Hardware
Camelback Miller Plaza
 
Phoenix-Mesa-Scottsdale, AZ
100.0
%
 
 
 
150,711

 
Sprouts Farmers Market
 
T.J. Maxx, PetSmart
Camelback Village Square
 
Phoenix-Mesa-Scottsdale, AZ
 
100.0
%
 
 
 
240,951

 
Fry’s Supermarket
 
(LA Fitness)
Desert Village Shopping Center
 
Phoenix-Mesa-Scottsdale, AZ
 
100.0
%
 
 
 
107,071

 
AJ Fine Foods
 
CVS
Fountain Plaza
 
Phoenix-Mesa-Scottsdale, AZ
 
100.0
%
 
 
 
304,107

 
Fry’s Supermarket
 
Dollar Tree, (Lowe's)
Madison Village Marketplace
 
Phoenix-Mesa-Scottsdale, AZ
 
100.0
%
 
 
 
90,264

 
Safeway
 

Monte Vista Village Center
 
Phoenix-Mesa-Scottsdale, AZ
 
100.0
%
 
 
 
108,551

 

 
(Wells Fargo)
Phoenix Office Building
 
Phoenix-Mesa-Scottsdale, AZ
 
100.0
%
 
 
 
21,122

 
 
 
Weingarten Realty Regional Office, Endurance Rehab
Pueblo Anozira Shopping Center
 
Phoenix-Mesa-Scottsdale, AZ
 
100.0
%
 
 
 
157,532

 
Fry’s Supermarket
 
Petco, Dollar Tree
Raintree Ranch Center
 
Phoenix-Mesa-Scottsdale, AZ
 
100.0
%
 
 
 
133,020

 
Whole Foods
 
 
Red Mountain Gateway
 
Phoenix-Mesa-Scottsdale, AZ
 
100.0
%
 
 
 
204,928

 
 
 
(Target), Bed Bath & Beyond, Famous Footwear
Scottsdale Horizon
 
Phoenix-Mesa-Scottsdale, AZ
 
100.0
%
 
 
 
155,046

 
Safeway
 
CVS
Scottsdale Waterfront
 
Phoenix-Mesa-Scottsdale, AZ
 
100.0
%
 
 
 
93,334

 
 
 
Olive & Ivy, P.F. Chang's, David's Bridal, Urban Outfitters

16
Table of Contents

Center
 
CBSA (7)
 
Owned %
 
Foot
Notes  
 
GLA
 
Grocer Anchor
( ) indicates owned
by others
 
Other Anchors
( ) indicates owned by others
Squaw Peak Plaza
 
Phoenix-Mesa-Scottsdale, AZ
 
100.0
%
 
 
 
60,713

 
Sprouts Farmers Market
 
 
Summit at Scottsdale
 
Phoenix-Mesa-Scottsdale, AZ
 
51.0
%
 
(1)(3)
 
322,992

 
Safeway
 
(Target), CVS, OfficeMax, PetSmart
Entrada de Oro Plaza Shopping Center
 
Tucson, AZ
 
100.0
%
 
 
 
109,075

 
Walmart Neighborhood Market
 
 
Madera Village Shopping Center
 
Tucson, AZ
 
100.0
%
 
 
 
106,858

 
Safeway
 
Dollar Tree
Oracle Wetmore Shopping Center
 
Tucson, AZ
 
100.0
%
 
 
 
343,298

 
 
 
(Home Depot), (Nordstrom Rack), Jo-Ann Fabric, Cost Plus World Market, PetSmart, Walgreens, Ulta Beauty
Shoppes at Bears Path
 
Tucson, AZ
 
100.0
%
 
 
 
66,131

 
 
 
(CVS Drug)
Arizona Total:
 
 
 
 
 
 
 
2,863,083

 
 
 
 
California
 
 
 
 
 
 
 
 
 
 
 
 
8000 Sunset Strip Shopping Center
 
Los Angeles-Long Beach-Anaheim, CA
 
100.0
%
 
 
 
169,775

 
Trader Joe's
 
CVS, Crunch, AMC Theaters, CB2
Centerwood Plaza
 
Los Angeles-Long Beach-Anaheim, CA
 
100.0
%
 
 
 
75,486

 
Superior Grocers
 
Dollar Tree
The Westside Center
 
Los Angeles-Long Beach-Anaheim, CA
 
100.0
%
 
 
 
36,540

 
 
 
Guitar Center
Westminster Center
 
Los Angeles-Long Beach-Anaheim, CA
 
100.0
%
 
 
 
440,437

 
Albertsons
 
Home Depot, Ross Dress for Less, Petco, Rite Aid, Dollar Tree, 24 Hour Fitness
Chino Hills Marketplace
 
Riverside-San Bernardino-Ontario, CA
 
100.0
%
 
 
 
310,812

 
Smart & Final Stores
 
Dollar Tree, 24 Hour Fitness, Rite Aid
Valley Shopping Center
 
Sacramento--Roseville--Arden-Arcade, CA
 
100.0
%
 
 
 
107,191

 
Food 4 Less
 

El Camino Promenade
 
San Diego-Carlsbad, CA
 
100.0
%
 
 
 
128,740

 

 
T.J. Maxx, Dollar Tree, BevMo
Rancho San Marcos Village
 
San Diego-Carlsbad, CA
 
100.0
%
 
 
 
133,439

 
Vons
 
24 Hour Fitness
San Marcos Plaza
 
San Diego-Carlsbad, CA
 
100.0
%
 
 
 
80,086

 
(Albertsons)
 

580 Market Place
 
San Francisco-Oakland-Hayward, CA
 
100.0
%
 
 
 
100,097

 
Safeway
 
24 Hour Fitness, Petco
Gateway Plaza
 
San Francisco-Oakland-Hayward, CA
 
100.0
%
 
 
 
352,778

 
Raley’s
 
24 Hour Fitness
Greenhouse Marketplace
 
San Francisco-Oakland-Hayward, CA
 
100.0
%
 
 
 
232,824

 
(Safeway)
 
(CVS), Jo-Ann Fabric, 99 Cents Only, Petco
Cambrian Park Plaza
 
San Jose-Sunnyvale-Santa Clara, CA
 
100.0
%
 
 
 
171,190

 

 
BevMo, Dollar Tree
Silver Creek Plaza
 
San Jose-Sunnyvale-Santa Clara, CA
 
100.0
%
 
 
 
201,716

 
Sprouts Farmers Market
 
Walgreens
Stevens Creek Central
 
San Jose-Sunnyvale-Santa Clara, CA
 
100.0
%
 
 
 
195,863

 
Safeway
 
Marshalls, Total Wine, Cost Plus World Market
Freedom Centre
 
Santa Cruz-Watsonville, CA
 
100.0
%
 
 
 
150,865

 
Safeway
 
Rite Aid, Big Lots
Stony Point Plaza
 
Santa Rosa, CA
 
100.0
%
 
 
 
200,011

 
Food Maxx
 
Ross Dress for Less, Fallas Paredes
Southampton Center
 
Vallejo-Fairfield, CA
 
100.0
%
 
 
 
162,026

 
Raley’s
 
Ace Hardware, Dollar Tree
California Total:
 
 
 
 
 
 
 
3,249,876

 
 
 
 
Colorado
 
 
 
 
 
 
 
 
 
 
 
 
Aurora City Place
 
Denver-Aurora-Lakewood, CO
 
50.0
%
 
(1)(3)
 
538,152

 
(Super Target)
 
Barnes & Noble, Ross Dress For Less, PetSmart, Michaels, Conn's
Crossing at Stonegate
 
Denver-Aurora-Lakewood, CO
 
100.0
%
 
 
 
109,080

 
King Sooper’s
 
 
Edgewater Marketplace
 
Denver-Aurora-Lakewood, CO
 
100.0
%
 
 
 
270,548

 
King Sooper's
 
Ace Hardware, (Target)
Lowry Town Center
 
Denver-Aurora-Lakewood, CO
 
100.0
%
 
 
 
129,425

 
(Safeway)
 
 
River Point at Sheridan
 
Denver-Aurora-Lakewood, CO
 
100.0
%
 
 
 
663,500

 
 
 
(Target), (Costco), Regal Cinema, Michaels, Conn's, PetSmart, Burlington
Colorado Total:
 
 
 
 
 
 
 
1,710,705

 
 
 
 
Florida
 
 
 
 
 
 
 
 
 
 
 
 
Argyle Village Shopping Center
 
Jacksonville, FL
 
100.0
%
 
 
 
306,506

 
Publix
 
Bed Bath & Beyond, T.J. Maxx, Jo-Ann Fabric, Michaels, American Signature Furniture
Atlantic West
 
Jacksonville, FL
 
50.0
%
 
(1)(3)
 
188,278

 
(Walmart Supercenter)
 
T.J. Maxx, HomeGoods, Dollar Tree, Shoe Carnival, (Kohl's)
Epic Village St. Augustine
 
Jacksonville, FL
 
70.0
%
 
(1)
 
64,180

 
 
 
(Epic Theaters)
Kernan Village
 
Jacksonville, FL
 
50.0
%
 
(1)(3)
 
288,780

 
(Walmart Supercenter)
 
Ross Dress for Less, Petco
Boca Lyons Plaza
 
Miami-Fort Lauderdale-West Palm Beach, FL
 
100.0
%
 
 
 
117,597

 
Aroma Market & Catering
 
Ross Dress for Less
Deerfield
 
Miami-Fort Lauderdale-West Palm Beach, FL
 
100.0
%
 
 
 
408,803

 
Publix
 
T.J. Maxx, Marshalls, Cinépolis, YouFit, Ulta
Embassy Lakes Shopping Center
 
Miami-Fort Lauderdale-West Palm Beach, FL
 
100.0
%
 
 
 
142,751

 

 
Tuesday Morning, Dollar Tree

17
Table of Contents

Center
 
CBSA (7)
 
Owned %
 
Foot
Notes  
 
GLA
 
Grocer Anchor
( ) indicates owned
by others
 
Other Anchors
( ) indicates owned by others
Flamingo Pines
 
Miami-Fort Lauderdale-West Palm Beach, FL
 
20.0
%
 
(1)(3)
 
148,841

 
Publix
 
 
Hollywood Hills Plaza
 
Miami-Fort Lauderdale-West Palm Beach, FL
 
20.0
%
 
(1)(3)
 
416,769

 
Publix
 
Target, Chewy.com
Northridge
 
Miami-Fort Lauderdale-West Palm Beach, FL
 
20.0
%
 
(1)(3)
 
236,478

 
Publix
 
Petco, Ross Dress for Less, Dollar Tree
Pembroke Commons
 
Miami-Fort Lauderdale-West Palm Beach, FL
 
20.0
%
 
(1)(3)
 
323,687

 
Publix
 
Marshalls, Office Depot, LA Fitness, Dollar Tree
Sea Ranch Centre
 
Miami-Fort Lauderdale-West Palm Beach, FL
 
100.0
%
 
 
 
98,851

 
Publix
 
CVS, Dollar Tree
Tamiami Trail Shops
 
Miami-Fort Lauderdale-West Palm Beach, FL
 
20.0
%
 
(1)(3)
 
132,647

 
Publix
 
CVS
The Palms at Town & County
 
Miami-Fort Lauderdale-West Palm Beach, FL
100.0
%
 
 
 
657,638

 
Publix
 
Kohl's, Marshalls, HomeGoods, Dick's Sporting Goods, 24 Hour Fitness, Nordstrom Rack, CVS
TJ Maxx Plaza
 
Miami-Fort Lauderdale-West Palm Beach, FL
 
100.0
%
 
 
 
161,429

 
Fresco Y Mas
 
T.J. Maxx, Dollar Tree
Vizcaya Square Shopping Center
 
Miami-Fort Lauderdale-West Palm Beach, FL
 
100.0
%
 
 
 
110,081

 
Winn Dixie
 
 
Wellington Green Commons
 
Miami-Fort Lauderdale-West Palm Beach, FL
 
100.0
%
 
 
 
136,556

 
Whole Foods Market
 
 
Clermont Landing
 
Orlando-Kissimmee-Sanford, FL
 
75.0
%
 
(1)(3)
 
347,284

 
 
 
(J.C. Penney), (Epic Theater), T.J. Maxx, Ross Dress for Less, Michaels
Colonial Plaza
 
Orlando-Kissimmee-Sanford, FL
 
100.0
%
 
 
 
498,457

 
 
 
Hobby Lobby, Ross Dress for Less, Marshalls, Old Navy, Staples, Stein Mart, Barnes & Noble, Petco, Big Lots
Phillips Crossing
 
Orlando-Kissimmee-Sanford, FL
 
100.0
%
 
 
 
145,644

 
Whole Foods
 
Golf Galaxy, Michaels
Shoppes of South Semoran
 
Orlando-Kissimmee-Sanford, FL
 
100.0
%
 
 
 
103,779

 
Walmart Neighborhood Market
 
Dollar Tree
The Marketplace at Dr. Phillips
 
Orlando-Kissimmee-Sanford, FL
 
20.0
%
 
(1)(3)
 
326,850

 
Publix
 
HomeGoods, Stein Mart, Morton's of Chicago, Office Depot
Winter Park Corners
 
Orlando-Kissimmee-Sanford, FL
 
100.0
%
 
 
 
93,311

 
Sprouts Farmers Market
 
 
Pineapple Commons
 
Port St. Lucie, FL
 
20.0
%
 
(1)(3)
 
269,924

 
 
 
Ross Dress for Less, Best Buy, PetSmart, Marshalls, (CVS)
Countryside Centre
 
Tampa-St. Petersburg-Clearwater, FL
 
100.0
%
 
 
 
245,958

 
 
 
T.J. Maxx, HomeGoods, Dick's Sporting Goods, Ross Dress for Less
East Lake Woodlands
 
Tampa-St. Petersburg-Clearwater, FL
 
20.0
%
 
(1)(3)
 
104,430

 
Walmart Neighborhood Market
 
Walgreens
Largo Mall
 
Tampa-St. Petersburg-Clearwater, FL
 
100.0
%
 
 
 
610,106

 
(Publix)
 
Marshalls, Bealls, PetSmart, Bed Bath & Beyond, Staples, Michaels, (Target)
Sunset 19 Shopping Center
 
Tampa-St. Petersburg-Clearwater, FL
 
100.0
%
 
 
 
267,819

 
Sprouts Farmers Market
 
Hobby Lobby, Bed Bath & Beyond, Barnes & Noble, Old Navy, Cost Plus World Market
Florida Total:
 
 
 
 
 
 
 
6,953,434

 
 
 
 
Georgia
 
 
 
 
 
 
 
 
 
 
 
 
Brownsville Commons
 
Atlanta-Sandy Springs-Roswell, GA
 
100.0
%
 
 
 
81,913

 
(Kroger)
 
 
Camp Creek Marketplace II
 
Atlanta-Sandy Springs-Roswell, GA
 
100.0
%
 
 
 
228,003

 
 
 
Burlington, DSW, LA Fitness, American Signature Furniture
Grayson Commons
 
Atlanta-Sandy Springs-Roswell, GA
 
100.0
%
 
 
 
76,581

 
Kroger
 
 
Lakeside Marketplace
 
Atlanta-Sandy Springs-Roswell, GA
 
100.0
%
 
 
 
332,699

 
(Super Target)
 
Ross Dress for Less, Petco
Mansell Crossing
 
Atlanta-Sandy Springs-Roswell, GA
 
20.0
%
 
(1)(3)
 
102,930

 
 
 
buybuy BABY, Ross Dress for Less, Party City
North Decatur Station
 
Atlanta-Sandy Springs-Roswell, GA
 
51.0
%
 
(1)(3)
 
88,778

 
Whole Foods 365
 

Perimeter Village
 
Atlanta-Sandy Springs-Roswell, GA
 
100.0
%
 
 
 
380,538

 
Walmart Supercenter
 
Hobby Lobby, Cost Plus World Market, DSW
Publix at Princeton Lakes
 
Atlanta-Sandy Springs-Roswell, GA
 
20.0
%
 
(1)(3)
 
72,205

 
Publix
 
 
Roswell Corners
 
Atlanta-Sandy Springs-Roswell, GA
 
100.0
%
 
 
 
327,261

 
(Super Target), Fresh Market
 
T.J. Maxx
Roswell Crossing Shopping Center
 
Atlanta-Sandy Springs-Roswell, GA
 
100.0
%
 
 
 
201,056

 
Trader Joe's
 
Office Max, PetSmart, Walgreens
Thompson Bridge Commons
 
Gainesville, GA
 
100.0
%
 
 
 
95,587

 
(Kroger)
 
 
Georgia Total:
 
 
 
 
 
 
 
1,987,551

 
 
 
 
Kentucky
 
 
 
 
 
 
 
 
 
 
 
 
Festival on Jefferson Court
 
Louisville/Jefferson County, KY-IN
 
100.0
%
 
 
 
218,107

 
Kroger
 
(PetSmart), (T.J. Maxx), Staples, Party City
Kentucky Total:
 
 
 
 
 
 
 
218,107

 
 
 
 
Maryland
 
 
 
 
 
 
 
 
 
 
 
 
Pike Center
 
Washington-Arlington-Alexandria, DC-VA-MD-WV
 
100.0
%
 
 
 
80,841

 

 
Pier 1, DXL Mens Apparel
Maryland Total:
 
 
 
 
 
 
 
80,841

 
 
 
 

18
Table of Contents

Center
 
CBSA (7)
 
Owned %
 
Foot
Notes  
 
GLA
 
Grocer Anchor
( ) indicates owned
by others
 
Other Anchors
( ) indicates owned by others
Nevada
 
 
 
 
 
 
 
 
 
 
 
 
Charleston Commons Shopping Center
 
Las Vegas-Henderson-Paradise, NV
 
100.0
%
 
 
 
366,952

 
Walmart
 
Ross Dress for Less, Office Max, 99 Cents Only, PetSmart
College Park Shopping Center
 
Las Vegas-Henderson-Paradise, NV
 
100.0
%
 
 
 
195,215

 
El Super
 
Factory 2 U, CVS
Francisco Center
 
Las Vegas-Henderson-Paradise, NV
 
100.0
%
 
 
 
148,815

 
La Bonita Grocery
 
(Ross Dress for Less)
Rancho Towne & Country
 
Las Vegas-Henderson-Paradise, NV
 
100.0
%
 
 
 
161,837

 
Smith’s Food
 

Nevada Total:
 
 
 
 
 
 
 
872,819

 
 
 
 
New Mexico
 
 
 
 
 
 
 
 
 
 
 
 
North Towne Plaza
 
Albuquerque, NM
 
100.0
%
 
 
 
145,851

 
Whole Foods Market
 
HomeGoods
New Mexico Total:
 
 
 
 
 
 
 
145,851

 
 
 
 
North Carolina
 
 
 
 
 
 
 
 
 
 
 
 
Galleria Shopping Center
 
Charlotte-Concord-Gastonia, NC-SC
 
100.0
%
 
 
 
324,704

 
(Walmart Supercenter)
 

Bull City Market
 
Durham-Chapel Hill, NC
 
100.0
%
 
 
 
40,875

 
Whole Foods Market
 
 
Hope Valley Commons
 
Durham-Chapel Hill, NC
 
100.0
%
 
 
 
81,327

 
Harris Teeter
 
 
Avent Ferry Shopping Center
 
Raleigh, NC
 
100.0
%
 
 
 
119,652

 
Food Lion
 
Family Dollar
Capital Square
 
Raleigh, NC
 
100.0
%
 
 
 
143,063

 
Food Lion
 
 
Falls Pointe Shopping Center
 
Raleigh, NC
 
100.0
%
 
 
 
198,549

 
Harris Teeter
 
(Kohl’s)
High House Crossing
 
Raleigh, NC
 
100.0
%
 
 
 
87,517

 
Lidl
 
 
Leesville Towne Centre
 
Raleigh, NC
 
100.0
%
 
 
 
127,106

 
Harris Teeter
 

Northwoods Shopping Center
 
Raleigh, NC
 
100.0
%
 
 
 
77,803

 
Walmart Neighborhood Market
 
Dollar Tree
Six Forks Shopping Center
 
Raleigh, NC
 
100.0
%
 
 
 
468,402

 
Food Lion
 
Target, Home Depot, Bed Bath & Beyond, PetSmart
Stonehenge Market
 
Raleigh, NC
 
100.0
%
 
 
 
188,437

 
Harris Teeter
 
Stein Mart, Walgreens
North Carolina Total:
 
 
 
 
 
 
 
1,857,435

 
 
 
 
Oregon
 
 
 
 
 
 
 
 
 
 
 
 
Clackamas Square
 
Portland-Vancouver-Hillsboro, OR-WA
 
20.0
%
 
(1)(3)
 
140,226

 
(Winco Foods)
 
T.J. Maxx
Raleigh Hills Plaza
 
Portland-Vancouver-Hillsboro, OR-WA
 
20.0
%
 
(1)(3)
 
39,520

 
New Seasons Market
 
Walgreens
Oregon Total:
 
 
 
 
 
 
 
179,746

 
 
 
 
Tennessee
 
 
 
 
 
 
 
 
 
 
 
 
Highland Square
 
Memphis, TN-MS-AR
 
100.0
%
 
 
 
14,490

 

 
Walgreens
Mendenhall Commons
 
Memphis, TN-MS-AR
 
100.0
%
 
 
 
88,108

 
Kroger
 

Ridgeway Trace
 
Memphis, TN-MS-AR
 
100.0
%
 
 
 
306,556

 

 
(Target), Best Buy, PetSmart, REI
The Commons at Dexter Lake
 
Memphis, TN-MS-AR
 
100.0
%
 
 
 
245,396

 
Kroger
 
Marshalls, HomeGoods, Stein Mart
Tennessee Total:
 
 
 
 
 
 
 
654,550

 
 
 
 
Texas
 
 
 
 
 
 
 
 
 
 
 
 
Mueller Regional Retail Center
 
Austin-Round Rock, TX
100.0
%
 
 
 
351,099

 
 
 
Marshalls, PetSmart, Bed Bath & Beyond, Home Depot, Best Buy, Total Wine
North Park Plaza
 
Beaumont-Port Arthur, TX
 
50.0
%
 
(1)(3)
 
281,035

 
 
 
(Target), Spec's, Kirkland's
North Towne Plaza
 
Brownsville-Harlingen, TX
 
100.0
%
 
 
 
144,846

 
 
 
(Lowe's)
Rock Prairie Marketplace
 
College Station-Bryan, TX
 
100.0
%
 
 
 
18,163

 
 
 

Overton Park Plaza
 
Dallas-Fort Worth-Arlington, TX
 
100.0
%
 
 
 
462,800

 
Sprouts Farmers Market
 
Burlington, PetSmart, T.J. Maxx, (Home Depot), buybuy BABY
Preston Shepard Place
 
Dallas-Fort Worth-Arlington, TX
 
20.0
%
 
(1)(3)
 
361,830

 
 
 
Nordstrom, Marshalls, Stein Mart, Office Depot, Petco, Burlington
10-Federal Shopping Center
 
Houston-The Woodlands-Sugar Land, TX
 
15.0
%
 
(1)
 
132,473

 
Sellers Bros.
 
Palais Royal, Harbor Freight Tools
Alabama Shepherd Shopping Center
 
Houston-The Woodlands-Sugar Land, TX
 
100.0
%
 
 
 
59,120

 
Trader Joe's
 
PetSmart
Baybrook Gateway
 
Houston-The Woodlands-Sugar Land, TX
 
100.0
%
 
 
 
241,149

 
 
 
Ashley Furniture, Cost Plus World Market, Barnes & Noble, Michaels
Bellaire Blvd. Shopping Center
 
Houston-The Woodlands-Sugar Land, TX
 
100.0
%
 
 
 
43,891

 
Randall’s
 
 
Blalock Market at I-10
 
Houston-The Woodlands-Sugar Land, TX
 
100.0
%
 
 
 
97,277

 
99 Ranch Market
 
 

19
Table of Contents

Center
 
CBSA (7)
 
Owned %
 
Foot
Notes  
 
GLA
 
Grocer Anchor
( ) indicates owned
by others
 
Other Anchors
( ) indicates owned by others
Citadel Building
 
Houston-The Woodlands-Sugar Land, TX
 
100.0
%
 
 
 
121,000

 
 
 
Weingarten Realty Investors Corporate Office
Galveston Place
 
Houston-The Woodlands-Sugar Land, TX
 
100.0
%
 
 
 
210,361

 
Randall’s
 
Office Depot, Palais Royal, Spec's
Griggs Road Shopping Center
 
Houston-The Woodlands-Sugar Land, TX
 
15.0
%
 
(1)
 
80,093

 

 
Family Dollar, Citi Trends
Harrisburg Plaza
 
Houston-The Woodlands-Sugar Land, TX
 
15.0
%
 
(1)
 
93,620

 
 
 
dd's Discount
HEB - Dairy Ashford & Memorial
 
Houston-The Woodlands-Sugar Land, TX
 
100.0
%
 
 
 
36,874

 
 
 
H-E-B Fulfillment Center
Heights Plaza Shopping Center
 
Houston-The Woodlands-Sugar Land, TX
 
100.0
%
 
 
 
71,277

 
Kroger
 
Goodwill
I45/Telephone Rd.
 
Houston-The Woodlands-Sugar Land, TX
 
15.0
%
 
(1)
 
171,600

 
Sellers Bros.
 
