HOUSTON-A shop space occupancy increase from 85.1% to 86.3% quarter over quarter had Weinstein Realty executives cautiously optimistic during the company’s Q2 2011 earnings conference call. If the economy continues its slow and steady improvement, Weinstein executives predicted that 2012 could be a very good year for the company.

The earnings conference took place on a day in which the stock market was clawing its way out of the doldrums and dour economic news was being reported, however. The executives did take note.

“Our assumptions are based on an extremely modest recovery, while avoiding a double dip recession,” commented Drew Alexander, Weingarten’s president and chief executive officer. He went on to say that tenants surviving this long weren’t about to go anywhere. Furthermore, grocers and discount retailers make up a large chunk of the Weingarten portfolio. That, combined with a dearth of quality retail space, should stand Weingarten in good stead through the remainder of 2011 and into 2012, Alexander noted.

“I want to be careful, though,” he added, saying that NOI could fluctuate if “we have a lot of unanticipated exits.” The good news for the company, however, was that small-shop tenant fallouts declined during Q2. “The continued improvement in the economy will help those smaller shops,” Alexander observed.

In addressing Blockbuster and Borders Bookstore closings, Weingarten vice president and chief operating officer Johnny Hendrix added that it shouldn’t “have a significant impact on net operating income in 2011.” Even as these retailers vacate their properties, Hendrix explained, there is interest from other tenants. “We’re making steady progress overall,” he commented. “Though the progress sometimes seems fragile, we continue to move forward.”

Other positive financial news for the company included an increase of 4.8% in recurring funds from operations for the quarter, year over year.  Retail occupancy, overall, was 92.4% for Q2, while industrial occupancy stood at 88%, an increase also year over year. The end result was a portfolio occupancy of 91.2% versus that of 90.8% during the same period in 2010.