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Executives

Michelle Wiggs

Andrew M. Alexander - Chief Executive Officer, President, Trust Manager, Chairman of Executive Committee and Chairman of Pricing Committee

Stephen C. Richter - Chief Financial Officer and Executive Vice President

Johnny L. Hendrix - Chief Operating Officer and Executive Vice President

Joe D. Shafer - Chief Accounting Officer and Senior Vice President

Analysts

Craig R. Schmidt - BofA Merrill Lynch, Research Division

Paula J. Poskon - Robert W. Baird & Co. Incorporated, Research Division

Richard C. Moore - RBC Capital Markets, LLC, Research Division

Cedrik Lachance - Green Street Advisors, Inc., Research Division

Vincent Chao - Deutsche Bank AG, Research Division

Michael W. Mueller - JP Morgan Chase & Co, Research Division

Michael Bilerman - Citigroup Inc, Research Division

Weingarten Realty Investors (WRI) Q4 2012 Earnings Call February 15, 2013 11:00 AM ET

Operator

Good morning, ladies and gentlemen, and welcome to the Weingarten Realty Fourth Quarter Earnings Conference Call. My name is Brandon, and I'll be the operator for today's call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to Michelle Wiggs. Michelle, you may begin.

Michelle Wiggs

Good morning, and welcome to our fourth quarter 2012 conference call. Joining me today is Drew Alexander, President and CEO; Johnny Hendrix, Executive Vice President and COO; Steve Richter, Executive Vice President and CFO; and Joe Shafer, Senior Vice President and CAO.

As a reminder, certain statements made during the course of this call are forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results could differ materially from those projected in such forward-looking statements due to a variety of factors. More information about these factors is contained in the company's SEC filings. Also, during this conference call, management may make reference to certain non-GAAP financial measures, such as funds from operations or FFO, both recurring and reported, which we believe help analysts and investors to better understand Weingarten's operating results. Reconciliation to these non-GAAP financial measures is available in our supplemental information package located under the Investor Relations tab of our website.

I will now turn the call over to Drew Alexander.

Andrew M. Alexander

Thanks, Michelle, and thanks to all of you for joining us. I'm pleased to announce [indiscernible] Investor Relations. I know all of you join me in congratulating [indiscernible] to a truly exceptional year. In our first quarter call this year, I indicated that 2012 would likely be a transformative year for our company and, in fact, it was. As to the fourth quarter, we once again made significant progress in achieving our 3 strategic objectives. Operationally, we achieved Same Property NOI growth of 5.1%. We continued our capital recycling activities with significant fourth quarter dispositions and we further delevered our balance sheet with these disposition proceeds. We continued to move occupancy up, with retail occupancy of 93.7% compared to 93% at the end of 2011. Strong lease commencement activity contributed to the strongest quarterly increase in Same Property NOI that we've experienced in 7 years. We are quite proud of our performance on this key metric.

We also had a very strong quarter of disposition activity, closing on over $113 million in sales. Our largest disposition was our only remaining property in Illinois, representing our exit from this state. As to the full year, we equaled or exceeded every goal in our business plan. Our acquisitions during the year totaled $235 million, adding some truly outstanding assets in gateway markets like West Hollywood, California and the Washington D.C. area. Our dispositions totaled over $700 million and included our exit from the industrial business.

While capital recycling is currently a very common theme in our sector, we've made tremendous progress on the portfolio repositioning plan we laid out at our Investor Day in April of 2011. With the net proceeds from this recycling activity, we were able to reduce our balance sheet leverage. Operationally, occupancy is up nicely, and we achieved our important goal of growing Same Property NOI by 4% to 5%, as we ended the year, up 4.2%. As I said, 2012, a truly transformative year, made possible by great people, great properties and a great platform.

Before I turn it over to Steve, a brief update on our new development efforts. As shown on our supplemental reporting package, we stabilized all but 2 of our properties under development during the fourth quarter, moving these other properties to operations. We stabilized 9 properties, representing an investment of $100 million that are currently generating in a return of about 4.5%, with an estimated ROI of about 7%, once all leasing is complete.

A couple of these projects were stabilized early which negatively impact certain operational metrics, such as occupancy, since in total, these properties are only about 80% leased. Overall, we felt this was the correct treatment, as these projects are now being handled by our Operations group, as development-related activity is complete. We continue to focus on the new projects in multiple markets, and we're confident our development expertise will add significant future shareholder value.