Famsa, Harbor Freight Tools
League City Plaza
 
Houston-The Woodlands-Sugar Land, TX
 
15.0
%
 
(1)
 
129,467

 

 
Crunch Fitness, Spec’s
Market at Westchase Shopping Center
 
Houston-The Woodlands-Sugar Land, TX
 
100.0
%
 
 
 
81,441

 
 
 
Blink Fitness
Oak Forest Shopping Center
 
Houston-The Woodlands-Sugar Land, TX
 
100.0
%
 
 
 
157,812

 
Kroger
 
Ross Dress for Less, Dollar Tree, PetSmart
Randalls Center/Kings Crossing
 
Houston-The Woodlands-Sugar Land, TX
 
100.0
%
 
 
 
126,397

 
Randall’s
 
CVS
Richmond Square
 
Houston-The Woodlands-Sugar Land, TX
 
100.0
%
 
 
 
92,657

 

 
Best Buy, Cost Plus World Market
River Oaks Shopping Center - East
 
Houston-The Woodlands-Sugar Land, TX
 
100.0
%
 
 
 
71,265

 
Kroger
 

River Oaks Shopping Center - West
 
Houston-The Woodlands-Sugar Land, TX
 
100.0
%
 
(5)
 
230,026

 
Kroger
 
Barnes & Noble, Talbots, Ann Taylor, GAP, JoS. A. Bank
Shoppes at Memorial Villages
 
Houston-The Woodlands-Sugar Land, TX
 
100.0
%
 
 
 
166,777

 

 
Gulf Coast Veterinary Specialists
Shops at Kirby Drive
 
Houston-The Woodlands-Sugar Land, TX
 
100.0
%
 
 
 
55,460

 

 
Freebirds Burrito
Shops at Three Corners
 
Houston-The Woodlands-Sugar Land, TX
 
70.0
%
 
(1)
 
282,613

 
Fiesta
 
Ross Dress for Less, PetSmart, Office Depot, Big Lots
Southgate Shopping Center
 
Houston-The Woodlands-Sugar Land, TX
 
15.0
%
 
(1)
 
124,453

 
Food-A-Rama
 
CVS, Family Dollar, Palais Royal
The Centre at Post Oak
 
Houston-The Woodlands-Sugar Land, TX
 
100.0
%
 
 
 
183,940

 

 
Marshalls, Old Navy, Grand Lux Café, Nordstrom Rack, Arhaus
The Shops at Hilshire Village
 
Houston-The Woodlands-Sugar Land, TX
 
100.0
%
 
 
 
117,473

 
Kroger
 
Walgreens
Tomball Marketplace
 
Houston-The Woodlands-Sugar Land, TX
 
100.0
%
 
 
 
326,545

 
 
 
(Academy), (Kohl's), Ross Dress For Less, Marshalls
Village Plaza at Bunker Hill
 
Houston-The Woodlands-Sugar Land, TX
 
57.8
%
 
(1)(3)
 
491,687

 
H-E-B
 
PetSmart, Academy, Nordstrom Rack, Burlington
West Gray
 
Houston-The Woodlands-Sugar Land, TX
 
100.0
%
 
 
 
36,900

 

 
Pier 1
Westchase Shopping Center
 
Houston-The Woodlands-Sugar Land, TX
 
100.0
%
 
 
 
347,475

 
Whole Foods Market
 
(Target), Ross Dress for Less, Petco
Westhill Village Shopping Center
 
Houston-The Woodlands-Sugar Land, TX
 
100.0
%
 
 
 
130,851

 

 
Ross Dress for Less, Office Depot, 99 Cents Only
Independence Plaza
 
Laredo, TX
 
100.0
%
 
 
 
347,302

 
H-E-B
 
T.J. Maxx, Ross Dress for Less, Hobby Lobby, Petco, Ulta Beauty
North Creek Plaza
 
Laredo, TX
 
100.0
%
 
 
 
487,850

 
(H-E-B)
 
(Target), Marshalls, Old Navy, Best Buy, HomeGoods
Plantation Centre
 
Laredo, TX
 
100.0
%
 
 
 
144,129

 
H-E-B
 

Las Tiendas Plaza
 
McAllen-Edinburg-Mission, TX
 
50.0
%
 
(1)(3)
 
500,084

 

 
(Target), Dick's Sporting Goods, Conn's, Ross Dress for Less, Marshalls, Office Depot, (HomeGoods), (Forever 21)
Market at Nolana
 
McAllen-Edinburg-Mission, TX
 
50.0
%
 
(1)(3)
 
245,057

 
(Walmart Supercenter)
 

Market at Sharyland Place
 
McAllen-Edinburg-Mission, TX
 
50.0
%
 
(1)(3)
 
301,174

 
(Walmart Supercenter)
 
Kohl's, Dollar Tree
McAllen Center
 
McAllen-Edinburg-Mission, TX
 
50.0
%
 
(1)(3)(6)
 
103,702

 
H-E-B
 

North Sharyland Crossing
 
McAllen-Edinburg-Mission, TX
 
50.0
%
 
(1)(3)
 
3,576

 
 
 

Northcross
 
McAllen-Edinburg-Mission, TX
 
50.0
%
 
(1)(3)
 
75,066

 
 
 
Barnes & Noble
Old Navy Building
 
McAllen-Edinburg-Mission, TX
 
50.0
%
 
(1)(3)
 
15,000

 
 
 
Old Navy
Sharyland Towne Crossing
 
McAllen-Edinburg-Mission, TX
 
50.0
%
 
(1)(3)
 
492,797

 
H-E-B
 
(Target), T.J. Maxx, Petco, Office Depot, Ross Dress for Less
Trenton Crossing
 
McAllen-Edinburg-Mission, TX
 
100.0
%
 
 
 
571,255

 

 
(Target), (Kohl's), Hobby Lobby, Ross Dress for Less, Marshalls, PetSmart
Starr Plaza
 
Rio Grande City, TX
 
50.0
%
 
(1)(3)
 
176,694

 
H-E-B
 
Bealls
Fiesta Trails
 
San Antonio-New Braunfels, TX
 
100.0
%
 
 
 
486,470

 
(H-E-B)
 
Marshalls, Bob Mills Furniture, Act III Theatres, Stein Mart, Petco
Parliament Square II
 
San Antonio-New Braunfels, TX
 
100.0
%
 
 
 
54,541

 

 
Incredible Pizza

20
Table of Contents

Center
 
CBSA (7)
 
Owned %
 
Foot
Notes  
 
GLA
 
Grocer Anchor
( ) indicates owned
by others
 
Other Anchors
( ) indicates owned by others
Stevens Ranch
 
San Antonio-New Braunfels, TX
 
50.0
%
 
(1)
 
21,314

 
 
 

The Shoppes at Wilderness Oaks
 
San Antonio-New Braunfels, TX
 
100.0
%
 
 
 
20,081

 

 

Thousand Oaks Shopping Center
 
San Antonio-New Braunfels, TX
 
15.0
%
 
(1)
 
161,807

 
H-E-B
 
Bealls, Tuesday Morning
Texas Total:
 
 
 
 
 
 
 
10,339,646

 
 
 
 
Utah
 
 
 
 
 
 
 
 
 
 
 
 
West Jordan Town Center
 
Salt Lake City, UT
 
100.0
%
 
 
 
304,899

 
Lucky Supermarket
 
(Target), Petco
Utah Total:
 
 
 
 
 
 
 
304,899

 
 
 
 
Virginia
 
 
 
 
 
 
 
 
 
 
 
 
Hilltop Village Center
 
Washington-Arlington-Alexandria, DC-VA-MD-WV
 
100.0
%
 
(4)
 
250,811

 
Wegmans
 
L.A. Fitness
Virginia Total:
 
 
 
 
 
 
 
250,811

 
 
 
 
Washington
 
 
 
 
 
 
 
 
 
 
 
 
2200 Westlake
 
Seattle-Tacoma-Bellevue, WA
 
69.4
%
 
(1)(3)
 
87,014

 
Whole Foods
 
 
Covington Esplanade
 
Seattle-Tacoma-Bellevue, WA
 
100.0
%
 
 
 
187,388

 

 
The Home Depot
Meridian Town Center
 
Seattle-Tacoma-Bellevue, WA
 
20.0
%
 
(1)(3)
 
143,401

 
(Safeway)
 
Jo-Ann Fabric, Tuesday Morning
Queen Anne Marketplace
 
Seattle-Tacoma-Bellevue, WA
 
51.0
%
 
(1)(3)
 
81,053

 
Metropolitan Market
 
Bartell's Drug
Rainier Square Plaza
 
Seattle-Tacoma-Bellevue, WA
 
20.0
%
 
(1)(3)
 
111,735

 
Safeway
 
Ross Dress for Less
South Hill Center
 
Seattle-Tacoma-Bellevue, WA
 
20.0
%
 
(1)(3)
 
134,010

 
 
 
Bed Bath & Beyond, Ross Dress for Less, Best Buy
The Whittaker
 
Seattle-Tacoma-Bellevue, WA
 
100.0
%
 

 
63,663

 
Whole Foods
 
 
Washington Total:
 
 
 
 
 
 
 
808,264

 
 
 
 
Total Operating Properties
 
 
 
 
 
32,477,618

 
 
 
 
New Development
 
 
 
 
 
 
 
 
 
 
Virginia
 
 
 
 
 
 
 
 
 
 
 
 
Centro Arlington
 
Washington-Arlington-Alexandria, DC-VA-MD-WV
 
90.0
%
 
(1)(2)(3)
 
72,294

 
Harris Teeter
 
 
West Alex
 
Washington-Arlington-Alexandria, DC-VA-MD-WV
 
100.0
%
 
 (2)
 
—

 
Harris Teeter
 
 
Virginia Total:
 
 
 
 
 
 
 
72,294

 
 
 
 
Total New Developments
 
 
 
 
 
72,294

 
 
 
 
Operating & New Development Properties
 
 
 
 
 
32,549,912

 
 
 
 
___________________
(1)
Denotes property is held by a real estate joint venture or partnership; however, the gross leasable area square feet figures include our partners’ ownership interest in the property and property owned by others.
(2)
Denotes property currently under development.
(3)
Denotes properties that are not consolidated under generally accepted accounting principles.
(4)
Denotes Hilltop Village Center, a 50/50 Joint Venture reflecting current 100% economics to WRI.
(5)
River Oaks Shopping Center - West includes The Driscoll at River Oaks which is under development.
(6)
McAllen Center formerly reported as South 10th St. HEB.
(7)
CBSA represents the Core Based Statistical Area.
ITEM 3. Legal Proceedings
We are involved in various matters of litigation arising in the normal course of business. While we are unable to predict the amounts involved, our management and counsel believe that when such litigation is resolved, our resulting liability, if any, will not have a material effect on our consolidated financial statements.
ITEM 4. Mine Safety Disclosures
Not applicable.

21
Table of Contents

PART II
ITEM 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities
Our common shares are listed and traded on the New York Stock Exchange under the symbol “WRI.” As of February 21, 2020, the number of holders of record of our common shares was 1,651.
Securities Authorized for Issuance under Equity Compensation Plans
The following table summarizes the equity compensation plans under which our common shares may be issued as of December 31, 2019:
Plan category
 
Number of shares to be issued upon exercise of outstanding options, warrants and rights
 
Weighted average exercise price of outstanding options, warrants and rights
 
Number of shares remaining available for future issuance under equity compensation plans
Equity compensation plans approved by shareholders
 
207,416
 
$23.84
 
952,877
Equity compensation plans not approved by shareholders
 
—
 
—
 
—
Total
 
207,416
 
$23.84
 
952,877

22
Table of Contents

Performance Graph
The graph and table below provides an indicator of cumulative total shareholder returns for us as compared with the S&P 500 Stock Index and the FTSE NAREIT Equity Shopping Centers Index, weighted by market value at each measurement point. The graph assumes that on December 31, 2014, $100 was invested in our common shares and that all dividends were reinvested by the shareholder.
Comparison of Five Year Cumulative Return
wri-2019123_chartx01077a12.jpg
*$100 invested on December 31, 2014 in stock or index, including reinvestment of dividends.
Fiscal year ending December 31.
Source: SNL Financial LC
 
2015
 
2016
 
2017
 
2018
 
2019
Weingarten Realty Investors
$
103.18

 
$
111.00

 
$
109.40

 
$
92.03

 
$
122.49

S&P 500 Index
101.38

 
113.51

 
138.29

 
132.23

 
173.86

FTSE NAREIT Equity Shopping Centers Index
104.72

 
108.57

 
96.23

 
82.23

 
102.81

There can be no assurance that our share performance will continue into the future with the same or similar trends depicted in the graph above. We do not make or endorse any predications as to future share performance.
Issuer Purchases of Equity Securities
We have a $200 million share repurchase plan. Under this plan, we may repurchase common shares from time-to-time in open-market or in privately negotiated purchases. The timing and amount of any shares repurchased will be determined by management based on its evaluation of market conditions and other factors. The repurchase plan may be suspended or discontinued at any time, and we have no obligations to repurchase any amount of our common shares under the plan. As of the date of this filing, $181.5 million of common shares remained available to be repurchased under the plan. Also, for the three months ended December 31, 2019, no common shares were surrendered or deemed surrendered to us to satisfy any employees' tax withholding obligations in connection with the vesting and/or exercise of awards under our equity-based compensation plans.

23
Table of Contents

ITEM 6. Selected Financial Data
The following table sets forth our selected consolidated financial data and should be read in conjunction with “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the Consolidated Financial Statements and accompanying Notes in “Item 8. Financial Statements and Supplementary Data” and the financial schedules included elsewhere in this Form 10-K.
 
(Amounts in thousands, except per share amounts)
Year Ended December 31,
 
2019 (1)
 
2018 (1)
 
2017
 
2016
 
2015
Operating Data:
 
 
 
 
 
 
 
 
 
Revenues
$
486,625

 
$
531,147

 
$
573,163

 
$
549,555

 
$
512,844

Operating expenses
327,095

 
356,820

 
395,356

 
354,453

 
327,993

Interest expense, net
57,601

 
63,348

 
80,326

 
83,003

 
87,783

Interest and other income, net
11,003

 
2,807

 
7,532

 
1,910

 
4,406

Gain on sale of property
189,914

 
207,865

 
218,611

 
100,714

 
59,621

Income before income taxes and equity in earnings of real estate joint ventures and partnerships, net
302,846

 
321,651

 
323,624

 
214,723

 
161,095

(Provision) benefit for income taxes
(1,040
)
 
(1,378
)
 
17

 
(6,856
)
 
(52
)
Equity in earnings of real estate joint ventures and partnerships, net
20,769

 
25,070

 
27,074

 
20,642

 
19,300

Gain on sale and acquisition of real estate joint venture and partnership interests
—

 
—

 
—

 
48,322

 
879

Net income
322,575

 
345,343

 
350,715

 
276,831

 
181,222

Less: net income attributable to noncontrolling interests
(7,140
)
 
(17,742
)
 
(15,441
)
 
(37,898
)
 
(6,870
)
Dividends and redemption costs of preferred shares
—

 
—

 
—

 
—

 
(13,517
)
Net income attributable to common shareholders
$
315,435

 
$
327,601

 
$
335,274

 
$
238,933

 
$
160,835

Per Share Data - Basic:
 
 
 
 
 
 
 
 
 
Net income attributable to common shareholders
$
2.47

 
$
2.57

 
$
2.62

 
$
1.90

 
$
1.31

Weighted average number of shares - basic
127,842

 
127,651

 
127,755

 
126,048

 
123,037

Per Share Data - Diluted:
 
 
 
 
 
 
 
 
 
Net income attributable to common shareholders
$
2.44

 
$
2.55

 
$
2.60

 
$
1.87

 
$
1.29

Weighted average number of shares - diluted
130,116

 
128,441

 
130,071

 
128,569

 
124,329

Balance Sheet Data:
 
 
 
 
 
 
 
 
 
Property before accumulated depreciation
$
4,145,249

 
$
4,105,068

 
$
4,498,859

 
$
4,789,145

 
$
4,262,959

Total assets
3,937,934

 
3,826,961

 
4,196,639

 
4,426,928

 
3,901,945

Debt, net
1,732,338

 
1,794,684

 
2,081,152

 
2,356,528

 
2,113,277

Total equity
1,876,160

 
1,750,699

 
1,809,842

 
1,716,896

 
1,545,010

Other Data:
 
 
 
 
 
 
 
 
 
Cash flows from operating activities
$
270,050

 
$
285,960

 
$
269,758

 
$
252,411

 
$
245,435

Cash flows from investing activities
(16,026
)
 
432,954

 
298,992

 
(366,172
)
 
(197,132
)
Cash flows from financing activities
(274,870
)
 
(664,111
)
 
(588,695
)
 
129,798

 
(126,248
)
Cash dividends per common share
1.58

 
2.98

 
2.29

 
1.46

 
1.38

NAREIT funds from operations attributable to common shareholders - basic (2)
271,608

 
307,934

 
308,517

 
291,656

 
258,126

NAREIT funds from operations attributable to common shareholders - diluted (2)
273,720

 
307,934

 
311,601

 
293,652

 
260,029

Core funds from operations attributable to common shareholders - diluted (2)
273,730

 
292,515

 
318,446

 
300,894

 
274,772

___________________
(1)
See Note 2 in Item 8 for newly issued accounting pronouncements that were adopted using a modified retrospective approach during the respective year and may affect the comparability of the above selected financial information.
(2)
See Item 7 for the definition of funds from operations attributable to common shareholders for these non-GAAP measures.

24
Table of Contents

ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with the consolidated financial statements and notes thereto and the comparative summary of selected financial data appearing elsewhere in this report. Historical results and trends which might appear should not be taken as indicative of future operations. Our results of operations and financial condition, as reflected in the accompanying consolidated financial statements and related footnotes, are subject to management’s evaluation and interpretation of business conditions, retailer performance, changing capital market conditions and other factors which could affect the ongoing viability of our tenants. Discussion regarding our results of operations for fiscal year 2018 as compared to fiscal year 2017 is included in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on February 28, 2019.
Executive Overview
Weingarten Realty Investors is a REIT organized under the Texas Business Organizations Code. We, and our predecessor entity, began the ownership of shopping centers and other commercial real estate in 1948. Our primary business is leasing space to tenants in the shopping centers we own or lease. These centers may be mixed-use properties that have both retail and residential components. We also provide property management services for which we charge fees to either joint ventures where we are partners or other outside owners.
We operate a portfolio of rental properties, primarily neighborhood and community shopping centers, totaling approximately 32.5 million square feet of gross leasable area that is either owned by us or others. We have a diversified tenant base with our largest tenant comprising only 2.6% of base minimum rental revenues during 2019.
At December 31, 2019, we owned or operated under long-term leases, either directly or through our interest in real estate joint ventures or partnerships, a total of 170 properties, which are located in 16 states spanning the country from coast to coast.
We also owned interests in 23 parcels of land held for development that totaled approximately 11.9 million square feet at December 31, 2019.
We had approximately 3,800 leases with 2,900 different tenants at December 31, 2019. Rental revenue is primarily derived from operating leases with terms of 10 years or less, and may include multiple options, upon tenant election, to extend the lease term in increments up to five years. Many of our leases have increasing minimum rental rates during the terms of the leases through escalation provisions. In addition, the majority of our leases provide for variable rental revenues, such as reimbursements of real estate taxes, maintenance and insurance and may include an amount based on a percentage of the tenants’ sales. Our anchor tenants are supermarkets, value-oriented apparel/discount stores and other retailers or service providers who generally sell basic necessity-type goods and services. Although there is a broad shift in shopping patterns, including internet shopping that continues to affect our tenants, we believe our anchor tenants, most of which have adopted omni-channel models which help drive foot traffic, combined with convenient locations, attractive and well-maintained properties, high quality retailers and a strong tenant mix, should lessen the effects of these conditions and maintain the viability of our portfolio.
Our goal is to remain a leader in owning and operating top-tier neighborhood and community shopping centers and mixed-use properties in certain markets of the United States. Our strategic initiatives include: (1) owning quality shopping centers in preferred locations that attract strong tenants, (2) growing net income from our existing portfolio by increasing occupancy and rental rates, (3) raising net asset value and cash flow through quality acquisitions and new developments, (4) continuously redeveloping our existing shopping centers to increase cash flow and enhance the value of the centers and (5) maintaining a strong, flexible consolidated balance sheet and a well-managed debt maturity schedule. We believe these initiatives will keep our portfolio of properties among the strongest in our sector. Due to current capitalization rates in the market along with the uncertainty of changes in interest rates and various other market conditions, we intend to continue to be very prudent in our evaluation of all new investment opportunities. We believe the pricing of assets that no longer meet our ownership criteria remains reasonably stable while the price of our common shares remains below our net asset value. Given these conditions, we have been focused on dispositions of properties with risk factors that impact our willingness to own them going forward, and although we intend to continue with this strategy, our dispositions are expected to decrease to a normalized level in 2020. We intend to utilize the proceeds from dispositions to, among other things, fund acquisitions along with both new development and redevelopment projects.

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As we discussed above, we continuously recycle non-core operating centers that no longer meet our ownership criteria and that will provide capital for growth opportunities. During 2019, we disposed of real estate assets, which were owned by us either directly or through our interest in real estate joint ventures or partnerships, with our share of aggregate gross sales proceeds totaling $451.7 million. We have approximately $96 million of dispositions currently under contracts or letters of intent; however, there are no assurances that these transactions will close at such prices or at all. For 2020, we expect the volume of dispositions will significantly decrease from those in 2019, and we anticipate that our normal disposition recycling program will range from $100 million to $150 million.
We intend to continue to actively seek acquisition properties that meet our return hurdles and to actively evaluate other opportunities as they enter the market. Due to the significant amount of capital available in the market, it has been difficult to participate at price points that meet our investment criteria. During 2019, we acquired six centers and other property, of which five are grocery-anchored shopping centers and one is in a 51% unconsolidated real estate joint venture, adding 828,000 square feet to the portfolio with our share of the aggregate gross purchase price totaling $246.4 million. For 2020, we expect to complete acquisition investments in the range of $100 million to $150 million; however, there are no assurances that this will actually occur.
We intend to continue to focus on identifying new development projects as another source of growth, as well as continue to look for redevelopment opportunities. The opportunities for additional new development projects are limited at this time primarily due to a lack of demand for new retail space. During 2019, we invested $150.4 million in two mixed-use new development projects that are partially or wholly owned and a 30-story, high-rise residential tower at our River Oaks Shopping Center in Houston, Texas, and we invested $19.2 million in 11 redevelopment projects that were partially or wholly owned. During 2019, we completed eight redevelopment projects, which added approximately 101,000 square feet to the portfolio with an incremental investment totaling $26.7 million. For 2020, we expect to invest in new development and redevelopments in the range of $75 million to $125 million, but we can give no assurances that this will actually occur.
We strive to maintain a strong, conservative capital structure which should provide ready access to a variety of attractive long and short-term capital sources. We carefully balance lower cost, short-term financing with long-term liabilities associated with acquired or developed long-term assets. We continue to look for transactions that will strengthen our consolidated balance sheet and further enhance our access to various sources of capital, while reducing our cost of capital. During 2019, we repaid a $50 million secured fixed-rate mortgage with a 7% interest rate. Additionally, proceeds from our disposition program and cash generated from operations further strengthened our balance sheet in 2019. Due to the variability in the capital markets, there can be no assurance that favorable pricing and accessibility will be available in the future.
Operational Metrics
In assessing the performance of our centers, management carefully monitors various operating metrics of the portfolio. As a result of our strong leasing activity and low tenant fallout, the operating metrics of our portfolio remained strong in 2019 as we focused on increasing rental rates and same property net operating income ("SPNOI" and see Non-GAAP Financial Measures for additional information). Our portfolio delivered solid operating results with:
•
occupancy of 95.2% at December 31, 2019;
•
an increase of 3.3% in SPNOI that includes redevelopments for the twelve months ended December 31, 2019 over the same period of 2018; and
•
rental rate increases of 16.3% for new leases and 10.2% for renewals during the three months ended December 31, 2019.

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Below are performance metrics associated with our signed occupancy, SPNOI growth and leasing activity on a pro rata basis:
 
December 31,
 
2019
 
2018
Anchor (space of 10,000 square feet or greater)
97.7
%
 
96.6
%
Non-Anchor
90.8
%
 
90.6
%
Total Occupancy
95.2
%
 
94.4
%
 
Three Months Ended
December 31, 2019
 
Twelve Months Ended
December 31, 2019
SPNOI Growth (including Redevelopments) (1)
2.5
%
 
3.3
%
_______________
(1)
See Non-GAAP Financial Measures for a definition of the measurement of SPNOI and a reconciliation to net income attributable to common shareholders within this section of Item 7.
 
Number
of
Leases
 
Square
Feet
('000's)
 
Average
New
Rent per
Square
Foot ($)
 
Average
Prior
Rent per
Square
Foot ($)
 
Average Cost
of Tenant
Improvements
per Square
Foot ($)
 
Change in
Base Rent
on Cash
Basis
Leasing Activity:
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended December 31, 2019
 
 
 
 
 
 
New leases (1)
49

 
160

 
$
21.73

 
$
18.69

 
$
60.86

 
16.3
%
Renewals
109

 
434

 
19.75

 
17.93

 
—

 
10.2
%
Not comparable spaces
37

 
153

 
 
 
 
 
 
 
 
Total
195

 
747

 
$
20.29

 
$
18.14

 
$
16.43

 
11.9
%
 
 
 
 
 
 
 
 
 
 
 
 
Twelve Months Ended December 31, 2019
 
 
 
 
 
 
New leases (1)
172

 
503

 
$
25.34

 
$
21.94

 
$
43.99

 
15.5
%
Renewals
483

 
2,292

 
17.52

 
16.64

 
—

 
5.2
%
Not comparable spaces
128

 
509

 
 
 
 
 
 
 
 
Total
783

 
3,304

 
$
18.92

 
$
17.60

 
$
7.92

 
7.5
%
_______________
(1)
Average external lease commissions per square foot for the three and twelve months ended December 31, 2019 were $6.82 and $5.91, respectively.
Changing shopping habits, driven by rapid expansion of internet-driven procurement, led to increased financial problems for many retailers, which had a negative impact on the retail real estate sector. We continue to monitor the effects of these trends, including the impact of retail customer spending over the long-term. We believe the desirability of our physical locations, the significant diversification of our portfolio, both geographically and by tenant base, and the quality of our portfolio, along with its leading retailers and service providers that sell primarily grocery and basic necessity-type goods and services, position us well to mitigate the impact of these changes. Additionally, most retailers have implemented omni-channel models that integrate on-line shopping with in-store experiences that has further reinforced the need for bricks and mortar locations. Despite some tenant bankruptcies, we continue to believe there is retailer demand for quality space within strong, strategically located centers.

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While we anticipate occupancy in 2020 to increase slightly from 2019, we may experience some fluctuations due to announced bankruptcies and the repositioning of those spaces in the future. A reduction in the availability of quality retail space, as well as continued retailer demand, contributed to the increase in overall rental rates on a same-space basis as we completed new leases and renewed existing leases; however, the magnitude of these increases decreased in comparison to previous years due to, among other factors, a shift in negotiating leverage to the tenant. We expect rental rates to continue to increase; however, we also expect the funding of tenant improvements and allowances will increase as well, and the variability in the mix of leasing transactions as to size of space, market, use and other factors may impact the magnitude of these increases, both positively and negatively. Leasing volume is anticipated to fluctuate due to the uncertainty in tenant fallouts related to bankruptcies and tenant non-renewals. Our expectation is that SPNOI growth including redevelopments will average between 1.5% to 2.5% for 2020 assuming no significant tenant bankruptcies, although there are no assurances that this will occur.
New Development/Redevelopment
At December 31, 2019, we had two mixed-use projects in the Washington D. C. market and a 30-story, high-rise residential tower at our River Oaks Shopping Center in Houston that were in various stages of development and are partially or wholly owned. We have funded $368.4 million through December 31, 2019 on these projects, and we estimate our aggregate net investment upon completion to be $485.0 million. Overall, the average projected stabilized return on investment for these multi-use properties, that include retail and residential components, is expected to approximate 5.5% upon completion.
We have 11 redevelopment projects in which we plan to invest approximately $74.2 million. Upon completion, the average projected stabilized return on our incremental investment on these redevelopment projects is expected to be between 8.0% and 12.0%.
We had approximately $40.7 million in land held for development at December 31, 2019 that may either be developed or sold. While we are experiencing some interest from retailers and other market participants in our land held for development, opportunities for economically viable developments remain limited. We intend to continue to pursue additional development and redevelopment opportunities in multiple markets; however, finding the right opportunities remains challenging.
Acquisitions
Acquisitions are a key component of our long-term growth strategy. The availability of quality acquisition opportunities remains sporadic in our targeted markets. Intense competition, along with a decline in the volume of high-quality core properties on the market, has driven pricing to very high levels. We intend to remain disciplined in approaching these opportunities, pursuing only those that provide appropriate risk-adjusted returns.
Dispositions
Dispositions are also a key component of our ongoing management process where we selectively prune properties from our portfolio that no longer meet our geographic or growth targets. Dispositions provide capital, which may be recycled into properties that are high barrier-to-entry locations within high growth metropolitan markets, and thus have higher long-term growth potential. Additionally, proceeds from dispositions may be used to reduce outstanding debt, further deleveraging our consolidated balance sheet, to repurchase our common shares and/or debt, dependent upon market prices, or to fund new development and redevelopment projects.
Summary of Critical Accounting Policies
Our discussion and analysis of financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and contingencies as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. We evaluate our assumptions and estimates on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies require more significant judgments and estimates used in the preparation of our consolidated financial statements.

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Real Estate Joint Ventures and Partnerships
To determine the method of accounting for real estate joint ventures and partnerships, management determines whether an entity is a variable interest entity (“VIE”) and, if so, determines which party is the primary beneficiary by analyzing whether we have both the power to direct the entity’s significant economic activities and the obligation to absorb potentially significant losses or receive potentially significant benefits. Significant judgments and assumptions inherent in this analysis include the design of the entity structure, the nature of the entity’s operations, future cash flow projections, the entity’s financing and capital structure, and contractual relationships and terms. We consolidate a VIE when we have determined that we are the primary beneficiary.
Primary risks associated with our involvement with our VIEs include the potential funding of the entities’ debt obligations or making additional contributions to fund the entities’ operations or capital activities.
Non-variable interest real estate joint ventures and partnerships over which we have a controlling financial interest are consolidated in our consolidated financial statements. In determining whether we have a controlling financial interest, we consider factors such as ownership interest, authority to make decisions, kick-out rights and substantive participating rights. Real estate joint ventures and partnerships where we do not have a controlling financial interest, but have the ability to exercise significant influence, are accounted for using the equity method.
Management continually analyzes and assesses reconsideration events, including changes in the factors mentioned above, to determine if the consolidation treatment remains appropriate. Decisions regarding consolidation of real estate joint ventures and partnerships frequently require significant judgment by our management. Errors in the assessment of consolidation could result in material changes to our consolidated financial statements.
Impairment
Our property, including right-of-use assets, is reviewed for impairment if events or changes in circumstances indicate that the carrying amount of the property, any capitalized costs and any identifiable intangible assets, may not be recoverable.
If such an event occurs, a comparison is made of the current and projected operating cash flows of each such property into the foreseeable future, with consideration of applicable holding periods, on an undiscounted basis to the carrying amount of such property. If we determine the carrying amount is not recoverable, our basis in the property is reduced to its estimated fair value to reflect impairment in the value of the asset. Fair values are determined by management utilizing cash flow models, market capitalization rates and market discount rates, or by obtaining third-party broker or appraisal estimates.
We review current economic considerations each reporting period, including the effects of tenant bankruptcies, the suspension of tenant expansion plans for new development projects, declines in real estate values and any changes to plans related to our new development projects, including land held for development, to identify properties where we believe market values may be deteriorating. Determining whether a property is impaired and, if impaired, the amount of write-down to fair value requires a significant amount of judgment by management and is based on the best information available to management at the time of evaluation. The evaluations used in these analyses could result in incorrect estimates when determining carrying values that could be material to our consolidated financial statements.
Our investment in real estate joint ventures and partnerships is reviewed for impairment each reporting period. We evaluate various factors, including operating results of the investee, our ability and intent to hold the investment and our views on current market and economic conditions, when determining if there is a decline in the investment value. We will record an impairment charge if we determine that a decline in the estimated fair value of an investment below its carrying amount is other than temporary. The ultimate realization of impairment losses is dependent on a number of factors, including the performance of each investment and market conditions. A considerable amount of judgment by our management is used in this evaluation and may have a significant impact on the resulting factors analyzed for these purposes.

