UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

~~WASHINGTON,~~Washington, D.C. 20549

FORM 10-Q

(Mark One)



ý☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the ~~quarter~~quarterly period ended ~~September~~June 30, ~~2018~~2019

ORor



o☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from [] to []

Commission file number 1-9876

Weingarten Realty Investors

(Exact name of registrant as specified in its charter)



~~TEXAS~~Texas		74-1464203
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2600 Citadel Plaza Drive
P.O. Box 924133
Houston,	Texas	77292-4133
(Address of principal executive offices)		(Zip Code)



(713)	866-6000
	~~(713) 866-6000~~
	(Registrant's telephone ~~number)~~	number, including area code)

Not Applicable

(Former name, former address and former fiscal

year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:



Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Shares of Beneficial Interest, $.03 par value	WRI	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ~~YES~~ý NOoYes☒No☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). ~~YES~~ý NO¨Yes☒No☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.



~~Large accelerated filer~~ ý	~~Accelerated filer~~ ¨
~~Non-accelerated filer~~ ¨ ~~(Do not check if a smaller reporting company)~~	~~Smaller reporting company~~ ¨
	Large accelerated filer	☒	Accelerated filer	☐
	Non-accelerated filer	☐	Smaller reporting company	☐
			Emerging growth company¨	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ~~YES~~¨ NOýYes☐No☒

As of ~~October 26, 2018~~,July 29, 2019, there were ~~128,324,766~~128,670,372 common shares of beneficial interest of Weingarten Realty Investors, $.03 par value, outstanding.

Table of Contents

TABLE OF CONTENTS



PART I.		Financial Information:	Page Number

	Item 1.	Financial Statements (unaudited):

		Condensed Consolidated Statements of Operations for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018	3

		Condensed Consolidated Statements of Comprehensive Income for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018	4

		Condensed Consolidated Balance Sheets as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017~~2018	5

		Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018	6

		Condensed Consolidated Statements of Equity for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018	7

		Notes to Condensed Consolidated Financial Statements	89

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44

	Item 4.	Controls and Procedures	44

PART II.		Other Information:

	Item 1.	Legal Proceedings	44

	Item 1A.	Risk Factors	44

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44

	Item 3.	Defaults Upon Senior Securities	45

	Item 4.	Mine Safety Disclosures	45

	Item 5.	Other Information	45

	Item 6.	Exhibits	45

Signatures			46

Exhibit Index			47

Table of Contents

PART I-FINANCIAL INFORMATION

ITEM 1. Financial Statements

WEINGARTEN REALTY INVESTORS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share amounts)


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017			2019			2018			2019			2018
Revenues:
Rentals, net	$	125,261		$	141,064		$	392,510		$	424,845		$	119,462		$	138,737		$	239,288		$	267,885
Other	3,529			3,046			10,818			8,951			3,198			3,349			6,510			6,653
Total	128,790			144,110			403,328			433,796
Expenses:
Total Revenues													122,660			142,086			245,798			274,538
Operating Expenses:
Depreciation and amortization	38,042			41,509			126,558			126,115			34,967			50,421			68,939			88,516
Operating	22,555			27,813			69,929			83,944			22,767			24,104			47,015			47,374
Real estate taxes, net	17,601			18,634			52,706			57,783			15,736			17,466			31,867			35,105
Impairment loss	2,398			—			2,398			15,012			—			—			74			—
General and administrative	5,971			6,450			17,715			20,252			8,880			6,149			18,461			11,744
Total	86,567			94,406			269,306			303,106
Operating Income	42,223			49,704			134,022			130,690
Interest Expense, net	(15,996		)	(19,850		)	(47,685		)	(61,405		)
Interest and Other Income (Expense)	1,847			1,398			4,735			4,210
Benefit (Provision) for Income Taxes	99			(577		)	(1,368		)	2,035
Total Operating Expenses													82,350			98,140			166,356			182,739
Other Income (Expense):
Interest expense, net													(14,953		)	(17,017		)	(30,242		)	(31,689		)
Interest and other income (expense)													1,921			1,355			6,305			2,888
Gain on sale of property													52,061			46,953			69,848			155,998
Total Other Income													39,029			31,291			45,911			127,197
Income Before Income Taxes and Equity in Earnings of Real Estate Joint Ventures and Partnerships													79,339			75,237			125,353			218,996
Provision for Income Taxes													(484		)	(684		)	(661		)	(1,467		)
Equity in Earnings of Real Estate Joint Ventures and Partnerships, net	8,022			5,219			19,333			17,966			6,665			5,318			12,082			11,311
Income from Continuing Operations	36,195			35,894			109,037			93,496
Gain on Sale of Property	17,079			38,579			173,077			86,566
Net Income	53,274			74,473			282,114			180,062			85,520			79,871			136,774			228,840
Less: Net Income Attributable to Noncontrolling Interests	(10,293		)	(1,844		)	(14,020		)	(12,755		)	(1,711		)	(1,582		)	(3,299		)	(3,727		)
Net Income Attributable to Common Shareholders	$	42,981		$	72,629		$	268,094		$	167,307		$	83,809		$	78,289		$	133,475		$	225,113
Earnings Per Common Share - Basic:
Net income attributable to common shareholders	$	.34		$	.57		$	2.10		$	1.31		$	.66		$	.61		$	1.04		$	1.76
Earnings Per Common Share - Diluted:
Net income attributable to common shareholders	$	.34		$	.56		$	2.08		$	1.30		$	.65		$	.61		$	1.03		$	1.74

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

WEINGARTEN REALTY INVESTORS

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In thousands)


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017			2019			2018			2019			2018
Net Income	$	53,274		$	74,473		$	282,114		$	180,062		$	85,520		$	79,871		$	136,774		$	228,840
Cumulative effect adjustment of new accounting standards (see Note 2)	—			—			(1,541		)	—
Cumulative effect adjustment of new accounting standards													—			—			—			(1,541		)
Other Comprehensive Income (Loss):
Net unrealized gain on investments, net of taxes	—			222			—			678
Net unrealized gain (loss) on derivatives	—			77			1,379			(29		)
Net unrealized gain on derivatives													—			—			—			1,379
Reclassification adjustment of derivatives and designated hedges into net income	(224		)	(90		)	(4,078		)	74			(221		)	(221		)	(440		)	(3,854		)
Retirement liability adjustment	325			365			903			1,111			299			307			587			578
Total	101			574			(1,796		)	1,834			78			86			147			(1,897		)
Comprehensive Income	53,375			75,047			278,777			181,896			85,598			79,957			136,921			225,402
Comprehensive Income Attributable to Noncontrolling Interests	(10,293		)	(1,844		)	(14,020		)	(12,755		)	(1,711		)	(1,582		)	(3,299		)	(3,727		)
Comprehensive Income Adjusted for Noncontrolling Interests	$	43,082		$	73,203		$	264,757		$	169,141		$	83,887		$	78,375		$	133,622		$	221,675

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

WEINGARTEN REALTY INVESTORS

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except per share amounts)


	September 30, 2018			December 31, 2017			June 30, 2019			December 31, 2018
ASSETS
Property	$	4,245,514		$	4,498,859		$	4,084,476		$	4,105,068
Accumulated Depreciation	(1,137,548		)	(1,166,126		)	(1,119,866		)	(1,108,188		)
Property Held for Sale, net	81,224			54,792
Property, net *	3,189,190			3,387,525			2,964,610			2,996,880
Investment in Real Estate Joint Ventures and Partnerships, net	344,024			317,763			377,590			353,828
Total	3,533,214			3,705,288			3,342,200			3,350,708
Unamortized Lease Costs, net	151,165			181,047			136,960			142,014
Accrued Rent, Accrued Contract Receivables and Accounts Receivable (net of allowance for doubtful accounts of $6,354 in 2018 and $7,516 in 2017) *	94,807			104,357
Accrued Rent, Accrued Contract Receivables and Accounts Receivable (net of allowance for doubtful accounts of $6,855 in 2018) *							74,784			97,924
Cash and Cash Equivalents *	24,412			13,219			118,222			65,865
Restricted Deposits and Mortgage Escrows	22,369			8,115			14,854			10,272
Other, net	171,160			184,613			200,634			160,178
Total Assets	$	3,997,127		$	4,196,639		$	3,887,654		$	3,826,961
LIABILITIES AND EQUITY
Debt, net *	$	1,793,128		$	2,081,152		$	1,787,400		$	1,794,684
Accounts Payable and Accrued Expenses	111,691			116,463			95,296			113,175
Other, net	169,587			189,182			210,108			168,403
Total Liabilities	2,074,406			2,386,797			2,092,804			2,076,262
Commitments and Contingencies	—			—
Commitments and Contingencies (see Note 14)							—			—
Equity:
Shareholders’ Equity:
Common Shares of Beneficial Interest - par value, $.03 per share; shares authorized: 275,000; shares issued and outstanding: 128,325 in 2018 and 128,447 in 2017	3,893			3,897
Common Shares of Beneficial Interest - par value, $.03 per share; shares authorized: 275,000; shares issued and outstanding: 128,670 in 2019 and 128,333 in 2018							3,904			3,893
Additional Paid-In Capital	1,766,528			1,772,066			1,778,320			1,766,993
Net Income Less Than Accumulated Dividends	(15,584		)	(137,065		)	(154,597		)	(186,431		)
Accumulated Other Comprehensive Loss	(9,507		)	(6,170		)	(10,402		)	(10,549		)
Total Shareholders’ Equity	1,745,330			1,632,728			1,617,225			1,573,906
Noncontrolling Interests	177,391			177,114			177,625			176,793
Total Equity	1,922,721			1,809,842			1,794,850			1,750,699
Total Liabilities and Equity	$	3,997,127		$	4,196,639		$	3,887,654		$	3,826,961
* Consolidated variable interest entities' assets and debt included in the above balances (see Note 15):
Property, net	$	200,276		$	207,969		$	198,884		$	198,466
Accrued Rent, Accrued Contract Receivables and Accounts Receivable, net	11,239			12,011			9,217			12,220
Cash and Cash Equivalents	8,989			9,025			9,193			8,243
Debt, net	45,964			46,253			45,388			45,774

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

WEINGARTEN REALTY INVESTORS

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)


	Nine Months Ended September 30,						Six Months Ended June 30,
	2018			2017			2019			2018
Cash Flows from Operating Activities:
Net Income	$	282,114		$	180,062		$	136,774		$	228,840
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	126,558			126,115			68,939			88,516
Amortization of debt deferred costs and intangibles, net	2,354			2,105			1,627			1,565
Non-cash lease expense							602			—
Impairment loss	2,398			15,012			74			—
Equity in earnings of real estate joint ventures and partnerships, net	(19,333		)	(17,966		)	(12,082		)	(11,311		)
Gain on sale of property	(173,077		)	(86,566		)	(69,848		)	(155,998		)
Distributions of income from real estate joint ventures and partnerships	12,817			12,683			9,508			8,676
Changes in accrued rent, accrued contract receivables and accounts receivable, net	3,459			(10,142		)	20,361			10,286
Changes in unamortized lease costs and other assets, net	(10,697		)	(15,237		)	(11,791		)	(8,282		)
Changes in accounts payable, accrued expenses and other liabilities, net	(1,858		)	10,664			(11,882		)	(11,695		)
Other, net	(10,133		)	4,529			2,404			(10,835		)
Net cash provided by operating activities	214,602			221,259			134,686			139,762
Cash Flows from Investing Activities:
Acquisition of real estate and land	(1,265		)	(1,902		)
Acquisition of real estate and land, net							(52,659		)	(1,265		)
Development and capital improvements	(112,927		)	(101,438		)	(95,895		)	(70,015		)
Proceeds from sale of property and real estate equity investments, net	372,439			216,343			194,394			326,319
Real estate joint ventures and partnerships - Investments	(25,731		)	(31,053		)	(24,355		)	(15,369		)
Real estate joint ventures and partnerships - Distribution of capital	4,487			5,759			2,340			3,155
Purchase of investments	—			(4,241		)
Proceeds from investments	1,500			4,250			9,125			1,500
Other, net	5,180			3,734			3,019			4,454
Net cash provided by investing activities	243,683			91,452			35,969			248,779
Cash Flows from Financing Activities:
Proceeds from issuance of debt	638			—			—			638
Principal payments of debt	(255,472		)	(23,217		)	(3,173		)	(253,955		)
Changes in unsecured credit facilities	—			(120,000		)	(5,000		)	—
Proceeds from issuance of common shares of beneficial interest, net	6,729			1,115			764			1,603
Repurchase of common shares of beneficial interest, net	(18,564		)	—			—			(18,564		)
Common share dividends paid	(152,110		)	(148,286		)	(101,641		)	(101,423		)
Debt issuance and extinguishment costs paid	(1,189		)	(395		)	(310		)	(1,183		)
Distributions to noncontrolling interests	(15,063		)	(16,752		)	(3,161		)	(4,593		)
Contributions from noncontrolling interests	1,324			—			326			389
Other, net	869			(2,236		)	(1,521		)	912
Net cash used in financing activities	(432,838		)	(309,771		)	(113,716		)	(376,176		)
Net increase (decrease) in cash, cash equivalents and restricted cash equivalents	25,447			2,940
Net increase in cash, cash equivalents and restricted cash equivalents							56,939			12,365
Cash, cash equivalents and restricted cash equivalents at January 1	21,334			41,279			76,137			21,334
Cash, cash equivalents and restricted cash equivalents at September 30	$	46,781		$	44,219
Interest paid during the period (net of amount capitalized of $5,387 and $3,314, respectively)	$	53,890		$	63,564
Income taxes paid during the period	$	1,515		$	1,009
Cash, cash equivalents and restricted cash equivalents at June 30							$	133,076		$	33,699
Supplemental disclosure of cash flow information:
Cash paid for interest (net of amount capitalized of $6,204 and $3,103, respectively)							$	28,995		$	35,018
Cash paid for income taxes							$	1,456		$	1,515
Cash paid for amounts included in lease liabilities							$	1,565		$	—

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

WEINGARTEN REALTY INVESTORS

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(In thousands, except per share amounts)

Common
Shares of
Beneficial
Interest

Additional
Paid-In
Capital

Net Income
Less Than
Accumulated
Dividends

Accumulated
Other
Comprehensive
Loss

Noncontrolling
Interests
Total
Balance, January 1, 2017 $ 3,885
$ 1,718,101
$ (177,647 ) $ (9,161 ) $ 181,718
$ 1,716,896
Net income 167,307
12,755
180,062
Shares issued under benefit plans, net 11
7,767
7,778
Change in classification of deferred compensation plan 45,377
45,377
Change in redemption value of deferred compensation plan (619 ) (619 )
Dividends paid – common shares (1) (148,286 ) (148,286 )
Distributions to noncontrolling interests (16,752 ) (16,752 )
Other comprehensive income 1,834
1,834
Other, net (228 ) (703 ) (931 )
Balance, September 30, 2017 $ 3,896
$ 1,771,017
$ (159,245 ) $ (7,327 ) $ 177,018
$ 1,785,359

Balance, January 1, 2018 $ 3,897
$ 1,772,066
$ (137,065 ) $ (6,170 ) $ 177,114
$ 1,809,842
Net income 268,094
14,020
282,114
Shares repurchased and cancelled (20 ) (18,544 ) (18,564 )
Shares issued under benefit plans, net 16
13,006
13,022
Cumulative effect adjustment of new accounting standards (see Note 2) 5,497
(1,541 ) 3,956
Dividends paid – common shares (1) (152,110 ) (152,110 )
Distributions to noncontrolling interests (15,063 ) (15,063 )
Contributions from noncontrolling interests 1,324
1,324
Other comprehensive loss (1,796 ) (1,796 )
Other, net

(4 ) (4 )
Balance, September 30, 2018 $ 3,893
$ 1,766,528
$ (15,584 ) $ (9,507 ) $ 177,391
$ 1,922,721

~~_______________~~


~~(1)~~	~~Common dividend per share was $1.19 and $1.16 for the nine months ended September 30, 2018 and 2017, respectively.~~



	Six Months Ended June 30, 2019
	Common Shares of Beneficial Interest		Additional Paid-In Capital		Net Income Less Than Accumulated Dividends			Accumulated Other Comprehensive Loss			Noncontrolling Interests			Total
Balance, January 1, 2019	$	3,893	$	1,766,993	$	(186,431	)	$	(10,549	)	$	176,793		$	1,750,699
Net income					49,666						1,588			51,254
Shares issued under benefit plans, net	10		8,141											8,151
Dividends paid – common shares ($.395 per share)					(50,816		)							(50,816		)
Distributions to noncontrolling interests											(1,572		)	(1,572		)
Contributions from noncontrolling interests											326			326
Other comprehensive income								69						69
Other, net			1,955								368			2,323
Balance, March 31, 2019	3,903		1,777,089		(187,581		)	(10,480		)	177,503			1,760,434
Net income					83,809						1,711			85,520
Shares issued under benefit plans, net	1		1,231											1,232
Dividends paid – common shares ($.395 per share)					(50,825		)							(50,825		)
Distributions to noncontrolling interests											(1,589		)	(1,589		)
Other comprehensive income								78						78
Balance, June 30, 2019	$	3,904	$	1,778,320	$	(154,597	)	$	(10,402	)	$	177,625		$	1,794,850

See Notes to Condensed Consolidated Financial Statements.