I'll now turn the call over to Steve to discuss our financial results.

Stephen C. Richter

Thanks, Drew. Recurring FFO was $0.47 per diluted share for the quarter versus $0.48 last year. The $0.01 difference was a result of a number of events. First, as Drew mentioned, we sold over $700 million of non-core assets during the year, resulting in a decrease in net operating income of over $0.07 per share, compared to the same quarter of 2011. Offsetting this reduction was a contribution of our acquisition program, a nice reduction in interest expense as we refinanced debt maturities, and an increase in operating income from an improvement in a commenced occupancy.

Reported FFO for the quarter decreased to $0.46 per share, compared to $0.48 per share in 2011. This decrease is due to the factors just mentioned, as well as redemption costs from the preferred shares we called in December. We continue working to improve our balance sheet. We've returned to the capital markets in the fourth quarter for the first time since 2009, with the issuance of $300 million of 3.375% 10-year notes. With these proceeds, we paid down our $500 million revolving credit facility and redeemed our 3.95% convertible bonds, as well as our 6.95% Series E Preferred Shares. This additional liquidity allows us to take advantage of growth opportunities as they arise, maintain our strong overall credit metrics and better positions us for future debt maturities.

During 2012, we successfully delevered our balance sheet. Our net debt-to-EBITDA at year end was 5.9x, compared to 6.5x at the end of last year. And at December 31, our debt-to-total market cap was 37.2%, compared to 44.4% a year ago. This is clearly a significant improvement. And as mentioned previously, we intend to keep our leverage below 40%.

As the company moves into 2013, we are expecting a slow, modest improvement in the general economy, as well as the retail environment, similar to what we experienced in 2012. The continued lack of new retail space should allow us to make progress in occupancy. Accordingly, we are affirming the 2013 guidance we communicated last quarter, a recurring FFO of $1.84 to $1.90 per share. The underlying assumptions of our guidance can be found on Page 9 of the supplemental, and the highlights include a Same Property NOI increase of 2% to 3% and occupancy ending the year between 94% and 95%.

The company remains committed to the recycling program, and we're anticipating dispositions of $200 million to $300 million of assets. We're also budgeting to invest $175 million to $225 million in high-quality assets and $25 million to $75 million in the New Development program. We budgeted these investments and dispositions to occur ratably throughout the year. The actual timing is a variable that will obviously affect our actual results. We feel this is a solid plan and advances our strategic objectives.

With that, I'll turn it over to Johnny.

Johnny L. Hendrix

Thanks, Steve. I'm thrilled with the accomplishments of our team for the fourth quarter and the entirety of 2012. We really knocked it out of the park this year. We produced Same Property NOI of 5.1% for the quarter and 4.2% for the year. Our leasing velocity remained steady. For the year, we executed 592 new leases and 867 renewals. We increased retail occupancy to 93.7%, a 70 basis-point improvement from a year ago. Our rent growth improved through the year, with 7.1% during the fourth quarter. We sold $707 million of non-core retail and industrial assets, and we acquired over $235 million of very good property.

Weingarten shopping centers, primarily anchored by supermarkets and discount-oriented merchants, continues to be attractive to retailers and service tenants. Our geographic footprint remains in very productive growth markets, which are experiencing the best increases in job growth. Over 1.5 million jobs were created in our top 10 markets during 2012. That accounted for a job growth more than 3x the national average. Combine this job growth, our anchored properties and our best-in-class operating platform, and you can see the great results.

Our Texas properties, which produced close to 29% of the company's revenue, have outperformed. For the year, Texas produced 5.7% Same Property NOI and have 95.2% occupancy at the end of the fourth quarter. Florida and California also continued to improve. Those states contributed Same Property NOI of 6.1% and 4.7%, respectively, for 2012. Most of the company's Same Property NOI gains are a result of the occupancy gains we've seen over the last 18 months. The good news for 2013 is we still have 757,000 square feet, or 250 basis points, of space that is signed and not commenced. We expect the commencement of those leases through the coming year to drive our Same Property NOI between the 2% and 3% Steve mentioned earlier.