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Table of Contents

Results of Operations
Comparison of the Year Ended December 31, 2019 to the Year Ended December 31, 2018
The following table is a summary of certain items in income from continuing operations from our Consolidated Statements of Operations, which we believe represent items that significantly changed during 2019 as compared to the same period in 2018:
 
Year Ended December 31,
 
2019
 
2018
 
Change
 
% Change
Revenues
$
486,625

 
$
531,147

 
$
(44,522
)
 
(8.4
)%
Depreciation and amortization
135,674

 
161,838

 
(26,164
)
 
(16.2
)
Real estate taxes, net
60,813

 
69,268

 
(8,455
)
 
(12.2
)
Impairment loss
74

 
10,120

 
(10,046
)
 
(99.3
)
General and administrative expenses
35,914

 
25,040

 
10,874

 
43.4

Interest expense, net
57,601

 
63,348

 
(5,747
)
 
(9.1
)
Interest and other income, net
11,003

 
2,807

 
8,196

 
292.0

Gain on sale of property
189,914

 
207,865

 
(17,951
)
 
(8.6
)
Equity in earnings of real estate joint ventures and partnerships, net
20,769

 
25,070

 
(4,301
)
 
(17.2
)
Revenues
The decrease in revenues of $44.5 million is attributable primarily to the $47.5 million impact of dispositions, a decrease of $9.1 million from the write-off of lease intangibles due to the termination of tenant leases, which includes a write-off of a $10.1 million below-market lease intangible in 2018, and $4.3 million of revenues for real estate taxes paid directly by our tenants in 2018 that can no longer be recorded due to the adoption of the new lease accounting standard on January 1, 2019. Partially offsetting this decrease is revenue from acquisitions, as well as increases in rental rates and occupancy at our existing portfolio, new developments and redevelopments, which contributed $16.4 million.
Depreciation and Amortization
The decrease in depreciation and amortization of $26.2 million is attributable primarily to the $13.1 million write-off of an in-place lease intangible from the termination of a tenant lease in 2018 and disposition activities of $15.1 million, which is partially offset by an increase of $2.0 million primarily from acquisitions.
Real Estate Taxes, net
The decrease in real estate taxes, net of $8.5 million is attributable primarily to dispositions and $4.3 million of real estate taxes paid directly by our tenants in 2018 that can no longer be recorded due to the adoption of the new lease accounting standard on January 1, 2019.
Impairment Loss
The decrease in impairment loss of $10.0 million is attributable primarily to losses recognized in 2018 associated with three centers that were sold.
General and Administrative Expenses
The increase in general and administrative expenses of $10.9 million is attributable primarily to a reduction in capitalized indirect leasing costs of $10.2 million resulting from the adoption of the new lease accounting standard on January 1, 2019.

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Interest Expense, net
Net interest expense decreased $5.7 million or 9.1%. The components of net interest expense were as follows (in thousands): 
 
Year Ended December 31,
 
2019
 
2018
Gross interest expense
$
67,993

 
$
71,899

Gain on extinguishment of debt including related swap activity
—

 
(3,759
)
Amortization of debt deferred costs, net
3,521

 
3,546

Over-market mortgage adjustment
(327
)
 
(400
)
Capitalized interest
(13,586
)
 
(7,938
)
Total
$
57,601

 
$
63,348

The decrease in net interest expense is attributable primarily to a reduction in the weighted average debt outstanding due to the pay down of debt with proceeds from dispositions and cash generated from operations. For the year ended December 31, 2019, the weighted average debt outstanding was $1.8 billion at a weighted average interest rate of 4.0% as compared to $1.9 billion outstanding at a weighted average interest rate of 4.0% in the same period of 2018. Additionally, net interest expense was impacted by an increase in capitalized interest of $5.6 million associated with an increase in new development investment, and a $3.8 million gain on extinguishment of debt in the first quarter of 2018, including the effect of a swap termination.
Interest and Other Income, net
The increase of $8.2 million in interest and other income, net is attributable primarily to a fair value increase of $6.8 million for assets held in a grantor trust related to deferred compensation and an increase of $1.4 million associated primarily with interest income from our short-term cash investments and other investments.
Gain on Sale of Property
The decrease of $18.0 million in gain on sale of property is attributable to the disposition of 15 centers and other property during 2019 as compared to 21 centers and other property in 2018.
Equity in Earnings of Real Estate Joint Ventures and Partnerships, net
The decrease of $4.3 million in equity in earnings of real estate joint ventures and partnerships, net is attributable primarily to impairment of interests in two joint ventures totaling $3.1 million.
Effects of Inflation
We have structured our leases in such a way as to remain largely unaffected should significant inflation occur. Many leases provide for increasing minimum rental rates during the terms of the leases through escalation provisions. In addition, many of our leases are for terms of less than 10 years, allowing us to adjust rental rates to changing market conditions when the leases expire. Some of our leases also contain percentage rent provisions whereby we receive increased rentals based on the tenants’ gross sales. Most of our leases also require the tenants to pay their proportionate share of operating expenses and real estate taxes, thereby reducing our exposure to increases in costs and operating expenses resulting from inflation. Under the current economic climate, inflation has been kept in check by the Federal Reserve and looks to remain low for the foreseeable future.
Economic Conditions
The U.S. is currently in a long economic expansion. At the end of 2019, certain financial indicators, such as yield curves, have declined or weakened somewhat, while other economic indicators, such as employment, remain strong. We believe that regardless of any mixed messages provided by the various soft-data trends, the recent trend by the U.S. leading economic indicators still points to continuing, if moderate, growth in the national economy. Our focus on supermarket-anchored centers in densely populated major metropolitan areas should position our portfolio to take advantage of a growing economy, and weather any downturns should the economy falter.

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Table of Contents

With respect to Houston and other markets that are energy dependent, the economic recovery from the oil downturn of 2015 to 2017 continued into its second year in 2019; however, future disruptions could impact the market in the long-term. The outlook for Houston’s economy specifically remains positive due primarily to economic diversity. Job growth throughout the Sunbelt is strong. Metros are becoming more economically diverse, with cities actively growing their indigenous, non-energy sectors, like medical and high-tech. Houston has been particularly focused on growing its data science, digital tech, and biotech clusters. Our presence in healthy, resilient metropolitan areas has been a part of our strategy to ensure our continued healthy, resilient property portfolio.
The trade areas for our portfolio of centers have seen robust growth in personal income and home values over the past year. As strengthening retail fundamentals drive demand for investments in top-tier retail real estate, we continue to dedicate internal resources to identify and evaluate available assets in our markets so that we may purchase the best assets and properties with the strongest upside potential. Also, we continue to look for redevelopment opportunities within our existing portfolio by repositioning our anchor tenants and new development opportunities to spur growth.
Capital Resources and Liquidity
Our primary operating liquidity needs are paying our common share dividends, maintaining and operating our existing properties, paying our debt service costs, excluding debt maturities, and funding capital expenditures. Under our 2020 business plan, cash flows from operating activities are expected to meet these planned capital needs.
The primary sources of capital for funding any debt maturities, acquisitions, new developments and redevelopments are our excess cash flow generated by our operating properties; credit facilities; proceeds from both secured and unsecured debt issuances; proceeds from equity issuances; and cash generated from the sale of property or interests in real estate joint ventures and partnerships and the formation of joint ventures. Amounts outstanding under the unsecured revolving credit facility are retired as needed with proceeds from the issuance of long-term debt, equity, cash generated from the disposition of properties and cash flow generated by our operating properties.
As of December 31, 2019, we had available borrowing capacity of $497.9 million under our unsecured revolving credit facility, and our debt maturities for 2020 total $22.7 million. As of December 31, 2019, we had cash and cash equivalents available of $41.5 million. Currently, we anticipate our disposition activities to continue, albeit at a lower rate than previous periods, and estimate between $100 million to $150 million in dispositions for 2020.
We believe net proceeds from planned capital recycling, combined with our available capacity under the revolving credit and short-term borrowing facilities, will provide adequate liquidity to fund our capital needs, including acquisitions, redevelopment and new development activities and, if necessary, special dividends. In the event our capital recycling program does not progress as expected, we believe other debt and equity alternatives are available to us. Although external market conditions are not within our control, we do not currently foresee any impediments to our entering the capital markets if needed.
During 2019, our share of aggregate gross sales proceeds from dispositions of centers owned by us, either directly or through our interest in real estate joint ventures or partnerships, totaled $451.7 million. Operating cash flows from assets disposed are included in net cash from operating activities in our Consolidated Statements of Cash Flows, while proceeds from these disposals are included as investing activities.
We have non-recourse debt secured by acquired or developed properties held in several of our real estate joint ventures and partnerships. At December 31, 2019, off-balance sheet mortgage debt for our unconsolidated real estate joint ventures and partnerships totaled $264.8 million, of which our pro rata ownership is $86.8 million. Scheduled principal mortgage payments on this debt, excluding deferred debt costs and non-cash related items totaling $(.6) million, at 100% are as follows (in millions): 
2020
$
3.1

2021
173.0

2022
2.1

2023
2.2

2024
2.3

Thereafter
82.7

Total
$
265.4


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We generally have the right to sell or otherwise dispose of our assets except in certain cases where we are required to obtain our joint venture partners’ consent or a lender's consent for assets held in special purpose entities.
Investing Activities
Acquisitions
During 2019, we acquired six grocery-anchored shopping centers and other property, one of which is in a 51% unconsolidated real estate joint venture, with our share of the aggregate gross purchase price totaling $246.4 million.
Dispositions
During 2019, we sold 15 centers and other property, including real estate assets owned through our interest in unconsolidated real estate joint ventures and partnerships. Our share of aggregate gross sales proceeds from these transactions totaled $451.7 million and generated our share of the gains of approximately $190.8 million.
New Development/Redevelopment
At December 31, 2019, we had two mixed-use projects and a 30-story, high-rise residential tower at our River Oaks Shopping Center under development with approximately .2 million of total square footage for retail and 962 residential units, that were partially or wholly owned. We have funded $368.4 million through December 31, 2019 on these projects. Upon completion, we expect our aggregate net investment in these multi-use projects to be $485.0 million.
At December 31, 2019, we had 11 redevelopment projects in which we plan to invest approximately $74.2 million. Upon completion, the average projected stabilized return on our incremental investment on these redevelopment projects is expected to be between 8.0% and 12.0%. During 2019, we completed eight redevelopment projects, which added approximately 101,000 square feet to the portfolio with an incremental investment totaling $26.7 million.
We typically finance our new development and redevelopment projects with proceeds from our unsecured revolving credit facility, as it is our general practice not to use third party construction financing. Management monitors amounts outstanding under our unsecured revolving credit facility and periodically pays down such balances using cash generated from operations, from debt issuances, from common and preferred share issuances and from the disposition of properties.
Capital Expenditures
Capital expenditures for additions to the existing portfolio, acquisitions, tenant improvements, new development, redevelopment and our share of investments in unconsolidated real estate joint ventures and partnerships are as follows (in thousands):
 
Year Ended December 31,
 
2019
 
2018
Acquisitions
$
245,814

 
$
—

New Development
149,080

 
103,102

Redevelopment
25,342

 
38,657

Tenant Improvements
30,072

 
27,560

Capital Improvements
20,340

 
20,825

Other
5,991

 
4,745

Total
$
476,639

 
$
194,889

The increase in capital expenditures is attributable primarily to the acquisition of six centers and the net increased activity from our new development and redevelopment centers.
For 2020, we anticipate our acquisitions to total approximately $100 million to $150 million. Our new development and redevelopment investment for 2020 is estimated to be approximately $75 million to $125 million. For 2020, capital and tenant improvements is expected to be consistent with 2019 expenditures. No assurances can be provided that our planned activities will occur. Further, we have entered into commitments aggregating $98.5 million comprised principally of construction contracts which are generally due in 12 to 36 months and anticipated to be funded under our unsecured revolving credit facility or through the use of excess cash.

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Table of Contents

Capital expenditures for additions described above relate to cash flows from investing activities as follows (in thousands):
 
Year Ended December 31,
 
2019
 
2018
Acquisition of real estate and land, net
$
218,849

 
$
1,265

Development and capital improvements
183,188

 
155,528

Real estate joint ventures and partnerships - Investments
74,602

 
38,096

Total
$
476,639

 
$
194,889

Capitalized soft costs, including payroll and other general and administrative costs, interest, insurance and real estate taxes, totaled $22.9 million and $16.2 million for the year ended December 31, 2019 and 2018, respectively.
Financing Activities
Debt
Total debt outstanding was $1.7 billion at December 31, 2019 and consisted of $17.4 million, which bears interest at variable rates, and $1.7 billion, which bears interest at fixed rates. Additionally, of our total debt, $281.6 million was secured by operating centers while the remaining $1.5 billion was unsecured.
At December 31, 2019, we have a $500 million unsecured revolving credit facility, which expires in March 2024 and provides borrowing rates that float at a margin over LIBOR plus a facility fee. At December 31, 2019, the borrowing margin and facility fee, which are priced off a grid that is tied to our senior unsecured credit ratings, were 82.5 and 15 basis points, respectively. The facility also contains a competitive bid feature that allows us to request bids for up to $250 million. Additionally, an accordion feature allows us to increase the facility amount up to $850 million. As of February 21, 2020, we had no amounts outstanding, and the available balance was $497.9 million, net of $2.1 million in outstanding letters of credit.
At December 31, 2019, we have a $10 million unsecured short-term facility that we maintain for cash management purposes. The facility, which matures in March 2021, provides for fixed interest rate loans at a 30-day LIBOR rate plus borrowing margin, facility fee and an unused facility fee of 125, 10, and 5 basis points, respectively. As of February 21, 2020, we had no amounts outstanding under this facility.
During 2019, the maximum balance and weighted average balance outstanding under both facilities combined were $5.0 million and $.1 million, respectively, at a weighted average interest rate of 3.3%.
On July 1, 2019, we repaid a $50 million secured fixed-rate mortgage with a 7.0% interest rate with cash from our disposition proceeds.
Our five most restrictive covenants, composed from both our public debt and revolving credit facility, include debt to asset, secured debt to asset, fixed charge, unencumbered asset test and unencumbered interest coverage ratios. We are not aware of any non-compliance with our public debt and revolving credit facility covenants as of December 31, 2019.
Our most restrictive public debt covenant ratios, as defined in our indenture and supplemental indenture agreements, were as follows at December 31, 2019:
Covenant
 
Restriction
 
Actual
Debt to Asset Ratio
 
Less than 60.0%
 
35.9%
Secured Debt to Asset Ratio
 
Less than 40.0%
 
5.8%
Fixed Charge Ratio
 
Greater than 1.5
 
4.6
Unencumbered Asset Test
 
Greater than 150%
 
299.7%

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Equity
Common share dividends paid totaled $203.3 million for the year ended December 31, 2019. Our dividend payout ratio (as calculated as dividends paid on common shares divided by core funds from operations attributable to common shareholders - basic) for the year ended December 31, 2019 approximated 74.8% (see Non-GAAP Financial Measures for additional information). Our Board of Trust Managers approved a first quarter 2020 dividend of $.395 per common share.
We have a $200 million share repurchase plan. Under this plan, we may repurchase common shares from time-to-time in open-market or in privately negotiated purchases. The timing and amount of any shares repurchased will be determined by management based on its evaluation of market conditions and other factors. The repurchase plan may be suspended or discontinued at any time, and we have no obligations to repurchase any amount of our common shares under the plan. At December 31, 2019 and as of the date of this filing, $181.5 million of common shares remained available to be repurchased under this plan.
We have an effective universal shelf registration statement which expires in September 2020. We will continue to closely monitor both the debt and equity markets and carefully consider our available financing alternatives, including both public offerings and private placements.
Contractual Obligations
We have debt obligations related to our mortgage loans and unsecured debt, including any draws on our credit facilities and payments for our finance lease obligation. We have shopping centers that are subject to ground leases where a third party owns and has leased the underlying land to us to construct and/or operate a shopping center. The table below excludes obligations related to our new development projects because such amounts are not fixed or determinable, and commitments aggregating $98.5 million comprised principally of construction contracts which are generally due in 12 to 36 months. The following table summarizes our primary contractual obligations as of December 31, 2019 (in thousands):
 
Payments due by period
 
Total
 
Less than 1 year
 
1 - 3 years
 
3 - 5 years
 
More than 5 years
Mortgages and Notes Payable (1)
 
 
 
 
 
 
 
 
 
Unsecured Debt
$
1,648,315

 
$
53,375

 
$
404,456

 
$
604,889

 
$
585,595

Secured Debt
349,146

 
35,306

 
49,128

 
91,421

 
173,291

Lease Payments
109,660

 
2,696

 
5,161

 
4,616

 
97,187

Other Obligations (2)
94,698

 
65,485

 
29,213

 
 
 
 
Total Contractual Obligations
$
2,201,819

 
$
156,862

 
$
487,958

 
$
700,926

 
$
856,073

 
_______________
(1)
Includes our finance lease obligation (see Note 7 for additional information) and principal and interest with interest on variable-rate debt calculated using rates at December 31, 2019. Also, excludes a $57.4 million debt service guaranty liability. See Note 6 for additional information.
(2)
Other obligations include income and real estate tax payments, commitments associated with our secured debt and other employee payments. Included in 2020, is the estimated contribution to our pension plan, which meets or exceeds the minimum statutory funding requirements; however, we have the right to discontinue contributions at any time. See Note 15 for additional information.
Related to a development project in Sheridan, Colorado, we have provided a guaranty for the payment of any debt service shortfalls on tax increment revenue bonds issued in connection with the project. The Sheridan Redevelopment Agency ("Agency") issued Series A bonds used for an urban renewal project, of which $57.4 million remain outstanding at December 31, 2019. The bonds are to be repaid with incremental sales and property taxes and a public improvement fee ("PIF") to be assessed on current and future retail sales and, to the extent necessary, any amounts we may have to provide under a guaranty. The incremental taxes and PIF are to remain intact until the earlier of the payment of the bond liability in full or 2040. The debt associated with this guaranty has been recorded in our consolidated financial statements as of December 31, 2019.
Off Balance Sheet Arrangements
As of December 31, 2019, none of our off-balance sheet arrangements had a material effect on our liquidity or availability of, or requirement for, our capital resources. Letters of credit totaling $7.0 million were outstanding at December 31, 2019.

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We have entered into several unconsolidated real estate joint ventures and partnerships. Under many of these agreements, we and our joint venture partners are required to fund operating capital upon shortfalls in working capital. As operating manager of most of these entities, we have considered these funding requirements in our business plan.
Reconsideration events, including changes in variable interests, could cause us to consolidate these joint ventures and partnerships. We continuously evaluate these events as we become aware of them. Some triggers to be considered are additional contributions required by each partner and each partner’s ability to make those contributions. Under certain of these circumstances, we may purchase our partner’s interest. Our material unconsolidated real estate joint ventures are with entities which appear sufficiently stable; however, if market conditions were to deteriorate and our partners are unable to meet their commitments, there is a possibility we may have to consolidate these entities. If we were to consolidate all of our unconsolidated real estate joint ventures, we would continue to be in compliance with our debt covenants.
As of December 31, 2019, one unconsolidated real estate joint venture was determined to be a VIE through the issuance of a secured loan, since the lender had the ability to make decisions that could have a significant impact on the profitability of the entity. Our maximum risk of loss associated with this VIE was limited to $34.0 million at December 31, 2019. Also at December 31, 2019, another joint venture arrangement for the future development of a mixed-use project was determined to be a VIE. We are not the primary beneficiary as the substantive participating rights associated with the entity are shared, and we do not have the power to direct the significant activities of the entity. We anticipate future funding of approximately $9 million associated with the mixed-use project through 2020.
Non-GAAP Financial Measures
Certain of our key performance indicators are considered non-GAAP financial measures. Management uses these measures along with our GAAP financial statements in order to evaluate our operating results. We believe these additional measures provide users of our financial information additional comparable indicators of our industry, as well as, our performance.
Funds from Operations Attributable to Common Shareholders
Effective January 1, 2019, the National Association of Real Estate Investment Trusts ("NAREIT") defines NAREIT FFO as net income (loss) attributable to common shareholders computed in accordance with GAAP, excluding gains or losses from sales of certain real estate assets (including: depreciable real estate with land, land development property and securities), changes in control of real estate equity investments, and interests in real estate equity investments and their applicable taxes, plus depreciation and amortization related to real estate and impairment of certain real estate assets and in substance real estate equity investments, including our share of unconsolidated real estate joint ventures and partnerships. We calculate NAREIT FFO in a manner consistent with the NAREIT definition.
Management believes NAREIT FFO is a widely recognized measure of REIT operating performance which provides our shareholders with a relevant basis for comparison among other REITs. Management uses NAREIT FFO as a supplemental internal measure to conduct and evaluate our business because there are certain limitations associated with using GAAP net income by itself as the primary measure of our operating performance. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, management believes that the presentation of operating results for real estate companies that uses historical cost accounting is insufficient by itself. There can be no assurance that NAREIT FFO presented by us is comparable to similarly titled measures of other REITs.
We also present Core FFO as an additional supplemental measure as it is more reflective of the core operating performance of our portfolio of properties. Core FFO is defined as NAREIT FFO excluding charges and gains related to non-cash, non-operating assets and other transactions or events that hinder the comparability of operating results. Specific examples of items excluded from Core FFO include, but are not limited to, gains or losses associated with the extinguishment of debt or other liabilities and transactional costs associated with unsuccessful development activities.
NAREIT FFO and Core FFO should not be considered as alternatives to net income or other measurements under GAAP as indicators of operating performance or to cash flows from operating, investing or financing activities as measures of liquidity. NAREIT FFO and Core FFO do not reflect working capital changes, cash expenditures for capital improvements or principal payments on indebtedness.

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NAREIT FFO and Core FFO is calculated as follows (in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Net income attributable to common shareholders
$
315,435

 
$
327,601

 
$
335,274

Depreciation and amortization of real estate
134,772

 
160,679

 
166,125

Depreciation and amortization of real estate of unconsolidated real estate joint ventures and partnerships
12,152

 
12,454

 
14,020

Impairment of properties and real estate equity investments
3,144

 
9,969

 
12,247

Gain on sale of property, investments securities and interests in real estate equity investments
(190,597
)
 
(206,930
)
 
(217,659
)
Gain on dispositions of unconsolidated real estate joint ventures and partnerships
(1,380
)
 
(6,300
)
 
(6,187
)
Provision (benefit) for income taxes (1)
133

 
2,223

 
(711
)
Noncontrolling interests and other (2)
(2,051
)
 
8,238

 
5,408

NAREIT FFO – basic (3)
271,608

 
307,934

 
308,517

Income attributable to operating partnership units
2,112

 
—

 
3,084

NAREIT FFO – diluted (3)
273,720

 
307,934

 
311,601

Adjustments to Core FFO:
 
 
 
 
 
Provision (benefit) for income taxes (1)
—

 
(1,488
)
 
(729
)
Other impairment loss
—

 
134

 
3,031

Gain on extinguishment of debt including related swap activity
—

 
(3,131
)
 
—

Lease terminations
—

 
(10,023
)
 
—

Severance costs
—

 
—

 
1,378

Storm damage costs
—

 
—

 
1,822

Recovery of pre-development costs
—

 
—

 
(949
)
Other
10

 
(911
)
 
2,292

Core FFO – diluted
$
273,730

 
$
292,515

 
$
318,446

 
 
 
 
 
 
FFO weighted average shares outstanding – basic
127,842

 
127,651

 
127,755

Effect of dilutive securities:
 
 
 
 
 
Share options and awards
842

 
790

 
870

Operating partnership units
1,432

 
—

 
1,446

FFO weighted average shares outstanding – diluted
130,116

 
128,441

 
130,071

 
 
 
 
 
 
NAREIT FFO per common share – basic
$
2.12

 
$
2.41

 
$
2.41

 
 
 
 
 
 
NAREIT FFO per common share – diluted
$
2.10

 
$
2.40

 
$
2.40

 
 
 
 
 
 
Core FFO per common share – diluted
$
2.10

 
$
2.28

 
$
2.45

_______________
(1) The applicable taxes related to gains and impairments of operating and non-operating real estate assets.
(2) Related to gains, impairments and depreciation on operating properties and unconsolidated real estate joint ventures, where applicable.
(3) 2019 NAREIT FFO is presented in accordance with 2018 Restatement of "Nareit's Funds from Operations White Paper."

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Same Property Net Operating Income
We consider SPNOI an important additional financial measure because it reflects only those income and expense items that are incurred at the property level, and when compared across periods, reflects the impact on operations from trends in occupancy rates, rental rates and operating costs. We calculate this most useful measurement by determining our proportional share of SPNOI from all owned properties, including our share of SPNOI from unconsolidated joint ventures and partnerships, which cannot be readily determined under GAAP measurements and presentation. Although SPNOI is a widely used measure among REITs, there can be no assurance that SPNOI presented by us is comparable to similarly titled measures of other REITs. Additionally, we do not control these unconsolidated joint ventures and partnerships, and the assets, liabilities, revenues or expenses of these joint ventures and partnerships, as presented, do not represent our legal claim to such items.
Properties are included in the SPNOI calculation if they are owned and operated for the entirety of the most recent two fiscal year periods, except for properties for which significant redevelopment or expansion occurred during either of the periods presented, and properties that have been sold. While there is judgment surrounding changes in designations, we move new development and redevelopment properties once they have stabilized, which is typically upon attainment of 90% occupancy. A rollforward of the properties included in our same property designation is as follows:
 
Three Months Ended
December 31, 2019
 
Twelve Months Ended
December 31, 2019
Beginning of the period
159

 
171

Properties added:
 
 
 
New Developments
—

 
1

Properties removed:
 
 
 
Dispositions
(4
)
 
(17
)
End of the period
155

 
155


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We calculate SPNOI using net income attributable to common shareholders and adjusted for net income attributable to noncontrolling interests, other income (expense), income taxes and equity in earnings of real estate joint ventures and partnerships. Additionally to reconcile to SPNOI, we exclude the effects of property management fees, certain non-cash revenues and expenses such as straight-line rental revenue and the related reversal of such amounts upon early lease termination, depreciation and amortization, impairment losses, general and administrative expenses and other items such as lease cancellation income, environmental abatement costs, demolition expenses and lease termination fees. Consistent with the capital treatment of such costs under GAAP, tenant improvements, leasing commissions and other direct leasing costs are excluded from SPNOI. A reconciliation of net income attributable to common shareholders to SPNOI is as follows (in thousands):
 
Three Months Ended
December 31,
 
Twelve Months Ended
December 31,
 
2019
 
2018
 
2019
 
2018
Net income attributable to common shareholders
$
75,218

 
$
59,507

 
$
315,435

 
$
327,601

Add:
 
 
 
 
 
 
 
Net income attributable to noncontrolling interests
2,074

 
3,722

 
7,140

 
17,742

Provision for income taxes
358

 
10

 
1,040

 
1,378

Interest expense, net
13,539

 
15,663

 
57,601

 
63,348

Property management fees
686

 
685

 
2,899

 
2,904

Depreciation and amortization
33,355

 
35,280

 
135,674

 
161,838

Impairment loss
—

 
7,722

 
74

 
10,120

General and administrative
9,021

 
7,325

 
35,914

 
25,040

Other (1)
937

 
752

 
3,762

 
2,680

Less:
 
 
 
 
 
 
 
Gain on sale of property
(45,951
)
 
(34,788
)
 
(189,914
)
 
(207,865
)
Equity in earnings of real estate joint ventures and partnership interests, net
(2,989
)
 
(5,737
)
 
(20,769
)
 
(25,070
)
Interest and other (income) expense, net
(3,594
)
 
1,928

 
(11,003
)
 
(2,807
)
Revenue adjustments (2)
(3,817
)
 
(3,022
)
 
(14,871
)
 
(25,007
)
Adjusted income
78,837

 
89,047

 
322,982

 
351,902

Less: Adjusted income related to consolidated entities not defined as same property and noncontrolling interests
(2,589
)
 
(14,780
)
 
(23,312
)
 
(62,520
)
Add: Pro rata share of unconsolidated entities defined as same property
8,931

 
8,838

 
34,440

 
34,201

Same Property Net Operating Income
85,179

 
83,105

 
334,110

 
323,583

Less: Redevelopment Net Operating Income
(8,794
)
 
(7,880
)
 
(33,797
)
 
(29,181
)
Same Property Net Operating Income excluding Redevelopments
$
76,385

 
$
75,225

 
$
300,313

 
$
294,402

___________________
(1)
Other includes items such as environmental abatement costs, demolition expenses, lease termination fees and ground rent. Prior year amounts were restated to conform to the current year presentation due to the adoption on January 1, 2019 of Accounting Standard Codification 842.
(2)
Revenue adjustments consist primarily of straight-line rentals, lease cancellation income and fee income primarily from real estate joint ventures and partnerships.
Newly Issued Accounting Pronouncements
See Note 2 to our consolidated financial statements in Item 8 for additional information related to recent accounting pronouncements.

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ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk
We use fixed and floating-rate debt to finance our capital requirements. These transactions expose us to market risk related to changes in interest rates. Derivative financial instruments may be used to manage a portion of this risk, primarily interest rate contracts with major financial institutions. These agreements expose us to credit risk in the event of non-performance by the counter-parties. We do not engage in the trading of derivative financial instruments in the normal course of business. At December 31, 2019, we had fixed-rate debt of $1.7 billion and variable-rate debt of $17.4 million. In the event interest rates were to increase 100 basis points and holding all other variables constant, annual net income and cash flows for the following year would decrease by approximately $.2 million associated with our variable-rate debt, including the effect of the interest rate contracts. The effect of the 100 basis points increase would decrease the fair value of our variable-rate and fixed-rate debt by approximately $.1 million and $75.9 million, respectively.
ITEM 8. Financial Statements and Supplementary Data
 
 
 
WEINGARTEN REALTY INVESTORS
 
 
 
 
Index to Financial Statements
 
 
 
Page  
 
 
 
 
 
 
(A)
 
(B)
Financial Statements:
 
 
 
(i)
 
 
(ii)
 
 
(iii)
 
 
(iv)

 
 
(v)
 
 
(vi)
 
(C)
Financial Statement Schedules:
 
 
 
II
 
 
III
 
 
IV
All other schedules are omitted since the required information is not present or is not present in amounts sufficient to require submission of the schedule or because the information required is included in the consolidated financial statements and notes thereto.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Trust Managers of Weingarten Realty Investors
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Weingarten Realty Investors and subsidiaries (the "Company") as of December 31, 2019 and 2018, the related consolidated statements of operations, comprehensive income, equity, and cash flows, for each of the three years in the period ended December 31, 2019, and the related notes and the schedules listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 27, 2020, expressed an unqualified opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Investment in Real Estate Joint Ventures and Partnerships - Refer to Note 1 Summary of Significant Accounting Policies of the 2019 Form 10-K
Critical Audit Matter Description
The Company’s evaluation of impairment for their investments in real estate joint ventures and partnerships involves an initial assessment of various factors, including operating results of the investee and the Company's ability and intent to hold the investment, to determine if there is a decrease in the investment value that may be other than temporary. Changes in the assumptions could have a significant impact on the investments in real estate joint ventures and partnerships identified for further analysis. Based on changes in management's intent for investments in real estate joint ventures and partnerships, a $3.1 million impairment loss has been recognized for the year ended December 31, 2019.
Given the Company’s evaluation of its intent to hold the investment when evaluating if a decline in fair value is other than temporary requires management to make significant assumptions, performing audit procedures to evaluate whether management appropriately evaluated this factor required a high degree of auditor judgment.

