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HOUSTON-Weingarten Realty Investors has the money to spend, but the product that it likes to buy isn’t as readily available as it was last year.

The Houston-based REIT might have a problem meeting its goal of $250 million to $300 million due to the changing environment, Tracy Pursell, the REIT’s investor relations director, tells GlobeSt.com. The REIT, she says, is experiencing more difficulty in identifying acquisitions for which it’s willing to pay lower cap rates.

Pursell says Weingarten maintained its standard acquisition criteria when cap and interest rates initially fell on the chance that economics may return to normal rates. With the rates still going south, Pursell confides the consideration now is to slightly lower the requirements to be more successful in its acquisition plans.

Pursell predicts the acquisition budget will rise about 10% in 2003, in keeping with its practice over the past five years. Last year’s $500-million bottom line was higher than the norm of $250 million to $350 million due to the purchase of a California grocery store chain, according to Pursell.

As of the second-quarter close, there were 11 properties acquired, said Drew Alexander, president and CEO. Seven were in Raleigh-Durham, NC. The 11 properties, all supermarket-anchored shopping centers, total 1.7 million sf and represent an investment of $161.3 million. “We have completed a considerable number of acquisitions thus far,” said Alexander, “and have others under review that we hope to close prior to yearend. Our new development program also remains extremely active with 17 projects in various stages of development.”

Highlights of the second-quarter earnings include an FFO increase to $42.6 million and NOI of $26.4 million or 51 cents per diluted share. Rental revenues came in at $90.3 million while occupancy was reported at 91.3%, down slightly from 92.7% for the same quarter in 2001 The Q2 occupancy hit was leveled by Kmart vacating three stores and Service Merchandise, two for a total of 370,000 sf. The anticipated vacancies were included in the company’s earnings guidance for the year.

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