We're very pleased with the results of our ShopCentric initiative, which emphasizes small tenant leasing. In addition to our simplified leasing process, short and easy to understand leases, we maintain constant contact with a group of over 150 regional and national tenants through global meetings and partner visits. In our global meetings, we review how our portfolio can meet the tenants' current or future growth needs, as well as discussing renewals and resolving isolated operating issues. We're usually meeting with the vice president of real estate, as well as several real estate managers, reviewing the entire country. We also try to include support staff like attorneys, construction managers and market research folks, so we can develop relationships in advance of working on specific transactions. These meetings have proven to be very productive, consistently leading to new leases and making renewals efficient.

Our partners' visits are a little different. These are coordinated in-store visits with store owners and managers, which allow us to gain valuable insight about a tenant's performance, expansion plans, competitor information, and generate powerful testimonials we can use to lease space. 562 of the new leases we signed during 2012 were shop spaces under 10,000 square feet. The overall mix of our leasing production has remained fairly consistent over the last 18 months or so. About 30% of our leases have been service tenants like Great Clips, Allstate, H&R Block and Sports Clips. About 20% have been restaurants like Pei Wei, Buffalo Wild Wings, Chick-fil-A and SUBWAY. Probably the biggest change we've seen over the last couple of years is the significant increase in medical services. MRI facilities, dentists, chiropractors and optometrists are migrating to neighborhood and regional centers. All these tenants are Internet-resistant and provide us a nice complement to traditional retailers.

We experienced a 30% improvement in fallout from 2011 to 2012.

A lot of factors influenced this slower fallout. Most prominently, the economy is improving. Not rapidly, but it is improving. Sales are up. Our portfolio has fewer local mom-and-pop tenants today. Through our recycling program and retenanting efforts over the last 4 years, we've been reshaping the profile of our tenant base. Today, almost 80% of our tenants are national or regional tenants, a significant increase from 69% in 2009. With a combination of steady leasing and reduced fallout, we've continued to improve our retail occupancy. At year end, we were at 93.7%. Shop space occupancy increased 150 basis points to 88.2%. These are great results, even though slightly muted by the early stabilization of the 9 new developments Drew mentioned earlier.

Rent growth will be a focus for us in 2013. We have good leverage with renewals, where we produced a 9.3% increase for the quarter. We expect to improve new rent growth for 2013, as space continues to be absorbed and the economy generates more business activity. 2012 was a great year for our capital recycling program. We sold over $707 million of assets. This includes the sale of our industrial properties. Today, we're a pure-play shopping center company. We sold almost $270 million of our retail assets during the year. These are small properties in small towns, demographically challenged assets, or markets where we've not been able to generate scale.

In 2012, we exited Chicago, Kansas City, Topeka, Southern Pines in North Carolina, Colorado Springs, Maine and Lubbock, Texas. We're looking for much of the same during 2013, as we remain committed to improve the portfolio, trimming non-core assets and adding high-quality properties. This is a multiyear initiative, but we're already seeing benefits. Today, our average supermarket sales have risen to $516 a square foot, one of the highest in our peer group. We'll continue to focus on acquisitions of high-quality assets in markets where we have regional offices, and will remain disciplined, buying assets with growth that are accretive to our shareholders.

2012 was a great year. Fantastic Same Property NOI of 5.1% for the fourth quarter, which is the top of our peer group. Improving occupancy to 93.7%, slowing fallout, steady leasing, and a continuation of the transformative recycling program. All our associates are looking forward to a productive 2013. Drew?

Andrew M. Alexander

Thanks, Johnny. I'm extremely proud of the efforts put forth by the entire team in producing the outstanding results for 2012 in the 3 strategic areas we've discussed. We made great strides in moving towards our goal of leasing the portfolio back up to 95%, 96%, as evidenced by the great Same Property NOI increase. We've successfully delevered our balance sheet, providing us with the flexibility to pursue growth opportunities. Most importantly, our capital recycling efforts were highly effective. The net effect of adding outstanding properties through our acquisition efforts, with the proceeds from the sale of lower tier assets, resulting in improvements in nearly every operational metric we track.

As for the future, there'll always be issues, but we're optimistic that we can continue to produce solid operating results from our enhanced portfolio and that we can further improve the quality of this portfolio through continued recycling of assets. At WRI, great people, great properties and a great platform results in great progress. I thank all of you for joining the call today and for your continued interest in Weingarten. Operator, we'd be happy to take questions.