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How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to management’s evaluation of the Company’s intent to hold the investment in identifying indicators of an other than temporary decline in fair value included the following:
•
We tested the effectiveness of controls, including those related to the evaluation of the Company’s intent and ability to hold their investments.
•
We evaluated the investments to identify any indications that impairment may be other than temporary by considering operating results of the investee and the Company’s intent to hold the investment. This included performing corroborating inquiries with management.
•
We evaluated the Company’s historical experience regarding the timely recognition of impairment by evaluating real estate sales within the joint ventures to evaluate if they were sold at a gain and any subsequent changes to the Company’s intent to hold the investment.
/s/ Deloitte & Touche LLP

Houston, Texas  
February 27, 2020  

We have served as the Company's auditor since 1963.

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WEINGARTEN REALTY INVESTORS
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
 
Year Ended December 31,
 
2019
 
2018
 
2017
Revenues:
 
 
 
 
 
Rentals, net
$
472,446

 
$
517,836

 
$
563,183

Other
14,179

 
13,311

 
9,980

Total Revenues
486,625

 
531,147

 
573,163

Operating Expenses:
 
 
 
 
 
Depreciation and amortization
135,674

 
161,838

 
167,101

Operating
94,620

 
90,554

 
109,310

Real estate taxes, net
60,813

 
69,268

 
75,636

Impairment loss
74

 
10,120

 
15,257

General and administrative
35,914

 
25,040

 
28,052

Total Operating Expenses
327,095

 
356,820

 
395,356

Other Income (Expense):


 


 


Interest expense, net
(57,601
)
 
(63,348
)
 
(80,326
)
Interest and other income, net
11,003

 
2,807

 
7,532

Gain on sale of property
189,914

 
207,865

 
218,611

Total Other Income
143,316

 
147,324

 
145,817

Income Before Income Taxes and Equity in Earnings of Real Estate Joint Ventures and Partnerships
302,846

 
321,651

 
323,624

(Provision) Benefit for Income Taxes
(1,040
)
 
(1,378
)
 
17

Equity in Earnings of Real Estate Joint Ventures and Partnerships, net
20,769

 
25,070

 
27,074

Net Income
322,575

 
345,343


350,715

Less: Net Income Attributable to Noncontrolling Interests
(7,140
)
 
(17,742
)
 
(15,441
)
Net Income Attributable to Common Shareholders
$
315,435

 
$
327,601

 
$
335,274

Earnings Per Common Share - Basic:
 
 
 
 
 
Net income attributable to common shareholders
$
2.47

 
$
2.57

 
$
2.62

Earnings Per Common Share - Diluted:
 
 
 
 
 
Net income attributable to common shareholders
$
2.44

 
$
2.55

 
$
2.60

See Notes to Consolidated Financial Statements.

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WEINGARTEN REALTY INVESTORS
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
 
Year Ended December 31,
 
2019
 
2018
 
2017
Net Income
$
322,575

 
$
345,343

 
$
350,715

Cumulative effect adjustment of new accounting standards
—

 
(1,541
)
 
—

Other Comprehensive (Loss) Income:
 
 
 
 
 
Net unrealized gain on investments, net of taxes
—

 
—

 
1,228

Realized gain on investments
—

 
—

 
(651
)
Net unrealized gain on derivatives
—

 
1,379

 
1,063

Reclassification adjustment of derivatives and designated hedges into net income
(887
)
 
(4,302
)
 
(42
)
Retirement liability adjustment
153

 
85

 
1,393

Total
(734
)
 
(2,838
)
 
2,991

Comprehensive Income
321,841

 
340,964

 
353,706

Comprehensive Income Attributable to Noncontrolling Interests
(7,140
)
 
(17,742
)
 
(15,441
)
Comprehensive Income Adjusted for Noncontrolling Interests
$
314,701

 
$
323,222

 
$
338,265

See Notes to Consolidated Financial Statements.


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WEINGARTEN REALTY INVESTORS
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
 
December 31,
 
2019
 
2018
ASSETS
 
 
 
Property
$
4,145,249

 
$
4,105,068

Accumulated Depreciation
(1,110,675
)
 
(1,108,188
)
Property, net *
3,034,574

 
2,996,880

Investment in Real Estate Joint Ventures and Partnerships, net
427,947

 
353,828

Total
3,462,521

 
3,350,708

Unamortized Lease Costs, net
148,479

 
142,014

Accrued Rent, Accrued Contract Receivables and Accounts Receivable (net of
allowance for doubtful accounts of $6,855 in 2018) *
83,639

 
97,924

Cash and Cash Equivalents *
41,481

 
65,865

Restricted Deposits and Escrows
13,810

 
10,272

Other, net
188,004

 
160,178

Total Assets
$
3,937,934

 
$
3,826,961

LIABILITIES AND EQUITY
 
 
 
Debt, net *
$
1,732,338

 
$
1,794,684

Accounts Payable and Accrued Expenses
111,666

 
113,175

Other, net
217,770

 
168,403

Total Liabilities
2,061,774

 
2,076,262

Commitments and Contingencies (see Note 16)
—

 
—

Equity:
 
 
 
Shareholders' Equity:
 
 
 
Common Shares of Beneficial Interest - par value, $.03 per share;
shares authorized: 275,000; shares issued and outstanding:
128,702 in 2019 and 128,333 in 2018
3,905

 
3,893

Additional Paid-In Capital
1,779,986

 
1,766,993

Net Income Less Than Accumulated Dividends
(74,293
)
 
(186,431
)
Accumulated Other Comprehensive Loss
(11,283
)
 
(10,549
)
Total Shareholders' Equity
1,698,315

 
1,573,906

Noncontrolling Interests
177,845

 
176,793

Total Equity
1,876,160

 
1,750,699

Total Liabilities and Equity
$
3,937,934

 
$
3,826,961

* Consolidated variable interest entities' assets and debt included in the above balances (see Note 17):
Property, net
$
196,636

 
$
198,466

Accrued Rent, Accrued Contract Receivables and Accounts Receivable, net
10,548

 
12,220

Cash and Cash Equivalents
8,135

 
8,243

Debt, net
44,993

 
45,774

See Notes to Consolidated Financial Statements.

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WEINGARTEN REALTY INVESTORS
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 
Year Ended December 31,
 
2019
 
2018
 
2017
Cash Flows from Operating Activities:
 
 
 
 
 
Net Income
$
322,575

 
$
345,343

 
$
350,715

Adjustments to reconcile net income to net cash provided by operating
activities:
 
 
 
 
 
Depreciation and amortization
135,674

 
161,838

 
167,101

Amortization of debt deferred costs and intangibles, net
3,194

 
3,146

 
2,790

Non-cash lease expense
1,241

 
—

 
—

Impairment loss
74

 
10,120

 
15,257

Equity in earnings of real estate joint ventures and partnerships, net
(20,769
)
 
(25,070
)
 
(27,074
)
Gain on sale of property
(189,914
)
 
(207,865
)
 
(218,611
)
Distributions of income from real estate joint ventures and partnerships
20,083

 
19,605

 
1,321

Changes in accrued rent, accrued contract receivables and accounts receivable, net
10,001

 
(2,807
)
 
(18,964
)
Changes in unamortized lease costs and other assets, net
(14,298
)
 
(8,632
)
 
(13,299
)
Changes in accounts payable, accrued expenses and other liabilities, net
(975
)
 
(2,315
)
 
4,970

Other, net
3,164

 
(7,403
)
 
5,552

Net cash provided by operating activities
270,050

 
285,960

 
269,758

Cash Flows from Investing Activities:
 
 
 
 
 
Acquisition of real estate and land, net
(218,849
)
 
(1,265
)
 
(1,902
)
Development and capital improvements
(183,188
)
 
(155,528
)
 
(133,336
)
Proceeds from sale of property and real estate equity investments, net
445,319

 
607,486

 
433,661

Real estate joint ventures and partnerships - Investments
(74,602
)
 
(38,096
)
 
(37,173
)
Real estate joint ventures and partnerships - Distributions of capital
2,482

 
6,936

 
28,791

Purchase of investments
—

 
—

 
(5,730
)
Proceeds from investments
10,375

 
1,500

 
8,502

Other, net
2,437

 
11,921

 
6,179

Net cash (used in) provided by investing activities
(16,026
)
 
432,954

 
298,992

Cash Flows from Financing Activities:
 
 
 
 
 
Proceeds from issuance of debt
—

 
638

 
—

Principal payments of debt
(55,556
)
 
(257,028
)
 
(28,723
)
Changes in unsecured credit facilities
(5,000
)
 
5,000

 
(245,000
)
Repurchase of common shares of beneficial interest, net
—

 
(18,564
)
 
—

Proceeds from issuance of common shares of beneficial interest, net
1,098

 
6,760

 
1,588

Common share dividends paid
(203,297
)
 
(382,464
)
 
(294,073
)
Debt issuance and extinguishment costs paid
(3,271
)
 
(1,271
)
 
(488
)
Distributions to noncontrolling interests
(6,782
)
 
(19,155
)
 
(19,342
)
Contributions from noncontrolling interests
326

 
1,465

 
—

Other, net
(2,388
)
 
508

 
(2,657
)
Net cash used in financing activities
(274,870
)
 
(664,111
)
 
(588,695
)
Net (decrease) increase in cash, cash equivalents and restricted cash equivalents
(20,846
)
 
54,803

 
(19,945
)
Cash, cash equivalents and restricted cash equivalents at January 1
76,137

 
21,334

 
41,279

Cash, cash equivalents and restricted cash equivalents at December 31
$
55,291

 
$
76,137

 
$
21,334

Supplemental disclosure of cash flow information:
 
 
 
 
 
Cash paid for interest (net of amount capitalized of $13,586, $7,938 and $4,868, respectively)
$
55,413

 
$
65,507

 
$
79,161

Cash paid for income taxes
$
1,526

 
$
1,545

 
$
1,009

Cash paid for amounts included in operating lease liabilities
$
2,785

 
$
—

 
$
—

See Notes to Consolidated Financial Statements.

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WEINGARTEN REALTY INVESTORS
CONSOLIDATED STATEMENTS OF EQUITY
(In thousands)
Year Ended December 31, 2019, 2018 and 2017

 
Common
Shares of
Beneficial
Interest
 
Additional
Paid-In
Capital
 
Net Income
Less Than
Accumulated
Dividends
 
Accumulated
Other
Comprehensive
Loss
 
Noncontrolling
Interests
 
Total
Balance, January 1, 2017
$
3,885

 
$
1,718,101

 
$
(177,647
)
 
$
(9,161
)
 
$
181,718

 
$
1,716,896

Net income
 
 
 
 
335,274

 
 
 
15,441

 
350,715

Shares issued under benefit plans, net
12

 
8,816

 
 
 
 
 
 
 
8,828

Change in classification of deferred compensation plan
 
 
45,377

 
 
 
 
 
 
 
45,377

Change in redemption value of deferred compensation plan
 
 
 
 
(619
)
 
 
 
 
 
(619
)
Dividends paid – common shares ($2.29 per share)
 
 
 
 
(294,073
)
 
 
 
 
 
(294,073
)
Distributions to noncontrolling interests
 
 
 
 
 
 
 
 
(19,342
)
 
(19,342
)
Other comprehensive income
 
 
 
 
 
 
2,991

 
 
 
2,991

Other, net
 
 
(228
)
 


 
 
 
(703
)
 
(931
)
Balance, December 31, 2017
3,897

 
1,772,066

 
(137,065
)
 
(6,170
)
 
177,114

 
1,809,842

Net income
 
 
 
 
327,601

 
 
 
17,742

 
345,343

Shares repurchased and cancelled
(20
)
 
(18,544
)
 
 
 
 
 
 
 
(18,564
)
Shares issued under benefit plans, net
16

 
13,471

 
 
 
 
 
 
 
13,487

Cumulative effect adjustment of new accounting standards
 
 
 
 
5,497

 
(1,541
)
 
 
 
3,956

Dividends paid – common shares ($2.98 per share)
 
 
 
 
(382,464
)
 
 
 
 
 
(382,464
)
Distributions to noncontrolling interests
 
 
 
 
 
 
 
 
(19,155
)
 
(19,155
)
Contributions from noncontrolling interests
 
 
 
 
 
 
 
 
1,465

 
1,465

Other comprehensive loss
 
 
 
 
 
 
(2,838
)
 
 
 
(2,838
)
Other, net
 
 


 


 
 
 
(373
)
 
(373
)
Balance, December 31, 2018
3,893

 
1,766,993

 
(186,431
)
 
(10,549
)
 
176,793

 
1,750,699

Net income
 
 
 
 
315,435

 
 
 
7,140

 
322,575

Shares issued under benefit plans, net
12

 
11,046

 
 
 
 
 
 
 
11,058

Dividends paid – common shares ($1.58 per share)
 
 
 
 
(203,297
)
 
 
 
 
 
(203,297
)
Distributions to noncontrolling interests
 
 
 
 
 
 
 
 
(6,782
)
 
(6,782
)
Contributions from noncontrolling interests
 
 
 
 
 
 
 
 
326

 
326

Other comprehensive loss
 
 
 
 
 
 
(734
)
 
 
 
(734
)
Other, net
 
 
1,947

 


 

 
368

 
2,315

Balance, December 31, 2019
$
3,905

 
$
1,779,986

 
$
(74,293
)
 
$
(11,283
)
 
$
177,845

 
$
1,876,160

   
See Notes to Consolidated Financial Statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1.      Summary of Significant Accounting Policies
Business
Weingarten Realty Investors is a REIT organized under the Texas Business Organizations Code. We currently operate, and intend to operate in the future, as a REIT.
We, and our predecessor entity, began the ownership of shopping centers and other commercial real estate in 1948. Our primary business is leasing space to tenants in the shopping centers we own or lease. These centers may be mixed-use properties that have both retail and residential components. We also provide property management services for which we charge fees to either joint ventures where we are partners or other outside owners.
We operate a portfolio of neighborhood and community shopping centers, totaling approximately 32.5 million square feet of gross leasable area that is either owned by us or others. We have a diversified tenant base, with our largest tenant comprising only 2.6% of base minimum rental revenues during 2019. Total revenues generated by our centers located in Houston and its surrounding areas was 20.0% of total revenue for the year ended December 31, 2019, and an additional 9.3% of total revenue was generated in 2019 from centers that are located in other parts of Texas. Also, in Florida and California, an additional 19.8% and 17.9%, respectively, of total revenue was generated in 2019.
Basis of Presentation
Our consolidated financial statements include the accounts of our subsidiaries, certain real estate joint ventures or partnerships and VIEs which meet the guidelines for consolidation. All intercompany balances and transactions have been eliminated.
Our financial statements are prepared in accordance with GAAP. Such statements require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. We have evaluated subsequent events for recognition or disclosure in our consolidated financial statements.
Leases
As part of our operations, we are primarily a lessor of commercial retail space. In certain instances, we are also a lessee, primarily of ground leases associated with our operations. Our contracts are reviewed to determine if they qualify, under the GAAP definition, as a lease. A contract is determined to be a lease when the right to obtain substantially all of the economic benefits and to direct the use of an identified asset is transferred to a customer over a defined period of time for consideration. During this review, we evaluate among other items, asset specification, substitution rights, purchase options, operating rights and control over the asset during the contract period.
We have elected accounting policy practical expedients, both as a lessor and a lessee, to not separate any nonlease components (primarily common area maintenance) within a lease contract for all classes of underlying assets (primarily real estate assets). As a lessor, we have further determined that this policy will be effective only on a lease that has been classified as an operating lease and the revenue recognition pattern and timing is the same for both types of components. We have determined to account for both the lease and nonlease components as a single component when the lease component is the predominate component of a contract. Therefore, Accounting Standards Codification ("ASC") No. 842, “Leases” will be applied to these lease contracts for both types of components. Additionally, for lessee leases, we have also elected not to apply the overall balance sheet recognition requirements to short-term leases that are less 12 months from the lease commencement date.
Significant judgments and assumptions are inherent in not only determining if a contract contains a lease but also the lease classification, terms, payments, and, if needed, discount rates. Judgments include the nature of any options with the determination if they will be exercised, evaluation of implicit discount rates, assessment and consideration of “fixed” payments for straight-line rent revenue calculations and the evaluation of asset identification and substitution rights.
The determination of the discount rate used in a lease is the incremental borrowing rate of the lease contract. For lessee leases, this rate is often not readily determinable as the lessor’s initial direct costs and expected residual value are at the end of the lease term and are unknown. Therefore, as the lessee, our incremental borrowing rate will be used. Selected discount rates will reflect rates that we would have to pay to borrow on a fully collateralized basis over a term similar to the lease. Additionally, we will obtain lender quotes with similar terms and if not available, we consider the asset type, risk free rates and financing spreads to account for creditworthiness and collateral.

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Our lessor leases are principally related to our shopping centers. We believe risk of an inadequate residual value of the leased asset upon the termination of these leases is low due to our ability to re-lease the space, the long-lived nature of our real estate assets and the propensity of real estate assets to hold their value over a long period of time.
Revenue Recognition
At the inception of a revenue producing contract, we determine if a contract qualifies as a lease and if not, then as a customer contract. Additionally, we exclude all taxes assessed by a governmental authority that is collected by us from Revenue. Based on this determination, the appropriate GAAP is applied to the contract, including its revenue recognition.
Rentals, net
Rental revenue is primarily derived from operating leases and, therefore, is generally recognized on a straight-line basis over the term of the lease, which typically begins the date the tenant takes control of the space. Variable rental revenue consists primarily of tenant reimbursements of taxes, maintenance expenses and insurance, is subject to our interpretation of lease provisions and is recognized over the term of a lease as services are provided. Additionally, variable rental revenue based on a percentage of tenants’ sales is recognized only after the tenant exceeds its sales breakpoint. In circumstances where we provide a tenant improvement allowance for improvements that are owned by the tenant, we recognize the allowance as a reduction of rental revenue on a straight-line basis over the term of the lease. Further, at the lease commencement date and on an ongoing basis, we consider the collectability of a lease when determining revenue to be recognized. Prior to the adoption of ASC No. 842, rental revenues were recognized under ASC No. 840, “Leases.”
Other
Other revenue consists of both customer contract revenue and income from contractual agreements with third parties or real estate joint ventures or partnerships, which do not meet the definition of a lease or a customer contract. Revenues which do not meet the definition of a lease or customer contract are recognized as the related services are performed under the applicable agreement.
We have identified primarily three types of customer contract revenue: (1) management contracts with real estate joint ventures or partnerships or third parties, (2) licensing and occupancy agreements and (3) certain non-tenant contracts. At contract inception, we assess the services provided in these contracts and identify any performance obligations that are distinct. To identify the performance obligation, we consider all services, whether explicitly stated or implied by customary business practices. We have identified the following substantive services, which may or may not be included in each contract type, that represent performance obligations:
Contract Type
 
Performance Obligation Description
 
Elements of Performance Obligations
 
Payment Timing
Management Agreements
 
• Management and asset management services
• Construction and development services
• Marketing services
 
• Over time
• Right to invoice
• Long-term contracts
 
Typically monthly or quarterly
 
 
• Leasing and legal preparation services
• Sales commissions
 
• Point in time
• Long-term contracts
 
 
Licensing and Occupancy Agreements
 
• Rent of non-specific space
 
• Over time
• Right to invoice
• Short-term contracts
 
Typically monthly
 
 
• Set-up services
 
• Point in time
• Right to invoice
 
 
Non-tenant Contracts
 
• Placement of miscellaneous items at our centers that do not qualify as a lease, i.e. advertisements, trash bins, etc.
 
• Point in time
• Long-term contracts
 
Typically monthly
 
 
• Set-up services
 
• Point in time
• Right to invoice
 
 

We also assess collectability of the customer contract revenue prior to recognition. None of these customer contracts include a significant financing component.

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Table of Contents

Property
Real estate assets are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method, generally over estimated useful lives of 18-40 years for buildings and 10-20 years for parking lot surfacing and equipment. Major replacements where the betterment extends the useful life of the asset are capitalized, and the replaced asset and corresponding accumulated depreciation are removed from the accounts. All other maintenance and repair items are charged to expense as incurred.
Acquisitions of properties are accounted for utilizing the acquisition of a nonfinancial asset method and, accordingly, the results of operations of an acquired property are included in our results of operations from the date of acquisition. Estimates of fair values are based upon estimated future cash flows and other valuation techniques. Fair values are used to allocate and record the purchase price of acquired property among land, buildings on an “as if vacant” basis, tenant improvements, other identifiable intangibles and any goodwill or gain on purchase. Other identifiable intangible assets and liabilities include the effect of out-of-market leases, the value of having leases in place (“as is” versus “as if vacant” and absorption costs), out-of-market assumed mortgages and tenant relationships. Depreciation and amortization is computed using the straight-line method, generally over estimated useful lives of 40 years for buildings and over the lease term for other identifiable intangible assets. Costs associated with the successful acquisition of an asset are capitalized as incurred.
Property also includes costs incurred in the development and redevelopment of operating properties. These properties are carried at cost, and no depreciation is recorded on these assets until rent commences or no later than one year from the completion of major construction. These costs include preacquisition costs directly identifiable with the specific project, development and construction costs, interest, insurance and real estate taxes. Indirect development costs, including salaries and benefits, travel and other related costs that are directly attributable to the development of the property, are also capitalized. The capitalization of such costs ceases at the earlier of one year from the completion of major construction or when the property, or any completed portion, becomes available for occupancy.
Property also includes costs for tenant improvements paid by us, including reimbursements to tenants for improvements that are owned by us and will remain our property after the lease expires.
Property identified for sale is reviewed to determine if it qualifies as held for sale based on the following criteria: management has approved and is committed to the disposal plan, the assets are available for immediate sale, an active plan is in place to locate a buyer, the sale is probable and expected to qualify as a completed sale within a year, the sales price is reasonable in relation to the current fair value, and it is unlikely that significant changes will be made to the sales plan or that the sales plan will be withdrawn. Upon qualification, these properties are segregated and classified as held for sale at the lower of cost or fair value less costs to sell. Our individual property disposals do not qualify for discontinued operations presentation; thus, the results of operations through the disposal date and any associated gains are included in income from continuing operations.
Some of our properties are held in single purpose entities. A single purpose entity is a legal entity typically established at the request of a lender solely for the purpose of owning a property or group of properties subject to a mortgage. There may be restrictions limiting the entity’s ability to engage in an activity other than owning or operating the property, assuming or guaranteeing the debt of any other entity, or dissolving itself or declaring bankruptcy before the debt has been repaid. Most of our single purpose entities are 100% owned by us and are consolidated in our consolidated financial statements.
Real Estate Joint Ventures and Partnerships
To determine the method of accounting for real estate joint ventures and partnerships, management determines whether an entity is a VIE and, if so, determines which party is the primary beneficiary by analyzing whether we have both the power to direct the entity’s significant economic activities and the obligation to absorb potentially significant losses or receive potentially significant benefits. Significant judgments and assumptions inherent in this analysis include the design of the entity structure, the nature of the entity’s operations, future cash flow projections, the entity’s financing and capital structure, and contractual relationships and terms. We consolidate a VIE when we have determined that we are the primary beneficiary.
Primary risks associated with our involvement with our VIEs include the potential funding of the entities’ debt obligations or making additional contributions to fund the entities’ operations or capital activities.

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Non-variable interest real estate joint ventures and partnerships over which we have a controlling financial interest are consolidated in our consolidated financial statements. In determining if we have a controlling financial interest, we consider factors such as ownership interest, authority to make decisions, kick-out rights and substantive participating rights. Real estate joint ventures and partnerships where we do not have a controlling financial interest, but have the ability to exercise significant influence, are accounted for using the equity method.
Management continually analyzes and assesses reconsideration events, including changes in the factors mentioned above, to determine if the consolidation or equity method treatment remains appropriate.
Unamortized Lease Costs, net
Lease costs represent the initial direct costs incurred in origination, negotiation and processing of a lease agreement. Upon the adoption of ASC No. 842, such costs include outside broker commissions and other independent third party costs, as well as internal leasing commissions paid directly related to completing a lease and are amortized over the life of the lease on a straight-line basis. Prior to the adoption of ASC No. 842, such costs included outside broker commissions and other independent third party costs, as well as salaries and benefits, travel and other internal costs directly related to completing a lease and are amortized over the life of the lease on a straight-line basis. Costs related to salaries and benefits, supervision, administration, unsuccessful origination efforts and other activities are charged to expense as incurred. Also included are in place lease costs which are amortized over the life of the applicable lease term on a straight-line basis.
Accrued Rent, Accrued Contract Receivables and Accounts Receivable, net
Receivables include rental revenue, amounts billed and currently due from customer contracts and receivables attributable to straight-line rental commitments. Accrued contract receivables includes amounts due from customers for contracts that do not qualify as a lease in which we earned the right to the consideration through the satisfaction of the performance obligation, but before the customer pays consideration or before payment is due. Upon the adoption of ASC No. 842, individual leases are assessed for collectability and upon the determination that the collection of rents is not probable, accrued rent and accounts receivables are reduced as an adjustment to rental revenues. Revenue from leases where collection is deemed to be less than probable is recorded on a cash basis until collectability is determined to be probable. Further, we assess whether operating lease receivables, at a portfolio level, are appropriately valued based upon an analysis of balances outstanding, historical bad debt levels and current economic trends. An allowance for the uncollectible portion of the portfolio is recorded as an adjustment to rental revenues. Prior to the adoption of ASC No. 842, an allowance for the uncollectible portion of accrued rents and accounts receivable was determined based upon an analysis of balances outstanding, historical bad debt levels, tenant creditworthiness and current economic trends. Additionally, estimates of the expected recovery of pre-petition and post-petition claims with respect to tenants in bankruptcy are considered in assessing the collectability of the related receivables. Management’s estimate of the collectability of accrued rents and accounts receivable is based on the best information available to management at the time of evaluation.
Cash and Cash Equivalents
All highly liquid investments with original maturities of three months or less are considered cash equivalents. Cash and cash equivalents are primarily held at major financial institutions in the U.S. We had cash and cash equivalents in certain financial institutions in excess of federally insured levels. We have diversified our cash and cash equivalents amongst several banking institutions in an attempt to minimize exposure to any one of these entities. We believe we are not exposed to any significant credit risk and regularly monitor the financial stability of these financial institutions.
Restricted Deposits and Escrows
Restricted deposits are held or restricted for a specific use or in a qualified escrow account for the purposes of completing like-kind exchange transactions. Escrows consist of deposits held by third parties or lenders for a specific use; including, capital improvements, rental income and taxes.
Our restricted deposits and escrows consist of the following (in thousands):
 
December 31,
 
2019
 
2018
Restricted deposits
$
12,793

 
$
8,150

Escrows
1,017

 
2,122

Total
$
13,810

 
$
10,272



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Other Assets, net
Other assets include an asset related to the debt service guaranty (see Note 6 for further information), tax increment revenue bonds, right-of-use assets, investments, investments held in a grantor trust, deferred tax assets (see Income Taxes), the net value of above-market leases and deferred debt costs associated with our revolving credit facilities. Right-of-use assets are amortized to achieve the recognition of rent expense on a straight-line basis after adjusting for the corresponding lease liabilities’ interest over the lives of the leases. Investments held in a grantor trust and investments in mutual funds are adjusted to fair value at each period with changes included in our Consolidated Statements of Operations. Investments held to maturity are carried at amortized cost and are adjusted using the interest method for amortization of premiums and accretion of discounts. Our tax increment revenue bonds have been classified as held to maturity and are recorded at amortized cost offset by a recognized credit loss (see Note 18 for further information). Above-market leases are amortized as adjustments to rental revenues over terms of the acquired leases. Deferred debt costs, including those classified in debt, are amortized primarily on a straight-line basis, which approximates the effective interest rate method, over the terms of the debt. Other miscellaneous receivables have a reserve applied to the carrying amount when it becomes apparent that conditions exist that may lead to our inability to fully collect on outstanding amounts due. Such conditions include delinquent or late payments on receivables, deterioration in the ongoing relationship with the borrower and other relevant factors. We establish a reserve when expected loss conditions exist by reviewing the borrower’s ability to generate revenues to meet debt service requirements and assessing the fair value of any collateral.
Other Liabilities, net
Other liabilities include non-qualified benefit plan liabilities (see Retirement Benefit Plans and Deferred Compensation Plan), lease liabilities and the net value of below-market leases. Lease liabilities are amortized to rent expense using the effective interest rate method, over the lease life. Below-market leases are amortized as adjustments to rental revenues over terms of the acquired leases.
Sales of Real Estate
Sales of real estate include the sale of tracts of land, property adjacent to shopping centers, operating properties, newly developed properties, investments in real estate joint ventures and partnerships and partial sales of real estate joint ventures and partnerships in which we participate.
These sales primarily fall under two types of contracts (1) sales of nonfinancial assets (primarily real estate) and (2) sales of investments in real estate joint ventures and partnerships of substantially nonfinancial assets. We review the sale contract to determine appropriate accounting guidance. Profits on sales of real estate are primarily not recognized until (a) a contract exists including: each party’s rights are identifiable along with the payment terms, the contract has commercial substance and the collection of consideration is probable; and (b) the performance obligation to transfer control of the asset has occurred; including transfer to the buyer of the usual risks and rewards of ownership.
We recognize gains on the sale of real estate to joint ventures and partnerships in which we participate to the extent we receive consideration from the joint venture or partnership, if it meets the sales criteria in accordance with GAAP.
Impairment
Our property, including right-of-use assets, is reviewed for impairment if events or changes in circumstances indicate that the carrying amount of the property, any capitalized costs and any identifiable intangible assets, may not be recoverable.
If such an event occurs, a comparison is made of the current and projected operating cash flows of each such property into the foreseeable future, with consideration of applicable holding periods, on an undiscounted basis to the carrying amount of such property. If we determine the carrying amount is not recoverable, our basis in the property is reduced to its estimated fair value to reflect impairment in the value of the asset. Fair values are determined by management utilizing cash flow models, market capitalization rates and market discount rates, or by obtaining third-party broker or appraisal estimates.
We review economic considerations at each reporting period, including the effects of tenant bankruptcies, the suspension of tenant expansion plans for new development projects, declines in real estate values, and any changes to plans related to our new development properties including land held for development, to identify properties where we believe market values may be deteriorating. Determining whether a property is impaired and, if impaired, the amount of write-down to fair value requires a significant amount of judgment by management and is based on the best information available to management at the time of evaluation. If market conditions deteriorate or management’s plans for certain properties change, additional write-downs could be required in the future.

