A full pipeline needs cash and Weingarten Realty Investors of Houston gained some with a March recapitalization. Weingarten and AEW Capital Management L.P. of Boston brought an unidentified major institutional client into a joint venture to recapitalize 13 Weingarten supermarket-anchored shopping centers, a regional power center and four neighborhood retail centers totaling 2.1 million square feet. The portfolio represents a collection of “high-performing properties in densely populated in-fill locations,” says Gary Greenberg, Weingarten senior vice president for capital markets.

Weingarten has owned some of the assets for years and carried nearly all on its books “at a very low basis point,” says Greenberg. The recapitalization “allowed us to demonstrate the value of the properties,” he adds. For example, the grocery-anchored centers benefited from growth in Texas's Hispanic population, he says. “Even though these properties were held at a low basis, there is significant value in properties in densely populated moderate-income areas,” Greenberg says.

AEW, which manages real estate for investors, has worked with Weingarten on two previous deals. This one generated more than $214 million in cash proceeds for Weingarten, as well as management fees and income from its remaining 15 percent equity — including a performance incentive.

What does it mean for the rest of the retail industry? “I think the important take-away is that there's still joint-venture capital available,” says Nicholas Vedder, senior associate with Green Street Advisors Inc., in Newport Beach, Calif.

Weingarten is more leveraged than other neighborhood center REITs, says Vedder — but now it has some breathing room. Its key challenge will be to build out its full pipeline, he adds. Weingarten's project list has multiplied more than tenfold to $600 million in the past three years.