Question-and-Answer Session

Operator

[Operator Instructions] And from Bank of America, we have Craig Schmidt on the line.

Craig R. Schmidt - BofA Merrill Lynch, Research Division

I wondered if you could give a little more color on the occupancy. It's great that you're still able to raise it by year end, but where will that occupancy gain come from, by what tenants?

Johnny L. Hendrix

Hey, Craig, this is Johnny. Our projection is most of this occupancy gain is going to come out of shop leasing. We do have a few anchor spaces, but most of it come out of shop leasing. And I think regionally, we're probably going to be depending on Atlanta, a little more on Florida I think we can get some more occupancy out of, and a little bit of Raleigh. Phoenix has shown a lot of promise in the last couple of months, too. We're certainly not full in Texas and in California, but we're getting up towards that area of 95%, 96%. There's not a lot of room left there.

Craig R. Schmidt - BofA Merrill Lynch, Research Division

And would you say the leasing environment now is stronger than 2002, similar or weaker?

Johnny L. Hendrix

2002?

Craig R. Schmidt - BofA Merrill Lynch, Research Division

I'm sorry, 2012.

Johnny L. Hendrix

I'm sorry, yes. Okay. 2012. It's about the same, Craig. It's -- I don't think it's any better. Most of what we're looking at are national tenants. Most of the tenants we're talking to are national tenants, and most of those are public companies. I think they have a pretty balanced expansion program, and they're under some amount of pressure just because there's less space available in the market. But I don't see a tremendous amount of pressure to expand, certainly not like it was back in 2006.

Operator

From Robert W. Baird, we have Paula Poskon online.

Paula J. Poskon - Robert W. Baird & Co. Incorporated, Research Division

First, 2 housekeeping questions. What was the over-market mortgage adjustment on the acquired asset?

Stephen C. Richter

That was in -- we acquired an asset, I guess, 10 years ago, Best in the West, out in Vegas where we had...

Joe D. Shafer

It was [indiscernible].

Stephen C. Richter

That's next year.

Joe D. Shafer

West Jordan.

Stephen C. Richter

West Jordan. It was where we paid off a loan and wrote off the balance of the unamortized, I guess, loan costs.

Joe D. Shafer

Yes, it was a mark-to-market when we bought it. But we had to amortize it over 20 years, but we were able to pay it off in 10. So there was 10 years of unamortized market adjustment left. And then -- but I would note we backed to that gain out, in coming down to recurring FFO.

Paula J. Poskon - Robert W. Baird & Co. Incorporated, Research Division

And also what generated the $1.5 million of new OP units in the quarter?

Joe D. Shafer

That's really, for the quarter, we were dilutive. Every other quarter this year, we were anti-dilutive. So when you're anti-dilutive you don't add those back. For the year, we were also anti-dilutive. But going into 2013, we expect to be dilutive the whole year and they will be added in every quarter.

Stephen C. Richter

The driver of that, quite frankly, had to do with the impairment losses that ran through those JVs, those downrate units. So that's what caused the swing in 2012.

Paula J. Poskon - Robert W. Baird & Co. Incorporated, Research Division

Got it. And what percentage of the expiring leases ended up renewing?

Johnny L. Hendrix

Well, I'm not -- that's not really a number that we have. We certainly -- I can tell you that 44% of the leases that are planned to expire this year, we've already renewed. I'm not really certain of the other one. I'll just have to get back with you on it.

Paula J. Poskon - Robert W. Baird & Co. Incorporated, Research Division

Okay, and then just one big picture question. Any thoughts on the commentary in the news about a potential Kroger buyout of Harris Teeter? And do you think that we can expect accelerated supermarket consolidation? What are your thoughts on that?

Andrew M. Alexander

As to the second part of the question, yes, I think that there will be M&A activity in retail generally, in supermarkets in particular. Obviously, we all read the news about Harris Teeter, good chain, good stores with them. So we're very comfortable that we'll be fine whatever happens, and as to -- I wouldn't really want to get into speculating as to who they're talking to or what they'll end up doing, that's really their process.

Operator

From RBC Capital Markets, we have Rich Moore online.