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Our investment in real estate joint ventures and partnerships is reviewed for impairment each reporting period. We evaluate various factors, including operating results of the investee, our ability and intent to hold the investment and our views on current market and economic conditions, when determining if there is a decline in the investment value. We will record an impairment charge if we determine that a decline in the estimated fair value of an investment below its carrying amount is other than temporary. The ultimate realization is dependent on a number of factors, including the performance of each investment and market conditions. There is no certainty that impairments will not occur in the future if market conditions decline or if management’s plans for these investments change.
Our investments in tax increment revenue bonds are reviewed for impairment, including the evaluation of changes in events or circumstances that may indicate that the carrying amount of the investment may not be recoverable. Realization is dependent on a number of factors, including investment performance, market conditions and payment structure. We will record an impairment charge if we determine that a decline in the value of the investment below its carrying amount is other than temporary, recovery of its cost basis is uncertain, and/or it is uncertain if the investment will be held to maturity.
Accrued contract receivables are reviewed for impairment based on changes in events or circumstances effecting our customers that may indicate that the carrying value of the asset may not be recoverable. An impairment charge will be recorded if we determine that the decline in the asset value is other than temporary or recovery of the cost basis is uncertain. Factors to be considered include current economic trends such as bankruptcy and market conditions affecting our investments in real estate joint ventures and partnerships.
See Note 10 for additional information regarding impairments.
Income Taxes
We have elected to be treated as a REIT under the Internal Revenue Code of 1986, as amended. As a REIT, we generally will not be subject to corporate level federal income tax on taxable income we distribute to our shareholders. To be taxed as a REIT, we must meet a number of requirements including defined percentage tests concerning the amount of our assets and revenues that come from, or are attributable to, real estate operations. As long as we distribute at least 90% of the taxable income of the REIT (without regard to capital gains or the dividends paid deduction) to our shareholders as dividends, we will not be taxed on the portion of our income we distribute as dividends unless we have ineligible transactions.
The Tax Relief Extension Act of 1999 gave REITs the ability to conduct activities which a REIT was previously precluded from doing as long as such activities are performed in entities which have elected to be treated as taxable REIT subsidiaries under the IRS code. These activities include buying or developing properties with the express purpose of selling them. We conduct certain of these activities in a taxable REIT subsidiary that we have created. We calculate and record income taxes in our consolidated financial statements based on the activities in this entity. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between our carrying amounts of existing assets and liabilities and their respective tax bases and net operating loss and tax credit carry-forwards. These are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. A valuation allowance for deferred tax assets is established for those assets when we do not consider the realization of such assets to be more likely than not.
On December 22, 2017, the U.S. government enacted the Tax Cuts and Jobs Act of 2017 ("Tax Act"). The Tax Act made broad and complex changes to the Internal Revenue Code including, but not limited to, (1) reducing the U.S. federal corporate income tax rate from 35% to 21%, (2) establishing a 20% deduction for REIT dividends (other than any portion that is a capital gain dividend), (3) limiting the deductibility of business interest, (4) allowing full expensing of certain qualifying property, (5) eliminating the corporate Alternative Minimum Tax (“AMT”) and changing how existing AMT credits can be realized, (6) limiting current net operating loss deductions and providing an indefinite carryforward and (7) limiting the deductibility of certain executive compensation. Management’s evaluation of deferred taxes and the associated valuation allowance includes the impact of the Tax Act (see Note 11 for additional information).
Additionally, GAAP prescribes a recognition threshold and measurement attribute for the financial statement recognition of a tax position taken, or expected to be taken, in a tax return. A tax position may only be recognized in the consolidated financial statements if it is more likely than not that the tax position will be sustained upon examination. We believe it is more likely than not that our tax positions will be sustained in any tax examinations.
In addition, we are subject to the State of Texas business tax (“Texas Franchise Tax”), which is determined by applying a tax rate to a base that considers both revenues and expenses. Therefore, the Texas Franchise Tax is considered an income tax and is accounted for accordingly.

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Share-Based Compensation
We have both share options and share awards outstanding. Since 2012, our employee long-term incentive program under our Amended and Restated 2010 Long-Term Incentive Plan grants only awards that incorporate both service-based and market-based measures for share awards to promote share ownership among the participants and to emphasize the importance of total shareholder return. The terms of each grant vary depending upon the participant's responsibilities and position within the Company. All awards are recorded at fair value on the date of grant and earn dividends throughout the vesting period; however, the dividends are subject to the same vesting terms as the award. Compensation expense is measured at the grant date and recognized over the vesting period. All share awards are awarded subject to the participant’s continued employment with us.
The share awards are subject to a three-year cliff vesting basis. Service-based and market-based share awards are subject to the achievement of select performance goals as follows:
•
Service-based awards and accumulated dividends typically vest three years from the grant date. These grants are subject only to continued employment and not dependent on future performance measures. Accordingly, if such vesting criteria are not met, compensation cost previously recognized would be reversed.
•
Market-based awards vest based upon the performance metrics at the end of a three-year period. These awards are based 50% on our three-year relative total shareholder return (“TSR”) as compared to the FTSE NAREIT U.S. Shopping Center Index. The other 50% is tied to our three-year absolute TSR, which is currently compared to an 6% hurdle. At the end of a three-year period, the performance measures are analyzed; the actual number of shares earned is determined; and the earned shares and the accumulated dividends vest. The probability of meeting the market criteria is considered when calculating the estimated fair value on the date of grant using a Monte Carlo simulation. These awards are accounted for as awards with market criteria, with compensation cost recognized over the service period, regardless of whether the market criteria are achieved and the awards are ultimately earned and vest.
Restricted shares granted to trust managers and share awards granted to retirement eligible employees are expensed immediately. Restricted shares and share awards have the same rights of a common shareholder, including the right to vote and receive dividends, except as otherwise provided by our Management Development and Executive Compensation Committee.
Options generally expire upon the earlier of termination of employment or 10 years from the date of grant, and all restricted shares are granted at no purchase price. Our policy is to recognize compensation expense for equity awards ratably over the vesting period, except for retirement eligible amounts.
Retirement Benefit Plans
Defined Benefit Plan:
We sponsor a noncontributory cash balance retirement plan (“Retirement Plan”) under which an account is maintained for each participant. Annual additions to each participant’s account include a service credit ranging from 3%-5% of compensation, depending on years of service, and an interest credit of 4.5%. Vesting generally occurs after three years of service.
Investments of Plan Assets
Our investment policy for our plan assets has been to determine the objectives for structuring a retirement savings program suitable to the long-term needs and risk tolerances of participants, to select appropriate investments to be offered by the plan and to establish procedures for monitoring and evaluating the performance of the investments of the plan. Our overall plan objectives for selecting and monitoring investment options are to promote and optimize retirement wealth accumulation; to provide a full range of asset classes and investment options that are intended to help diversify the portfolio to maximize return within reasonable and prudent levels of risk; to control costs of administering the plan; and to manage the investments held by the plan.
The selection of investment options is determined using criteria based on the following characteristics: fund history, relative performance, investment style, portfolio structure, manager tenure, minimum assets, expenses and operation considerations. Investment options selected for use in the plan are reviewed at least on a semi-annual basis to evaluate material changes from the selection criteria. Asset allocation is used to determine how the investment portfolio should be split between stocks, bonds and cash. The asset allocation decision is influenced by investment time horizon; risk tolerance; and investment return objectives. The primary factor in establishing asset allocation is demographics of the plan, including attained age and future service. A broad market diversification model is used in considering all these factors, and the percentage allocation to each investment category may also vary depending upon market conditions. Re-balancing of the allocation of plan assets occurs semi-annually.

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Defined Contribution Plans:
We have two separate and independent nonqualified supplemental retirement plans (“SRP”) for certain employees that are classified as defined contribution plans. These unfunded plans provide benefits in excess of the statutory limits of our noncontributory cash balance retirement plan. For active participants, annual additions to each participant’s account include an actuarially-determined service credit ranging from 3% to 5% and an interest credit of 4.5%. Vesting generally occurs between five and 10 years of service. We have elected to use the actuarial present value of the vested benefits to which the participant was entitled if the participant separated immediately from the SRP, as permitted by GAAP.
The SRP participants' account balances prior to 2012 no longer receive service credits but continue to receive a 7.5% interest credit for active participants. All inactive participants receive a December 31, 90-day LIBOR rate plus .50% interest credit.
We have a Savings and Investment Plan pursuant to which eligible employees may elect to contribute from 1% of their salaries to the maximum amount established annually by the IRS. Employee contributions are matched by us at the rate of 50% for the first 6% of the employee's salary. The employees vest in the employer contributions ratably over a five-year period.
Deferred Compensation Plan
We have a deferred compensation plan for eligible employees allowing them to defer portions of their current cash salary or share-based compensation. Deferred amounts are deposited in a grantor trust, which are included in Other, net Assets, and are reported as compensation expense in the year service is rendered. Cash deferrals are invested based on the employee’s investment selections from a mix of assets selected using a broad market diversification model. Deferred share-based compensation cannot be diversified, and distributions from this plan are made in the same form as the original deferral.
Fair Value Measurements
Certain financial instruments, estimates and transactions are required to be calculated, reported and/or recorded at fair value. The estimated fair values of such financial items, including debt instruments, impaired assets, acquisitions and investment securities, have been determined using a market-based measurement. This measurement is determined based on the assumptions that management believes market participants would use in pricing an asset or liability; including, market capitalization rates, discount rates, current operating results, local economics and other factors. As a basis for considering market participant assumptions in fair value measurements, GAAP establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).
Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which is typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. The fair value of such financial instruments, estimates and transactions was determined using available market information and appropriate valuation methodologies as prescribed by GAAP.
Internally developed and third party fair value measurements, including the unobservable inputs, are evaluated by management with sufficient experience for reasonableness based on current market knowledge, trends and transactional experience in the real estate and capital markets. Our valuation policies and procedures are determined by our Accounting Group, which reports to the Chief Financial Officer and the results of significant impairment transactions are discussed with the Audit Committee on a quarterly basis.

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Fair value estimates are based on limited available market information for similar transactions, including our tax increment revenue bonds, investments held to maturity and debt, and there can be no assurance that the disclosed value of any financial instrument could be realized by immediate settlement of the instrument. The following provides information about the methods used to estimate the fair value of our financial instruments, including their estimated fair values:
Cash Equivalents and Restricted Cash
Cash equivalents and restricted cash are valued based on publicly-quoted market prices for identical assets.
Investments and Deferred Compensation Plan Obligations
Investments in mutual funds held in a grantor trust and mutual funds are valued based on publicly-quoted market prices for identical assets. The deferred compensation plan obligations corresponds to the value of our investments held in a grantor trust. Investments held to maturity are carried at amortized cost and are adjusted using the interest method for amortization of premiums and accretion of discounts.
Tax Increment Revenue Bonds
The fair value estimates of our held to maturity tax increment revenue bonds, which were issued by the Agency in connection with our investment in a development project in Sheridan, Colorado, are based on assumptions that management believes market participants would use in pricing, using widely accepted valuation techniques including discounted cash flow analysis based on the expected future sales tax revenues of the project. This analysis reflects the contractual terms of the bonds, including the period to maturity, and uses observable market-based inputs, such as market discount rates and unobservable market-based inputs, such as future growth and inflation rates.
Debt
The fair value of our debt may be based on quoted market prices for publicly-traded debt, on a third-party established benchmark for inactively traded debt and on the discounted estimated future cash payments to be made for non-traded debt. For inactively traded debt, our third-party provider establishes a benchmark for all REIT securities based on the largest, most liquid and most frequent investment grade securities in the REIT bond market. This benchmark is then adjusted to consider how a market participant would be compensated for risk premiums such as, longevity of maturity dates, lack of liquidity and credit quality of the issuer. The discount rates used approximate current lending rates for loans or groups of loans with similar maturities and credit quality, assumes the debt is outstanding through maturity and considers the debt’s collateral (if applicable). We have utilized market information as available or present value techniques to estimate the amounts required to be disclosed.
Reportable Segments
Our primary focus is to lease space to tenants in shopping centers that we own, lease or manage. We evaluate the performance of the reportable segments based on net operating income, defined as total revenues less operating expenses and real estate taxes. Management does not consider the effect of gains or losses from the sale of property or interests in real estate joint ventures and partnerships in evaluating segment operating performance.
No individual property constitutes more than 10% of our revenues or assets, and we have no operations outside of the United States of America. Therefore, our properties have been aggregated into one reportable segment since such properties and the tenants thereof each share similar economic and operating characteristics.

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Accumulated Other Comprehensive Loss
Changes in accumulated other comprehensive loss by component consists of the following (in thousands):
 
Gain
on
Investments
 
Gain on
Cash Flow
Hedges
 
Defined Benefit Pension Plan
 
Total
Balance, January 1, 2017
$
(964
)
 
$
(6,403
)
 
$
16,528

 
$
9,161

Change excluding amounts reclassified from accumulated other comprehensive loss
(1,228
)
 
(1,063
)
 
82

 
(2,209
)
Amounts reclassified from accumulated other comprehensive loss
651

 
42

(1) 
(1,475
)
(2) 
(782
)
Net other comprehensive (income) loss
(577
)
 
(1,021
)
 
(1,393
)
 
(2,991
)
Balance, December 31, 2017
(1,541
)
 
(7,424
)
 
15,135

 
6,170

Cumulative effect adjustment of accounting standards
1,541

 
—

 
—

 
1,541

Change excluding amounts reclassified from accumulated other comprehensive loss
—

 
(1,379
)
 
1,143

 
(236
)
Amounts reclassified from accumulated other comprehensive loss
—

 
4,302

(1) 
(1,228
)
(2) 
3,074

Net other comprehensive loss (income)
—

 
2,923

 
(85
)
 
2,838

Balance, December 31, 2018
—

 
(4,501
)
 
15,050

 
10,549

Change excluding amounts reclassified from accumulated other comprehensive loss
—

 
—

 
1,044

 
1,044

Amounts reclassified from accumulated other comprehensive loss
—

 
887

(1) 
(1,197
)
(2) 
(310
)
Net other comprehensive loss (income)
—

 
887

 
(153
)
 
734

Balance, December 31, 2019
$
—

 
$
(3,614
)
 
$
14,897

 
$
11,283

___________________
(1)
This reclassification component is included in interest expense.
(2)
This reclassification component is included in the computation of net periodic benefit cost (see Note 15 for additional information).
Additionally, as of December 31, 2019 and 2018, the net gain balance in accumulated other comprehensive loss relating to previously terminated cash flow interest rate swap contracts was $3.6 million and $4.5 million, respectively, which will be reclassified to net interest expense as interest payments are made on the originally hedged debt. Within the next 12 months, approximately $.9 million in accumulated other comprehensive loss is expected to be reclassified as a reduction to interest expense related to our interest rate contracts.
Reclassifications
We have reclassified prior years’ miscellaneous lease-related revenues identified during our implementation of ASC No. 842 of $1.3 million and $2.5 million for the year ended December 31, 2018 and 2017, respectively, to Rentals, net from Other revenue in our Consolidated Statements of Operations to conform to the current year presentation (see Note 2 for further information).

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Note 2.      Newly Issued Accounting Pronouncements
Adopted
In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2016-02, "Leases." This ASU was further updated by ASU No. 2018-01, "Land Easement Practical Expedient for Transition for Topic 842," ASU No. 2018-10, "Codification Improvements to Topic 842," ASU No. 2018-11, "Targeted Improvements for Topic 842," ASU No. 2018-20, "Narrow-Scope Improvements for Lessors" and ASU No. 2019-01, "Codification Improvements to Topic 842." These ASUs set out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The ASUs require lessees to adopt a right-of-use asset approach that will bring substantially all leases onto the balance sheet, with the exception of short-term leases. The subsequent accounting for this right-of-use asset will be based on a dual-model approach, under which the lease will be classified as either a finance or an operating lease. The lessor accounting model under these ASUs is similar to current guidance, but certain underlying principles in the lessor model have been aligned with the new revenue recognition standard. A practical expedient was added for lessors to elect, by class of underlying assets, to account for lease and nonlease components as a single lease component if certain criteria are met. The provisions of these ASUs were effective for us as of January 1, 2019. We adopted this guidance as of January 1, 2019 and applied it on a modified retrospective approach and elected not to restate comparative periods.
Upon adoption, we applied the following practical expedients:
•
The practical expedient package which allows an entity not to reassess (1) whether any expired or existing contracts are or contain leases; (2) the lease classification for expired or existing leases; and (3) initial direct costs for any existing leases.
•
The practical expedient which allows an entity not to reassess whether any existing or expired land easements that were not previously accounted for as a lease or if the contract contains a lease.
•
As an accounting policy election, a lessor may choose not to separate the nonlease components, by class of underlying assets, from the lease components and instead account for both types of components as a single lease component under certain conditions.
•
As an accounting policy election, a lessee may choose not to separate the nonlease components, by class of underlying assets, from the lease components and instead account for both types of components as a single lease component.
•
As an accounting policy election, a lessee may choose by class of the underlying asset, not to apply the recognition requirements to short-term leases.
The adoption resulted in the following changes as of January 1, 2019:
•
From the Lessor Perspective:
◦
Our existing leases will continue to be classified as operating leases, however, leases entered into or modified after January 1, 2019 may be classified as either operating or sales-type leases, based on specific classification criteria. We believe the majority of our leases will continue to be classified as operating leases, and all operating leases will continue to have a similar pattern of recognition as under current GAAP.
◦
Capitalization of leasing costs has been limited under the new ASU which no longer allows indirect costs to be capitalized. Therefore, indirect, internally-generated leasing and legal costs are no longer capitalized and are recorded in General and administrative expenses in our Consolidated Statement of Operations in the period of adoption prospectively. We continue to capitalize direct costs as defined within the ASU.
◦
We are entitled to receive tenant reimbursements for operating expenses for common area maintenance (“CAM”). These ASUs have defined CAM reimbursement revenue as a nonlease component, which would need to be accounted for in accordance with Topic 606. However, we have applied the practical expedient for all of our real estate related leases, to account for the lease and nonlease components as a single, combined operating lease component as long as the nonlease component is not the predominate component of the combined components within a contract.

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◦
We previously accounted for real estate taxes that are paid directly by the tenant on a gross basis in our consolidated financial statements. These ASUs have indicated that a lessor should exclude from variable payments, lessor costs paid by a lessee directly to a third party. Therefore, we have excluded any costs paid directly by the tenant from our revenues and expenses and will only include as variable payments those which are reimbursed to us by our tenants. Real estate taxes paid directly by our tenants was $4.3 million and $4.6 million for the year ended December 31, 2018 and 2017, respectively.
•
From the Lessee Perspective:
◦
On January 1, 2019, we were the lessee under ground lease agreements for land underneath all or a portion of 12 centers and under four administrative office leases that we accounted for as operating leases. Also, we had one finance lease in which we were the lessee of two centers with a $21.9 million lease obligation.
We recognized right-of-use assets for our operating leases in Other Assets, along with corresponding lease liabilities in Other Liabilities on January 1, 2019 in the amounts of $44.2 million and $42.9 million, respectively, in the Consolidated Balance Sheet. The difference between the right-of-use assets and the lease liabilities is primarily associated with intangibles related to ground leases. For these existing operating leases, we continue to recognize a single lease expense for both our ground and office leases, currently included in Operating expenses and General and administrative expenses, respectively, in the Consolidated Statements of Operations.
◦
We continue to recognize our finance lease asset balance in Property and our finance lease liability in Debt in our Consolidated Balance Sheets. The finance lease charges a portion of the payment to both asset amortization and interest expense.
In June 2018, the FASB issued ASU No. 2018-07, "Improvements to Nonemployee Share-Based Payment Accounting." This ASU amends prior employee share-based payment guidance to include nonemployee share-based payment transactions for acquiring services or property. This ASU now aligns the determination of the measurement date, the accounting for performance conditions, and the accounting for share-based payments after vesting in addition to other items. The provisions of ASU No. 2018-07 were effective for us as of January 1, 2019 using a modified transition method upon adoption. The adoption of this ASU did not have a material impact to our consolidated financial statements.
Not Yet Adopted
In June 2016, the FASB issued ASU No. 2016-13, "Measurement of Credit Losses on Financial Instruments." This ASU was further updated by ASU No. 2018-19, "Codification Improvements to Topic 326, Financial Instruments - Credit Losses, "ASU No. 2019-04, "Codification Improvements to Topic 326, Financial Instruments - Credit Losses," ASU No. 2019-05, "Targeted Transition Relief" and ASU No. 2019-11, "Codification Improvements to Topic 326, Financial Instruments - Credit Losses." These ASUs amend prior guidance on the impairment of financial instruments, and adds an impairment model that is based on expected losses rather than incurred losses with the recognition of an allowance based on an estimate of expected credit losses. The provisions of ASU No. 2016-13, as amended in subsequently issued amendments, were effective for us as of January 1, 2020.
In identifying all of our financial instruments covered under this guidance, the majority of our instruments result from operating leasing transactions, which are not within the scope of the new standard and are to remain governed by the recently issued leasing guidance and other previously issued guidance. Upon adoption at January 1, 2020, we recognized the cumulative effect for credit losses which has decreased retained earnings and other assets by $.7 million, respectively. In addition, we evaluated controls around the implementation of this ASU and have concluded there will be no significant impact on our control structure.
In August 2018, the FASB issued ASU No. 2018-13, "Changes to the Disclosure Requirements for Fair Value Measurement." This ASU amends and removes several disclosure requirements including the valuation processes for Level 3 fair value measurements. The ASU also modifies some disclosure requirements and requires additional disclosures for changes in unrealized gains and losses included in other comprehensive income for recurring Level 3 fair value measurements and requires the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The provisions of ASU No. 2018-13 were effective for us as of January 1, 2020 using a prospective transition method for amendments effecting changes in unrealized gains and losses, significant unobservable inputs used to develop Level 3 fair value measurements and narrative description on uncertainty of measurements. The remaining provisions of the ASU have been applied retrospectively. The adoption of this ASU did not have a material impact to our consolidated financial statements.

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In August 2018, the FASB issued ASU No. 2018-14, "Changes to the Disclosure Requirements for Defined Benefit Plans." This ASU clarifies current disclosures and removes several disclosures requirements including accumulated other comprehensive income expected to be recognized over the next fiscal year and amount and timing of plan assets expected to be returned to the employer. The ASU also requires additional disclosures for the weighted-average interest crediting rates for cash balance plans and explanations for significant gains and losses related to changes in the benefit plan obligation. The provisions of ASU No. 2018-14 are effective for us as of December 31, 2020 using a retrospective basis for all periods presented, and early adoption is permitted. Although we are still assessing the impact of this ASU's adoption, we do not believe this ASU will have a material impact to our consolidated financial statements.
In December 2019, the FASB issued ASU No. 2019-12, "Simplifying the Accounting for Income Taxes." This ASU clarifies/simplifies current disclosures and removes several disclosures requirements. Simplification includes franchise taxes based partially on income as an income-based tax; entities should reflect enacted tax law and rate changes in the interim period that includes the enactment date; and allowing entities to allocate consolidated tax amounts to individual legal entities under certain elections. The provisions of ASU No. 2019-12 are effective for us as of January 1, 2021, and early adoption is permitted. Although we are still assessing the impact of this ASU's adoption, we do not believe this ASU will have a material impact to our consolidated financial statements.
Note 3.      Property
Our property consists of the following (in thousands):
 
December 31,
 
2019
 
2018
Land
$
911,521

 
$
919,237

Land held for development
40,667

 
45,673

Land under development
53,076

 
55,793

Buildings and improvements
2,898,867

 
2,927,954

Construction in-progress
241,118

 
156,411

Total
$
4,145,249

 
$
4,105,068


During the year ended December 31, 2019, we sold 15 centers and other property. Aggregate gross sales proceeds from these transactions approximated $464.1 million and generated gains of approximately $189.8 million. Also, for the year ended December 31, 2019, we acquired five grocery-anchored shopping centers and other property with an aggregate gross purchase price of approximately $219.6 million, and we invested $109.7 million in new development projects.

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Note 4.      Investment in Real Estate Joint Ventures and Partnerships
We own interests in real estate joint ventures or limited partnerships and have tenancy-in-common interests in which we exercise significant influence, but do not have financial and operating control. We account for these investments using the equity method, and our interests ranged for the periods presented from 20% to 90% in both 2019 and 2018. Combined condensed financial information of these ventures (at 100%) is summarized as follows (in thousands):
 
December 31,
 
2019
 
2018
Combined Condensed Balance Sheets
 
 
 
 
 
 
 
ASSETS
 
 
 
Property
$
1,378,328

 
$
1,268,557

Accumulated depreciation
(331,856
)
 
(305,327
)
Property, net
1,046,472

 
963,230

Other assets, net
108,366

 
104,267

Total Assets
$
1,154,838

 
$
1,067,497

 
 
 
 
LIABILITIES AND EQUITY
 
 
 
Debt, net (primarily mortgages payable)
$
264,782

 
$
269,113

Amounts payable to Weingarten Realty Investors and Affiliates
11,972

 
11,732

Other liabilities, net
25,498

 
24,717

Total Liabilities
302,252

 
305,562

Equity
852,586

 
761,935

Total Liabilities and Equity
$
1,154,838

 
$
1,067,497


 
Year Ended December 31,
 
2019
 
2018
 
2017
Combined Condensed Statements of Operations
 
 
 
 
 
Revenues, net
$
135,258

 
$
133,975

 
$
137,419

Expenses:
 
 
 
 
 
Depreciation and amortization
32,126

 
32,005

 
34,818

Interest, net
9,664

 
11,905

 
11,836

Operating
25,046

 
24,112

 
23,876

Real estate taxes, net
18,070

 
18,839

 
18,865

General and administrative
551

 
696

 
623

Provision for income taxes
133

 
138

 
112

Total
85,590

 
87,695

 
90,130

Gain on dispositions
2,009

 
9,495

 
12,492

Net Income
$
51,677

 
$
55,775

 
$
59,781


Our investment in real estate joint ventures and partnerships, as reported in our Consolidated Balance Sheets, differs from our proportionate share of the entities’ underlying net assets due to basis differences, which arose upon the transfer of assets to the joint ventures. The net positive basis differences, which totaled $9.0 million and $5.2 million at December 31, 2019 and 2018, respectively, are generally amortized over the useful lives of the related assets.