Table of Contents



	Six Months Ended June 30, 2018
	Common Shares of Beneficial Interest			Additional Paid-In Capital			Net Income Less Than Accumulated Dividends			Accumulated Other Comprehensive Loss			Noncontrolling Interests			Total
Balance, January 1, 2018	$	3,897		$	1,772,066		$	(137,065	)	$	(6,170	)	$	177,114		$	1,809,842
Net income							146,824						2,145			148,969
Shares repurchased and cancelled	(9		)	(8,099		)										(8,108		)
Shares issued under benefit plans, net	7			5,339												5,346
Cumulative effect adjustment of new accounting standards							5,497			(1,541		)				3,956
Dividends paid – common shares ($.395 per share)							(50,836		)							(50,836		)
Distributions to noncontrolling interests													(884		)	(884		)
Contributions from noncontrolling interests													41			41
Other comprehensive loss										(1,983		)				(1,983		)
Balance, March 31, 2018	3,895			1,769,306			(35,580		)	(9,694		)	178,416			1,906,343
Net income							78,289						1,582			79,871
Shares repurchased and cancelled	(11		)	(10,445		)										(10,456		)
Shares issued under benefit plans, net	2			2,096												2,098
Dividends paid – common shares ($.395 per share)							(50,587		)							(50,587		)
Distributions to noncontrolling interests													(3,709		)	(3,709		)
Contributions from noncontrolling interests													348			348
Other comprehensive income										86						86
Balance, June 30, 2018	$	3,886		$	1,760,957		$	(7,878	)	$	(9,608	)	$	176,637		$	1,923,994

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

WEINGARTEN REALTY INVESTORS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Summary of Significant Accounting Policies

Business

Weingarten Realty Investors is a real estate investment trust (“REIT”) organized under the Texas Business Organizations Code. We currently operate, and intend to operate in the future, as a REIT.

We, and our predecessor entity, began the ownership of shopping centers and other commercial real estate in 1948. Our primary business is leasing space to tenants in the shopping centers we own or lease. We also provide property management services for which we charge fees to either joint ventures where we are partners or other outside owners.

We operate a portfolio of neighborhood and community shopping centers, totaling approximately ~~37.4~~33.9 million square feet of gross leaseable area that is either owned by us or others. We have a diversified tenant base, with our largest tenant comprising only ~~2.6%~~2.5% of base minimum rental revenues during the first ~~nine~~six months of ~~2018~~2019. Total revenues generated by our centers located in Houston and its surrounding areas was ~~18.8%~~19.7% of total revenue for the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, and an additional ~~8.6%~~9.1% of total revenue was generated during this period from centers that are located in other parts of Texas. Also, in Florida and California, an additional ~~20.8%~~19.5% and ~~16.9%~~18.6%, respectively, of total revenue was generated during the first ~~nine~~six months of ~~2018.~~2019.

Basis of Presentation

Our condensed consolidated financial statements include the accounts of our subsidiaries, certain partially owned real estate joint ventures or partnerships and variable interest entities (“VIEs”) which meet the guidelines for consolidation. All intercompany balances and transactions have been eliminated.

The condensed consolidated financial statements included in this report are unaudited; however, amounts presented in the condensed consolidated balance sheet as of December 31, ~~2017~~2018 are derived from our audited financial statements at that date. In our opinion, all adjustments necessary for a fair presentation of such financial statements have been included. Such adjustments consisted of normal recurring items. Interim results are not necessarily indicative of results for a full year.

The condensed consolidated financial statements and notes are presented as permitted by Form 10-Q and certain information included in our annual financial statements and notes thereto has been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and related notes for the year ended December 31, ~~2017~~2018.

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Such statements require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. We have evaluated subsequent events for recognition or disclosure in our condensed consolidated financial statements.

Leases

As part of our operations, we are primarily a lessor of commercial retail space. In certain instances, we are also a lessee, primarily of ground leases associated with our operations. Our contracts are reviewed to determine if they qualify as a lease. A contract is determined to be a lease when the right to obtain substantially all of the economic benefits and to direct the use of an identified asset is transferred to a customer over a defined period of time for consideration. During this review, we evaluate among other items, asset specification, substitution rights, purchase options, operating rights and control over the asset during the contract period.

We have elected accounting policy practical expedients, both as a lessor and a lessee, to not separate any nonlease components (primarily common area maintenance) within a lease contract for all classes of underlying assets (primarily real estate assets). We have determined to account for both the lease and nonlease components as a single component when the lease component is the predominate component of a contract. As a lessor, we have further determined that this policy will be effective only on a lease that has been classified as an operating lease and the revenue recognition pattern and timing is the same for both types of components. Therefore, Accounting Standards Codification ("ASC") No. 842, “Leases” will be applied to these lease contracts for both types of components. Additionally, for lessee leases, we have also elected not to apply the overall balance sheet recognition requirements to short-term leases.

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Significant judgments and assumptions are inherent in not only determining if a contract contains a lease but also the lease classification, terms, payments, and, if needed, discount rates. Judgments include the nature of any options with the determination if they will be exercised, evaluation of implicit discount rates, assessment and consideration of “fixed” payments for straight-line rent revenue calculations and the evaluation of asset identification and substitution rights.

The determination of the discount rate used in a lease should be the incremental borrowing rate of the lease contract. For lessee leases, this rate is often not readily determinable as the lessor’s initial direct costs and expected residual value are at the end of the lease term and unknown. Therefore, as the lessee, our incremental borrowing rate will be used. Selected discount rates reflect rates that we would have to pay to borrow on a fully collateralized basis over a term similar to the lease. Additionally, we obtain lender quotes with similar terms and if not available, the asset type, risk free rates and financing spreads to account for creditworthiness and collateral.

Our lessor leases are principally related to our shopping centers. We believe risk of an inadequate residual value of the leased asset upon the termination of these leases is low due to our ability to re-lease the space, the long-lived nature of our real estate assets and the propensity of real estate assets to hold their value over a long period of time.

Revenue Recognition

At the inception of a revenue producing contract, we determine if a contract qualifies as a lease and if not, then as a customer contract. Based on this determination, the appropriate GAAP is applied to the contract, including its revenue recognition.

Rentals, net

Rental revenue is primarily derived from operating leases and, therefore, is generally recognized on a straight-line basis over the term of the lease, which ~~generally~~typically begins the date the tenant takes control of the space. ~~Revenue from~~Variable rental revenue consists primarily of tenant reimbursements of taxes, maintenance expenses and insurance, is subject to our interpretation of lease provisions and is recognized inover the ~~period the related expense is recognized. Both~~term of ~~these revenues have been recognized under Accounting Standards Codification No. 840, “Leases.” Revenue~~a lease as services are provided. Additionally, variable rental revenue based on a percentage of tenants’ sales is recognized only after the tenant exceeds ~~their~~its sales breakpoint. In circumstances where we provide a tenant improvement allowance for improvements that are owned by the tenant, we recognize the allowance as a reduction of rental revenue on a straight-line basis over the term of the lease. Further, at the lease commencement date, we consider the collectability of a lease when determining revenue to be recognized. Prior to the adoption of ASC No. 842, rental revenues were recognized under ASC No. 840, “Leases.”

Other

Other revenue consists of both customer contract revenue and income from contractual agreements with third parties ~~tenants~~ or partially owned real estate joint ventures or partnerships, which do not meet the definition of a lease or a customer contract. Revenues which do not meet the definition of a lease or customer contract are recognized as the related services are performed under the ~~respective agreements.~~applicable agreement.

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We have identified primarily three types of customer contract ~~revenue;~~revenue: (1) management contracts with partially-owned real estate joint ventures or partnerships or third parties, (2) licensing and occupancy agreements and (3) certain non-tenant contracts. At contract inception, we assess the services provided in these contracts and identify any performance obligations that are distinct. To identify the performance obligation, we consider all services, whether explicitly stated or implied by customary business practices. We have identified the following substantive services, which may or may not be included in each contract type, that represent performance obligations:



Contract Type	Performance Obligation Description	Elements of Performance Obligations	Payment Timing
Management Agreements	• Management and asset management services • Construction and development services • Marketing ~~fees~~services	• Over time • Right to invoice • Long-term contracts	Typically monthly or quarterly
	• Leasing and legal preparation services • Sales commissions	• Point in time • Long-term contracts
Licensing and Occupancy Agreements	• Rent of non-specific space	• Over time • Right to invoice • Short-term contracts	Typically monthly
	• Set-up services	• Point in time • Right to invoice
Non-tenant Contracts	• Placement of miscellaneous items at our centers that do not qualify as a lease, i.e. advertisements, trash bins, etc.	• Point in time • Long-term contracts	Typically monthly
	• Set-up services	• Point in time • Right to invoice

We also assess collectability of the customer contract revenue prior to recognition. None of these customer contracts include a significant financing component. ~~Customer contract revenue for~~

Unamortized Lease Costs, net

Lease costs represent the ~~nine months ended September 30, 2018 does not~~initial direct costs incurred in origination, negotiation and processing of a lease agreement. Such costs include ~~any amounts that were from obligations satisfied (or partially satisfied)~~outside broker commissions and other independent third party costs, as well as internal leasing commissions paid directly related to completing a lease and are amortized over the life of the lease on a straight-line basis. Costs related to salaries and benefits, supervision, administration, unsuccessful origination efforts and other activities are charged to expense as incurred. Also included are in ~~prior periods, or was~~place lease costs which are amortized over the life of the applicable lease term on a ~~contract liability at January 1, 2018.~~straight-line basis.

Accrued Rent, Accrued Contract Receivables and Accounts Receivable, net

Receivables include ~~base rents, tenant reimbursements,~~rental revenue, amounts billed and currently due from customer contracts and receivables attributable to straight-line rental commitments. Accrued contract receivables includes amounts due from customers for contracts that do not qualify as a lease in which we earned the right to the consideration through the satisfaction of the performance obligation, but before the customer pays consideration or before payment is due. Upon the adoption of ASC No. 842, individual leases are assessed for collectability and upon the determination that the collection of rents is not probable, accrued rent and accounts receivables are reduced as an adjustment to rental revenues. Revenue from leases where collection is deemed to be less than probable is recorded on a cash basis until collectability is determined to be probable. Further, we assess whether operating lease receivables, at a portfolio level, are appropriately valued based upon an analysis of balances outstanding, historical bad debt levels and current economic trends. An allowance for the uncollectible portion of the portfolio is recorded as an adjustment to rental revenues. Prior to the adoption of ASC No. 842, an allowance for the uncollectible portion of accrued rents and accounts receivable iswas determined based upon an analysis of balances outstanding, historical bad debt levels, tenant creditworthiness and current economic trends. Additionally, estimates of the expected recovery of pre-petition and post-petition claims with respect to tenants in bankruptcy are considered in assessing the collectability of the related receivables. Management’s estimate of the collectability of accrued rents and accounts receivable is based on the best information available to management at the time of evaluation.

~~Sales of Real Estate~~

Sales of real estate include the sale of tracts of land within a shopping center development, property adjacent to shopping centers, operating properties, newly developed properties, investments in real estate joint ventures and partnerships and partial sales to real estate joint ventures and partnerships in which we participate.

These sales primarily fall under two types of contracts (1) sales of nonfinancial assets and (2) sales of investments in real estate joint ventures and partnerships. We review the sale contract to determine appropriate accounting guidance. Profits on sales of real estate are primarily not recognized until (a) a contract exists including: each party’s rights are identifiable along with the payment terms, the contract has commercial substance and the collection of consideration is probable; and (b) the performance obligation to transfer control of the asset has occurred; including transfer to the buyer of the usual risks and rewards of ownership.

We recognize gains on the sale of real estate to joint ventures and partnerships in which we participate to the extent we receive cash from the joint venture or partnership, if it meets the sales criteria in accordance with GAAP.

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~~Impairment~~

Our property is reviewed for impairment if events or changes in circumstances indicate that the carrying amount of the property, including any capitalized costs and any identifiable intangible assets, may not be recoverable.

If such an event occurs, a comparison is made of the current and projected operating cash flows of each such property into the foreseeable future, with consideration of applicable holding periods, on an undiscounted basis to the carrying amount of such property. If we determine the carrying amount is not recoverable, our basis in the property is reduced to its estimated fair value to reflect impairment in the value of the asset. Fair values are determined by management utilizing cash flow models, market capitalization rates and market discount rates, or by obtaining third-party broker or appraisal estimates in accordance with our fair value measurements accounting policy.

We review economic considerations at each reporting period, including the effects of tenant bankruptcies, the suspension of tenant expansion plans for new development projects, declines in real estate values, and any changes to plans related to our new development properties including land held for development, to identify properties where we believe market values may be deteriorating. Determining whether a property is impaired and, if impaired, the amount of write-down to fair value requires a significant amount of judgment by management and is based on the best information available to management at the time of evaluation. If market conditions deteriorate or management’s plans for certain properties change, additional write-downs could be required in the future.

Our investment in partially owned real estate joint ventures and partnerships is reviewed for impairment each reporting period. The ultimate realization is dependent on a number of factors, including the performance of each investment and market conditions. We will record an impairment charge if we determine that a decline in the estimated fair value of an investment below its carrying amount is other than temporary. There is no certainty that impairments will not occur in the future if market conditions decline or if management’s plans for these investments change.

Our investments in tax increment revenue bonds are reviewed for impairment, including the evaluation of changes in events or circumstances that may indicate that the carrying amount of the investment may not be recoverable. Realization is dependent on a number of factors, including investment performance, market conditions and payment structure. We will record an impairment charge if we determine that a decline in the value of the investment below its carrying amount is other than temporary, recovery of its cost basis is uncertain, and/or it is uncertain if the investment will be held to maturity.

