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HOUSTON-Balance sheet strengthening and lease improvements marked Weingarten Realty’s Q2. As a result, executives were cautiously optimistic about the direction of both its balance sheet and the economy.

“We remain cautiously optimistic that our operations levels have reached the point where the worst is behind us,” remarked Weingarten president and CEO Drew Alexander. However, Alexander acknowledged that the remainder of 2009 and 2010 will “remain challenging.”

Net income, on a diluted, per-share basis did drop from $.35 per share from $.76 per share last year; however, this was due to a decrease in the gains of sale of properties from $41 million in 2008 to $11 million so far this year. The company’s common equity offering also impacted net income.

But the leasing was looking up; retail occupancy increased to 92.1% during Q2 2009 versus 91.7% at the end of Q1 2009. Fallouts in the industrial division, however, pushed total occupancy downward to 90.9% from 91.5% from the previous quarter.

More positive news, noted Steve Richter, executive vice president and CFO, was Weingarten’s ability to obtain secured loans from life companies, to help retire existing debt. Right before the quarter ended, the company closed a $71 million secured loan with a major life insurance company, and will also close an additional $48 million with another company before the end of Q3. The company is also working on two secured loans with banks, he added.

As a result, though the REIT still is interested in selling a chunk of its assets to strengthen liquidity–the goal is to realize $300 million in sales by year end–”we don’t have the same pressure to sell that we did,” Richter commented.

Alexander declined to predict when, specifically, things might begin to look up. We’ve been in a recession since 2007, he said, then things got worse. Though the majority of pundits are pointing to 2012-2013 for any kind of uptick, “I’d hope things would end up betting better a lot sooner,” Alexander said. “We’re making fantastic progress on liquidity needs, and am hopeful we’re getting closer to better times, for everyone.”

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