According to Richard Summers, vice president and investorrelations director for Weingarten, the collateral is 13grocery-anchored shopping centers, one regional power center andfour neighborhood retail centers, all in Texas. The other commondenominator is that the centers are positioned in denselypopulated, infill locations. According to a press release about theJV, Weingarten says the average sales volume of each supermarketexceeds $500 per sf.

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"The capital we receive from this joint venture will be used toexecute our strategic plans, which includes new developments andacquisitions," Summers says. "This allows us to grow and expandwhile we maintain and increase our income." The joint venture willbe leveraged 65%. Weingarten will have a 15% interest and thebalance will belong to a client of Boston-based AEW.

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Fifteen assets are located in Houston and the remainder inGalveston, San Antonio and Amarillo. The 95%-occupied portfoliocontains well-known national credit retailers, including apparel,banks and restaurants. Weingarten will oversee management andleasing of all properties.

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Northwestern Mutual Life Insurance Co. of Milwaukee providedfinancing. New York City-based Eastdil Secured LLC representedWeingarten's interest in structuring the venture.

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"This new joint venture further diversifies our sources ofcapital while leveraging our operational expertise through theongoing management and leasing of the properties," StanfordAlexander, Weingarten's chairman, says in the press release."Weingarten Realty will receive more than $214 million in cashproceeds while maintaining a significant ownership stake."

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Philip Martin, managing director with Cantor Fitzgerald &Co.'s Chicago office, says Weingarten's actions aren't unusual,especially when it comes to stabilized assets. "If they canredeploy the money more profitably, it makes sense," he tellsGlobeSt.com. "They're actually looking at other portfolios aroundthe country to do this very same thing."

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Martin, who follows Weingarten on a regular basis, says thatREITs and other large asset owners end up forming such jointventures for the sole purpose of boosting liquidity. The cash isthen used for new investments, which is what Weingarten isplanning. It also could be used to reduce debt on a balance sheetand improve financial ratios. "If they have a good use for theproceeds, which Weingarten typically does, this isn't a bad idea,"Martin assesses.

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