Accrued contract receivables are reviewed for impairment based on changes in events or circumstances effecting our customers that may indicate that the carrying value of the asset may not be recoverable. An impairment charge will be recorded if we determine that the decline in the asset value is other than temporary or recovery of the cost basis is uncertain. Factors to be considered include current economic trends such as bankruptcy and market conditions affecting our investments in partially owned real estate joint ventures and partnerships.

Restricted Deposits and Mortgage Escrows

Restricted deposits and mortgage escrows consist of escrow deposits held by lenders primarily for property taxes, insurance and replacement reserves and restricted deposits that are held for a specific use or in a qualified escrow account for the purposes of completing like-kind exchange transactions.

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Our restricted deposits and mortgage escrows consist of the following (in thousands):



	June 30, 2019		December 31, 2018
Restricted deposits	$	13,349	$	8,150
Mortgage escrows	1,505		2,122
Total	$	14,854	$	10,272

September 30,
2018 December 31,
2017
Restricted deposits ⁽¹⁾
$ 21,909
$ 6,291
Mortgage escrows 460
1,824
Total $ 22,369
$ 8,115
Other Assets, net

~~_______________~~Other assets include an asset related to the debt service guaranty (see Note 5 for further information), tax increment revenue bonds, right-of-use assets, investments, investments held in a grantor trust, deferred tax assets, prepaid expenses, the net value of above-market leases, deferred debt costs associated with our revolving credit facilities and other miscellaneous receivables. Right-of-use assets are amortized to achieve the recognition of rent expense on a straight-line basis after adjusting for the corresponding lease liabilities’ interest over the lives of the leases. Investments held in a grantor trust and investments in mutual funds are adjusted to fair value at each period with changes included in our Condensed Consolidated Statements of Operations. Investments held to maturity are carried at amortized cost and are adjusted using the interest method for amortization of premiums and accretion of discounts. Our tax increment revenue bonds have been classified as held to maturity and are recorded at amortized cost offset by a recognized credit loss (see Note 16 for further information). Above-market leases are amortized as adjustments to rental revenues over terms of the acquired leases. Deferred debt costs, including those classified in debt, are amortized primarily on a straight-line basis, which approximates the effective interest rate method, over the terms of the debt. Other miscellaneous receivables have a reserve applied to the carrying amount when it becomes apparent that conditions exist that may lead to our inability to fully collect on outstanding amounts due. Such conditions include delinquent or late payments on receivables, deterioration in the ongoing relationship with the borrower and other relevant factors. We establish a reserve when expected loss conditions exist by reviewing the borrower’s ability to generate revenues to meet debt service requirements and assessing the fair value of any collateral.


~~(1)~~	~~The increase between the periods presented is primarily attributable to $12.4 million placed in a qualified escrow account for the purpose of completing a like-kind exchange transaction.~~

Other Liabilities, net

Other liabilities include non-qualified benefit plan liabilities, deferred revenue, lease liabilities, the net value of below-market leases and other miscellaneous liabilities. Lease liabilities are amortized to rent expense using the effective interest rate method, over the lease life. Below-market leases are amortized as adjustments to rental revenues over terms of the acquired leases.

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Accumulated Other Comprehensive Loss

Changes in accumulated other comprehensive loss by component consists of the following (in thousands):

Gain
on
Investments

Gain
on
Cash Flow
Hedges
Defined Benefit Pension Plan-Actuarial Loss Total
Balance, December 31, 2017 $ (1,541 ) $ (7,424 ) $ 15,135
$ 6,170
Cumulative effect adjustment of accounting standards (see Note 2) 1,541
1,541
Change excluding amounts reclassified from accumulated other comprehensive loss (1,379 ) (1,379 )
Amounts reclassified from accumulated other comprehensive loss 4,078
⁽¹⁾
(903 )
⁽²⁾
3,175
Net other comprehensive loss (income) —
2,699
(903 ) 1,796
Balance, September 30, 2018 $ —
$ (4,725 ) $ 14,232
$ 9,507

Gain
on
Investments

Gain
on
Cash Flow
Hedges
Defined Benefit Pension Plan-Actuarial Loss Total
Balance, December 31, 2016 $ (964 ) $ (6,403 ) $ 16,528
$ 9,161
Change excluding amounts reclassified from accumulated other comprehensive loss (678 ) 29
(649 )
Amounts reclassified from accumulated other comprehensive loss

(74 )
⁽¹⁾
(1,111 )
⁽²⁾
(1,185 )
Net other comprehensive income (678 ) (45 ) (1,111 ) (1,834 )
Balance, September 30, 2017 $ (1,642 ) $ (6,448 ) $ 15,417
$ 7,327



	Gain on Investments			Gain on Cash Flow Hedges				Defined Benefit Pension Plan-Actuarial Loss				Total
Balance, January 1, 2019	$	—		$	(4,501	)		$	15,050			$	10,549
Amounts reclassified from accumulated other comprehensive loss				219				(288		)	⁽¹⁾	(69		)
Net other comprehensive loss (income)	—			219				(288		)		(69		)
Balance, March 31, 2019	—			(4,282		)		14,762				10,480
Amounts reclassified from accumulated other comprehensive loss				221				(299		)	⁽¹⁾	(78		)
Net other comprehensive loss (income)	—			221				(299		)		(78		)
Balance, June 30, 2019	$	—		$	(4,061	)		$	14,463			$	10,402

	Gain on Investments			Gain on Cash Flow Hedges				Defined Benefit Pension Plan-Actuarial Loss				Total
Balance, January 1, 2018	$	(1,541	)	$	(7,424	)		$	15,135			$	6,170
Cumulative effect adjustment of accounting standards	1,541											1,541
Change excluding amounts reclassified from accumulated other comprehensive loss				(1,379		)						(1,379		)
Amounts reclassified from accumulated other comprehensive loss				3,633			⁽²⁾	(271		)	⁽¹⁾	3,362
Net other comprehensive loss (income)	—			2,254				(271		)		1,983
Balance, March 31, 2018	—			(5,170		)		14,864				9,694
Amounts reclassified from accumulated other comprehensive loss				221				(307		)	⁽¹⁾	(86		)
Net other comprehensive loss (income)	—			221				(307		)		(86		)
Balance, June 30, 2018	$	—		$	(4,949	)		$	14,557			$	9,608

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(1) ~~This reclassification component is included in interest expense (see Note 6 for additional information).~~

~~(2)~~ This reclassification component is included in the computation of net periodic benefit cost (see Note 12 for additional information).

~~Retrospective Application~~(2)This reclassification component is included in interest expense (see Note 5 for additional information)

Additionally, as of ~~Accounting Standard Update~~June 30, 2019 and December 31, 2018, the net gain balance in accumulated other comprehensive loss relating to previously terminated cash flow interest rate swap contracts was $4.1 million and $4.5 million, respectively, which will be reclassified to net interest expense as interest payments are made on the originally hedged debt. Within the next 12 months, approximately $.9 million in accumulated other comprehensive loss is expected to be reclassified as a reduction to interest expense related to our interest rate contracts.

~~The retrospective application~~Reclassifications

We have reclassified prior years’ miscellaneous lease-related revenues identified during our implementation of ~~adopting~~ Accounting Standard Update ("ASU") No. ~~2017-07, "Improving~~2016-02, "Leases" of $.2 million and $.6 million for the ~~Presentation of Net Periodic Pensions Cost~~three and ~~Net Periodic Postretirement Benefit Cost" on prior year's~~six months ended June 30, 2018 to Rentals, net from Other revenue in our Condensed Consolidated Statements of Operations ~~was made~~ to conform to the current year presentation (see Note 2 for ~~additional~~further information). Also, the retrospective application of adopting ASU No. 2016-15, "Classification of Certain Cash Receipts and Cash Payments" and ASU No. 2016-18, "Restricted Cash" as of December 31, 2017 on prior year's Condensed Consolidated Statement of Cash Flows was made to conform to the current year presentation. The adoption of these ASUs in the Condensed Consolidated Statement of Cash Flow for the nine months ended September 30, 2017, resulted in a retrospective reclassification of $11.1 million from cash flows from investing activities to cash flows from operating activities, and cash flows from investing activities no longer reflect the change in restricted deposits and mortgage escrows totaling $20.2 million.

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Note 2. Newly Issued Accounting Pronouncements

Adopted

In ~~May 2014,~~February 2016, the Financial Accounting Standards Board ("FASB") issued ASU No. 2014-09, "Revenue from Contracts with Customers." This ASU's core objective is for an entity to recognize revenue based on the consideration it expects to receive in exchange for goods or services. Additionally, this ASU requires entities to use a single model in accounting for revenues derived from contracts with customers. ASU No. 2014-09 replaces prior guidance regarding the recognition of revenue from sales of real estate, except for revenue from sales that are part of a sale-leaseback transaction. The provisions of ASU No. 2014-09, as amended in subsequently issued amendments, were effective for us on January 1, 2018. We adopted this guidance as of January 1, 2018 and applied it on a modified retrospective approach upon adoption.

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The adoption resulted in the identification of primarily three types of customer contracts: (1) management contracts with partially owned real estate joint ventures or partnerships or third parties, (2) licensing and occupancy agreements and (3) certain non-tenant contracts. We will continue to recognize these fees as we currently do with the exception of the timing associated with the performance obligation in our management contracts related to leasing and lease preparation related services. Upon adoption, we recognized the cumulative effect for these fees which has increased retained earnings and accrued rent, accrued contract receivables and accounts receivable, net each by $.3 million. In addition, we evaluated controls around the implementation of this ASU and have concluded there was no significant impact on our control structure. We have included our customer contract revenues under the caption Other revenues in the Condensed Consolidated Statements of Operations and have expanded our disclosures related to this ASU in Note 1.

In January 2016, the FASB issued ASU No. 2016-01, "Recognition and Measurement of Financial Assets and Financial Liabilities." This ASU will require equity investments, excluding those investments accounted for under the equity method of accounting or those that result in consolidation of the investee, to be measured at fair value with the changes in fair value recognized in net income; will simplify the impairment assessment of those investments; will eliminate the disclosure of the method(s) and significant assumptions used to estimate the fair value for financial instruments measured at amortized cost and change the fair value calculation for those investments; will change the disclosure in other comprehensive income for financial liabilities that are measured at fair value in accordance with the fair value options for financial instruments; and will clarify that a deferred asset related to available-for-sale securities should be included in an entity's evaluation for a valuation allowance. The provisions of ASU No. 2016-01 were effective for us as of January 1, 2018 and are required to be applied on a modified retrospective approach. Upon adoption, we recognized the cumulative effect for the fair value of equity investments which has increased retained earnings and accumulated other comprehensive loss each by $1.5 million and includes the effects of ASU No. 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income."

In February 2017, the FASB issued ASU No. 2017-05, "Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets." The ASU clarifies that a financial asset is within the scope of Subtopic 610-20 if it meets the definition, as amended, of an in substance nonfinancial asset. If substantially all of the fair value of assets that are promised to a counterparty in a contract is concentrated in nonfinancial assets, then all of the financial assets promised to the counterparty are in substance nonfinancial assets within the scope of Subtopic 610-20, including a parent transferring control of a nonfinancial asset through a transfer of ownership interests of a consolidated subsidiary. The provisions of ASU No. 2017-05 were effective for us as of January 1, 2018 and depending on the contract type may be recorded on a retrospective or modified retrospective approach. As a result of our contract analysis under ASU 2014-09, the majority of our contracts relate to property sales to be accounted for under this ASU and could result in future gains being recognized sooner. Upon adoption, we applied the modified retrospective approach for all contract types and for contracts considered not completed. We recognized the cumulative effect for in substance nonfinancial assets in which gains would have been realized and have increased each of retained earnings and other assets by $3.6 million at January 1, 2018.

In March 2017, the FASB issued ASU No. 2017-07, "Improving the Presentation of Net Periodic Pensions Cost and Net Periodic Postretirement Benefit Cost." The ASU requires the service cost component to be reported as compensation costs arising from services rendered by pertinent employees during the period. The other components of net periodic benefit cost are required to be presented in the income statement separately from the service cost component and outside income from operations. Additionally, only the service cost component will be eligible for capitalization when applicable. The provisions of ASU No. 2017-07 were effective for us as of January 1, 2018 on a retrospective basis for the presentation within the income statement and prospectively for the capitalization of costs. The adoption of this ASU did not have a material impact to our consolidated financial statements. We have elected to use the practical expedient in determining estimates for applying the retrospective presentation requirements. For the three and nine months ended September 30, 2017, net periodic benefit cost, excluding the service cost component, of $.1 million and $.3 million, respectively, was included in Interest and Other Income/Expense in our Condensed Consolidated Statements of Operations. For the year ended December 31, 2017, net periodic benefit cost, excluding the service cost component, was $.4 million.

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In August 2017, the FASB issued ASU No. 2017-12, "Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities." The ASU amends current hedge accounting recognition and presentation requirements. Items focused on include: alignment of an entity’s risk management activities and its financial reporting for hedging relationships, the use of hedge accounting for risk components in hedging relationships involving nonfinancial risk and interest rate risk, updates for designating fair value hedges of interest rate risk and measuring the related change in fair value of the hedged item, alignment of the recognition and presentation of the effects of the hedging instrument and the hedged item, and permits an entity to exclude certain amounts related to currency swaps. Lastly, the ASU also provides additional relief on effectiveness testing methods and disclosures. The provisions of ASU No. 2017-12 are effective for us as of January 1, 2019, and early adoption is permitted. We have adopted this ASU as of January 1, 2018, which required the modified retrospective transition method upon adoption. The adoption of this ASU did not have a material impact to our consolidated financial statements.

In February 2018, the FASB issued ASU No. 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income." ASU No. 2018-02 allows for the reclassification of the stranded tax effects resulting from the Tax Cuts and Jobs Act to retained earnings. The provisions of ASU No. 2018-02 are effective for us as of January 1, 2019, may be applied either at the beginning of the period of adoption or retrospectively, and early adoption is permitted. We adopted this ASU along with the adoption of ASU No. 2016-01 on January 1, 2018.

~~Not Yet Adopted~~

~~In February 2016, the FASB~~ issued ASU No. 2016-02, "Leases." This ASU was further updated by ASU No. 2018-01, "Land Easement Practical Expedient for Transition for Topic ~~842",~~842," ASU No. 2018-10, "Codification Improvements to Topic ~~842" and~~842," ASU No. 2018-11, "Targeted Improvements for Topic 842," ASU No. 2018-20, "Narrow-Scope Improvements for Lessors" and ASU No. 2019-01, "Codification Improvements to Topic 842." ~~The~~These ASUs set out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The ASUs require lessees to adopt a right-of-use asset approach that will bring substantially all leases onto the balance sheet, with the exception of short-term leases. The subsequent accounting for this right-of-use asset will be based on a dual-model approach, under which the lease will be classified as either a finance or an operating lease. The lessor accounting model under these ASUs is similar to current guidance, but certain underlying principles in the lessor model have been aligned with the new revenue recognition standard. A practical expedient was added for lessors to elect, by class of underlying assets, to account for lease and ~~non-lease~~nonlease components as a single lease component if certain criteria are met. The provisions of these ASUs ~~are~~were effective for us as of January 1, 2019. We adopted this guidance as of January 1, 2019 ~~are required to be~~and applied it on a modified retrospective ~~approach or to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Early adoption is permitted.~~approach.