Richard C. Moore - RBC Capital Markets, LLC, Research Division

A question for you on the industrial JVs. They both appeared to have gone away, and I think you had promised that they would, or at least indicated you thought they would. What exactly happened to those? Were those dismantled, or did you just sell your partner's share or sell your share to your partner?

Andrew M. Alexander

Several different things, Rich. we sold some outright. We sold some to our partner, and then we have interest in 2 very small Buildings in Memphis that are under contract and should be sold. And then also one little freezer building, so we're talking about under $10 million of value. So it is something that, in my mind, we are done but will be absolutely, completely, totally done here before too long.

Richard C. Moore - RBC Capital Markets, LLC, Research Division

Okay, good. Drew, and then on the development pipeline, you guys moved those, that group of projects over and have 2 left. Is there anything else? Obviously, $25 million to $50 million are -- I think it was just your spend for the year, but what's that's pipeline look like? You have some land, of course, that could be turned into shopping centers. I mean, how do you see development shaping up over the next couple of years, in terms of new projects?

Andrew M. Alexander

As you know, we have active dialogue and are working across our entire growth footprint. I think we are working on a lot of deals, but I don't quite see the catalyst to create a tremendous amount of new development. Land owners who have good property don't want to sell at discounts to what they could have gotten years ago. Tenants are still somewhat able to achieve their open-to-buys, but increasingly more worried about 2014, 2015, how they're going to get there. They are filling some of their open-to-buys in small towns, which is fine for them but not a significant part of our strategy. And I think even a lot of the private guys -- I was at a shopping center trustees meeting not long ago, a lot of the private guys are recognizing that working for free is not really a very good long-term plan. So if you look at the overlap of things, I don't think there'll be a tremendous amount of new development. But we're very close with the Targets, the Wal-Marts, the Whole Foods, the Krogers, the Publix, the HEBs, and all the other folks that we would want to anchor our centers. So over the next several years, I think there will be more, but specifically when that ramps up, I'm not sure, but I don't think it will be immediate.

Richard C. Moore - RBC Capital Markets, LLC, Research Division

Okay, good. Drew, and then flipping around to acquisitions for a second. What's that looking like? Is your pipeline filling up? Are you seeing it starting to diminish a bit? Or how do you think of the whole acquisitions you see?

Johnny L. Hendrix

We've got -- yes, this is Johnny, Rich. We've got about $60 million in the pipeline today. There's no certainty that any of that will close. We certainly believe it will, but we're not certain. And over the last 30 to 45 days, there does seem to be a good number of other assets that we may have an opportunity to buy. So we're feeling pretty good, certainly, about the guidance range.

Richard C. Moore - RBC Capital Markets, LLC, Research Division

Okay, and would you do any of those in JVs, Johnny? Or is that sort of something you're not going to do much more of in the near future?

Johnny L. Hendrix

Rich, we certainly would look at joint ventures and have some partners today that we will talk to on a regular basis. I don't think it will be a large part of the overall acquisitions that we have and certainly, not a priority from our perspective.

Operator

From Green Street Advisors we have Cedrik Lachance online.

Cedrik Lachance - Green Street Advisors, Inc., Research Division

Just looking at the dispositions in the recent quarter, you had an average gap right there of about 8.5%, I believe. What do you observe in the market in terms of your ability to sell some of these lower-quality assets?

Johnny L. Hendrix

Cedric, it has remained pretty constant all year. And you're right, the assets that we're selling are some of the lower-quality assets, small towns, demographically challenged. Most of these assets, we're actually selling to individuals. We're obviously selling them on a one-off basis, which is a little more labor-intensive and does take a little bit longer. We are seeing good opportunities for the buyers, given the debt market today. They're able to get a pretty good yield at 8.5%, even if you only get 60% leverage, maybe 40%, a 4% debt. So we feel like we've been pretty successful in it, and I think -- certainly think going forward, we're going to be able to continue to sell some of these assets in 2013.

Cedrik Lachance - Green Street Advisors, Inc., Research Division

So what do you observe from a pricing perspective? Has the yield there been about constant? Or do you see any compression, or do you see -- foresee any ability to sell at higher prices for that kind of quality?