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We recorded joint venture fee income included in Other revenues for the year ended December 31, 2019, 2018 and 2017 of $6.5 million, $6.1 million and $6.2 million, respectively.
During 2019, a parcel of land was sold with gross sales proceeds of approximately $2.3 million, of which our share of the gain, included in equity earnings in real estate joint ventures and partnerships, totaled $1.1 million. In July 2019, a 51% owned unconsolidated real estate joint venture acquired a center with a gross purchase price of $52.6 million. Also during 2019, we invested $47.6 million in a 90% owned unconsolidated real estate joint venture for a mixed-use new development.
During 2018, a center was sold through a series of partial sales with gross sales proceeds of approximately $33.9 million, of which our share of the gain, included in equity in earnings in real estate joint ventures and partnerships, totaled $6.3 million.
Note 5.      Identified Intangible Assets and Liabilities
Identified intangible assets and liabilities associated with our property acquisitions are as follows (in thousands):
 
December 31,
 
2019
 
2018
Identified Intangible Assets:
 
 
 
Above-market leases (included in Other Assets, net)
$
23,830

 
$
38,181

Above-market leases - Accumulated Amortization
(12,145
)
 
(19,617
)
In place leases (included in Unamortized Lease Costs, net)
196,207

 
193,658

In place leases - Accumulated Amortization
(92,918
)
 
(99,352
)
 
$
114,974

 
$
112,870

Identified Intangible Liabilities:
 
 
 
Below-market leases (included in Other Liabilities, net)
$
95,240

 
$
85,742

Below-market leases - Accumulated Amortization
(32,326
)
 
(27,745
)
Above-market assumed mortgages (included in Debt, net)
3,446

 
3,446

Above-market assumed mortgages - Accumulated Amortization
(1,987
)
 
(1,660
)
 
$
64,373

 
$
59,783


These identified intangible assets and liabilities are amortized over the applicable lease terms or the remaining lives of the assumed mortgages, as applicable.
The net amortization of above-market and below-market leases increased rental revenues by $4.6 million, $12.8 million and $3.7 million in 2019, 2018 and 2017, respectively. The significant year over year change in rental revenues in 2019 to 2018 is primarily due to a write-off of a below-market lease intangible from the termination of a tenant's lease in 2018. The estimated net amortization of these intangible assets and liabilities will increase rental revenues for each of the next five years as follows (in thousands):
2020
$
4,883

2021
4,604

2022
4,255

2023
4,141

2024
4,048



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The amortization of the in place lease intangible assets recorded in depreciation and amortization, was $14.9 million, $29.8 million and $21.0 million in 2019, 2018 and 2017, respectively. The significant year over year change in depreciation and amortization from 2019 to 2018 is primarily due to the write-off of in-place lease intangibles from the termination of tenant leases in 2018. The estimated amortization of these intangible assets will increase depreciation and amortization for each of the next five years as follows (in thousands):
2020
$
15,762

2021
13,512

2022
11,118

2023
9,351

2024
7,926


The net amortization of above-market assumed mortgages decreased net interest expense by $.3 million, $.7 million and $1.1 million in 2019, 2018 and 2017, respectively. The estimated net amortization of these intangible liabilities will decrease net interest expense for each of the next five years as follows (in thousands):
2020
$
327

2021
287

2022
141

2023
136

2024
136


The following table details the identified intangible assets and liabilities and the remaining weighted-average amortization period associated with our asset acquisitions in 2019 as follows:
Identified intangible assets and liabilities subject to amortization (in thousands):
 
 
Assets:
 
 
In place leases
 
$
30,253

Above-market leases
 
1,323

Liabilities:
 
 
Below-market leases
 
13,762

 
 
 
Identified intangible assets and liabilities remaining weighted-average amortization period (in years):
 
 
Assets:
 
 
In place leases
 
11.0

Above-market leases
 
7.2

Liabilities:
 
 
Below-market leases
 
13.5



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Note 6.      Debt
Our debt consists of the following (in thousands):
 
December 31,
 
2019
 
2018
Debt payable, net to 2038 (1)
$
1,653,154

 
$
1,706,886

Unsecured notes payable under credit facilities
—

 
5,000

Debt service guaranty liability
57,380

 
60,900

Finance lease obligation
21,804

 
21,898

Total
$
1,732,338

 
$
1,794,684


___________________
(1)
At December 31, 2019, interest rates ranged from 3.3% to 7.0% at a weighted average rate of 3.9%. At December 31, 2018, interest rates ranged from 3.3% to 7.0% at a weighted average rate of 4.0%.
The allocation of total debt between fixed and variable-rate as well as between secured and unsecured is summarized below (in thousands):
 
December 31,
 
2019
 
2018
As to interest rate (including the effects of interest rate contracts):
 
 
 
Fixed-rate debt
$
1,714,890

 
$
1,771,999

Variable-rate debt
17,448

 
22,685

Total
$
1,732,338

 
$
1,794,684

As to collateralization:
 
 
 
Unsecured debt
$
1,450,762

 
$
1,457,432

Secured debt
281,576

 
337,252

Total
$
1,732,338

 
$
1,794,684


We maintain a $500 million unsecured revolving credit facility, which was amended and extended on December 11, 2019. This facility expires in March 2024, provides for two consecutive six-month extensions upon our request, and borrowing rates that float at a margin over LIBOR plus a facility fee. At December 31, 2019 and 2018, the borrowing margin and facility fee, which are priced off a grid that is tied to our senior unsecured credit ratings, were 82.5 and 15 basis points and 90 and 15 basis points, respectively. The facility also contains a competitive bid feature that allows us to request bids for up to $250 million. Additionally, an accordion feature allows us to increase the facility amount up to $850 million.
Additionally, we have a $10 million unsecured short-term facility, which was amended and extended on January 3, 2020, that we maintain for cash management purposes, which matures in March 2021. At both December 31, 2019 and 2018, the facility provided for fixed interest rate loans at a 30-day LIBOR rate plus a borrowing margin, facility fee and an unused facility fee of 125, 10, and 5 basis points, respectively.

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The following table discloses certain information regarding our unsecured notes payable under our credit facilities (in thousands, except percentages):
 
December 31,
 
2019
 
2018
Unsecured revolving credit facility:
 
 
 
Balance outstanding
$
—

 
$
5,000

Available balance
497,946

 
492,946

Letter of credit outstanding under facility
2,054

 
2,054

Variable interest rate (excluding facility fee) at end date
—
%
 
3.3
%
Unsecured short-term facility:
 
 
 
Balance outstanding
$
—

 
$
—

Variable interest rate at end date
—
%
 
—
%
Both facilities:
 
 
 
Maximum balance outstanding during the year
$
5,000

 
$
26,500

Weighted average balance
123

 
1,096

Year-to-date weighted average interest rate (excluding facility fee)
3.3
%
 
2.9
%

Related to a development project in Sheridan, Colorado, we have provided a guaranty for the payment of any debt service shortfalls until a coverage rate of 1.4x is met on tax increment revenue bonds issued in connection with the project. The bonds are to be repaid with incremental sales and property taxes and a PIF to be assessed on current and future retail sales and, to the extent necessary, any amounts we may have to provide under a guaranty. The incremental taxes and PIF are to remain intact until the earlier of the date the bond liability has been paid in full or 2040. Therefore, a debt service guaranty liability equal to the fair value of the amounts funded under the bonds was recorded. As of December 31, 2019 and 2018, we had $57.4 million and $60.9 million outstanding for the debt service guaranty liability, respectively.
During the year ended December 31, 2019, we repaid a $50 million secured fixed-rate mortgage with a 7.0% interest rate from cash from our disposition proceeds.
During the year ended December 31, 2018, we prepaid, without penalty, our $200 million unsecured variable-rate term loan, swapped to a fixed rate of 2.5%, and terminated three interest rate swap contracts that had an aggregate notional amount of $200 million, and we recognized a $3.4 million gain due to the probability that the related hedged forecasted transactions would no longer occur. Additionally, during the year ended December 31, 2018, we paid at par $51.0 million of outstanding debt. These transactions resulted in a net gain upon their extinguishment of $.4 million, excluding the effect of the swap termination.
Various leases and properties, and current and future rentals from those leases and properties, collateralize certain debt. At December 31, 2019 and 2018, the carrying value of such assets aggregated $.5 billion and $.6 billion, respectively. Additionally at December 31, 2019 and 2018, investments of $5.3 million and $5.2 million, respectively, included in Restricted Deposits and Escrows are held as collateral for letters of credit totaling $5.0 million.

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Scheduled principal payments on our debt (excluding $21.8 million of a finance lease obligation, $(3.9) million net premium/(discount) on debt, $(5.5) million of deferred debt costs, $1.5 million of non-cash debt-related items, and $57.4 million debt service guaranty liability) are due during the following years (in thousands): 
2020
$
22,743

2021
18,434

2022
307,922

2023
347,815

2024
252,153

2025
293,807

2026
277,291

2027
38,288

2028
92,159

2029
917

Thereafter
9,518

Total
$
1,661,047


Our various debt agreements contain restrictive covenants, including minimum interest and fixed charge coverage ratios, minimum unencumbered interest coverage ratios, minimum net worth requirements and maximum total debt levels. We are not aware of any non-compliance with our public debt and revolving credit facility covenants as of December 31, 2019.
Note 7.      Lease Obligations
We are engaged in the operation of shopping centers, which are either owned or, with respect to certain shopping centers, operated under operating ground leases. These ground leases expire at various dates through 2069 with renewal options ranging from five years to 20 years and in some cases, include options to purchase the underlying asset by either the lessor or lessee. Generally, our ground lease variable payments for real estate taxes, insurance and utilities are paid directly by us and are not a component of rental expense. Most of our leases have increasing minimum rental rates during the terms of the leases through escalation provisions and also may include an amount based on a percentage of operating revenues or sublease tenant revenue. Space in our shopping centers is leased to tenants pursuant to agreements that generally provide for terms of 10 years or less and may include multiple options to extend the lease term in increments up to five years, for annual rentals subject to upward adjustments based on operating expense levels, sales volume, or contractual increases as defined in the lease agreements.
Also, we have two properties under a finance lease that consists of variable lease payments with a purchase option. The right-of-use asset associated with this finance lease at December 31, 2019 was $8.9 million. At December 31, 2018, the related assets associated with a capital lease in buildings and improvements totaled $15.7 million, and the balance of accumulated depreciation was $14.1 million. Amortization of property under the finance lease is included in depreciation and amortization expense. Note that amounts prior to January 1, 2019 were accounted for under ASC No. 840.

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A schedule of lease costs including weighted average lease terms and weighted-average discount rates is as follows (in thousands, except as noted):
 
Year Ended December 31,
 
2019
Operating lease cost:
 
Included in Operating expense
$
3,044

Included in General and administrative expense
302

Finance cost:
 
Amortization of right-of-use asset (included in Depreciation and Amortization)
174

Interest on lease liability (included in Interest expense, net)
1,642

Short-term lease cost
44

Variable lease cost
309

Sublease income (included in Rentals, net)
(27,400
)
Total lease cost
$
(21,885
)
 
 
 
December 31, 2019
Weighted-average remaining lease term (in years):
 
Operating leases
41.5

Finance lease
4.0

 
 
Weighted-average discount rate (percentage):
 
Operating leases
4.9
%
Finance lease
7.5
%

A reconciliation of our lease liabilities on an undiscounted cash flow basis, which primarily represents shopping center ground leases, for the subsequent five years and thereafter, as calculated as of December 31, 2019, is as follows (in thousands):
 
Operating
 
Finance
Lease payments:
 
 
 
2020
$
2,696

 
$
1,744

2021
2,585

 
1,751

2022
2,576

 
1,759

2023
2,458

 
23,037

2024
2,158

 
 
Thereafter
97,187

 
 
Total
$
109,660

 
$
28,291

 
 
 
 
Lease liabilities(1)
43,063

 
21,804

Undiscounted excess amount
$
66,597

 
$
6,487

___________________
(1)
Operating lease liabilities are included in Other Liabilities, and finance lease liabilities are included in Debt, net in our Consolidated Balance Sheet.

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Scheduled minimum rental payments as defined under ASC No. 840, under the terms of all non-cancelable operating leases in which we are the lessee, principally for shopping center ground leases, for the subsequent five years and thereafter ending December 31, as calculated as of December 31, 2018, were as follows (in thousands):
 
Operating
 
Finance
Lease payments:
 
 
 
2019
$
2,779

 
$
1,642

2020
2,536

 
1,635

2021
2,334

 
1,627

2022
2,318

 
1,618

2023
2,283

 
22,878

Thereafter
99,302

 
 
Total
$
111,552

 
$
29,400


Rental expense for operating leases as defined under ASC No. 840 was, in millions: $3.1 in 2018 and $2.9 in 2017, which was recognized in Operating expense. Minimum revenues under subleases, applicable to the ground lease rentals, under the terms of all non-cancelable tenant leases was, in millions: $22.8 million in 2018 and $27.1 million in 2017.
Future undiscounted, sublease payments applicable to the ground lease rentals, under the terms of all non-cancelable tenant leases, excluding estimated variable payments for the subsequent five years and thereafter ending December 31, as calculated as of December 31, 2019 and 2018, were as follows (in thousands):
 
December 31, 2019
 
December 31, 2018
Sublease payments:
 
 
 
Finance lease(1)
$
10,279

 
$
14,382

Operating leases:
 
 
 
2019
 
 
$
22,528

2020
$
24,137

 
20,903

2021
22,168

 
18,886

2022
20,400

 
17,245

2023
18,583

 
15,128

2024
13,567

 
 
Thereafter
39,111

 
43,439

Total
$
137,966

 
$
138,129

___________________
(1)
The sublease payments related to our finance lease represents cumulative payments through the lease term ending in 2023.
Note 8.      Common Shares of Beneficial Interest
We have a $200 million share repurchase plan where we may repurchase common shares from time-to-time in open-market or in privately negotiated purchases. The timing and amount of any shares repurchased will be determined by management based on its evaluation of market conditions and other factors. The repurchase plan may be suspended or discontinued at any time, and we have no obligations to repurchase any amount of our common shares under the plan.
No common shares were repurchased during the year ended December 31, 2019, and .7 million common shares were repurchased at an average price of $27.10 per share during the year ended December 31, 2018. At December 31, 2019 and as of the date of this filing, $181.5 million of common shares remained available to be repurchased under this plan.

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Common dividends declared per share were $1.58, $2.98 and $2.29 for the year ended December 31, 2019, 2018 and 2017, respectively. The regular dividend rate per share for our common shares for each quarter of 2019, 2018 and 2017 was $.395, $.395 and $.385, respectively. No special dividend was paid in 2019, and for each December 2018 and 2017, we paid a special dividend for our common shares in an amount per share of $1.40 and $.75, respectively, which was due to the significant gains on dispositions of property. Subsequent to December 31, 2019, a first quarter dividend of $.395 per common share was approved by our Board of Trust Managers.
Note 9.      Leasing Operations
As a commercial real estate lessor, generally our leases are for terms of 10 years or less and may include multiple options, upon tenant election, to extend the lease term in increments up to five years. Our leases typically do not include an option to purchase. Tenant terminations prior to the lease end date occasionally results in a one-time termination fee based on the remaining unpaid lease payments including variable payments and could be material to the tenant. Many of our leases have increasing minimum rental rates during the terms of the leases through escalation provisions. In addition, the majority of our leases provide for variable rental revenues, such as, reimbursements of real estate taxes, maintenance and insurance and may include an amount based on a percentage of the tenants’ sales.
Future undiscounted, lease payments for tenant leases, excluding estimated variable payments, at December 31, 2019 is as follows (in thousands):
2020
$
335,451

2021
292,146

2022
238,559

2023
191,552

2024
144,329

Thereafter
451,531

Total payments due
$
1,653,568


Future minimum rental income as defined under ASC No. 840 from tenant leases, excluding estimated contingent rentals, at December 31, 2018 is as follows (in thousands):
2019
$
347,476

2020
305,404

2021
253,269

2022
198,414

2023
151,538

Thereafter
473,416

Total payments due
$
1,729,517


Variable lease payments recognized in Rentals, net are as follows (in thousands):
 
 
Year Ended December 31,
 
 
2019
Variable lease payments
 
$
109,685


Contingent rentals recognized in Rentals, net are as follows (in thousands):
 
Year Ended December 31,
 
2018
 
2017
Contingent rentals
$
118,703

 
$
129,635



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Note 10.      Impairment
The following impairment charges were recorded on the following assets based on the difference between the carrying amount of the assets and the estimated fair value (see Note 18 for additional fair value information) (in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Operating expenses:
 
 
 
 
 
Properties held for sale, under contract for sale or sold (1)
$
—

 
$
9,969

 
$
12,203

Land held for development and undeveloped land (1)
74

 
151

 
2,719

Other
—

 
—

 
335

Total impairment charges
74

 
10,120

 
15,257

Other financial statement captions impacted by impairment:
 
 
 
 
 
Equity in earnings of real estate joint ventures and partnerships, net (1)
3,070

 
—

 
—

Net income attributable to noncontrolling interests
(17
)
 
(17
)
 
21

Net impact of impairment charges
$
3,127

 
$
10,103

 
$
15,278

___________________
(1)
Amounts reported were based on changes in management's plans or intent for the properties and/or investments in real estate joint ventures and partnerships, third party offers, recent comparable market transactions and/or a change in market conditions.
Note 11.      Income Tax Considerations
We qualify as a REIT under the provisions of the Internal Revenue Code, and therefore, no tax is imposed on our taxable income distributed to shareholders. To maintain our REIT status, we must distribute at least 90% of our ordinary taxable income to our shareholders and meet certain income source and investment restriction requirements. Our shareholders must report their share of income distributed in the form of dividends.
Taxable income differs from net income for financial reporting purposes primarily because of differences in the timing of recognition of depreciation, rental revenue, repair expense, compensation expense, impairment losses and gain from sales of property. As a result of these differences, the book value of our net real estate assets is in excess of tax basis by $286.2 million and $211.0 million at December 31, 2019 and 2018, respectively.
The following table reconciles net income adjusted for noncontrolling interests to REIT taxable income (in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Net income adjusted for noncontrolling interests
$
315,435

 
$
327,601

 
$
335,274

Net (income) loss of taxable REIT subsidiary included above
(32,225
)
 
(13,496
)
 
4,220

Net income from REIT operations
283,210

 
314,105

 
339,494

Book depreciation and amortization
132,957

 
158,607

 
162,964

Tax depreciation and amortization
(75,824
)
 
(89,700
)
 
(95,512
)
Book/tax difference on gains/losses from capital transactions
(89,217
)
 
19,807

 
6,261

Deferred/prepaid/above and below-market rents, net
(9,332
)
 
(15,589
)
 
(11,146
)
Impairment loss from REIT operations
3,118

 
10,008

 
5,071

Other book/tax differences, net
(21,358
)
 
(13,718
)
 
(244
)
REIT taxable income
223,554

 
383,520

 
406,888

Dividends paid deduction (1)
(223,554
)
 
(383,520
)
 
(406,888
)
Dividends paid in excess of taxable income
$
—

 
$
—

 
$
—


___________________
(1)
For 2019, 2018 and 2017, the dividends paid deduction includes designated dividends of $121.2 million, $105.7 million and $112.8 million from 2020, 2019 and 2018, respectively.

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For federal income tax purposes, the cash dividends distributed to common shareholders are characterized as follows:
 
Year Ended December 31,
 
2019
 
2018
 
2017
Ordinary income
65.4
%
 
42.2
%
 
23.0
%
Capital gain distributions
34.6
%
 
57.8
%
 
77.0
%
Total
100.0
%
 
100.0
%
 
100.0
%

Our deferred tax assets and liabilities, including a valuation allowance, consisted of the following (in thousands):
 
December 31,
 
2019
 
2018
Deferred tax assets:
 
 
 
Impairment loss (1)
$
4,692

 
$
4,732

Net operating loss carryforwards (2)
3,206

 
11,132

Straight-line rentals
—

 
1,391

Book-tax basis differential
1,101

 
1,800

Other (4)
177

 
201

Total deferred tax assets
9,176

 
19,256

Valuation allowance (3)
(5,749
)
 
(12,787
)
Total deferred tax assets, net of allowance
$
3,427

 
$
6,469

Deferred tax liabilities:
 
 
 
Book-tax basis differential (1)
$
1,547

 
$
6,005

Other
155

 
398

Total deferred tax liabilities
$
1,702

 
$
6,403

___________________
(1)
Impairment losses and book-tax basis differential liabilities will not be recognized until the related properties are sold. Realization of impairment losses is dependent upon generating sufficient taxable income in the year the property is sold.
(2)
We have net operating loss carryforwards of $15.3 million that is an indefinite carryforward.
(3)
Management believes it is more likely than not that a portion of the deferred tax assets, which primarily consists of impairment losses and net operating losses, will not be realized and established a valuation allowance. However, the amount of the deferred tax asset considered realizable could be reduced if estimates of future taxable income are reduced.
(4)
Classification of prior year's amounts were made to conform to the current year presentation.
We are subject to federal, state and local income taxes and have recorded an income tax provision (benefit) as follows (in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Net income (loss) before taxes of taxable REIT subsidiary
$
32,602

 
$
13,480

 
$
(5,788
)
Federal provision (benefit) (1)
$
6,846

 
$
2,831

 
$
(2,026
)
Valuation allowance decrease
(7,038
)
 
(2,800
)
 
—

Effect of change in statutory rate on net deferrals
—

 
—

 
282

Other
569

 
(46
)
 
176

Federal income tax provision (benefit) of taxable REIT subsidiary (2)
377

 
(15
)
 
(1,568
)
State and local taxes, primarily Texas franchise taxes
663

 
1,393

 
1,551

Total
$
1,040

 
$
1,378

 
$
(17
)
___________________
(1)
At statutory rate of 21% for both the year ended December 31, 2019 and 2018 and 35% for the year ended December 31, 2017.
(2)
All periods from December 31, 2016 through December 31, 2019 are open for examination by the IRS.

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Also, a current tax obligation of $.7 million and $1.5 million has been recorded at December 31, 2019 and 2018, respectively, in association with these taxes.
Note 12.      Supplemental Cash Flow Information
Cash, cash equivalents and restricted cash equivalents consists of the following (in thousands):
 
December 31,
 
2019
 
2018
 
2017
Cash and cash equivalents
$
41,481

 
$
65,865

 
$
13,219

Restricted deposits and escrows (see Note 1)
13,810

 
10,272

 
8,115

Total
$
55,291

 
$
76,137

 
$
21,334


Supplemental disclosure of non-cash transactions is summarized as follows (in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Accrued property construction costs
$
8,014

 
$
11,135

 
$
7,728

Reduction of debt service guaranty liability
(3,520
)
 
(3,245
)
 
(2,980
)
Right-of-use assets exchanged for operating lease liabilities
43,729

 
—

 
—

Increase in equity associated with deferred compensation plan
—

 
—

 
44,758


Note 13.      Earnings Per Share
Earnings per common share – basic is computed using net income attributable to common shareholders and the weighted average number of shares outstanding – basic. Earnings per common share – diluted includes the effect of potentially dilutive securities. Earnings per common share – basic and diluted components for the periods indicated are as follows (in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Numerator:
 
 
 
 
 
Net income
$
322,575

 
$
345,343

 
$
350,715

Net income attributable to noncontrolling interests
(7,140
)
 
(17,742
)
 
(15,441
)
Net income attributable to common shareholders – basic
315,435

 
327,601

 
335,274

Income attributable to operating partnership units
2,112

 
—

 
3,084

Net income attributable to common shareholders – diluted
$
317,547

 
$
327,601

 
$
338,358

Denominator:
 
 
 
 
 
Weighted average shares outstanding – basic
127,842

 
127,651

 
127,755

Effect of dilutive securities:
 
 
 
 
 
Share options and awards
842

 
790

 
870

Operating partnership units
1,432

 
—

 
1,446

Weighted average shares outstanding – diluted
130,116

 
128,441

 
130,071



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Anti-dilutive securities of our common shares, which are excluded from the calculation of earnings per common share – diluted, are as follows (in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Operating partnership units
—

 
1,432

 
—

Total anti-dilutive securities
—

 
1,432

 
—



Note 14.      Share Options and Awards
Under our Amended and Restated 2010 Long-Term Incentive Plan (as amended), 4.0 million common shares are reserved for issuance, and options and share awards of 1.0 million are available for future grant at December 31, 2019. This plan expires in April 2028.
Compensation expense, net of forfeitures, associated with share options and restricted shares totaled $8.3 million in 2019, $7.3 million in 2018 and $8.6 million in 2017, of which $.8 million in 2019, $1.1 million in 2018 and $1.7 million in 2017 was capitalized.
Options
The fair value of share options issued prior to 2012 was estimated on the date of grant using the Black-Scholes option pricing method based on the expected weighted average assumptions.
Following is a summary of the option activity for the three years ended December 31, 2019:
 
Shares
Under
Option
 
Weighted
Average
Exercise
Price
Outstanding, January 1, 2017
934,201

 
$
22.85

Forfeited or expired
(4,042
)
 
43.37

Exercised
(101,805
)
 
16.11

Outstanding, December 31, 2017
828,354

 
23.58

Forfeited or expired
(196,159
)
 
32.22

Exercised
(352,318
)
 
19.78

Outstanding, December 31, 2018
279,877

 
22.30

Forfeited or expired
(1,136
)
 
11.85

Exercised
(71,325
)
 
17.98

Outstanding, December 31, 2019
207,416

 
$
23.84


The total intrinsic value of options exercised was $.9 million in 2019, $3.6 million in 2018 and $1.7 million in 2017. All share options were vested, and there was no unrecognized compensation cost related to share options.
The following table summarizes information about share options outstanding and exercisable at December 31, 2019:
Range of
Exercise Prices
 
Outstanding
 
Exercisable
 
Number
 
Weighted
Average
Remaining
Contractual
Life
 
Weighted
Average
Exercise
Price
 
Aggregate
Intrinsic
Value
(000’s)
 
Number
 
Weighted
Average
Remaining
Contractual
Life
 
Weighted
Average
Exercise
Price
 
Aggregate
Intrinsic
Value
(000’s)
$22.68 - $24.87  
 
207,416

 
0.8 years
 
$
23.84

 
1,535

 
207,416

 
0.8 years
 
$
23.84

 
1,535



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Share Awards
The fair value of the market-based share awards was estimated on the date of grant using a Monte Carlo valuation model based on the following assumptions:
 
Year Ended December 31, 2019
 
Minimum
 
Maximum
Dividend yield
0.0
%
 
5.5
%
Expected volatility (1)
19.3
%
 
21.3
%
Expected life (in years)
N/A

 
3

Risk-free interest rate
2.4
%
 
2.6
%
_______________
(1)
Includes the volatility of the FTSE NAREIT U.S. Shopping Center Index and Weingarten Realty Investors.
A summary of the status of unvested share awards for the year ended December 31, 2019 is as follows:
 
Unvested
Share
Awards
 
Weighted
Average 
Grant
Date Fair 
Value
Outstanding, January 1, 2019
674,293

 
$
30.26

Granted:
 
 
 
Service-based awards
179,825

 
28.61

Market-based awards relative to FTSE NAREIT U.S. Shopping Center
Index
80,848

 
30.20

Market-based awards relative to three-year absolute TSR
80,847

 
32.91

Trust manager awards
27,768

 
29.17

Vested
(236,716
)
 
32.13

Forfeited
(5,519
)
 
29.86

Outstanding, December 31, 2019
801,346

 
$
29.56


As of December 31, 2019 and 2018, there was approximately $2.1 million and $1.8 million, respectively, of total unrecognized compensation cost related to unvested share awards, which is expected to be amortized over a weighted average of 1.8 years and 1.7 years at December 31, 2019 and 2018, respectively.

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Note 15.      Employee Benefit Plans
Defined Benefit Plan:
The following tables summarize changes in the benefit obligation, the plan assets and the funded status of our pension plan as well as the components of net periodic benefit costs, including key assumptions (in thousands). The measurement dates for plan assets and obligations were December 31, 2019 and 2018.
 
December 31,
 
2019
 
2018
Change in Projected Benefit Obligation:
 
 
 
Benefit obligation at beginning of year
$
55,759

 
$
58,998

Service cost
1,090

 
1,295

Interest cost
2,257

 
2,056

Actuarial loss (gain) (1)
7,889

 
(4,478
)
Benefit payments
(2,742
)
 
(2,112
)
Benefit obligation at end of year
$
64,253

 
$
55,759

Change in Plan Assets:
 
 
 
Fair value of plan assets at beginning of year
$
50,802

 
$
53,808

Actual return on plan assets
10,356

 
(1,894
)
Employer contributions
1,000

 
1,000

Benefit payments
(2,742
)
 
(2,112
)
Fair value of plan assets at end of year
$
59,416

 
$
50,802

Unfunded status at end of year (included in accounts payable and accrued expenses in 2019 and 2018)
$
(4,837
)
 
$
(4,957
)
Accumulated benefit obligation
$
64,159

 
$
55,683

Net loss recognized in accumulated other comprehensive loss
$
14,897

 
$
15,050

___________________
(1)
The change in actuarial loss (gain) is attributable primarily to census and mortality table updates and a decrease in the discount rate in 2019.
The following is the required information for other changes in plan assets and benefit obligation recognized in other comprehensive income (in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Net loss
$
1,044

 
$
1,143

 
$
82

Amortization of net loss (1)
(1,197
)
 
(1,228
)
 
(1,475
)
Total recognized in other comprehensive income
$
(153
)
 
$
(85
)
 
$
(1,393
)
Total recognized in net periodic benefit cost and other comprehensive income
$
880

 
$
767

 
$
213


___________________
(1)
The estimated net loss that will be amortized from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year is $1.2 million.