Upon adoption, we ~~plan to apply~~applied the following practical expedients:

The transition method in which the application date ~~will be~~of January 1, 2019 is the beginning of the reporting period that we first ~~apply~~applied the new guidance.

The practical expedient package which allows an entity not to reassess (1) whether any expired or existing contracts are or contain leases; (2) the lease classification for expired or existing leases; and (3) initial direct costs for any existing leases.

The practical expedient which allows an entity not to reassess whether any existing or expired land easements that were not previously accounted for as a lease or if the contract contains a lease.

As an accounting policy election, a lessor may choose not to separate the nonlease components, by class of underlying assets, from the lease components and instead account for both types of components as a single component under certain conditions.

~~We are~~As an accounting policy election, a lessee may choose not to separate the nonlease components, by class of underlying assets, from the lease components and instead account for both types of components as a single component.

As an accounting policy election, a lessee may choose by class of the underlying asset, not to apply the recognition requirements to short-term leases.

The adoption resulted in the process of evaluating the impact to our 5,100 lessor leases and other lessee leases, if any, that the adoption of this ASU will have on our consolidated financial statements. Within our lessor leases, we are entitled to receive tenant reimbursements for operating expenses such as real estate taxes, insurance and common area maintenance (“CAM”). These ASUs have defined CAM reimbursement revenue as a non-lease component, which may need to be accounted for in accordance with Topic 606 (ASU No. 2014-09 as discussed above) if certain criteria has not been met or if the non-lease component is predominate to the combined components within a contract.

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~~We have currently identified some areas we believe may be impacted by these ASUs.~~

We have ground lease agreements in which we are the lessee for land underneath all or a portion of 12 centers and four administrative office leases that we account for as operating leases. Rental expense associated with these operating leases for the nine months ended September 30, 2018 and 2017 was $2.0 million and $2.2 million, respectively. We have one capital lease in which we are the lessee of two centers with a $21 million lease obligation. We have also identified several contracts related to office equipment and IT services which are being analyzed. We will record, if applicable, any rights and obligations under these leases as an asset and a liability in our consolidated balance sheets. Additionally, operating leases will be amortized to rent expense while any finance leases will charge a portion to both asset amortization and interest expense.

Determination of costs to be capitalized associated with leases. This ASU will limit the capitalization associated with certain costs, primarily certain internally-generated leasing and legal costs, of which we capitalized internal costs of $7.0 million for the nine months ended September 30, 2018, and $9.5 million for the year ended December 31, 2017. We believe we will be able to continue to capitalize internal leasing commissions that are a direct result of obtaining a lease.

In June 2016, the FASB issued ASU No. 2016-13, "Measurement of Credit Losses on Financial Instruments." This ASU amends prior guidance on the impairment of financial instruments, and adds an impairment model that is based on expected losses rather than incurred losses with the recognition of an allowance based on an estimate of expected credit losses. The provisions of ASU No. 2016-13 are effective for usfollowing changes as of January 1, ~~2020,~~2019:

From the Lessor Perspective:

◦

Our existing leases will continue to be classified as operating leases, however, leases entered into or modified after January 1, 2019 may be classified as either operating or sales-type leases, based on specific classification criteria. We believe the majority of our leases will continue to be classified as operating leases, and all operating leases will continue to have a similar pattern of recognition as under current GAAP.

◦

Capitalization of leasing costs has been limited under the new ASU which no longer allows indirect costs to be capitalized. Therefore, indirect, internally-generated leasing and legal costs are no longer capitalized and are recorded in General and administrative expenses in our Condensed Consolidated Statement of Operations in the period of adoption prospectively. We continue to capitalize direct costs as defined within the ASU.

◦

We are entitled to receive tenant reimbursements for operating expenses for common area maintenance (“CAM”). These ASUs have defined CAM reimbursement revenue as a nonlease component, which would need to be accounted for in accordance with Topic 606. However, we have applied the practical expedient for all of our real estate related leases, to account for the lease and nonlease components as a single, combined operating lease component as long as the nonlease component is not the predominate component of the combined components within a contract.

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◦

We previously accounted for real estate taxes that are paid directly by the tenant on a gross basis in our consolidated financial statements. These ASUs have indicated that a lessor should exclude from variable payments, lessor costs paid by a lessee directly to a third party. Therefore, we have excluded any costs paid directly by the tenant from our revenues and expenses and will only include as variable payments those which are reimbursed to us by our tenants. Real estate taxes paid directly by our tenants was $1.0 million and $2.2 million for the three and six months ended June 30, 2018, respectively.

From the Lessee Perspective:


◦	On January 1, 2019, we were the lessee under ground lease agreements for land underneath all or a portion of 12 centers and under four administrative office leases that we accounted for as operating leases. Also, we had one finance lease in which we were the lessee of two centers with a $21.9 million lease obligation.

We recognized right-of-use assets for our operating leases in Other Assets, along with corresponding lease liabilities in Other Liabilities on January 1, 2019 in the amounts of $44.2 million and ~~early adoption~~$42.9 million, respectively, in the Condensed Consolidated Balance Sheet. The difference between the right-of-use assets and the lease liabilities is ~~permitted~~primarily associated with intangibles related to ground leases. For these existing operating leases, we continue to recognize a single lease expense for ~~fiscal years beginning after December 15, 2018. We are~~both our ground and office leases, currently ~~assessing~~included in Operating expenses and General and administrative expenses, respectively, in the ~~impact, if any, that the adoption~~Condensed Consolidated Statements of ~~this ASU will have on our consolidated financial statements.~~Operations.


◦	We continue to recognize our finance lease asset balance in Property and our finance lease liability in Debt in our Condensed Consolidated Balance Sheets. The finance lease charges a portion of the payment to both asset amortization and interest expense.

In June 2018, the FASB issued ASU No. 2018-07, "Improvements to Nonemployee Share-Based Payment Accounting." This ASU amends prior employee share-based payment guidance to include nonemployee share-based payment transactions for acquiring services or property. This ASU now aligns the determination of the measurement date, the accounting for performance conditions, and the accounting for share-based payments after vesting in addition to other items. The provisions of ASU No. 2018-07 ~~are~~were effective for us as of January 1, 2019 using a modified transition method upon adoption. The adoption ~~and early adoption is permitted. Although we are still assessing the impact~~ of this ~~ASU's adoption, we do~~ASU did not ~~believe this ASU will~~ have a material impact to our consolidated financial statements.

Not Yet Adopted

In June 2016, the FASB issued ASU No. 2016-13, "Measurement of Credit Losses on Financial Instruments." This ASU was further updated by ASU No. 2018-19, "Codification Improvements to Topic 326, Financial Instruments - Credit Losses," ASU No. 2019-04, "Codification Improvements to Topic 326, Financial Instruments - Credit Losses" and ASU No. 2019-05, "Targeted Transition Relief." These ASUs amend prior guidance on the impairment of financial instruments, and adds an impairment model that is based on expected losses rather than incurred losses with the recognition of an allowance based on an estimate of expected credit losses. The provisions of ASU No. 2016-13, as amended in subsequently issued amendments, are effective for us as of January 1, 2020, and early adoption is permitted for fiscal years beginning after December 15, 2018.

We are in the process of evaluating the impact that the adoption of ASU 2016-13, as amended, will have on our consolidated financial statements and related disclosures. In identifying all of our financial instruments covered under this guidance, the majority of our instruments result from operating leasing transactions, which are not within the scope of the new standard and are to remain governed by the recently issued leasing guidance and other previously issued guidance. Excluding these instruments, the adoption of this standard may impact our financial instruments, which include tax increment revenue bonds, debt securities and cash equivalents recorded at amortized cost, a debt service guaranty asset, and other financial instruments.

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In August 2018, the FASB issued ASU No. 2018-13, "Changes to the Disclosure Requirements for Fair Value Measurement." This ASU amends and removes several disclosure requirements including the valuation processes for Level 3 fair value measurements. The ASU also modifies some disclosure requirements and requires additional disclosures for changes in unrealized gains and losses included in other comprehensive income for recurring Level 3 fair value measurements and requires the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The provisions of ASU No. 2018-13 are effective for us as of January 1, 2020 using a prospective transition method for amendments effecting changes in unrealized gains and losses, significant unobservable inputs used to develop Level 3 fair value measurements and narrative description on uncertainty of measurements. The remaining provisions of the ASU are to be applied retrospectively, and early adoption is permitted. Although we are still assessing the impact of this ASU's adoption, we do not believe this ASU will have a material impact to our consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-14, "Changes to the Disclosure Requirements for Defined Benefit Plans." This ASU clarifies current disclosures and removes several disclosures requirements including accumulated other comprehensive income expected to be recognized over the next fiscal year and amount and timing of plan assets expected to be returned to the employer. The ASU also requires additional disclosures for the weighted-average interest crediting rates for cash balance plans and explanations for significant gains and losses related to changes in the benefit plan obligation. The provisions of ASU No. 2018-14 are effective for us as of December 31, 2020 using a retrospective basis for all periods presented, and early adoption is permitted. Although we are still assessing the impact of this ASU's adoption, we do not believe this ASU will have a material impact to our consolidated financial statements.

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Note 3. Property

Our property consists of the following (in thousands):



	June 30, 2019		December 31, 2018
Land	$	885,144	$	919,237
Land held for development	41,608		45,673
Land under development	56,595		55,793
Buildings and improvements	2,887,563		2,927,954
Construction in-progress	213,566		156,411
Total	$	4,084,476	$	4,105,068

September 30,
2018 December 31,
2017
Land $ 957,362
$ 1,068,022
Land held for development 57,736
69,205
Land under development 53,570
48,985
Buildings and improvements 3,045,537
3,232,074
Construction in-progress 131,309
80,573
Total $ 4,245,514
$ 4,498,859

During the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, we sold 17eight centers and other property. Aggregate gross sales proceeds from these transactions approximated ~~$381.7~~$201.4 million and generated gains of approximately ~~$173.1 million, including properties previously classified as held for sale.~~$69.8 million. Also, during the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, we acquired two grocery-anchored shopping centers with an aggregate gross purchase price of approximately $53.7 million, and we invested ~~$54.7~~$52.6 million in new development projects.

At September 30, 2018, two centers, totaling $111.3 million before accumulated depreciation, were classified as held for sale. At December 31, 2017, three centers, totaling $78.7 million before accumulated depreciation, were classified as held for sale. None of these centers qualified to be reported in discontinued operations.

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Note 4. Investment in Real Estate Joint Ventures and Partnerships

We own interests in real estate joint ventures or limited partnerships and have tenancy-in-common interests in which we exercise significant influence, but do not have financial and operating control. We account for these investments using the equity method, and our interests ranged for the periods presented from 20% to 90% in ~~2018~~both 2019 and ~~2017.~~2018. Combined condensed financial information of these ventures (at 100%) is summarized as follows (in thousands):



	June 30, 2019			December 31, 2018
Combined Condensed Balance Sheets
ASSETS
Property	$	1,305,687		$	1,268,557
Accumulated depreciation	(318,421		)	(305,327		)
Property, net	987,266			963,230
Other assets, net	100,815			104,267
Total Assets	$	1,088,081		$	1,067,497
LIABILITIES AND EQUITY
Debt, net (primarily mortgages payable)	$	264,965		$	269,113
Amounts payable to Weingarten Realty Investors and Affiliates	11,626			11,732
Other liabilities, net	30,108			24,717
Total Liabilities	306,699			305,562
Equity	781,382			761,935
Total Liabilities and Equity	$	1,088,081		$	1,067,497

September 30,
2018 December 31,
2017
Combined Condensed Balance Sheets
ASSETS
Property $ 1,254,846
$ 1,241,004
Accumulated depreciation (300,201 ) (285,033 )
Property, net 954,645
955,971
Other assets, net 123,247
115,743
Total Assets $ 1,077,892
$ 1,071,714
LIABILITIES AND EQUITY
Debt, net (primarily mortgages payable) $ 270,443
$ 298,124
Amounts payable to Weingarten Realty Investors and Affiliates 11,740
12,017
Other liabilities, net 29,597
24,759
Total Liabilities 311,780
334,900
Equity 766,112
736,814
Total Liabilities and Equity $ 1,077,892
$ 1,071,714



	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Combined Condensed Statements of Operations
Revenues, net	$	32,877	$	32,810	$	65,392	$	66,696
Expenses:
Depreciation and amortization	7,646		8,196		15,495		16,239
Interest, net	2,491		2,980		4,950		6,504
Operating	5,685		5,645		11,785		12,073
Real estate taxes, net	4,522		5,191		9,057		10,133
General and administrative	243		95		312		320
Provision for income taxes	36		37		69		73
Total	20,623		22,144		41,668		45,342
Gain on dispositions	1,474		1,906		2,009		5,439
Net income	$	13,728	$	12,572	$	25,733	$	26,793

~~Table of Contents~~

Three Months Ended
September 30, Nine Months Ended
September 30,
2018 2017 2018 2017
Combined Condensed Statements of Operations
Revenues, net $ 33,626
$ 33,383
$ 100,322
$ 104,182
Expenses:
Depreciation and amortization 7,925
8,595
24,164
26,399
Interest, net 2,974
2,851
9,478
8,928
Operating 6,001
5,727
18,074
17,655
Real estate taxes, net 4,728
4,775
14,861
14,494
General and administrative 253
(139 ) 573
523
Provision for income taxes 33
30
106
77
Total 21,914
21,839
67,256
68,076
Gain on dispositions 4,052
67
9,491
3,963
Net income $ 15,764
$ 11,611
$ 42,557
$ 40,069

Our investment in real estate joint ventures and partnerships, as reported in our Condensed Consolidated Balance Sheets, differs from our proportionate share of the entities' underlying net assets due to basis differences, which arose upon the transfer of assets to the joint ventures. The net positive basis differences, which totaled ~~$4.4~~$6.8 million and ~~$2.2~~$5.2 million at ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, respectively, are generally amortized over the useful lives of the related assets.

~~For~~During 2019, a parcel of land was sold with gross sales proceeds of approximately $2.3 million, of which our share of the ~~nine months ended September 30,~~gain, included in equity earnings in real estate joint ventures and partnerships, totaled $1.1 million.

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During 2018, a center was sold through a series of partial sales with gross sales proceeds of approximately $33.9 million, of which our share of the gain, included in equity earnings in real estate joint ventures and partnerships, totaled $6.3 million.

During 2017, two centers were sold with aggregate gross sales proceeds of approximately $19.6 million, of which our share of the gain, included in equity earnings in real estate joint ventures and partnerships, totaled $6.2 million. In June 2017, a venture acquired land with a gross purchase price of $23.5 million for a mixed-use development project, and we simultaneously increased our ownership interest to 90% (See Note 15 for additional information).