Johnny L. Hendrix

Now Cedric, we are -- we believe there will be some compression going forward. We think, with the alternative investments being relatively limited, and a good yield, a reasonable leverage, we feel like cap rates will compress. We have anecdotally seen a few things that would give us the impression that it's moving, but it is pretty slow to move at this point. I wouldn't be able to tell you that cap rates have compressed, significantly, over the last 6 to 12 months in that product category.

Cedrik Lachance - Green Street Advisors, Inc., Research Division

And then looking at your land bank at this point, what percentage of it is adjacent to your existing centers and what percentage is really raw land that's in the path of development?

Andrew M. Alexander

I'm not sure, Cedric, I have that exact number in front of me. The land is detailed, so we could go through that and figure it out. My team is flipping through papers. So we'll circle back to you on that.

Cedrik Lachance - Green Street Advisors, Inc., Research Division

Okay, that sounds good. We can follow up after the call. And then, perhaps, final question. In regards to your same-store projection. When I think about the 9 properties that were transferred from development into your operating property, are those assets going to be considered same-store? And if so, by how much can they impact your same-store guidance for next year?

Johnny L. Hendrix

Cedric, what we typically do is we have a property that once it's stabilized for over a year, then we bring it into same-store. So these 9 properties will not be in same-store. We have somewhere around 93% of the properties, our total population in same-store, so I think we're pretty aggressive in that area. But these assets really aren't that big that they would have impacted it significantly one way or the other, but they will not be included in the same-store.

Operator

From Deutsche Bank, we have Vincent Chao online.

Vincent Chao - Deutsche Bank AG, Research Division

Just a quick question on the spreads which were quite strong this quarter, and just looking at the expected spread going forward in 2013? I mean, was there a couple single deals that really spiked the quarterly spread higher this time around?

Johnny L. Hendrix

No, there really wasn't. We've had good leverage in the renewals which really drove the spread. A lot of what we've done over the last year is we've done some short-term leases, and some of those probably have been less, and you've probably seen our rent growth slower than some of our peers. We're hoping that -- and it appears that we are going to be able to pick some of that up in the renewals over the next year or so. We haven't had great rent growth in the existing -- in the new leases and certainly, we believe that we can improve that, going forward, and that's what you're seeing in our guidance.

Vincent Chao - Deutsche Bank AG, Research Division

Okay, and just given the fact that the fourth quarter sometimes has its, sort of, trueups and that kind of thing, I'm just wondering on the expense side, was there anything unusual in the real estate or property operating expenses this quarter? Just it seemed like the tenant recovery ratio, it was a little bit higher than it's been, so I'm just trying to get some color.

Stephen C. Richter

Taxes were slightly higher, Vincent. We actually are -- excuse me, lower. We actually adjust our pro ratas, our CAM tax and insurance on a monthly basis. So clearly, there was no really variance there, but taxes were down a little bit.

Vincent Chao - Deutsche Bank AG, Research Division

Okay, and do you think the current level of the, sort of, recovery rate is what we should expect in 2013?

Stephen C. Richter

Yes. I mean, I think I would use the annual number as opposed to any one quarter, because it can vary slightly quarter-to-quarter.

Vincent Chao - Deutsche Bank AG, Research Division

Okay. And then just one, sort of a, it's a step-back sort of question. Just in terms of the net dispositions there, not a huge amount but a small net disposition expectation for 2013. If you go back to the Analyst Day, which I know is a little bit -- is far back now, but I think at that point, the expectation, it was -- would be that you'd be a net acquirer. I'm just wondering from that time to today, what's changed in the landscape that has you continue to sell more than buy? And maybe as a follow-up to that, in terms of your select versus your secondary market breakout that you previously provided, can you give us an update of where you're at there in terms of the percent of NOI?

Andrew M. Alexander

On the big picture, and then I'll let my colleague chime in on some of the sub-components. I think the biggest change is the decision to sell the industrial, handle a lot of the needs and put us in a position to delever the balance sheet and continue a multiyear approach. So that's where, as Johnny mentioned, there are a few acquisition opportunities that we're seeing, a little more encouragement there. We are also seeing the opportunity to sell some of the outlying properties that helps our overhead in places where we're never going to have any strategic mass, at prices that we think are pretty reasonable and fair. So our estimate and midpoint of guidance is to be about capital-neutral, as we shared with you last time, when you factor in the New Development. But obviously, when you get to the details of how the plan works, the timing of how things work and how things affect their dramatic differences, we were able to sell a little bit more property last quarter, and that's good. We do have some acquisition opportunities working and certainly, some other disposition opportunities. So we'll certainly have quarterly calls and keep folks informed, but there are a lot of moving pieces, and as always, we're going to do the right long-term thing. Johnny, you want to talk for a second there?