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The following is the required information with an accumulated benefit obligation in excess of plan assets (in thousands):
 
December 31,
 
2019
 
2018
Projected benefit obligation
$
64,253

 
$
55,759

Accumulated benefit obligation
64,159

 
55,683

Fair value of plan assets
59,416

 
50,802


The components of net periodic benefit cost are as follows (in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Service cost
$
1,090

 
$
1,295

 
$
1,223

Interest cost
2,257

 
2,056

 
2,123

Expected return on plan assets
(3,511
)
 
(3,727
)
 
(3,215
)
Amortization of net loss
1,197

 
1,228

 
1,475

Total
$
1,033

 
$
852

 
$
1,606


The components of net periodic benefit cost other than the service cost component are included in Interest and Other Income, net in the Consolidated Statements of Operations.
The assumptions used to develop net periodic benefit cost are shown below:
 
Year Ended December 31,
 
2019
 
2018
 
2017
Discount rate
4.12
%
 
3.50
%
 
4.01
%
Salary scale increases
3.50
%
 
3.50
%
 
3.50
%
Long-term rate of return on assets
7.00
%
 
7.00
%
 
7.00
%

The selection of the discount rate is made annually after comparison to yields based on high quality fixed-income investments. The salary scale is the composite rate which reflects anticipated inflation, merit increases, and promotions for the group of covered participants. The long-term rate of return is a composite rate for the trust. It is derived as the sum of the percentages invested in each principal asset class included in the portfolio multiplied by their respective expected rates of return. We considered the historical returns and the future expectations for returns for each asset class, as well as the target asset allocation of the pension portfolio. This analysis resulted in the selection of 7.00% as the long-term rate of return assumption for 2019.
The assumptions used to develop the actuarial present value of the benefit obligation are shown below:
 
Year Ended December 31,
 
2019
 
2018
 
2017
Discount rate
3.09
%
 
4.12
%
 
3.50
%
Salary scale increases
3.50
%
 
3.50
%
 
3.50
%

The expected contribution to be paid for the Retirement Plan by us during 2020 is approximately $1.0 million. The expected benefit payments for the next 10 years for the Retirement Plan is as follows (in thousands):
2020
$
2,436

2021
2,602

2022
2,772

2023
2,936

2024
3,062

2025-2029
16,209



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The participant data used in determining the liabilities and costs for the Retirement Plan was collected as of January 1, 2019, and no significant changes have occurred through December 31, 2019.
At December 31, 2019, our investment asset allocation compared to our benchmarking allocation model for our plan assets was as follows:
 
Portfolio
 
Benchmark
Cash and Short-Term Investments
5
%
 
4
%
U.S. Stocks
51
%
 
56
%
International Stocks
14
%
 
10
%
U.S. Bonds
24
%
 
26
%
International Bonds
5
%
 
3
%
Other
1
%
 
1
%
Total
100
%
 
100
%

The fair value of plan assets was determined based on publicly quoted market prices for identical assets, which are classified as Level 1 observable inputs. The allocation of the fair value of plan assets was as follows:
 
December 31,
 
2019
 
2018
Cash and Short-Term Investments
18
%
 
20
%
Large Company Funds
34
%
 
33
%
Mid Company Funds
7
%
 
7
%
Small Company Funds
7
%
 
6
%
International Funds
11
%
 
8
%
Fixed Income Funds
15
%
 
18
%
Growth Funds
8
%
 
8
%
Total
100
%
 
100
%

Concentrations of risk within our equity portfolio are investments classified within the following sectors: technology, financial services, healthcare, consumer cyclical goods and industrial, which represents approximately 21%, 17%, 15%, 12% and 11% of total equity investments, respectively.
Defined Contribution Plans:
Compensation expense related to our defined contribution plans was $3.9 million in 2019, $3.8 million in 2018 and $3.9 million in 2017.
Note 16.      Commitments and Contingencies
Commitments and Contingencies
As of December 31, 2019 and 2018, we participated in two real estate ventures structured as DownREIT partnerships. We have operating and financial control over these ventures and consolidate them in our consolidated financial statements. These ventures allow the outside limited partners to put their interest in the partnership to us, and we have the option to redeem the interest in cash or a fixed number of our common shares, at our discretion. We also participate in a real estate venture that has a property in Texas that allows its outside partner to put operating partnership units to us. We have the option to redeem these units in cash or a fixed number of our common shares, at our discretion. The aggregate redemption value of these interests was approximately $45 million and $36 million as of December 31, 2019 and 2018, respectively.
As of December 31, 2019, we have entered into commitments aggregating $98.5 million comprised principally of construction contracts which are generally due in 12 to 36 months.

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We issue letters of intent signifying a willingness to negotiate for acquisitions, dispositions or joint ventures, as well as other types of potential transactions, during the ordinary course of our business. Such letters of intent and other arrangements are non-binding to all parties unless and until a definitive contract is entered into by the parties. Even if definitive contracts relating to the acquisition or disposition of property are entered into, these contracts generally provide the purchaser a time period to evaluate the property and conduct due diligence. The purchaser, during this time, will have the ability to terminate a contract without penalty or forfeiture of any deposit or earnest money. No assurance can be provided that any definitive contracts will be entered into with respect to any matter covered by letters of intent, or that we will consummate any transaction contemplated by a definitive contract. Additionally, due diligence periods for property transactions are frequently extended as needed. An acquisition or disposition of property becomes probable at the time the due diligence period expires and the definitive contract has not been terminated. Our risk is then generally extended only to any earnest money deposits associated with property acquisition contracts, and our obligation to sell under a property sales contract.
We are subject to numerous federal, state and local environmental laws, ordinances and regulations in the areas where we own or operate properties. We are not aware of any contamination which may have been caused by us or any of our tenants that would have a material effect on our consolidated financial statements.
As part of our risk management activities, we have applied and been accepted into state sponsored environmental programs which will limit our expenses if contaminants need to be remediated. We also have an environmental insurance policy that covers us against third party liabilities and remediation costs.
While we believe that we do not have any material exposure to environmental remediation costs, we cannot give absolute assurance that changes in the law or new discoveries of contamination will not result in additional liabilities to us.
Litigation
We are involved in various matters of litigation arising in the normal course of business. While we are unable to predict the amounts involved, our management and counsel are of the opinion that, when such litigation is resolved, any additional liability, if any, will not have a material effect on our consolidated financial statements.
Note 17.      Variable Interest Entities
Consolidated VIEs:
At December 31, 2019 and 2018, eight and nine of our real estate joint ventures, respectively, whose activities primarily consisted of owning and operating 21 neighborhood/community shopping centers, were determined to be VIEs. Based on a financing agreement by one of our real estate joint ventures that has a bottom dollar guaranty, which is disproportionate to our ownership, we have determined that we are the primary beneficiary and have consolidated this joint venture. For the remaining real estate joint ventures, we concluded we are the primary beneficiary based primarily on our significant power to direct the entities' activities without any substantive kick-out or participating rights.
A summary of our consolidated VIEs is as follows (in thousands):
 
December 31,
 
2019
 
2018
Assets Held by VIEs
$
228,954

 
$
225,388

Assets Held as Collateral for Debt (1)
39,782

 
40,004

Maximum Risk of Loss (1)
29,784

 
29,784

___________________
(1)
Represents the amount of debt and related assets held as collateral associated with the bottom dollar guaranty at one real estate joint venture.
Restrictions on the use of these assets can be significant because they may serve as collateral for debt. Further, we are generally required to obtain our partner's approval in accordance with the joint venture agreement for any major transactions. Transactions with these joint ventures in our consolidated financial statements have primarily been positive as demonstrated by the generation of net income and operating cash flows, as well as the receipt of cash distributions. We and our partners are subject to the provisions of the joint venture agreements which include provisions for when additional contributions may be required to fund operating cash shortfalls, development expenditures and unplanned capital expenditures.

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Unconsolidated VIEs:
At both December 31, 2019 and 2018, two unconsolidated real estate joint ventures were determined to be VIEs. We have determined that one entity was a VIE through the issuance of a secured loan, since the lender had the ability to make decisions that could have a significant impact on the success of the entity. Based on the associated agreements for the future development of a mixed-use project, we concluded that the other entity was a VIE, but we are not the primary beneficiary as the substantive participating rights associated with the entity are shared, and we do not have the power to direct the significant activities of the entity. Our analysis considered that all major decisions require unanimous member consent and those decisions include significant activities such as development, financing, leasing and operations of the entity.
A summary of our unconsolidated VIEs is as follows (in thousands):
 
December 31,
 
2019
 
2018
Investment in Real Estate Joint Ventures and Partnerships, net (1)
$
128,361

 
$
76,575

Other Liabilities, net (2)
7,735

 
6,592

Maximum Risk of Loss (3)
34,000

 
34,000

___________________
(1)
The carrying amount of the investment represents our contributions to a real estate joint venture, net of any distributions made and our portion of the equity in earnings of the real estate joint venture. The increase between the periods represents new development funding of a mixed-use project.
(2)
Includes the carrying amount of an investment where distributions have exceeded our contributions and our portion of the equity in earnings for a real estate joint venture.
(3)
The maximum risk of loss has been determined to be limited to our debt exposure for the real estate joint ventures. Additionally, our investment, including contributions and distributions, associated with a mixed-use project is disclosed in (1) above.
We and our partners are subject to the provisions of the joint venture agreements that specify conditions, including operating shortfalls, development expenditures and unplanned capital expenditures, under which additional contributions may be required. With respect to our future development of a mixed-use project, we anticipate funding of approximately $9 million through 2020.
Note 18.      Fair Value Measurements
Recurring Fair Value Measurements:
Assets and liabilities measured at fair value on a recurring basis as of December 31, 2019 and 2018, aggregated by the level in the fair value hierarchy in which those measurements fall, are as follows (in thousands):
 
Quoted Prices
in Active
Markets for
Identical
Assets
and Liabilities
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 
Fair Value at
December 31,
2019
Assets:
 
 
 
 
 
 
 
Cash equivalents, primarily money market funds (1)
$
28,330

 
 
 
 
 
$
28,330

Restricted cash, primarily money market funds (1)
9,916

 
 
 
 
 
9,916

Investments, mutual funds held in a grantor trust (1)
38,378

 
 
 
 
 
38,378

Total
$
76,624

 
$
—

 
$
—

 
$
76,624

Liabilities:
 
 
 
 
 
 
 
Deferred compensation plan obligations
$
38,378

 
 
 
 
 
$
38,378

Total
$
38,378

 
$
—

 
$
—

 
$
38,378

___________________
(1)
For the year ended December 31, 2019, a net gain of $9.4 million was included in Interest and Other Income, net, of which $6.7 million represented an unrealized gain.

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Quoted Prices
in Active
Markets for
Identical
Assets
and Liabilities
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 
Fair Value at
December 31,
2018
Assets:
 
 
 
 
 
 
 
Cash equivalents, primarily money market funds (1)
$
54,848

 
 
 
 
 
$
54,848

Restricted cash, primarily money market funds (1)
5,254

 
 
 
 
 
5,254

Investments, mutual funds held in a grantor trust (1)
30,996

 
 
 
 
 
30,996

Investments, mutual funds (1)
6,635

 
 
 
 
 
6,635

Total
$
97,733

 
$
—

 
$
—

 
$
97,733

Liabilities:
 
 
 
 
 
 
 
Deferred compensation plan obligations
$
30,996

 
 
 
 
 
$
30,996

Total
$
30,996

 
$
—

 
$
—

 
$
30,996

___________________
(1)
For the year ended December 31, 2018, a net gain of $1.4 million was included in Interest and Other Income, net, of which $(3.0) million represented an unrealized loss.
Nonrecurring Fair Value Measurements:
Investment in Real Estate Joint Ventures and Partnerships Impairments
Estimated fair values are determined by management utilizing the performance of each investment, the life and other terms of the investment, holding periods, market conditions, cash flow models, market capitalization rates and market discount rates, or by obtaining third-party broker valuation estimates, appraisals, bona fide purchase offers or the expected sales price of an executed sales agreement in accordance with our fair value measurements accounting policy. Market capitalization rates and market discount rates are determined by reviewing current sales of similar properties and transactions, and utilizing management’s knowledge and expertise in property marketing.
No assets were measured at fair value on a nonrecurring basis at December 31, 2018. Assets measured at fair value on a nonrecurring basis at December 31, 2019 aggregated by the level in the fair value hierarchy in which those measurements fall, are as follows (in thousands):
 
Quoted Prices in Active 
Markets for
Identical 
Assets
and Liabilities
(Level 1)
 
Significant 
Other
Observable 
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 
Fair Value
 
Total Gains
(Losses) (1)
Investment in real estate joint ventures and partnerships (2)

 
$
1,830

 
$
24,154

 
$
25,984

 
$
(3,070
)
Total
$
—

 
$
1,830

 
$
24,154

 
$
25,984

 
$
(3,070
)
____________
(1)
Total gains (losses) presented in this table relate to assets that are still held by us at December 31, 2019.
(2)
In accordance with our policy of evaluating and recording impairments on the disposal of investments in real estate joint ventures and partnerships, investments with a carrying amount of $29.1 million were written down to a fair value of $26.0 million, resulting in a loss of $3.1 million, which was included in earnings for the fourth quarter of 2019. Management’s estimate of fair value of these investments were determined using a bona fide purchase offer for the Level 2 inputs, and see the quantitative information about the significant unobservable inputs used for our Level 3 fair value measurements in the table below.

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Fair Value Disclosures:
Unless otherwise listed below, short-term financial instruments and receivables are carried at amounts which approximate their fair values based on their highly-liquid nature, short-term maturities and/or expected interest rates for similar instruments.
Schedule of our fair value disclosures is as follows (in thousands):
 
December 31,
 
2019
 
2018
 
Carrying
Value
 
Fair Value
Using
Significant 
Other
Observable 
Inputs
(Level 2)
 
Fair Value
Using
Significant
Unobservable
Inputs
(Level 3)
 
Carrying
Value
 
Fair Value
Using
Significant 
Other
Observable 
Inputs
(Level 2)
 
Fair Value
Using
Significant
Unobservable
Inputs
(Level 3)
Other Assets:
 
 
 
 
 
 
 
 
 
 
 
Tax increment revenue bonds (1)
$
17,277

 
 
 
$
25,000

 
$
20,009

 
 
 
$
25,000

Investments, held to maturity (2)
—

 
$
—

 
 
 
3,000

 
$
2,988

 
 
Debt:
 
 
 
 
 
 
 
 
 
 
 
Fixed-rate debt
1,714,890

 
 
 
1,787,663

 
1,771,999

 
 
 
1,761,215

Variable-rate debt
17,448

 
 
 
17,426

 
22,685

 
 
 
23,131


___________________
(1)
At December 31, 2019 and 2018, the credit loss balance on our tax increment revenue bonds was $31.0 million.
(2)
Investments held to maturity are recorded at cost. As of December 31, 2018, these investments had unrealized losses of $12 thousand.
The quantitative information about the significant unobservable inputs used for our nonrecurring Level 3 fair value measurements as of December 31, 2019 reported in the above table, is as follows:
 
 
Fair Value at
December 31,
 
 
 
 
 
Range
 
 
2019
 
 
 
 
 
Minimum
 
Maximum
Description
 
(in thousands)
 
Valuation Technique
 
Unobservable Inputs
 
2019
 
2019
Investment in real estate joint ventures and partnerships
 
$
24,154

 
Discounted cash flows
 
Discount rate
 
7.3
%
 
7.5
%
 
 
 
 
 
 
Capitalization rate
 
5.8
%
 
8.0
%
 
 
 
 
 
 
Noncontrolling interest discount
 
 
 
15.0
%


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Note 19.      Quarterly Financial Data (Unaudited)
Summarized quarterly financial data is as follows (in thousands):
 
First
 
Second
 
Third
 
Fourth
 
2019
 
 
 
 
 
 
 
 
Revenues
$
123,138

(1) 
$
122,660

(1) 
$
121,362

(1) 
$
119,465

(1) 
Net income
51,254

(2) 
85,520

(2) 
108,509

(2) 
77,292

(2)(3) 
Net income attributable to
common shareholders
49,666

(2) 
83,809

(2) 
106,742

(2) 
75,218

(2)(3) 
Earnings per common
share – basic
.39

(2) 
.66

(2) 
.83

(2) 
.59

(2)(3) 
Earnings per common
share – diluted
.39

(2) 
.65

(2) 
.82

(2) 
.58

(2)(3) 
2018
 
 
 
 
 
 
 
 
Revenues
$
132,452

(1) 
$
142,086

(1) 
$
128,790

(1) 
$
127,819

(1) 
Net income
148,969

(2)(4) 
79,871

(1)(2)(3) 
53,274

(2)(3) 
63,229

(2)(3) 
Net income attributable to
common shareholders
146,824

(2)(4)(5) 
78,289

(1)(2)(3) 
42,981

(2)(3)(5) 
59,507

(2)(3)(5) 
Earnings per common
share – basic
1.15

(2)(4)(5) 
.61

(1)(2)(3) 
.34

(2)(3)(5) 
.47

(2)(3)(5) 
Earnings per common
share – diluted
1.13

(2)(4)(5) 
.61

(1)(2)(3) 
.34

(2)(3)(5) 
.46

(2)(3)(5) 
___________________
(1)
The quarter results include revenues associated with dispositions and acquisitions. Revenue amounts associated with dispositions are: $9.7 million, $8.8 million, $4.3 million and $1.3 million for the three months ended March 31, 2019, June 30, 2019, September 30, 2019 and December 31, 2019, respectively, and $11.9 million, $8.3 million, $7.0 million and $4.1 million for the three months ended March 31, 2018, June 30, 2018, September 30, 2018 and December 31, 2018, respectively. Revenue amounts associated with acquisitions totaled $.5 million, $1.6 million and $3.0 million for the three months ended June 30, 2019, September 30, 2019 and December 31, 2019, respectively. Additionally, a $10.0 million write-off of a below-market lease intangible from the termination of a tenant's lease increased revenues for the three months ended June 30, 2018, and additional revenue of $1.1 million was realized from the termination of two tenant leases for the three months ended September 30, 2019.
(2)
The quarter results include significant gains on the sale of property and investments, including gains in equity in earnings from real estate joint ventures and partnerships, net. Gain amounts are: $19.2 million, $52.7 million, $74.1 million and $46.0 million for the three months ended March 31, 2019, June 30, 2019, September 30, 2019 and December 31, 2019, respectively, and $111.4 million, $48.2 million, $19.8 million and $34.8 million for the three months ended March 31, 2018, June 30, 2018, September 30, 2018 and December 31, 2018, respectively.
(3)
The quarter results include $3.1 million, $2.4 million and $7.7 million of impairment losses for the three months ended December 31, 2019, September 30, 2018 and December 31, 2018, respectively. Additionally, the quarter results include a $13.1 million write-off of an in-place lease intangible for the three months ended June 30, 2018.
(4)
The quarter results include a gain on extinguishment of debt including related swap activity totaling $3.8 million for the three months ended March 31, 2018.
(5)
Associated primarily with the gains discussed in (2) above, amounts in net income attributable to noncontrolling interests are: $.5 million, $8.6 million and $1.9 million for the three months ended March 31, 2018, September 30, 2018 and December 31, 2018, respectively.
* * * * *

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ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not applicable.
ITEM 9A. Controls and Procedures
Under the supervision and with the participation of our principal executive officer and principal financial officer, management has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) as of December 31, 2019. Based on that evaluation, our principal executive officer and our principal financial officer have concluded that our disclosure controls and procedures were effective as of December 31, 2019.
There has been no change to our internal control over financial reporting during the quarter ended December 31, 2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Weingarten Realty Investors and its subsidiaries (“WRI”) maintain a system of internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act, which is a process designed under the supervision of WRI’s principal executive officer and principal financial officer and effected by WRI’s Board of Trust Managers, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
WRI’s internal control over financial reporting includes those policies and procedures that:
•
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of WRI’s assets;
•
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of WRI are being made only in accordance with authorizations of management and trust managers of WRI; and
•
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of WRI’s assets that could have a material effect on the financial statements.
WRI’s management has responsibility for establishing and maintaining adequate internal control over financial reporting for WRI. Management, with the participation of WRI’s Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of WRI’s internal control over financial reporting as of December 31, 2019 based on the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Based on their evaluation of WRI’s internal control over financial reporting, WRI’s management along with the Chief Executive Officer and Chief Financial Officer believe that WRI’s internal control over financial reporting is effective as of December 31, 2019.
Deloitte & Touche LLP, WRI’s independent registered public accounting firm that audited the consolidated financial statements and financial statement schedules included in this Form 10-K, has issued an attestation report on the effectiveness of WRI’s internal control over financial reporting.
February 27, 2020

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Trust Managers of Weingarten Realty Investors
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Weingarten Realty Investors and subsidiaries (the “Company”) as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements and financial statement schedules as of and for the year ended December 31, 2019, of the Company and our report dated February 27, 2020, expressed an unqualified opinion on those financial statements and financial statement schedules.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report On Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Deloitte & Touche LLP

Houston, Texas  
February 27, 2020  


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ITEM 9B. Other Information
Not applicable.
PART III
ITEM 10. Trust Managers, Executive Officers and Corporate Governance
Information with respect to our trust managers and executive officers is incorporated herein by reference to the “Election of Trust Managers - Proposal One," “Compensation Discussion and Analysis - Overview” and “Share Ownership of Beneficial Owners and Management” sections of our definitive Proxy Statement for the Annual Meeting of Shareholders to be held April 29, 2020.
Code of Conduct and Ethics
We have adopted a code of business and ethics for trust managers, officers and employees, known as the Code of Conduct and Ethics. The Code of Conduct and Ethics is available on our website at www.weingarten.com. Shareholders may request a free copy of the Code of Conduct and Ethics from:
Weingarten Realty Investors
Attention: Investor Relations
2600 Citadel Plaza Drive, Suite 125
Houston, Texas 77008
(713) 866-6000
www.weingarten.com
We have also adopted a Code of Ethical Conduct for Officers and Senior Financial Associates setting forth a code of ethics applicable to our principal executive officer, principal financial officer, chief accounting officer and financial associates, which is available on our website at www.weingarten.com. Shareholders may request a free copy of the Code of Conduct for Officers and Senior Financial Associates from the address and phone number set forth above.
Governance Guidelines
We have adopted governance guidelines, known as the Governance Policies, which are available on our website at www.weingarten.com. Shareholders may request a free copy of the Governance Policies from the address and phone number set forth above under “Code of Conduct and Ethics.”
ITEM 11. Executive Compensation
Information with respect to executive compensation is incorporated herein by reference to the “Compensation Discussion and Analysis,” “Trust Manager Compensation” including the "Trust Manager Compensation Table” section, “Compensation Committee Report” and “Summary Compensation Table” sections of our definitive Proxy Statement for the Annual Meeting of Shareholders to be held April 29, 2020.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
The “Share Ownership of Beneficial Owners and Management” section of our definitive Proxy Statement for the Annual Meeting of Shareholders to be held April 29, 2020 is incorporated herein by reference.

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The following table summarizes the equity compensation plans under which our common shares of beneficial interest may be issued as of December 31, 2019:
Plan category
 
Number of shares to be issued upon exercise of outstanding options, warrants and rights
 
Weighted average exercise price of outstanding options, warrants and rights
 
Number of shares remaining available for future issuance under equity compensation plans
Equity compensation plans approved by shareholders
 
207,416
 
$23.84
 
952,877
Equity compensation plans not approved by shareholders
 
—
 
—
 
—
Total
 
207,416
 
$23.84
 
952,877
ITEM 13. Certain Relationships and Related Transactions, and Trust Manager Independence
The “Governance,” "Compensation Committee Interlocks and Insider Participation” and "Certain Transactions" sections of our definitive Proxy Statement for the Annual Meeting of Shareholders to be held April 29, 2020 are incorporated herein by reference.
ITEM 14. Principal Accountant Fees and Services
The “Accounting Firm Fees” section within “Ratification of Independent Registered Public Accounting Firm - Proposal Two” of our definitive Proxy Statement for the Annual Meeting of Shareholders to be held April 29, 2020 is incorporated herein by reference.
PART IV
ITEM 15. Exhibits and Financial Statement Schedules
(a)
 
Financial Statements and Financial Statement Schedules:
 
—
Weingarten Realty Investors 2019 financial statements and financial statement schedules, together with the reports of Deloitte & Touche LLP, are listed in the index immediately preceding the financial statements in Item 8, Financial Statements and Supplementary Data.
(b)
 
Exhibits:
3.1
—
3.2
—
3.3
—
3.4
—
3.5
—
3.6
—
3.7
—
3.8
—
3.9
—

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3.10
—
4.1
—
4.2
—
4.3
—
4.4
—
4.5
—
4.6
—
4.7
—
4.8
—
4.9
—
4.10
—
4.11
—
4.12
—
4.13
—
10.1†
—
10.2†
—
10.3†
—
10.4†
—
10.5†
—
10.6†
—
10.7†
—
10.8†
—

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10.9†
—
10.10†
—
10.11†
—
10.12†
—
10.13†
—
10.14†
—
10.15†
—
10.16†
—
10.17†
—
10.18†
—
10.19†
—
10.20†
—
10.21†
—
10.22†
—
10.23†
—
10.24†
—
10.25†
—
10.26†
—
10.27†
—
10.28†
—

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10.29†
—
10.30†
—
10.31†
—
10.32†
—
10.33
—
10.34
—
10.35
—
10.36
—
10.37
—
10.38
—
10.39
—
10.40
—
10.41
—
10.42
—

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10.43
—
10.44
—
10.45
—
21.1*
—
23.1*
—
31.1*
—
31.2*
—
32.1**
—
32.2**
—
101.INS**
—
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH**
—
XBRL Taxonomy Extension Schema Document
101.CAL**
—
XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF**
—
XBRL Taxonomy Extension Definition Linkbase Document
101.LAB**
—
XBRL Taxonomy Extension Labels Linkbase Document
101.PRE**
—
XBRL Taxonomy Extension Presentation Linkbase Document
 
 
*
Filed with this report.
**
Furnished with this report.
†
Management contract or compensation plan or arrangement.

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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and 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
 
 
 
 
By:
/s/  Andrew M. Alexander
 
 
Andrew M. Alexander
 
 
Chairman/President/Chief Executive Officer
Date: February 27, 2020
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each of Weingarten Realty Investors, a real estate investment trust organized under the Texas Business Organizations Code, and the undersigned trust managers and officers of Weingarten Realty Investors hereby constitute and appoint Andrew M. Alexander, Stanford Alexander, Stephen C. Richter and Joe D. Shafer or any one of them, its or his true and lawful attorney-in-fact and agent, for it or him and in its or his name, place and stead, in any and all capacities, with full power to act alone, to sign any and all amendments to this report, and to file each such amendment to the report, with all exhibits thereto, and any and all other documents in connection therewith, with the Securities and Exchange Commission, hereby granting unto said attorney-in-fact and agent full power and authority to do and perform any and all acts and things requisite and necessary to be done in and about the premises as fully to all intents and purposes as it or he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.

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Pursuant to the requirement of the Securities and Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
 
Signature
Title
Date
 
 
 
 
By:
/s/ Andrew M. Alexander
Chairman/President/Chief Executive Officer
and Trust Manager
(Principal Executive Officer)
February 27, 2020
 
Andrew M. Alexander
 
 
 
 
By:
/s/ Stanford J. Alexander
Chairman Emeritus
and Trust Manager
February 27, 2020
 
Stanford J. Alexander
 
 
 
 
By:
/s/ Shelaghmichael C. Brown
Trust Manager
February 27, 2020
 
Shelaghmichael C. Brown
 
 
 
 
By:
/s/ Stephen A. Lasher
Trust Manager
February 27, 2020
 
Stephen A. Lasher
 
 
 
 
By:
/s/ Stephen C. Richter
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
February 27, 2020
 
Stephen C. Richter
 
 
 
 
By:
/s/ Thomas L. Ryan
Trust Manager
February 27, 2020
 
Thomas L. Ryan
 
 
 
 
By:
/s/ Douglas W. Schnitzer
Trust Manager
February 27, 2020
 
Douglas W. Schnitzer
 
 
 
 
By:
/s/ Joe D. Shafer
Senior Vice President/Chief Accounting Officer
(Principal Accounting Officer)
February 27, 2020
 
Joe D. Shafer
 
 
 
 
By:
/s/ C. Park Shaper
Trust Manager
February 27, 2020
 
C. Park Shaper
 
 
 
 
By:
/s/ Marc J. Shapiro
Trust Manager
February 27, 2020
 
Marc J. Shapiro

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Table of Contents

Schedule II
WEINGARTEN REALTY INVESTORS
VALUATION AND QUALIFYING ACCOUNTS
December 31, 2019, 2018, and 2017
(Amounts in thousands)
Description
 
Balance at
beginning
of period
 
Charged
to costs
and
expenses
 
Deductions (1)
 
Balance
at end of
period
2019
 
 
 
 
 
 
 
 
Tax Valuation Allowance
 
$
12,787

 
$
—

 
$
7,038

 
$
5,749

2018
 
 
 
 
 
 
 
 
Allowance for Doubtful Accounts (2)
 
$
7,516

 
$
2,361

 
$
3,022

 
$
6,855

Tax Valuation Allowance
 
15,587

 
—

 
2,800

 
12,787

2017
 
 
 
 
 
 
 
 
Allowance for Doubtful Accounts
 
$
6,700

 
$
4,255

 
$
3,439

 
$
7,516

Tax Valuation Allowance
 
25,979

 
—

 
10,392

 
15,587

___________________
(1)
The tax valuation allowance deductions for the year ended 2017 represents the effect of the change in the statutory tax rate as a result of the enactment of the Tax Act on December 22, 2017. For other periods presented, deductions included write-offs of amounts previously reserved.
(2)
With the implementation of ASU No. 2016-02 as of January 1, 2019 (see Note 2), the current guidance clarified that uncollectible lease payments were to be recognized as a reduction in revenues and were not considered an allowance. With this implementation, the Allowance for Doubtful Accounts was re-characterized to be appropriately reflected as reductions in Revenues for uncollectible amounts.