Note 5. Debt

Our debt consists of the following (in thousands):



	June 30, 2019		December 31, 2018
Debt payable, net to 2038 ⁽¹⁾	$	1,704,649	$	1,706,886
Unsecured notes payable under credit facilities	—		5,000
Debt service guaranty liability	60,900		60,900
Finance lease obligation	21,851		21,898
Total	$	1,787,400	$	1,794,684

September 30,
2018 December 31,
2017
Debt payable, net to 2038 ⁽¹⁾
$ 1,707,983
$ 1,996,007
Debt service guaranty liability 64,145
64,145
Obligations under capital leases 21,000
21,000
Total $ 1,793,128
$ 2,081,152

_______________


(1)	At ~~September~~both June 30, 2019 and December 31, 2018, interest rates ranged from 3.3% to 7.0% at a weighted average rate of 4.0%. ~~At December 31, 2017, interest rates ranged from 2.6% to 7.9% at a weighted average rate of 4.0%.~~

~~Table of Contents~~

The allocation of total debt between fixed and variable-rate as well as between secured and unsecured is summarized below (in thousands):



	June 30, 2019		December 31, 2018
As to interest rate (including the effects of interest rate contracts):
Fixed-rate debt	$	1,769,843	$	1,771,999
Variable-rate debt	17,557		22,685
Total	$	1,787,400	$	1,794,684
As to collateralization:
Unsecured debt	$	1,453,354	$	1,457,432
Secured debt	334,046		337,252
Total	$	1,787,400	$	1,794,684

September 30,
2018 December 31,
2017
As to interest rate (including the effects of interest rate contracts):
Fixed-rate debt $ 1,775,381
$ 2,063,263
Variable-rate debt 17,747
17,889
Total $ 1,793,128
$ 2,081,152
As to collateralization:
Unsecured debt $ 1,455,225
$ 1,667,462
Secured debt 337,903
413,690
Total $ 1,793,128
$ 2,081,152

We maintain a $500 million unsecured revolving credit facility, which was amended and extended on March 30, 2016. This facility expires in March 2020, provides for two consecutive six-month extensions upon our request, and borrowing rates that float at a margin over LIBOR plus a facility fee. At both ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, the borrowing margin and facility fee, which are priced off a grid that is tied to our senior unsecured credit ratings, were 90 and 15 basis points, respectively. The facility also contains a competitive bid feature that allows us to request bids for up to $250 million. Additionally, an accordion feature allows us to increase the facility amount up to $850 million.

Additionally, we have a $10 million unsecured short-term facility, which was amended and extended on March 27, ~~2018,~~2019, that we maintain for cash management purposes, which matures in March ~~2019.~~2020. At both ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, the facility provided for fixed interest rate loans at a 30-day LIBOR rate plus a borrowing margin, facility fee and an unused facility fee of 125, 10, and 5 basis points, respectively.

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The following table discloses certain information regarding our unsecured notes payable under our credit facilities (in thousands, except percentages):



	June 30, 2019			December 31, 2018
Unsecured revolving credit facility:
Balance outstanding	$	—		$	5,000
Available balance	497,946			492,946
Letters of credit outstanding under facility	2,054			2,054
Variable interest rate (excluding facility fee)	3.3		%	3.3		%
Unsecured short-term facility:
Balance outstanding	$	—		$	—
Variable interest rate (excluding facility fee)	—		%	—		%
Both facilities:
Maximum balance outstanding during the period	$	5,000		$	26,500
Weighted average balance	249			1,096
Year-to-date weighted average interest rate (excluding facility fee)	3.3		%	2.9		%

September 30,
2018 December 31,
2017
Unsecured revolving credit facility:
Balance outstanding $ —
$ —
Available balance 497,946
493,610
Letters of credit outstanding under facility 2,054
6,390
Variable interest rate (excluding facility fee) — % — %
Unsecured short-term facility:
Balance outstanding $ —
$ —
Variable interest rate (excluding facility fee) — % — %
Both facilities:
Maximum balance outstanding during the period $ 26,500
$ 245,000
Weighted average balance 1,373
133,386
Year-to-date weighted average interest rate (excluding facility fee) 2.8 % 1.8 %

Related to a development project in Sheridan, Colorado, we have provided a guaranty for the payment of any debt service shortfalls until a coverage rate of 1.4x is met on tax increment revenue bonds issued in connection with the project. The bonds are to be repaid with incremental sales and property taxes and a public improvement fee (“PIF”) to be assessed on current and future retail sales and, to the extent necessary, any amounts we may have to provide under a guaranty. The incremental taxes and PIF are to remain intact until the earlier of the date the bond liability has been paid in full or 2040. Therefore, a debt service guaranty liability equal to the fair value of the amounts funded under the bonds was recorded. As of both ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, we had ~~$64.1~~$60.9 million outstanding for the debt service guaranty liability.

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During the ~~nine months~~year ended ~~September 30,~~December 31, 2018, we prepaid, without penalty, our $200 million unsecured variable-rate term loan, swapped to a fixed rate of 2.5%, and terminated ~~the associated~~three interest rate swap contracts ~~(see Note 6 for additional information).~~ that had an aggregate notional amount of $200 million, and we recognized a $3.4 million gain due to the probability that the related hedged forecasted transactions would no longer occur. Additionally, during the ~~nine months~~year ended ~~September 30,~~December 31, 2018, we paid at par $51.0 million of outstanding debt. These transactions resulted in a net gain upon their extinguishment of $.4 million, excluding the effect of the swap ~~termination (see Note 6 for additional information).~~termination.

Various leases and properties, and current and future rentals from those leases and properties, collateralize certain debt. At ~~September~~both June 30, ~~2018~~2019 and December 31, ~~2017~~2018, the carrying value of such assets aggregated $.6 ~~billion and $.7 billion, respectively.~~billion. Additionally, at ~~September~~June 30, 2019 and December 31, 2018,, investments of $5.3 million and $5.2 million, respectively, are held as collateral for letters of credit totaling $5.0 million.

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Scheduled principal payments on our debt (excluding ~~$21.0~~$21.9 million of ~~certain capital leases,~~ a finance lease obligation, $~~(4.8)~~(4.3) million net premium/(discount) on debt, ~~$(7.2)~~$(6.1) million of deferred debt costs, ~~$1.9~~$1.6 million of non-cash debt-related items, and ~~$64.1~~$60.9 million debt service guaranty liability) are due during the following years (in thousands):



2019 remaining	$	69,831
2020	5,296
2021	18,434
2022	307,922
2023	347,815
2024	252,153
2025	293,807
2026	277,291
2027	38,288
2028	92,159
Thereafter	10,435
Total	$	1,713,431

2018 remaining $ 1,599
2019 72,962
2020 5,296
2021 18,434
2022 307,922
2023 347,815
2024 252,153
2025 293,807
2026 277,291
2027 38,288
Thereafter 102,594
Total $ 1,718,161

Our various debt agreements contain restrictive covenants, including minimum interest and fixed charge coverage ratios, minimum unencumbered interest coverage ratios, minimum net worth requirements and maximum total debt levels. We are not aware of any non-compliance with our public debt and revolving credit facility covenants as of ~~September~~June 30, ~~2018~~2019.

Note 6. ~~Derivatives~~Lease Obligations

We are engaged in the operation of shopping centers, which are either owned or, with respect to certain shopping centers, operated under operating ground leases. These ground leases expire at various dates through 2069 with renewal options ranging from five years to 20 years, which have been predominantly excluded from our lease liabilities, and ~~Hedging~~in some cases, include options to purchase the underlying asset by either the lessor or lessee. Generally, our ground lease variable payments for real estate taxes, insurance and utilities are paid directly by us and are not a component of rental expense. Most of our leases have increasing minimum rental rates during the terms of the leases through escalation provisions and also may include an amount based on a percentage of operating revenues or sublease tenant revenue. Space in our shopping centers is leased to tenants pursuant to agreements that generally provide for terms of 10 years or less and may include multiple options to extend the lease term in increments up to five years, for annual rentals subject to upward adjustments based on operating expense levels, sales volume, or contractual increases as defined in the lease agreements.

Also, we have two properties under a finance lease that consists of variable lease payments with a purchase option. The ~~fair value~~right-of-use asset associated with this finance lease at June 30, 2019 was $9.0 million. At December 31, 2018, the related assets associated with a capital lease in buildings and improvements totaled $15.7 million, and the balance of ~~all our interest rate swap contracts~~accumulated depreciation was ~~reported~~$14.1 million. Amortization of property under the finance lease is included in depreciation and amortization expense. Note that amounts prior to January 1, 2019 were accounted for under ASC No. 840.

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A schedule of lease costs including weighted average lease terms and weighted-average discount rates is as follows (in ~~thousands)~~thousands, except as noted):



	~~Assets~~			~~Liabilities~~
	~~Balance Sheet~~ ~~Location~~	~~Amount~~		~~Balance Sheet~~ ~~Location~~	~~Amount~~
~~Designated Hedges:~~
~~September 30, 2018~~	~~Other Assets, net~~	$	—	~~Other Liabilities, net~~	$	—
~~December 31, 2017~~	~~Other Assets, net~~	~~2,035~~		~~Other Liabilities, net~~	—



	Three Months Ended June 30, 2019			Six Months Ended June 30, 2019
Lease cost:
Operating lease cost:
Included in Operating expense	$	761		$	1,522
Included in General and administrative expense	67			128
Finance cost:
Amortization of right-of-use asset (included in Depreciation and Amortization)	38			83
Interest on lease liability (included in Interest expense, net)	411			821
Short-term lease cost	17			44
Variable lease cost	61			134
Sublease income (included in Rentals, net)	(6,754		)	(13,534		)
Total lease cost	$	(5,399	)	$	(10,802	)

	June 30, 2019
Weighted-average remaining lease term (in years):
Operating leases				42.1
Finance lease				4.5

Weighted-average discount rate (percentage):
Operating leases				4.9		%
Finance lease				7.5		%

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~~The gross presentation, the effects of offsetting for derivatives with the right to offset under master netting agreements and the net presentation~~A reconciliation of our ~~interest rate swap contracts~~lease liabilities on an undiscounted cash flow basis, which primarily represents shopping center ground leases, for the subsequent five years and thereafter ending December 31, as calculated as of June 30, 2019, is as follows (in thousands):

Gross Amounts Not
Offset in Balance
Sheet

Gross
Amounts
Recognized

Gross
Amounts
Offset in
Balance
Sheet

Net
Amounts
Presented
in Balance
Sheet

Financial
Instruments

Cash
Collateral
Received
Net Amount
September 30, 2018
Assets $ —
$ —
$ —
$ —
$ —
$ —
December 31, 2017
Assets 2,035
—
2,035
—
—
2,035



	Operating		Finance
Lease payments:
2019 remaining	$	1,214	$	869
2020	2,623		1,744
2021	2,414		1,751
2022	2,401		1,759
2023	2,367		23,037
2024	2,165
Thereafter	97,187
Total	$	110,371	$	29,160

Lease liabilities⁽¹⁾	42,748		21,851
Undiscounted excess amount	$	67,623	$	7,309

~~Cash Flow Hedges~~___________________


(1)	Operating lease liabilities are included in Other Liabilities, and finance lease liabilities are included in Debt, net in our Condensed Consolidated Balance Sheet.

Table of ~~September 30, 2018~~,Contents

Scheduled minimum rental payments as defined under ASC No. 840, under the terms of all non-cancelable operating leases in which we ~~had no active interest rate swap contracts. During~~are the ~~nine months ended September 30, 2018, associated with~~lessee, principally for shopping center ground leases, for the ~~prepayment of an unsecured note, we terminated three interest rate swap contracts that had an aggregate notional amount of $200 million,~~subsequent five years and ~~we recognized a $3.4 million gain due to the probability that the related hedged forecasted transactions would no longer occur.~~

~~As of~~ thereafter ending December 31, ~~2017, we had three interest rate swap contracts, maturing through March 1, 2020, with an aggregate notional amount~~as calculated as of ~~$200 million that were designated as cash flow hedges and fixed the LIBOR component of the interest rates at 1.5%.~~

~~As of~~ ~~September 30, 2018~~ ~~and~~ December 31, ~~2017~~, the net gain balance in accumulated other comprehensive loss relating to previously terminated cash flow interest rate swap contracts was $4.7 million and $7.4 million, respectively, which will be reclassified to net interest expense as interest payments are made on the originally hedged debt. Within the next 12 months, approximately ~~$.9 million~~ ~~in accumulated other comprehensive loss is expected to be reclassified as a reduction to interest expense related to our interest rate contracts.~~

~~A summary of cash flow interest rate swap contract hedging activity is~~2018, were as follows (in thousands):

Derivatives in Cash Flow Hedging Relationships Amount of (Gain) Loss Recognized in Other Comprehensive Income (Loss) on Derivative Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income as a Result That a Forecasted Transaction is No Longer Probable of Occurring Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income as a Result That a Forecasted Transaction is No Longer Probable of Occurring Total Amount of Interest Expense, net Presented in the Condensed Consolidated Statement of Operations
Three Months Ended September 30, 2018 $ —

Interest expense,
net
$ 224

Interest expense,
net
$ —
$ (15,996 )
Nine Months Ended September 30, 2018 (1,379 )
Interest expense,
net
688

Interest expense,
net
3,390
(47,685 )
Three Months Ended September 30, 2017 (77 )
Interest expense,
net
90

Interest expense,
net
—
(19,850 )
Nine Months Ended September 30, 2017 29

Interest expense,
net
(74 )
Interest expense,
net
—
(61,405 )



	Operating		Finance
Lease payments:
2019	$	2,779	$	1,642
2020	2,536		1,635
2021	2,334		1,627
2022	2,318		1,618
2023	2,283		22,878
Thereafter	99,302
Total	$	111,552	$	29,400

Future undiscounted, sublease payments, applicable to the ground lease rentals, under the terms of all non-cancelable tenant leases, excluding estimated variable payments for the subsequent five years and thereafter ending December 31, as calculated as of June 30, 2019 and December 31, 2018, were as follows (in thousands):



	June 30, 2019		December 31, 2018
Sublease payments:
Finance lease⁽¹⁾	$	14,003	$	14,382
Operating leases:
2019 remaining	$	11,744	$	22,528
2020	22,387		20,903
2021	20,277		18,886
2022	18,513		17,245
2023	16,370		15,128
2024	11,232
Thereafter	34,634		43,439
Total	$	135,157	$	138,129

___________________


(1)	The sublease payments related to our finance lease represents cumulative payments through the lease term ending in 2023.

~~Table of Contents~~

Note 7. Common Shares of Beneficial Interest

We have a $200 million share repurchase plan ~~where~~under which we may repurchase common shares of beneficial interest ("common shares") from time-to-time in open-market or in privately negotiated purchases. The timing and amount of any shares repurchased will be determined by management based on its evaluation of market conditions and other factors. The repurchase plan may be suspended or discontinued at any time, and we have no obligations to repurchase any amount of our common shares under the plan.

~~During~~We did not repurchase any shares during the ~~nine~~six months ended ~~September~~June 30, ~~2018, we repurchased .7 million common shares at an average price of $27.10 per share.~~2019. At ~~September~~June 30, ~~2018~~2019 and as of the date of this filing, $181.5 million of common shares remained available to be repurchased under this plan.

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Note 8. ~~Impairment~~Leasing Operations

~~The following impairment charges were recorded on~~As a commercial real estate lessor, generally our leases are for terms of 10 years or less and may include multiple options, upon tenant election, to extend the ~~following assets~~lease term in increments up to five years. Our leases typically do not include an option to purchase. Tenant terminations prior to the lease end date occasionally results in a one-time termination fee based on the ~~difference between~~remaining unpaid lease payments including variable payments and could be material to the ~~carrying amount~~tenant. Many of our leases have increasing minimum rental rates during the terms of the ~~assets~~leases through escalation provisions. In addition, the majority of our leases provide for variable rental revenues, such as, reimbursements of real estate taxes, maintenance and insurance and may include an amount based on a percentage of the tenants’ sales.