Johnny L. Hendrix

Sure, I haven't run that specific number, but generally we've sold about a little bit over 1/2 of the assets that we had identified at that time. Obviously, the NOI has kind of moved around a little bit, so I think 1/2 is probably somewhere around a good number.

Operator

From JPMorgan, we have Michael Mueller online.

Michael W. Mueller - JP Morgan Chase & Co, Research Division

So for the -- I think it was about a 250 basis points of occupancy that's signed, but not yet in place, that you talk about coming online this year. Is that extremely back-end loaded because that's -- it would imply a same-store growth, I'd say above the 2% to 3% level?

Johnny L. Hendrix

No, it's not. It's pretty well even throughout the year. One of the things that you've got to -- kind of as we're looking at the ins and outs of the same-store and kind of what tenants may leave and what tenants may come and kind of how you're replacing some of those anchored tenants, is kind of really the timing of it all. There is some fallout in the first quarter, not a significant amount, but some fallout that we budgeted in the first quarter. And I'd say it's pretty even over the year. It's interesting, about 16 tenants make up over 1/2 of that overall 750,000 square feet. And I was kind of going through those, and I would say they're kind of average, the middle of the year or so.

Michael W. Mueller - JP Morgan Chase & Co, Research Division

Okay. You were talking about different types of medical uses coming more into the shopping centers. I mean, how do the rents for those types of tenants generally compare to traditional retailers?

Johnny L. Hendrix

It's been pretty favorable. A lot of these tenants have actually taken some of the old Blockbuster spaces and we've made some pretty good gains in the rents on those. There is some capital associated with that, but even after capital, generally, we feel pretty positive. Most of the leases are 10-year leases and many of them -- or most of them are with professionals. So we feel really good, that on a long-term basis, these will be good tenants.

Michael W. Mueller - JP Morgan Chase & Co, Research Division

Okay. And you mentioned a stat, I think it was national regional tenants are now about 80% of the portfolio. Before, they were about 70% or 69%. Is the ramp-up there -- I mean, how much of that is you consciously going out and targeting national regionals as opposed to locals, compared to just not having the local demand there at all, so it's just evolved that way.

Johnny L. Hendrix

It's probably a little of both. There is not a lot of new business formation in what we would consider that mom-and-pop tenant. The other thing is, is we've improved the quality of the properties that we own. We're buying better properties, selling some of the lower-end properties. And generally those tenants are going to have your national and regional operators, so those are the tenants we're leasing to. So it's a little bit of both, probably.

Operator

From Citigroup, we have Quentin Velleley [ph] online.

Michael Bilerman - Citigroup Inc, Research Division

Yes, it's Michael Bilerman. Just thinking about just the acquisitions and dispositions, how does the sort of the timing and the spread? I assume you're still at the negative spread between your acquisitions and dispositions. How is that being rolled into your guidance numbers? I assume it's going to have some dilutive effect, but I'm just curious how you've layered that into your 184 to 190?

Stephen C. Richter

Michael, we've actually, as we articulated, we scheduled it out, our -- the budget has assumed a pro rata or ratably throughout the year on both the acquisitions and the dispositions. And as you say it is dilutive -- to earnings, so it's spread throughout the year.

Michael Bilerman - Citigroup Inc, Research Division

And what are you assuming in terms of -- so you are matching it, if you have -- so it's a net, let's say, 250, in terms of -- for the year, you're doing $63 million a quarter. At what negative spread in your guidance?

Stephen C. Richter

Well, that the -- when you actually look at the dispositions, net-net, we're probably talking about 250 basis points of spread difference.

Michael Bilerman - Citigroup Inc, Research Division

So much higher than what you were in 2012?

Andrew M. Alexander

Much the same.

Stephen C. Richter

Yes, I would say it's pretty close to being the same number.

Michael Bilerman - Citigroup Inc, Research Division

Okay, just looking on Page 13, it would be 7 8 versus 6 3. So that's 150?

