Exemplified in the first-quarter purchase of nine shoppingcenters and another asset for $210 million, plus a 10-buildingwarehouse portfolio consumed last month for $136 million, WRI isnot averse to buying outright for its two favorite food groups,retail and industrial. During a financial conference call onFriday, management stressed that WRI covets existing opportunitiesin markets offering barriers to entry and solid demographics.

The problem is a lack of suitable real estate. Retail inventorywas picked clean in 2006, says CFO Stephen Richter, and remainingproperties either don't fit the core-profile embraced by WRI orlack sufficient yield, making construction the best path toreturns. Some projects will be owned outright, others put inpartnerships, while a third—and expanding— "bucket" is merchantbuilding; methodically spinning projects off to investors and/oroperators.Seventeen of the 32 initiatives under construction fitthe merchant build mold, says SVP Robert Smith, who oversees WRI'sdevelopment team.

Total investment there is $416 million, he estimates,underscoring a view that the program "will be a significantcomponent" of WRI's financial success. Even as a blip in the firstquarter results, merchant building income is expected to accountfor 13 to 18 cents per share in FFO this year, officialsreiterated.