Future undiscounted, lease payments for tenant leases, excluding estimated ~~fair value (see Note 16 for additional fair value information)~~variable payments, at June 30, 2019 is as follows (in thousands):



2019 remaining	$	176,038
2020	327,898
2021	277,198
2022	221,595
2023	173,512
2024	124,128
Thereafter	405,975
Total payments due	$	1,706,344

Three Months Ended
September 30, Nine Months Ended
September 30,
2018 2017 2018 2017
Continuing operations:
Properties held for sale, under contract for sale or sold⁽¹⁾
$ 2,398
$ —
$ 2,398
$ 12,198
Land held for development and undeveloped land⁽¹⁾
—
—
—
2,719
Other —
—
—
95
Total impairment charges 2,398
—
2,398
15,012
Other financial statement captions impacted by impairment:
Net income attributable to noncontrolling interests —
—
—
24
Net impact of impairment charges $ 2,398
$ —
$ 2,398
$ 15,036
Future minimum rental income as defined under ASC No. 840 from tenant leases, excluding estimated contingent rentals, at December 31, 2018 is as follows (in thousands):

~~___________________~~



2019	$	347,476
2020	305,404
2021	253,269
2022	198,414
2023	151,538
Thereafter	473,416
Total payments due	$	1,729,517


~~(1)~~	~~Amounts reported were based on changes in management's plans for the properties, third party offers, recent comparable market transactions and/or a change in market conditions.~~

Variable lease payments recognized in Rentals, net are as follows (in thousands):



	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Variable lease payments	$	26,175	$	54,105

Note 9. Supplemental Cash Flow Information

Cash, cash equivalents and restricted cash equivalents consists of the following (in thousands):



	June 30, 2019		June 30, 2018
Cash and cash equivalents	$	118,222	$	13,096
Restricted deposits and mortgage escrows (see Note 1)	14,854		20,603
Total	$	133,076	$	33,699

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September 30, 2018 September 30, 2017
Cash and cash equivalents $ 24,412
$ 39,246
Restricted deposits and mortgage escrows (see Note 1) 22,369
4,973
Total $ 46,781
$ 44,219

~~Non-cash investing and financing activities are~~Supplemental disclosure of non-cash transactions is summarized as follows (in thousands):



	Six Months Ended June 30,
	2019		2018
Accrued property construction costs	$	9,800	$	9,689
Right-of-use assets exchanged for operating lease liabilities	43,258		—

Nine Months Ended
September 30,
2018 2017
Accrued property construction costs $ 9,081
$ 5,367
Increase in equity associated with deferred compensation plan —
44,758

~~Table of Contents~~

Note 10. Earnings Per Share

Earnings per common share – basic is computed using net income attributable to common shareholders and the weighted average number of shares outstanding – basic. Earnings per common share – diluted includes the effect of potentially dilutive securities. ~~Income from continuing operations attributable to common shareholders includes gain on sale of property in accordance with Securities and Exchange Commission guidelines.~~ Earnings per common share – basic and diluted components for the periods indicated are as follows (in thousands):



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Numerator:
Net income	$	85,520		$	79,871		$	136,774		$	228,840
Net income attributable to noncontrolling interests	(1,711		)	(1,582		)	(3,299		)	(3,727		)
Net income attributable to common shareholders - basic	83,809			78,289			133,475			225,113
Income attributable to operating partnership units	528			528			1,056			1,056
Net income attributable to common shareholders - diluted	$	84,337		$	78,817		$	134,531		$	226,169
Denominator:
Weighted average shares outstanding – basic	127,856			127,505			127,807			127,714
Effect of dilutive securities:
Share options and awards	847			813			841			799
Operating partnership units	1,432			1,432			1,432			1,432
Weighted average shares outstanding – diluted	130,135			129,750			130,080			129,945

Three Months Ended
September 30, Nine Months Ended
September 30,
2018 2017 2018 2017
Numerator:
Income from continuing operations $ 36,195
$ 35,894
$ 109,037
$ 93,496
Gain on sale of property 17,079
38,579
173,077
86,566
Net income attributable to noncontrolling interests (10,293 ) (1,844 ) (14,020 ) (12,755 )
Net income attributable to common shareholders - basic 42,981
72,629

268,094

167,307
Income attributable to operating partnership units —
515
1,584
1,567
Net income attributable to common shareholders - diluted $ 42,981
$ 73,144
$ 269,678
$ 168,874
Denominator:
Weighted average shares outstanding – basic 127,525
127,801
127,651
127,734
Effect of dilutive securities:
Share options and awards 792
844
809
877
Operating partnership units —
1,432
1,432
1,450
Weighted average shares outstanding – diluted 128,317
130,077
129,892
130,061

~~Anti-dilutive~~For both the three and six months ended June 30, 2019 and 2018, we had no anti-dilutive securities of our common shares, which are excluded from the calculation of earnings per common share – ~~diluted, are as follows (in thousands):~~diluted.

Three Months Ended
September 30, Nine Months Ended
September 30,
2018 2017 2018 2017
Share options ⁽¹⁾
—
207
—
—
Operating partnership units 1,432
—
—
—
Total anti-dilutive securities 1,432
207
—
—

~~_______________~~


~~(1)~~	~~Exclusion results as exercise prices were greater than the average market price for each respective period.~~

Note 11. Share Options and Awards

During ~~2018~~2019, we granted share awards incorporating both service-based and market-based measures to promote share ownership among the participants and to emphasize the importance of total shareholder return ("TSR"). The ~~terms~~term of each grant ~~vary~~varies depending upon the participant's responsibilities and position within the Company. We categorize these share awards as either service-based share awards or market-based share awards. All awards were valued at the fair market value on the date of grant and earn dividends from the date of grant. Compensation expense is measured at the grant date and recognized over the vesting period. Generally, unvested share awards are forfeited upon the termination of the participant’s employment with us.

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The fair value of the market-based share awards was estimated on the date of grant using a Monte Carlo valuation model based on the following assumptions:



	Six Months Ended June 30, 2019
	Minimum		Maximum
Dividend yield	0.0	%	5.5	%
Expected volatility ⁽¹⁾	19.3	%	21.3	%
Expected life (in years)	N/A		3
Risk-free interest rate	2.4	%	2.6	%

Nine Months Ended
September 30, 2018
Minimum Maximum
Dividend yield 0.0 % 5.5 %
Expected volatility ⁽¹⁾
18.5 % 20.4 %
Expected life (in years) N/A
3
Risk-free interest rate 1.8 % 2.4 %

_______________

(1) Includes the volatility of the FTSE NAREIT U.S. Shopping Center Index and Weingarten Realty Investors.

A summary of the status of unvested share awards for the ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 is as follows:



	Unvested Share Awards		Weighted Average Grant Date Fair Value
Outstanding, January 1, 2019	674,293		$	30.26
Granted:
Service-based awards	177,755		28.58
Market-based awards relative to FTSE NAREIT U.S. Shopping Center Index	80,848		30.20
Market-based awards relative to three-year absolute TSR	80,847		32.91
Trust manager awards	27,768		29.17
Vested	(234,646	)	32.14
Forfeited	(4,815	)	29.98
Outstanding, June 30, 2019	802,050		$	29.56

Unvested
Share
Awards

Weighted
Average
Grant
Date Fair
Value
Outstanding, January 1, 2018 619,606
$ 33.81
Granted:
Service-based awards 133,125
28.12
Market-based awards relative to FTSE NAREIT U.S. Shopping Center
Index 60,909
29.69
Market-based awards relative to three-year absolute TSR 60,908
13.68
Trust manager awards 34,328
27.95
Vested (226,448 ) 33.63
Forfeited (9,605 ) 32.40
Outstanding, September 30, 2018 672,823
$ 30.27

As of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017~~2018, there was approximately $~~2.3~~3.1 million and ~~$2.2~~$1.8 million, respectively, of total unrecognized compensation cost related to unvested share awards, which is expected to be amortized over a weighted average of 2.1 years and 1.7 years at ~~both~~ ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017~~.2018, respectively.

Note 12. Employee Benefit Plans

Defined Benefit Plan

We sponsor a noncontributory qualified retirement plan. The components of net periodic benefit cost for this plan are as follows (in thousands):



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Service cost	$	272		$	324		$	597		$	657
Interest cost	564			514			1,039			839
Expected return on plan assets	(877		)	(921		)	(1,738		)	(1,413		)
Amortization of net loss	299			307			587			578
Total	$	258		$	224		$	485		$	661

Three Months Ended
September 30, Nine Months Ended
September 30,
2018 2017 2018 2017
Service cost $ 319
$ 278
$ 976
$ 926
Interest cost 666
482
1,505
1,527
Expected return on plan assets (1,192 ) (760 ) (2,605 ) (2,323 )
Amortization of net loss 325
365
903
1,111
Total $ 118
$ 365
$ 779
$ 1,241

The components of net periodic benefit cost other than the service cost component are included in Interest and Other ~~Income/Expense~~Income (Expense) in the Condensed Consolidated Statements of Operations.

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Table of Contents

For both the ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, we contributed $1.0 ~~million and $2.5~~ million to the qualified retirement ~~plan, respectively.~~plan. Currently, we do not anticipate making any additional contributions to this plan during ~~2018.~~2019.

Defined Contribution Plans

Compensation expense related to our defined contribution plans was ~~$.9~~$1.0 million for both the three months ended ~~September~~June 30, 2019 and 2018, and ~~2017, and $2.8~~$2.0 million and ~~$3.0~~$1.9 million for the ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, respectively.

Note 13. Related Parties

Through our management activities and transactions with our real estate joint ventures and partnerships, we had ~~net~~ accounts receivable of $.7.6 million and ~~$2.0~~$.5 million outstanding as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017~~2018, respectively. We also had accounts payable and accrued expenses of $.3 million and ~~$.4~~$.7 million outstanding as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017~~2018, respectively. We recorded joint venture fee income included in Other ~~Revenue~~revenue for the three months ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018 of ~~$1.3~~$1.4 million and ~~$1.4~~$1.7 million, respectively, and ~~$4.6~~$2.9 million and ~~$4.4~~$3.3 million for the ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, respectively.

Note 14. Commitments and Contingencies

Commitments and Contingencies

As of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, we participated in two real estate ventures structured as DownREIT ~~partnerships that have centers in Arkansas, North Carolina and Texas.~~partnerships. We have operating and financial control over these ventures and consolidate them in our condensed consolidated financial statements. These ventures allow the outside limited partners to put their interest in the partnership to us, and we have the option to redeem the interest in cash or a fixed number of our common shares, at our discretion. We also participate in a real estate venture that has a property in Texas that allows its outside partner to put operating partnership units to us. We have the option to redeem these units in cash or a fixed number of our common shares, at our discretion. The aggregate redemption value of these interests was approximately ~~$43~~$39 million and ~~$47~~$36 million as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, respectively.

As of ~~September~~June 30, ~~2018~~2019, we have entered into commitments aggregating ~~$211.0~~$147.5 million comprised principally of construction contracts which are generally due in 12 to 36 months.

We issue letters of intent signifying a willingness to negotiate for acquisitions, dispositions or joint ventures, as well as other types of potential transactions, during the ordinary course of our business. Such letters of intent and other arrangements are non-binding to all parties unless and until a definitive contract is entered into by the parties. Even if definitive contracts relating to the acquisition or disposition of property are entered into, these contracts generally provide the purchaser a time period to evaluate the property and conduct due diligence. The purchaser, during this time, will have the ability to terminate a contract without penalty or forfeiture of any deposit or earnest money. No assurance can be provided that any definitive contracts will be entered into with respect to any matter covered by letters of intent, or that we will consummate any transaction contemplated by a definitive contract. Additionally, due diligence periods for property transactions are frequently extended as needed. An acquisition or disposition of property becomes probable at the time the due diligence period expires and the definitive contract has not been terminated. Our risk is then generally extended only to any earnest money deposits associated with property acquisition contracts, and our obligation to sell under a property sales contract.

We are subject to numerous federal, state and local environmental laws, ordinances and regulations in the areas where we own or operate properties. We are not aware of any contamination which may have been caused by us or any of our tenants that would have a material effect on our condensed consolidated financial statements.

As part of our risk management activities, we have applied and been accepted into state sponsored environmental programs which will limit our expenses if contaminants need to be remediated. We also have an environmental insurance policy that covers us against third party liabilities and remediation costs.

While we believe that we do not have any material exposure to environmental remediation costs, ~~we cannot give absolute assurance that~~ changes in the law or new discoveries of contamination ~~will not~~may result in additional liabilities to us.

~~Table of Contents~~

Litigation

We are involved in various matters of litigation arising in the normal course of business. While we are unable to predict the amounts involved, our management and counsel are of the opinion that, when such litigation is resolved, any additional liability, if any, will not have a material effect on our condensed consolidated financial statements.

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Note 15. Variable Interest Entities

Consolidated VIEs:

At both ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, nine of our real estate joint ventures, whose activities primarily consisted of owning and operating 21 ~~and 22~~ neighborhood/community shopping centers, ~~respectively,~~ were determined to be VIEs. Based on a financing agreement by one of our real estate joint ventures that has a bottom dollar guaranty, which is disproportionate to our ownership, we have determined that we are the primary beneficiary and have consolidated this joint venture. For the remaining real estate joint ventures, we concluded we are the primary beneficiary based primarily on our significant power to direct the entities' activities without any substantive kick-out or participating rights.

A summary of our consolidated VIEs is as follows (in thousands):


	September 30, 2018		December 31, 2017		June 30, 2019		December 31, 2018
Assets Held by VIEs	$	227,164	$	235,713	$	229,221	$	225,388
Assets Held as Collateral for Debt ⁽¹⁾	40,665		42,979		38,944		40,004
Maximum Risk of Loss ⁽¹⁾	29,784		29,784		29,784		29,784

___________________


(1)	Represents the amount of debt and related assets held as collateral associated with the bottom dollar guaranty at one real estate joint venture.

Restrictions on the use of these assets can be significant because they may serve as collateral for debt. Further, we are generally required to obtain our partner's approval in accordance with the joint venture agreement for any major transactions. Transactions with these joint ventures on our condensed consolidated financial statements have primarily been positive as demonstrated by the generation of net income and operating cash flows, as well as the receipt of cash distributions. We and our partners are subject to the provisions of the joint venture agreements which include provisions for when additional contributions may be required to fund operating cash shortfalls, development expenditures and unplanned capital expenditures. For both the nine months ended September 30, 2018 and 2017, we made $.1 million in additional contributions primarily to fund an operating shortfall, and no additional contributions are currently anticipated to be made during the remainder of 2018.

Unconsolidated VIEs:

At both ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, two unconsolidated real estate joint ventures were determined to be VIEs. We have determined that one entity was a VIE through the issuance of a secured loan, since the lender had the ability to make decisions that could have a significant impact on the success of the entity. Based on the associated agreements for the future development of a mixed-use project, we concluded that the other entity was a VIE, but we are not the primary beneficiary as the substantive participating rights associated with the entity are shared, and we do not have the power to direct the significant activities of the entity. Our analysis considered that all major decisions require unanimous member consent and those decisions include significant activities such as development, financing, leasing and operations of the entity.

~~Table of Contents~~

A summary of our unconsolidated VIEs is as follows (in thousands):


	September 30, 2018		December 31, 2017		June 30, 2019		December 31, 2018
Investment in Real Estate Joint Ventures and Partnerships, net ⁽¹⁾	$	63,408	$	36,784	$	103,043	$	76,575
Other Liabilities, net ⁽²⁾	5,656		5,799		5,941		6,592
Maximum Risk of Loss ⁽³⁾	34,000		34,000		34,000		34,000

___________________


(1)	The carrying amount of the investment represents our contributions to a real estate joint venture, net of any distributions made and our portion of the equity in earnings of the real estate joint venture. The increase between periods represents new development funding of a mixed-use project.