Stephen C. Richter

Well, there's also some non-shopping center numbers in there that pushed that number a little higher -- a little lower, I guess cap rate.

Michael Bilerman - Citigroup Inc, Research Division

Right, so you're expecting 250 in terms of a negative spread between your acquisitions and dispositions and ratably throughout the year.

Stephen C. Richter

That's correct. In my prepared remarks, I made the comment of that timing of that can obviously, can vary and drive our guidance numbers.

Michael Bilerman - Citigroup Inc, Research Division

Right. And correct. It's just important to know what's in there, so then you can -- as things come in, benchmark off of it. As you think about the acquisition environment, are you looking at all at any of your, sort of joint ventures, right? So if you look at all the joint ventures you got, there's about $1.5 billion assets in there. You have, call it gross 35%, so about $500 million. Do any of those joint ventures serve up opportunities for you to acquire? Or you would look at wholly-owned assets?

Johnny L. Hendrix

I think a lot of the properties that we own in joint ventures are good properties and we certainly would be interested in buying them. The question, obviously, always comes is, can I pay the same price that the market would. We have some opportunity there. We have talked with some of our partners and who are just kind of surveying the landscape and would like to understand what they're opportunities are. We're certainly not close to doing anything of any significance with any of our partners.

Michael Bilerman - Citigroup Inc, Research Division

Okay, and then Steve, what's the assumption in terms of the debt rolling? You have about $310 million split between unsecured and secured, sort of the timing of those maturities, and what you're assuming in terms of refi?

Stephen C. Richter

Yes, we're basically, on a weighted average basis, we -- call it 4% that we're using as our cost of refinancing the debt as it rolls.

Michael Bilerman - Citigroup Inc, Research Division

And then the timing of the 3, is there anything that we should know about timing of the maturities in 2013?

Stephen C. Richter

No, I think it's pretty much as it's laid out in the maturity schedule.

Michael Bilerman - Citigroup Inc, Research Division

Okay. And then what's happening on the preferred? Do those come up for redemption in the first quarter?

Stephen C. Richter

The preferred is actually open to be called at any point. As you might remember we did call the 70 -- $2.5 million tranche last year, in October I believe it was. And quite frankly, we are most likely going to call the $75 million tranche in the first quarter.

Michael Bilerman - Citigroup Inc, Research Division

And then what does that leave you in terms of -- so you got 425 preferred, what does that leave you? And you'll replace that as debt, that $75 million?

Stephen C. Richter

At this point in time, yes.

Michael Bilerman - Citigroup Inc, Research Division

And then that remaining 350 is comprised at what rate, and sort of when is that open for redemption?

Stephen C. Richter

It's open for redemption now and it's at a 650 coupon. So it's not that far off of where the current market is. We feel like that we can issue a new preferred somewhere in the 5 3/4, 5 7/8, so it's slightly inside of 6, but it's not -- the pay-off on the 650 to refi with the preferred is pretty strong.

Michael Bilerman - Citigroup Inc, Research Division

And then the 75 comes off when?

Stephen C. Richter

Well, I think it will occur during the first quarter. You have to give notice and so forth, so it doesn't get -- it will very much towards the end of the quarter before we actually can execute.

Michael Bilerman - Citigroup Inc, Research Division

And that is what rate, sorry?

Stephen C. Richter

That is 6.75.

Michael Bilerman - Citigroup Inc, Research Division

6.75, okay. And you'll roll down the line at 4, so get that accretion. Okay.

Operator

[Operator Instructions] And I'm showing no further questions. At this point, I'll turn it back to our presenters for any final remarks.

Andrew M. Alexander

Yes, this is Drew Alexander. Just let me circle back and answer question, that I think Cedric asked. If one looks at Page 12, I think the breakdown in the New Development phase projects of $44 million is about right versus $60 million in the other raw land, so totaling to the $105 million. So it's about a 60-40 split between the phases and the brand-new developments there.

So I appreciate everyone joining us on the call. We'll, of course, be at the Wells Fargo Conference coming up and the Citigroup Conference after that, and look forward to seeing many of you there. We're around all day, if there's any other questions, and thanks so much for your interest in Weingarten.

Operator

And this concludes today's conference. Thank you for joining. You may now disconnect.

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