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Schedule III

WEINGARTEN REALTY INVESTORS
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2019
(Amounts in thousands)
 
 
Initial Cost to Company
 
 
 
Gross Amounts Carried at Close of Period
 
 
 
 
 
 
 
 
Description
 
Land
 
Building and
Improvements
 
Cost
Capitalized
Subsequent 
to
Acquisition
 
Land
 
Building and Improvements
 
Total
(1)
 
Accumulated
Depreciation
 
Total Costs,
Net of
Accumulated
Depreciation
 
Encumbrances
(2)
 
Date of
Acquisition /
Construction
Centers:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10-Federal Shopping Center
 
$
1,791

 
$
7,470

 
$
1,417

 
$
1,791

 
$
8,887

 
$
10,678

 
$
(7,694
)
 
$
2,984

 
$
(6,191
)
 
03/20/2008
580 Market Place
 
3,892

 
15,570

 
4,136

 
3,889

 
19,709

 
23,598

 
(9,794
)
 
13,804

 
—

 
04/02/2001
8000 Sunset Strip Shopping Center
 
18,320

 
73,431

 
8,776

 
18,320

 
82,207

 
100,527

 
(19,366
)
 
81,161

 
—

 
06/27/2012
Alabama Shepherd Shopping Center
 
637

 
2,026

 
8,401

 
1,062

 
10,002

 
11,064

 
(6,158
)
 
4,906

 
—

 
04/30/2004
Argyle Village Shopping Center
 
4,524

 
18,103

 
4,813

 
4,526

 
22,914

 
27,440

 
(10,688
)
 
16,752

 
—

 
11/30/2001
Avent Ferry Shopping Center
 
1,952

 
7,814

 
1,494

 
1,952

 
9,308

 
11,260

 
(4,371
)
 
6,889

 
—

 
04/04/2002
Baybrook Gateway
 
10,623

 
30,307

 
5,283

 
10,623

 
35,590

 
46,213

 
(6,412
)
 
39,801

 
—

 
02/04/2015
Bellaire Blvd. Shopping Center
 
124

 
37

 
936

 
1,011

 
86

 
1,097

 
(49
)
 
1,048

 
—

 
11/13/2008
Blalock Market at I-10
 
—

 
4,730

 
2,097

 
—

 
6,827

 
6,827

 
(5,688
)
 
1,139

 
—

 
12/31/1990
Boca Lyons Plaza
 
3,676

 
14,706

 
6,277

 
3,651

 
21,008

 
24,659

 
(9,367
)
 
15,292

 
—

 
08/17/2001
Broadway Marketplace
 
898

 
3,637

 
2,234

 
906

 
5,863

 
6,769

 
(3,964
)
 
2,805

 
—

 
12/16/1993
Brownsville Commons
 
1,333

 
5,536

 
618

 
1,333

 
6,154

 
7,487

 
(2,196
)
 
5,291

 
—

 
05/22/2006
Bull City Market
 
930

 
6,651

 
1,001

 
930

 
7,652

 
8,582

 
(2,910
)
 
5,672

 
—

 
06/10/2005
Cambrian Park Plaza
 
48,803

 
1,089

 
189

 
48,851

 
1,230

 
50,081

 
(1,001
)
 
49,080

 
—

 
02/27/2015
Camelback Miller Plaza
 
9,176

 
26,898

 
154

 
9,176

 
27,052

 
36,228

 
(430
)
 
35,798

 
—

 
06/27/2019
Camelback Village Square
 
—

 
8,720

 
1,511

 
—

 
10,231

 
10,231

 
(6,497
)
 
3,734

 
—

 
09/30/1994
Camp Creek Marketplace II
 
6,169

 
32,036

 
4,946

 
4,697

 
38,454

 
43,151

 
(12,393
)
 
30,758

 
—

 
08/22/2006
Capital Square
 
1,852

 
7,406

 
2,272

 
1,852

 
9,678

 
11,530

 
(4,694
)
 
6,836

 
—

 
04/04/2002
Centerwood Plaza
 
915

 
3,659

 
3,697

 
914

 
7,357

 
8,271

 
(3,698
)
 
4,573

 
—

 
04/02/2001
Charleston Commons Shopping Center
 
23,230

 
36,877

 
3,791

 
23,210

 
40,688

 
63,898

 
(14,411
)
 
49,487

 
—

 
12/20/2006
Chino Hills Marketplace
 
7,218

 
28,872

 
13,424

 
7,234

 
42,280

 
49,514

 
(23,453
)
 
26,061

 
—

 
08/20/2002
Citadel Building
 
3,236

 
6,168

 
9,067

 
534

 
17,937

 
18,471

 
(15,349
)
 
3,122

 
—

 
12/30/1975
College Park Shopping Center
 
2,201

 
8,845

 
8,000

 
2,641

 
16,405

 
19,046

 
(12,481
)
 
6,565

 
(11,425
)
 
11/16/1998
Colonial Plaza
 
10,806

 
43,234

 
16,507

 
10,813

 
59,734

 
70,547

 
(33,169
)
 
37,378

 
—

 
02/21/2001
Countryside Centre
 
15,523

 
29,818

 
10,717

 
15,559

 
40,499

 
56,058

 
(16,712
)
 
39,346

 
—

 
07/06/2007
Covington Esplanade
 
10,571

 
18,509

 
—

 
10,571

 
18,509

 
29,080

 
(79
)
 
29,001

 
—

 
11/18/2019
Crossing At Stonegate
 
6,400

 
23,384

 
356

 
6,400

 
23,740

 
30,140

 
(2,797
)
 
27,343

 
(13,614
)
 
02/12/2016

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Table of Contents

Schedule III

 
 
Initial Cost to Company
 
 
 
Gross Amounts Carried at Close of Period
 
 
 
 
 
 
 
 
Description
 
Land
 
Building and
Improvements
 
Cost
Capitalized
Subsequent 
to
Acquisition
 
Land
 
Building and Improvements
 
Total
(1)
 
Accumulated
Depreciation
 
Total Costs,
Net of
Accumulated
Depreciation
 
Encumbrances
(2)
 
Date of
Acquisition /
Construction
Deerfield Mall
 
$
10,522

 
$
94,321

 
$
7,445

 
$
27,806

 
$
84,482

 
$
112,288

 
$
(10,259
)
 
$
102,029

 
$
—

 
05/05/2016
Desert Village Shopping Center
 
3,362

 
14,969

 
2,488

 
3,362

 
17,457

 
20,819

 
(4,763
)
 
16,056

 
—

 
10/28/2010
Edgewater Marketplace
 
4,821

 
11,225

 
835

 
4,821

 
12,060

 
16,881

 
(3,429
)
 
13,452

 
—

 
11/19/2010
El Camino Promenade
 
4,431

 
20,557

 
5,020

 
4,429

 
25,579

 
30,008

 
(11,272
)
 
18,736

 
—

 
05/21/2004
Embassy Lakes Shopping Center
 
2,803

 
11,268

 
2,515

 
2,803

 
13,783

 
16,586

 
(6,018
)
 
10,568

 
—

 
12/18/2002
Entrada de Oro Plaza Shopping Center
 
6,041

 
10,511

 
2,120

 
6,115

 
12,557

 
18,672

 
(5,020
)
 
13,652

 
—

 
01/22/2007
Epic Village St. Augustine
 
283

 
1,171

 
3,702

 
320

 
4,836

 
5,156

 
(3,780
)
 
1,376

 
—

 
09/30/2009
Falls Pointe Shopping Center
 
3,535

 
14,289

 
1,649

 
3,542

 
15,931

 
19,473

 
(6,840
)
 
12,633

 
—

 
12/17/2002
Festival on Jefferson Court
 
5,041

 
13,983

 
4,048

 
5,022

 
18,050

 
23,072

 
(8,235
)
 
14,837

 
—

 
12/22/2004
Fiesta Trails
 
8,825

 
32,790

 
14,342

 
11,267

 
44,690

 
55,957

 
(16,895
)
 
39,062

 
—

 
09/30/2003
Fountain Plaza
 
1,319

 
5,276

 
2,591

 
1,095

 
8,091

 
9,186

 
(5,065
)
 
4,121

 
—

 
03/10/1994
Francisco Center
 
1,999

 
7,997

 
4,963

 
2,403

 
12,556

 
14,959

 
(8,958
)
 
6,001

 
(10,379
)
 
11/16/1998
Freedom Centre
 
2,929

 
15,302

 
6,009

 
6,944

 
17,296

 
24,240

 
(7,815
)
 
16,425

 
—

 
06/23/2006
Galleria Shopping Center
 
10,795

 
10,339

 
9,490

 
10,504

 
20,120

 
30,624

 
(6,594
)
 
24,030

 
—

 
12/11/2006
Galveston Place
 
2,713

 
5,522

 
6,242

 
3,279

 
11,198

 
14,477

 
(9,031
)
 
5,446

 
—

 
11/30/1983
Gateway Plaza
 
4,812

 
19,249

 
5,611

 
4,808

 
24,864

 
29,672

 
(12,503
)
 
17,169

 
(23,000
)
 
04/02/2001
Grayson Commons
 
3,180

 
9,023

 
619

 
3,163

 
9,659

 
12,822

 
(3,739
)
 
9,083

 
(3,858
)
 
11/09/2004
Greenhouse Marketplace
 
4,607

 
22,771

 
4,581

 
4,750

 
27,209

 
31,959

 
(11,954
)
 
20,005

 
—

 
01/28/2004
Griggs Road Shopping Center
 
257

 
2,303

 
678

 
257

 
2,981

 
3,238

 
(1,966
)
 
1,272

 
—

 
03/20/2008
Harrisburg Plaza
 
1,278

 
3,924

 
1,424

 
1,278

 
5,348

 
6,626

 
(4,399
)
 
2,227

 
(9,496
)
 
03/20/2008
HEB - Dairy Ashford & Memorial
 
1,717

 
4,234

 
—

 
1,717

 
4,234

 
5,951

 
(1,474
)
 
4,477

 
—

 
03/06/2012
Heights Plaza Shopping Center
 
58

 
699

 
2,613

 
1,055

 
2,315

 
3,370

 
(1,816
)
 
1,554

 
—

 
06/30/1995
High House Crossing
 
2,576

 
10,305

 
656

 
2,576

 
10,961

 
13,537

 
(5,067
)
 
8,470

 
—

 
04/04/2002
Highland Square
 
—

 
—

 
1,970

 
—

 
1,970

 
1,970

 
(708
)
 
1,262

 
—

 
10/06/1959
Hilltop Village Center
 
3,196

 
7,234

 
53,978

 
3,960

 
60,448

 
64,408

 
(23,748
)
 
40,660

 
—

 
01/01/2016
Hope Valley Commons
 
2,439

 
8,487

 
541

 
2,439

 
9,028

 
11,467

 
(2,403
)
 
9,064

 
—

 
08/31/2010
I45/Telephone Rd.
 
678

 
11,182

 
535

 
678

 
11,717

 
12,395

 
(7,123
)
 
5,272

 
(11,461
)
 
03/20/2008
Independence Plaza I & II
 
19,351

 
31,627

 
2,538

 
19,351

 
34,165

 
53,516

 
(10,347
)
 
43,169

 
(12,921
)
 
06/11/2013
Lakeside Marketplace
 
6,064

 
22,989

 
3,806

 
6,150

 
26,709

 
32,859

 
(10,246
)
 
22,613

 
—

 
08/22/2006
Largo Mall
 
10,817

 
40,906

 
8,715

 
10,810

 
49,628

 
60,438

 
(21,000
)
 
39,438

 
—

 
03/01/2004
League City Plaza
 
1,918

 
7,592

 
3,229

 
2,261

 
10,478

 
12,739

 
(5,905
)
 
6,834

 
—

 
03/20/2008
Leesville Towne Centre
 
7,183

 
17,162

 
1,927

 
7,223

 
19,049

 
26,272

 
(7,972
)
 
18,300

 
—

 
01/30/2004
Lowry Town Center
 
1,889

 
23,165

 
617

 
1,889

 
23,782

 
25,671

 
(2,272
)
 
23,399

 
—

 
09/14/2016

95
Table of Contents

Schedule III

 
 
Initial Cost to Company
 
 
 
Gross Amounts Carried at Close of Period
 
 
 
 
 
 
 
 
Description
 
Land
 
Building and
Improvements
 
Cost
Capitalized
Subsequent 
to
Acquisition
 
Land
 
Building and Improvements
 
Total
(1)
 
Accumulated
Depreciation
 
Total Costs,
Net of
Accumulated
Depreciation
 
Encumbrances
(2)
 
Date of
Acquisition /
Construction
Madera Village Shopping Center
 
$
3,788

 
$
13,507

 
$
1,590

 
$
3,816

 
$
15,069

 
$
18,885

 
$
(5,540
)
 
$
13,345

 
$
—

 
03/13/2007
Madison Village Marketplace
 
3,157

 
13,123

 
115

 
3,158

 
13,237

 
16,395

 
(311
)
 
16,084

 
—

 
03/28/2019
Market at Westchase Shopping Center
 
1,199

 
5,821

 
4,241

 
1,415

 
9,846

 
11,261

 
(6,815
)
 
4,446

 
—

 
02/15/1991
Mendenhall Commons
 
2,655

 
9,165

 
1,092

 
2,677

 
10,235

 
12,912

 
(3,949
)
 
8,963

 
—

 
11/13/2008
Monte Vista Village Center
 
1,485

 
58

 
5,817

 
755

 
6,605

 
7,360

 
(4,369
)
 
2,991

 
—

 
12/31/2004
Mueller Regional Retail Center
 
10,382

 
56,303

 
1,578

 
10,382

 
57,881

 
68,263

 
(16,169
)
 
52,094

 
—

 
10/03/2013
North Creek Plaza
 
6,915

 
25,625

 
7,792

 
7,617

 
32,715

 
40,332

 
(14,100
)
 
26,232

 
—

 
08/19/2004
North Towne Plaza
 
960

 
3,928

 
9,644

 
879

 
13,653

 
14,532

 
(9,616
)
 
4,916

 
—

 
02/15/1990
North Towne Plaza
 
6,646

 
99

 
(5,553
)
 
259

 
933

 
1,192

 
(682
)
 
510

 
—

 
04/01/2010
Northwoods Shopping Center
 
1,768

 
7,071

 
758

 
1,772

 
7,825

 
9,597

 
(3,685
)
 
5,912

 
—

 
04/04/2002
Oak Forest Shopping Center
 
760

 
2,726

 
7,290

 
1,358

 
9,418

 
10,776

 
(6,814
)
 
3,962

 
—

 
12/30/1976
Oracle Wetmore Shopping Center
 
24,686

 
26,878

 
8,494

 
13,813

 
46,245

 
60,058

 
(16,548
)
 
43,510

 
—

 
01/22/2007
Overton Park Plaza
 
9,266

 
37,789

 
16,513

 
9,264

 
54,304

 
63,568

 
(24,977
)
 
38,591

 
—

 
10/24/2003
Parliament Square II
 
2

 
10

 
1,183

 
3

 
1,192

 
1,195

 
(1,105
)
 
90

 
—

 
06/24/2005
Perimeter Village
 
29,701

 
42,337

 
5,202

 
34,404

 
42,836

 
77,240

 
(16,708
)
 
60,532

 
(29,616
)
 
07/03/2007
Phillips Crossing
 
—

 
1

 
28,515

 
872

 
27,644

 
28,516

 
(15,768
)
 
12,748

 
—

 
09/30/2009
Phoenix Office Building
 
1,696

 
3,255

 
1,700

 
1,773

 
4,878

 
6,651

 
(2,260
)
 
4,391

 
—

 
01/31/2007
Pike Center
 
—

 
40,537

 
3,314

 
—

 
43,851

 
43,851

 
(14,558
)
 
29,293

 
—

 
08/14/2012
Plantation Centre
 
3,463

 
14,821

 
2,409

 
3,471

 
17,222

 
20,693

 
(7,125
)
 
13,568

 
—

 
08/19/2004
Pueblo Anozira Shopping Center
 
2,750

 
11,000

 
5,764

 
2,768

 
16,746

 
19,514

 
(10,975
)
 
8,539

 
(13,581
)
 
06/16/1994
Raintree Ranch Center
 
11,442

 
595

 
18,021

 
10,983

 
19,075

 
30,058

 
(12,403
)
 
17,655

 
—

 
03/31/2008
Rancho San Marcos Village
 
3,533

 
14,138

 
6,141

 
3,887

 
19,925

 
23,812

 
(8,918
)
 
14,894

 
—

 
02/26/2003
Rancho Towne and Country
 
1,161

 
4,647

 
773

 
1,166

 
5,415

 
6,581

 
(3,474
)
 
3,107

 
—

 
10/16/1995
Randalls Center/Kings Crossing
 
3,570

 
8,147

 
761

 
3,585

 
8,893

 
12,478

 
(6,033
)
 
6,445

 
—

 
11/13/2008
Red Mountain Gateway
 
2,166

 
89

 
13,012

 
3,317

 
11,950

 
15,267

 
(5,810
)
 
9,457

 
—

 
12/31/2003
Richmond Square
 
1,993

 
953

 
12,996

 
14,037

 
1,905

 
15,942

 
(1,382
)
 
14,560

 
—

 
12/31/1996
Ridgeway Trace
 
26,629

 
544

 
26,306

 
16,100

 
37,379

 
53,479

 
(18,013
)
 
35,466

 
—

 
11/09/2006
River Oaks Shopping Center - East
 
1,354

 
1,946

 
392

 
1,363

 
2,329

 
3,692

 
(2,044
)
 
1,648

 
—

 
12/04/1992
River Oaks Shopping Center - West
 
3,320

 
17,741

 
35,242

 
3,993

 
52,310

 
56,303

 
(29,007
)
 
27,296

 
—

 
12/04/1992
River Point at Sheridan
 
28,898

 
4,042

 
26,705

 
11,819

 
47,826

 
59,645

 
(15,461
)
 
44,184

 
—

 
04/01/2010
Roswell Corners
 
6,136

 
21,447

 
6,903

 
7,103

 
27,383

 
34,486

 
(10,300
)
 
24,186

 
—

 
06/24/2004
Roswell Crossing Shopping Center
 
7,625

 
18,573

 
1,480

 
7,625

 
20,053

 
27,678

 
(6,862
)
 
20,816

 
—

 
07/18/2012

96
Table of Contents

Schedule III

 
 
Initial Cost to Company
 
 
 
Gross Amounts Carried at Close of Period
 
 
 
 
 
 
 
 
Description
 
Land
 
Building and
Improvements
 
Cost
Capitalized
Subsequent 
to
Acquisition
 
Land
 
Building and Improvements
 
Total
(1)
 
Accumulated
Depreciation
 
Total Costs,
Net of
Accumulated
Depreciation
 
Encumbrances
(2)
 
Date of
Acquisition /
Construction
San Marcos Plaza
 
$
1,360

 
$
5,439

 
$
1,394

 
$
1,358

 
$
6,835

 
$
8,193

 
$
(3,110
)
 
$
5,083

 
$
—

 
04/02/2001
Scottsdale Horizon
 
—

 
3,241

 
39,756

 
12,914

 
30,083

 
42,997

 
(7,405
)
 
35,592

 
—

 
01/22/2007
Scottsdale Waterfront
 
10,281

 
40,374

 
1,848

 
21,586

 
30,917

 
52,503

 
(2,957
)
 
49,546

 
—

 
08/17/2016
Sea Ranch Centre
 
11,977

 
4,219

 
2,356

 
11,977

 
6,575

 
18,552

 
(2,154
)
 
16,398

 
—

 
03/06/2013
Shoppes at Bears Path
 
3,252

 
5,503

 
1,797

 
3,290

 
7,262

 
10,552

 
(2,931
)
 
7,621

 
—

 
03/13/2007
Shoppes at Memorial Villages
 
1,417

 
4,786

 
13,153

 
3,332

 
16,024

 
19,356

 
(9,438
)
 
9,918

 
—

 
01/11/2012
Shoppes of South Semoran
 
5,339

 
9,785

 
(1,315
)
 
5,672

 
8,137

 
13,809

 
(2,950
)
 
10,859

 
—

 
08/31/2007
Shops at Kirby Drive
 
1,201

 
945

 
272

 
1,202

 
1,216

 
2,418

 
(540
)
 
1,878

 
—

 
05/27/2008
Shops at Three Corners
 
6,215

 
9,303

 
11,448

 
10,587

 
16,379

 
26,966

 
(11,868
)
 
15,098

 
—

 
12/31/1989
Silver Creek Plaza
 
3,231

 
12,924

 
9,876

 
3,228

 
22,803

 
26,031

 
(8,624
)
 
17,407

 
—

 
04/02/2001
Six Forks Shopping Center
 
6,678

 
26,759

 
6,668

 
6,728

 
33,377

 
40,105

 
(16,531
)
 
23,574

 
—

 
04/04/2002
Southampton Center
 
4,337

 
17,349

 
3,353

 
4,333

 
20,706

 
25,039

 
(10,656
)
 
14,383

 
(19,750
)
 
04/02/2001
Southgate Shopping Center
 
232

 
8,389

 
777

 
231

 
9,167

 
9,398

 
(6,227
)
 
3,171

 
(6,353
)
 
03/20/2008
Squaw Peak Plaza
 
816

 
3,266

 
3,563

 
818

 
6,827

 
7,645

 
(4,389
)
 
3,256

 
—

 
12/20/1994
Stevens Creek Central
 
41,812

 
45,997

 
—

 
41,812

 
45,997

 
87,809

 
(169
)
 
87,640

 
—

 
11/08/2019
Stonehenge Market
 
4,740

 
19,001

 
2,877

 
4,740

 
21,878

 
26,618

 
(10,528
)
 
16,090

 
—

 
04/04/2002
Stony Point Plaza
 
3,489

 
13,957

 
11,401

 
3,453

 
25,394

 
28,847

 
(13,411
)
 
15,436

 
—

 
04/02/2001
Sunset 19 Shopping Center
 
5,519

 
22,076

 
25,410

 
5,899

 
47,106

 
53,005

 
(13,421
)
 
39,584

 
—

 
10/29/2001
The Centre at Post Oak
 
13,731

 
115

 
25,591

 
17,822

 
21,615

 
39,437

 
(14,868
)
 
24,569

 
—

 
12/31/1996
The Commons at Dexter Lake
 
4,946

 
18,948

 
4,064

 
4,988

 
22,970

 
27,958

 
(10,210
)
 
17,748

 
—

 
11/13/2008
The Palms at Town & Country
 
56,833

 
195,203

 
8,181

 
79,673

 
180,544

 
260,217

 
(20,529
)
 
239,688

 
—

 
07/27/2016
The Shops at Hilshire Village
 
12,929

 
20,666

 
—

 
12,929

 
20,666

 
33,595

 
(141
)
 
33,454

 
—

 
10/24/2019
The Westside Center
 
14,952

 
10,350

 
558

 
14,952

 
10,908

 
25,860

 
(1,282
)
 
24,578

 
—

 
12/22/2015
The Whittaker
 
5,237

 
19,395

 
3,386

 
5,315

 
22,703

 
28,018

 
(1,318
)
 
26,700

 
—

 
01/01/2019
Thompson Bridge Commons
 
604

 
—

 
625

 
513

 
716

 
1,229

 
(165
)
 
1,064

 
—

 
04/26/2005
Thousand Oaks Shopping Center
 
2,973

 
13,142

 
1,190

 
2,973

 
14,332

 
17,305

 
(6,364
)
 
10,941

 
(11,595
)
 
03/20/2008
TJ Maxx Plaza
 
3,400

 
19,283

 
4,268

 
3,430

 
23,521

 
26,951

 
(9,756
)
 
17,195

 
—

 
03/01/2004
Tomball Marketplace
 
9,616

 
262

 
26,559

 
6,726

 
29,711

 
36,437

 
(15,395
)
 
21,042

 
—

 
04/12/2006
Trenton Crossing/North McAllen
 
9,855

 
29,133

 
2,803

 
9,855

 
31,936

 
41,791

 
(4,255
)
 
37,536

 
—

 
08/31/2015
Valley Shopping Center
 
4,293

 
13,736

 
5,298

 
8,910

 
14,417

 
23,327

 
(4,258
)
 
19,069

 
—

 
04/07/2006
Vizcaya Square Shopping Center
 
3,044

 
12,226

 
2,631

 
3,044

 
14,857

 
17,901

 
(6,660
)
 
11,241

 
—

 
12/18/2002
Wellington Green Commons & Pad
 
16,500

 
32,489

 
3,179

 
16,500

 
35,668

 
52,168

 
(4,773
)
 
47,395

 
(17,338
)
 
04/20/2015

97
Table of Contents

Schedule III

 
 
Initial Cost to Company
 
 
 
Gross Amounts Carried at Close of Period
 
 
 
 
 
 
 
 
Description
 
Land
 
Building and
Improvements
 
Cost
Capitalized
Subsequent 
to
Acquisition
 
Land
 
Building and Improvements
 
Total
(1)
 
Accumulated
Depreciation
 
Total Costs,
Net of
Accumulated
Depreciation
 
Encumbrances
(2)
 
Date of
Acquisition /
Construction
West Jordan Town Center
 
$
4,306

 
$
17,776

 
$
1,082

 
$
3,269

 
$
19,895

 
$
23,164

 
$
(8,158
)
 
$
15,006

 
$
—

 
12/19/2003
Westchase Shopping Center
 
3,085

 
7,920

 
13,611

 
3,189

 
21,427

 
24,616

 
(14,532
)
 
10,084

 
(15,527
)
 
08/29/1978
Westhill Village Shopping Center
 
408

 
3,002

 
6,679

 
437

 
9,652

 
10,089

 
(6,206
)
 
3,883

 
—

 
05/01/1958
Westminster Center
 
11,215

 
44,871

 
10,117

 
11,204

 
54,999

 
66,203

 
(27,707
)
 
38,496

 
(47,250
)
 
04/02/2001
Winter Park Corners
 
2,159

 
8,636

 
13,490

 
2,257

 
22,028

 
24,285

 
(5,667
)
 
18,618

 
—

 
09/06/2001
 
 
837,327

 
2,105,287

 
813,747

 
897,103

 
2,859,258

 
3,756,361

 
(1,075,771
)
 
2,680,590

 
(263,355
)
 
 
New Development/Redevelopment:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
West Alex
 
39,029

 
2,669

 
135,828

 
45,637

 
131,889

 
177,526

 
—

 
177,526

 
—

 
11/01/2016
The Driscoll at River Oaks
 
214

 
—

 
70,096

 
790

 
69,520

 
70,310

 
—

 
70,310

 
—

 
12/04/1992
 
 
39,243

 
2,669

 
205,924

 
46,427

 
201,409

 
247,836

 
—

 
247,836

 
—

 
 
Miscellaneous (not to exceed 5% of total)
 
80,374

 
3,096

 
57,582

 
61,734

 
79,318

 
141,052

 
(34,904
)
 
106,148

 
—

 
 
Total of Portfolio
 
$
956,944

 
$
2,111,052

 
$
1,077,253

 
$
1,005,264

 
$
3,139,985

 
$
4,145,249

 
$
(1,110,675
)
 
$
3,034,574

 
$
(263,355
)
 
 
___________________
(1)
The book value of our net real estate assets is in excess of tax basis by approximately $286.2 million at December 31, 2019.
(2)
Encumbrances do not include $17.4 million outstanding under fixed-rate mortgage debt associated with a tenancy-in-common arrangement, $1.5 million of non-cash debt related items and $(.7) million of deferred debt costs.
Depreciation is computed using the straight-line method, generally over estimated useful lives of 18-40 years for buildings and 10-20 years for parking lot surfacing and equipment. Tenant and leasehold improvements are depreciated over the remaining life of the lease or the useful life whichever is shorter.
The changes in total cost of the properties were as follows (in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Balance at beginning of year
$
4,105,068

 
$
4,498,859

 
$
4,789,145

Additions at cost
389,858

 
164,150

 
137,462

Retirements or sales
(349,603
)
 
(547,821
)
 
(334,105
)
Property held for sale
—

 
—

 
(78,721
)
Impairment loss
(74
)
 
(10,120
)
 
(14,922
)
Balance at end of year
$
4,145,249

 
$
4,105,068

 
$
4,498,859


98
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Schedule III

The changes in accumulated depreciation were as follows (in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Balance at beginning of year
$
1,108,188

 
$
1,166,126

 
$
1,184,546

Additions at cost
109,825

 
118,664

 
132,900

Retirements or sales
(107,338
)
 
(176,602
)
 
(127,391
)
Property held for sale
—

 
—

 
(23,929
)
Balance at end of year
$
1,110,675

 
$
1,108,188

 
$
1,166,126



99
Table of Contents

Schedule IV
WEINGARTEN REALTY INVESTORS
MORTGAGE LOANS ON REAL ESTATE
DECEMBER 31, 2019
(Amounts in thousands)
 
State
 
Interest
Rate
 
Final
Maturity
Date
 
Periodic
Payment
Terms
 
Face
Amount of
Mortgages
 
Carrying
Amount of
Mortgages (1)
Shopping Centers:
 
 
 
 
 
 
 
 
 
 
 
First Mortgages:
 
 
 
 
 
 
 
 
 
 
 
College Park Realty Company
NV
 
7.00%
 
10/31/2053
 
At Maturity
 
$
3,410

 
$
3,410

Total Mortgage Loans on
Real Estate
 
 
 
 
 
 
 
 
$
3,410

 
$
3,410

___________________
(1)
The aggregate cost at December 31, 2019 for federal income tax purposes is $3.4 million, and there are no prior liens to be disclosed. As this is an interest only mortgage loan, there have been no changes in its carrying amount for each year ended December 31, 2019, 2018 and 2017.

100