(2)	Includes the carrying amount of an investment where distributions have exceeded our contributions and our portion of the equity in earnings for a real estate joint venture.


(3)	The maximum risk of loss has been determined to be limited to our debt exposure for the real estate joint ventures. Additionally, our investment, including contributions and distributions, associated with a mixed-use project is disclosed in (1) above.

We and our partners are subject to the provisions of the joint venture agreements that specify conditions, including operating shortfalls, development expenditures and unplanned capital expenditures, under which additional contributions may be required. With respect to our future development of a mixed-used project, we anticipate future funding of approximately ~~$69~~$32 million through 2020.

Table of Contents

Note 16. Fair Value Measurements

Recurring Fair Value Measurements:

Assets and liabilities measured at fair value on a recurring basis as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017, aggregated by the level in the fair value hierarchy in which those measurements fall, are as follows (in thousands):~~

Quoted Prices
in Active
Markets for
Identical
Assets
and Liabilities
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)
Fair Value at
September 30,
2018
Assets:
Cash equivalents, primarily money market funds ⁽¹⁾
$ 16,842
$ 16,842
Restricted cash, primarily commercial paper and mutual funds ⁽¹⁾
6,939
6,939
Investments, mutual funds held in a grantor trust ⁽¹⁾
33,191
33,191
Investments, mutual funds ⁽¹⁾
7,783
7,783
Total $ 64,755
$ —
$ —
$ 64,755
Liabilities:
Deferred compensation plan obligations $ 33,191
$ 33,191
Total $ 33,191
$ —
$ —
$ 33,191

~~___________________~~

~~(1) For the three and nine months ended September 30, 2018~~, ~~a gain of $1.2 million and $3.9 million, respectively, was included in Interest and Other Income/Expense, of which $.8 million and $.4 million represented an unrealized gain, respectively.~~

~~Table of Contents~~

Quoted Prices
in Active
Markets for
Identical
Assets
and Liabilities
(Level 1) Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3) Fair Value at
December 31,
2017
Assets:
Investments, mutual funds held in a grantor trust $ 31,497
$ 31,497
Investments, mutual funds 7,206
7,206
Derivative instruments:
Interest rate contracts $ 2,035
2,035
Total $ 38,703
$ 2,035
$ —
$ 40,738
Liabilities:
Deferred compensation plan obligations $ 31,497
$ 31,497
Total $ 31,497
$ —
$ —
$ 31,497

~~Nonrecurring Fair Value Measurements:~~

~~Property and Property Held for Sale Impairments~~

Property is reviewed for impairment if events or changes in circumstances indicate that the carrying amount of the property, including any identifiable intangible assets, site costs and capitalized interest, may not be recoverable. In such an event, a comparison is made of the current and projected operating cash flows of each such property into the foreseeable future on an undiscounted basis to the carrying amount of such property. If we conclude that an impairment may have occurred, estimated fair values are determined by management utilizing cash flow models, market capitalization rates and market discount rates, or by obtaining third-party broker valuation estimates, appraisals, bona fide purchase offers or the expected sales price of an executed sales agreement in accordance with our fair value measurements accounting policy. Market capitalization rates and market discount rates are determined by reviewing current sales of similar properties and transactions, and utilizing management’s knowledge and expertise in property marketing.

~~Assets measured at fair value on a nonrecurring basis at September 30,~~ 2018, aggregated by the level in the fair value hierarchy in which those measurements fall, are as follows (in thousands):



	Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value at June 30, 2019
Assets:
Cash equivalents, primarily money market funds and time deposits	$	108,937					$	108,937
Restricted cash, primarily money market funds	8,858						8,858
Investments, mutual funds held in a grantor trust	35,434						35,434
Total	$	153,229	$	—	$	—	$	153,229
Liabilities:
Deferred compensation plan obligations	$	35,434					$	35,434
Total	$	35,434	$	—	$	—	$	35,434

Quoted Prices
in Active
Markets for
Identical
Assets
and Liabilities
(Level 1) Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3) Fair Value Total Gains
(Losses)
Property ⁽¹⁾
$ 9,292
$ 9,292
$ (1,950 )
Property held for sale ⁽²⁾
39,193
39,193
(448 )
Total $ —
$ 48,485
$ —
$ 48,485
$ (2,398 )

~~____________~~

~~(1)~~

In accordance with our policy of evaluating and recording impairments on the disposal of long-lived assets, property with a carrying amount of $11.3 million was written down to a fair value of $9.3 million, resulting in a loss of $2.0 million, which was included in earnings for the period. Management’s estimate of fair value of this property was determined using a bona fide purchase offer for the Level 2 inputs.


~~(2)~~	Property held for sale with a carrying amount of $39.6 million was written down to a fair value of $39.2 million, net of costs to sell, resulting in a loss of $.4 million, which was included in earnings for the period. Management's estimate of the fair value of this property was determined using a bona fide purchase offer for the Level 2 inputs.



	Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value at December 31, 2018
Assets:
Cash equivalents, primarily money market funds	$	54,848					$	54,848
Restricted cash, primarily money market funds	5,254						5,254
Investments, mutual funds held in a grantor trust	30,996						30,996
Investments, mutual funds	6,635						6,635
Total	$	97,733	$	—	$	—	$	97,733
Liabilities:
Deferred compensation plan obligations	$	30,996					$	30,996
Total	$	30,996	$	—	$	—	$	30,996

~~Table~~Net gains and losses recognized on equity securities held at each period end were included in Interest and Other Income (Expense). For the three months ended June 30, 2019 and 2018, this included a net gain of ~~Contents~~

~~Assets measured at fair value on~~$1.7 million and $1.2 million, respectively, of which $.9 million and $(.8) million, respectively, represented an unrealized gain (loss). For the six months ended June 30, 2019 and 2018, this included a ~~nonrecurring basis at December 31, 2017 aggregated by the level in the fair value hierarchy in~~net gain of $5.2 million and $2.7 million, respectively, of which ~~those measurements fall, are as follows (in thousands):~~$3.9 million and $(.4) million, respectively, represented an unrealized gain (loss).

~~____________~~


~~(1)~~	~~Total gains (losses) exclude impairments on disposed assets because they are no longer held by us.~~

~~(2)~~

In accordance with our policy of evaluating and recording impairments on the disposal of long-lived assets, property with a carrying amount of $24.9 million was written down to a fair value of $17.1 million, resulting in a loss of $7.8 million, which was included in earnings for the first quarter of 2017. Management’s estimate of fair value of these properties was determined using a bona fide purchase offer for the Level 2 inputs. See the quantitative information about the significant unobservable inputs used for our Level 3 fair value measurements table below.

Fair Value Disclosures:

Unless otherwise described below, short-term financial instruments and receivables are carried at amounts which approximate their fair values based on their highly-liquid nature, short-term maturities and/or expected interest rates for similar instruments.

Table of Contents

Schedule of our fair value disclosures is as follows (in thousands):



	June 30, 2019						December 31, 2018
	Carrying Value		Fair Value Using Significant Other Observable Inputs (Level 2)		Fair Value Using Significant Unobservable Inputs (Level 3)		Carrying Value		Fair Value Using Significant Other Observable Inputs (Level 2)		Fair Value Using Significant Unobservable Inputs (Level 3)
Other Assets:
Tax increment revenue bonds⁽¹⁾	$	20,009			$	25,000	$	20,009			$	25,000
Investments, held to maturity⁽²⁾	1,250		$	1,249			3,000		$	2,988
Debt:
Fixed-rate debt	1,769,843				1,825,891		1,771,999				1,761,215
Variable-rate debt	17,557				17,532		22,685				23,131

September 30, 2018 December 31, 2017
Carrying Value
Fair Value
Using
Significant
Other
Observable
Inputs
(Level 2)

Fair Value
Using
Significant
Unobservable
Inputs
(Level 3)
Carrying Value Fair Value
Using
Significant
Other
Observable
Inputs
(Level 2)
Fair Value
Using
Significant
Unobservable
Inputs
(Level 3)
Other Assets:
Tax increment revenue bonds⁽¹⁾
$ 22,097
$ 25,000
$ 22,097
$ 25,000
Investments, held to maturity⁽²⁾
3,000
$ 2,984
4,489
$ 4,479

Debt:
Fixed-rate debt 1,775,381
1,760,863
2,063,263
2,109,658
Variable-rate debt 17,747
18,303
17,889
16,393

_______________


(1)	At ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, the credit loss balance on our tax increment revenue bonds was $31.0 million.


(2)	Investments held to maturity are recorded at cost. As of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, these investments had unrealized losses of ~~$16~~$1 thousand and ~~$10~~$12 thousand, respectively.

27Note 17. Subsequent Events

~~Table~~Subsequent to June 30, 2019, we acquired one grocery-anchored shopping center with a gross purchase price of ~~Contents~~

$52.6 million in a 51% unconsolidated real estate limited partnership. Additionally, we sold real estate assets with aggregate gross sales proceeds totaling $114 million. No impairment losses will be realized associated with these dispositions, and we have no continuing involvement with these dispositions.

On July 1, 2019, we paid off a $50 million secured fixed-rate mortgage with a 7% interest rate.

~~The quantitative information about the significant unobservable inputs used for our Level 3 nonrecurring fair value measurements as of~~ ~~December 31, 2017~~ ~~reported in the above table, is as follows:~~

Description Fair Value at Valuation Technique Unobservable Inputs Range
December 31,
2017 Minimum Maximum
(in thousands) 2017 2017
Property $ 4,184
Discounted cash flows Discount rate 10.5 % 12.0 %
Capitalization rate 8.8 % 10.0 %
Holding period (years) 5
10

Expected future inflation rate ⁽¹⁾
2.0 %

Market rent growth rate ⁽¹⁾
3.0 %

Expense growth rate ⁽¹⁾
2.0 %

Vacancy rate ⁽¹⁾
20.0 %

Renewal rate ⁽¹⁾
70.0 %

Average market rent rate ⁽¹⁾
$ 11.00
$ 16.00

Average leasing cost per square foot ⁽¹⁾
$ 10.00
$ 35.00

~~_______________~~


~~(1)~~	~~Only applies to one property valuation.~~

*****

~~Table of Contents~~

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This quarterly report on Form 10-Q, together with other statements and information publicly disseminated by us, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and include this statement for purposes of complying with these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” or similar expressions. You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect actual results, performances or achievements. As described in "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, ~~2017~~2018, factors which may cause actual results to differ materially from current expectations include, but are not limited to, (i) disruptions in financial markets, (ii) general economic and local real estate conditions, (iii) the inability of major tenants to continue paying their rent obligations due to bankruptcy, insolvency or general downturn in their business, (iv) financing risks, such as the inability to obtain equity, debt, or other sources of financing on favorable terms and changes in LIBOR availability, (v) changes in governmental laws and regulations, (vi) the level and volatility of interest rates, (vii) the availability of suitable acquisition opportunities, (viii) the ability to dispose of properties, (ix) changes in expected development activity, (x) increases in operating costs, (xi) tax matters, including the effect of changes in tax laws and the failure to qualify as a real estate investment trust, and (xii) investments through real estate joint ventures and partnerships, which involve risks not present in investments in which we are the sole investor. Accordingly, there is no assurance that our expectations will be realized. We do not undertake any obligation to release publicly any revisions to our forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q.

Table of Contents

The following discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto and the comparative summary of selected financial data appearing elsewhere in this report. Historical results and trends which might appear should not be taken as indicative of future operations. Our results of operations and financial condition, as reflected in the accompanying condensed consolidated financial statements and related footnotes, are subject to management’s evaluation and interpretation of business conditions, retailer performance, changing capital market conditions and other factors which could affect the ongoing viability of our tenants.

Executive Overview

Weingarten Realty Investors is a REIT organized under the Texas Business Organizations Code. We, and our predecessor entity, began the ownership of shopping centers and other commercial real estate in 1948. Our primary business is leasing space to tenants in the shopping centers we own or lease. We also provide property management services for which we charge fees to either joint ventures where we are partners or other outside owners.

We operate a portfolio of rental properties, primarily neighborhood and community shopping centers, totaling approximately ~~37.4~~33.9 million square feet of gross leaseable area that is either owned by us or others. We have a diversified tenant base with our largest tenant comprising only ~~2.6%~~2.5% of base minimum rental revenues during the first ~~nine~~six months of ~~2018.~~2019.

At ~~September~~June 30, ~~2018,~~2019, we owned or operated under long-term leases, either directly or through our interest in real estate joint ventures or partnerships, a total of ~~185~~173 properties, which are located in 17 states spanning the country from coast to coast.

We also owned interests in 2523 parcels of land held for development that totaled approximately ~~14.6~~13.4 million square feet at ~~September~~June 30, ~~2018.~~

~~Table of Contents~~

2019.

We had approximately ~~5,100~~3,900 leases with ~~3,500~~2,900 different tenants at ~~September~~June 30, ~~2018. Leases for our properties range~~2019. Rental revenue is primarily derived from operating leases with terms of 10 years or less, ~~than a year for smaller spaces~~and may include multiple options, upon tenant election, to ~~over 25 years for larger tenants. Rental revenues generally include minimum lease payments, which often increase over~~extend the lease term in increments up to five years. Many of our leases have increasing minimum rental rates during the terms of the leases through escalation provisions. In addition, the majority of our leases provide for variable rental revenues, such as, reimbursements of ~~property operating expenses, including~~ real estate taxes, maintenance and ~~additional rent payments~~insurance and may include an amount based on a percentage of the tenants’ sales. Our anchor tenants are supermarkets, value-oriented apparel/discount stores and other retailers or service providers who generally sell basic necessity-type goods and services. Although there is a broad shift in shopping patterns, including internet shopping that continues to affect our tenants, we believe our anchor tenants, ~~that~~most of which have adopted omni-channel networks which help drive foot traffic, combined with convenient locations, attractive and well-maintained properties, high quality retailers and a strong tenant mix, should lessen the effects of these conditions and maintain the viability of our portfolio.

Our goal is to remain a leader in owning and operating top-tier neighborhood and community shopping centers in certain markets of the United States. Our strategic initiatives include: (1) raising net asset value and cash flow through quality acquisitions ~~redevelopments~~ and new developments, (2) maintaining a strong, flexible consolidated balance sheet and a well-managed debt maturity schedule, (3) growing net ~~operating~~ income from our existing portfolio by increasing occupancy and rental rates, (4) continuously redeveloping our existing shopping centers to increase cash flow and ~~(4)~~enhance the value of the centers and (5) owning quality shopping centers in preferred locations that attract strong tenants. We believe these initiatives will keep our portfolio of properties among the strongest in our sector. Due to current capitalization rates in the market along with the uncertainty of the impact of increasing interest rates and various other market conditions, we intend to continue to be very prudent in our evaluation of all new investment opportunities. We believe the pricing of assets that no longer meet our ownership criteria remains reasonably stable while the price of our common shares ~~has dropped well~~remains below our net asset value. Given these conditions, we have been focused on dispositions of properties with risk factors that impact our willingness to own them going forward, and ~~utilized~~although we intend to continue with this strategy, our dispositions in 2019 are expected to decrease as compared to the prior year. We intend to utilize the proceeds from dispositions to ~~repurchase common shares, pay down our debt~~fund acquisitions and ~~fund~~ both ~~our~~ new development and redevelopment projects.

As we discussed above, we continuously recycle non-core operating centers that no longer meet our ownership criteria and that will provide capital for growth opportunities. During the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, we disposed of real estate assets, which were owned by us either directly or through our interest in real estate joint ventures or partnerships, with our share of aggregate gross sales proceeds totaling ~~$393.9~~$200.2 million. ~~For 2018,~~Subsequent to June 30, 2019, we ~~believe we will complete dispositions in amounts between $525~~disposed of an additional $114 million ~~to $625 million, and we~~of real estate assets. We have ~~approximately $418 million of~~several dispositions currently under contracts or letters of ~~intent;~~intent, and we anticipate that our dispositions in 2019 could range from $350 million to $450 million, but will decrease to a normalized level in 2020 of around $150 million; however, there are no assurances that these transactions will close at such prices or at all. ~~Looking ahead to 2019, we currently intend to continue to opportunistically take advantage~~

Table of ~~the market conditions; however, we expect the volume of dispositions will significantly decrease from those in 2018.~~Contents

We intend to continue to actively seek acquisition properties that meet our return hurdles and to actively evaluate other opportunities as they enter the market. Due to the ~~immense~~significant amount of capital available in the market, it has been difficult to participate at price points that meet our investment criteria. As of June 30, 2019, we acquired two grocery-anchored shopping centers adding 234,000 square feet to the portfolio with an aggregate gross purchase price of $53.7 million. Subsequent to June 30, 2019, we acquired in a 51% unconsolidated real estate joint venture a grocery-anchored shopping center for $52.6 million. For ~~2018,~~2019, we expect to complete acquisition investments in athe range ~~from $25~~of $50 million to ~~$75 million; however, there are no assurances that this will actually occur.~~$150 million.

We intend to continue to focus on identifying new development projects as another source of growth, as well as continue to look for redevelopment opportunities. ~~Although we have begun the development of mixed-use projects, the~~The opportunities for additional new development projects are limited at this time primarily due to a lack of demand for new retail space. During the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, we invested ~~$73.4~~$79.0 million in ~~three~~two mixed-use new development projects in the Washington D.C. area that are partially or wholly owned and a 30-story, high-rise residential tower at our River Oaks Shopping Center in Houston, ~~Texas. Also during the nine months ended September 30, 2018,~~Texas, and we invested ~~$28.7~~$12.4 million in 1411 redevelopment projects that were partially or wholly owned. Effective January 1, 2019, we stabilized the development in Seattle, Washington, moving it to our operating property portfolio, which added 62,427 square feet to the portfolio at an estimated cost per square foot of $490. Also during the six months ended June 30, 2019, we completed six redevelopment projects, which added approximately 49,000 square feet to the portfolio with an incremental investment totaling $12.4 million. For ~~2018,~~2019, we expect to invest in new development and redevelopments in the range of ~~$125~~$175 million to ~~$175~~$225 million, but we can give no assurances that this will actually occur.

We strive to maintain a strong, conservative capital structure which should provide ready access to a variety of attractive long and short-term capital sources. We carefully balance lower cost, short-term financing with long-term liabilities associated with acquired or developed long-term assets. We continue to look for transactions that will strengthen our consolidated balance sheet and further enhance our access to various sources of capital, while reducing our cost of capital. On July 1, 2019, we paid off a $50 million secured fixed-rate mortgage with a 7% interest rate, which further enhances our future positioning. Due to the variability in the capital markets, there can be no assurance that favorable pricing and ~~availability~~accessibility will be available in the future. ~~During the first nine months of 2018, we paid down debt totaling $251.0 million and repurchased $18.5 million of our common shares. These transactions were funded with proceeds~~Proceeds from our disposition program and cash generated from operations continue to further strengthen our balance sheet.

~~Table of Contents~~

Operational Metrics

In assessing the performance of our centers, management carefully monitors various operating metrics of the portfolio. As a result of our strong leasing activity and low tenant fallout, the operating metrics of our portfolio remained strong through the first ~~nine~~six months of ~~2018~~2019 as we focused on increasing rental rates and same property net operating income ("SPNOI" and see Non-GAAP Financial Measures for additional information). Our portfolio delivered ~~solid~~strong operating results with:

occupancy of ~~94.4%~~94.8% at ~~September~~June 30, ~~2018;~~2019;

an increase of ~~2.2%~~4.2% in SPNOI that includes redevelopments for the three months ended ~~September~~June 30, ~~2018~~2019 over the same period of ~~2017;~~2018; and

rental rate increases of ~~12.7%~~20.0% for new leases and ~~5.9%~~6.3% for renewals during the three months ended ~~September~~June 30, ~~2018.~~2019.

Below are performance metrics associated with our signed occupancy, SPNOI growth and leasing activity on a pro rata basis:


	September 30,				June 30,
	2018		2017		2019		2018
Anchor (space of 10,000 square feet or greater)	96.6	%	97.7	%	97.4	%	97.3	%
Non-Anchor	91.0	%	90.4	%	90.4	%	90.3	%
Total Occupancy	94.4	%	94.8	%	94.8	%	94.6	%

Three Months Ended
September 30, 2018 Nine Months Ended
September 30, 2018
SPNOI Growth (including Redevelopments) ⁽¹⁾
2.2 % 2.2 %



	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
SPNOI Growth (including Redevelopments) ⁽¹⁾	4.2	%	3.7	%

_______________


(1)	See Non-GAAP Financial Measures for a definition of the measurement of SPNOI and a reconciliation to ~~operating~~net income attributable to common shareholders within this section of Item 2.

Table of Contents


	Number of Leases	Square Feet ('000's)	Average New Rent per Square Foot ($)		Average Prior Rent per Square Foot ($)		Average Cost of Tenant Improvements per Square Foot ($)		Change in Base Rent on Cash Basis		Number of Leases	Square Feet ('000's)	Average New Rent per Square Foot ($)		Average Prior Rent per Square Foot ($)		Average Cost of Tenant Improvements per Square Foot ($)		Change in Base Rent on Cash Basis
Leasing Activity:
Three Months Ended September 30, 2018
Three Months Ended June 30, 2019											Three Months Ended June 30, 2019
New leases ⁽¹⁾	36	77	$	28.22	$	25.04	$	26.78	12.7	%	35	103	$	26.69	$	22.25	$	37.60	20.0	%
Renewals	156	550	19.03		17.97		.07		5.9	%	121	621	15.62		14.69		—		6.3	%
Not comparable spaces	23	52									36	189
Total	215	679	$	20.16	$	18.84	$	3.34	7.0	%	192	913	$	17.20	$	15.77	$	5.35	9.1	%

Nine Months Ended September 30, 2018
Six Months Ended June 30, 2019											Six Months Ended June 30, 2019
New leases ⁽¹⁾	139	349	$	25.26	$	22.31	$	39.27	13.2	%	78	220	$	26.82	$	23.27	$	37.80	15.3	%
Renewals	456	2,055	18.08		17.01		.05		6.3	%	266	1,446	15.96		15.38		—		3.8	%
Not comparable spaces	74	237									58	263
Total	669	2,641	$	19.13	$	17.78	$	5.75	7.6	%	402	1,929	$	17.40	$	16.42	$	4.99	6.0	%

_______________


(1)	Average external lease commissions per square foot for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 were ~~$6.45~~$6.05 and ~~$5.45,~~$5.47, respectively.

~~Table of Contents~~

Changing shopping habits, driven by rapid expansion of internet-driven procurement, has led to increased financial problems for many retailers, which has had a negative impact on the retail real estate sector. We continue to monitor the effects of these trends, including the impact of retail customer spending over the long-term. We believe the desirability of our physical locations, the significant diversification of our portfolio, both geographically and by tenant base, and the quality of our portfolio, along with its leading retailers and service providers that sell primarily grocery and basic necessity-type goods and services, position us well to mitigate the impact of these changes. Additionally, most retailers have implemented omni-channel networks that integrate on-line shopping with in-store experiences that has further reinforced the need for bricks and mortar locations. Despite recent tenant bankruptcies, we continue to believe there is retailer demand for quality space within strong, strategically located centers.

While we anticipate occupancy in 2019 to ~~remain comparable through year end,~~increase slightly from 2018, we ~~may experience~~are experiencing some fluctuations due to previously announced bankruptcies and the repositioning of those ~~spaces in the future.~~spaces. A reduction in the availability of quality retail space, ~~available,~~ as well as continued retailer demand, contributed to the increase in overall rental rates on a same-space basis as we completed new leases and renewed existing leases; however, the magnitude of these increases decreased in comparison to previous ~~periods~~years due to, among other factors, a ~~recent~~continued shift in negotiating leverage to the ~~tenant.~~tenant, especially on anchor spaces. We expect rental rates to continue to increase and the funding of tenant improvements and allowances could increase; however, the variability in the mix of leasing transactions as to size of space, market, use and other factors may impact the magnitude of these increases, both positively and negatively. Leasing volume is anticipated to fluctuate due to the uncertainty in tenant fallouts related to bankruptcies and tenant non-renewals. Our expectation is that SPNOI growth including redevelopments will ~~be at the lower end of our guidance range of~~average between 2.5% to 3.5% for ~~2018~~2019 assuming no significant tenant bankruptcies, although there are no assurances that this will occur.

New Development/Redevelopment

At ~~September~~June 30, ~~2018,~~2019, we ~~had three~~have two mixed-use projects ~~in various stages of development that were partially or wholly owned~~ and a 30-story, high-rise residential tower at our River Oaks Shopping Center that were in ~~Houston, Texas.~~various stages of development and are partially or wholly owned. We have funded ~~$217.5~~$297.0 million through ~~September~~June 30, ~~2018~~2019 on these projects, and we estimate our aggregate net investment upon completion to be ~~$513.0~~$485.0 million. Overall, the average projected stabilized return on investment for these multi-use properties, that include retail, office and residential components, is expected to approximate 5.5% upon completion.

We have 1411 redevelopment projects in which we plan to invest approximately ~~$78.2~~$86.6 million. Upon completion, the average projected stabilized return on our incremental investment on these redevelopment projects is expected to be between 8.0% and ~~14.0%~~12.0%.

We had approximately ~~$57.7~~$41.6 million in land held for development at ~~September~~June 30, ~~2018~~2019 that may either be developed or sold. While we are experiencing some interest from retailers and other market participants in our land held for development, opportunities for economically viable developments remain limited. We intend to continue to pursue additional development and redevelopment opportunities in multiple markets; however, finding the right opportunities remains challenging.

Table of Contents

Acquisitions

Acquisitions are a key component of our long-term growth strategy. The availability of quality acquisition opportunities in the market remains sporadic in our targeted markets. Intense competition, along with a decline in the volume of high-quality core properties inon the market, has driven pricing to very high levels. We intend to remain disciplined in approaching these opportunities, pursuing only those that provide appropriate risk-adjusted returns.

Dispositions

Dispositions are also a key component of our ongoing management process where we selectively prune properties from our portfolio that no longer meet our geographic or growth targets. Dispositions provide capital, which may be recycled into properties that are high barrier-to-entry locations within high growth metropolitan markets, and thus have higher long-term growth potential. Additionally, proceeds from dispositions may be used to reduce outstanding debt, further deleveraging our consolidated balance sheet, to repurchase our common shares and/or debt, dependent upon market prices, or to fund acquisitions and both new development and redevelopment projects.

~~Table of Contents~~

Summary of Critical Accounting Policies

Our discussion and analysis of financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and contingencies as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. We evaluate our assumptions and estimates on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

A disclosure of our critical accounting policies which affect our more significant judgments and estimates used in the preparation of our condensed consolidated financial statements is included in our Annual Report on Form 10-K for the year ended December 31, ~~2017~~2018 in Management’s Discussion and Analysis of Financial Condition and Results of Operations. There have been no significant changes to our critical accounting policies during ~~2018.~~2019.

Results of Operations

Comparison of the Three Months Ended ~~September~~June 30, ~~2018~~2019 to the Three Months Ended ~~September~~June 30, ~~2017~~2018

The following table is a summary of certain items in income from continuing operations from our Condensed Consolidated Statements of Operations, which we believe represent items that significantly changed during the three months ended ~~September~~June 30, ~~2018~~2019 as compared to the same period in ~~2017~~2018:


	Three Months Ended September 30,									Three Months Ended June 30,
	2018		2017		Change			% Change		2019		2018		Change			% Change
Revenues	$	128,790	$	144,110	$	(15,320	)	(10.6	)%	$	122,660	$	142,086	$	(19,426	)	(13.7	)%
Depreciation and amortization	38,042		41,509		(3,467		)	(8.4	)	34,967		50,421		(15,454		)	(30.6	)
Operating expenses	22,555		27,813		(5,258		)	(18.9	)
Impairment loss	2,398		—		2,398			NA
General and administrative expenses										8,880		6,149		2,731			44.4
Interest expense, net	15,996		19,850		(3,854		)	(19.4	)	14,953		17,017		(2,064		)	(12.1	)
Equity in earnings of real estate joint ventures and partnerships, net	8,022		5,219		2,803			53.7
Gain on sale of property										52,061		46,953		5,108			10.9

Revenues

The decrease in revenues of ~~$15.3~~$19.4 million is attributable primarily ~~attributable~~ to the $9.9 million impact of dispositions, the $10.1 million below-market lease intangible write-off in the second quarter of 2018 from the termination of a tenant's lease, and $1.0 million of revenues for real estate taxes paid directly by our tenants in 2018, that ~~totaled $16.1 million.~~can no longer be recorded due to the adoption of the new lease accounting standard on January 1, 2019. Offsetting this decrease, the existing portfolio, including acquisition, new development and redevelopment properties, contributed ~~$.8~~$1.6 million ~~due to~~resulting from increases in rental rates and changes in occupancy.

Table of Contents

Depreciation and Amortization

The decrease in depreciation and amortization of $15.5 million is attributable primarily to the $13.1 million write-off of an in-place lease intangible from the termination of a tenant's lease in the second quarter of 2018 and disposition activities of $3.5 million, which is offset by an increase of $1.1 million primarily ~~attributable to the impact of dispositions between the respective periods.~~from acquisitions and redevelopment centers.

~~Operating~~General and Administrative Expenses

The ~~decrease~~increase in ~~operating~~general and administrative expenses of ~~$5.3~~$2.7 million is attributable primarily ~~attributable~~ to ~~dispositions and other fees of $2.1 million, $1.3 million in management fees associated primarily with~~ a reduction in ~~compensation expense, $1.4~~capitalized indirect leasing costs of $2.4 million ~~in insurance costs associated~~due primarily ~~with hurricane and general liability claims and $.5 million in costs associated with~~to the ~~deferred compensation plan.~~

~~Impairment Loss~~

~~The impairment loss in 2018 is associated with two centers that are held or under contract for sale.~~

~~Table~~adoption of ~~Contents~~

the new lease accounting standard update on January 1, 2019.

Interest Expense, net

Net interest expense decreased ~~$3.9~~$2.1 million or ~~19.4%~~12.1%. The components of net interest expense were as follows (in thousands):


	Three Months Ended September 30,						Three Months Ended June 30,
	2018			2017			2019			2018
Gross interest expense	$	17,492		$	20,577		$	17,429		$	17,896
Gain on extinguishment of debt including related swap activity							—			(1		)
Amortization of debt deferred costs, net	869			985			888			867
Over-market mortgage adjustment	(81		)	(301		)	(81		)	(82		)
Capitalized interest	(2,284		)	(1,411		)	(3,283		)	(1,663		)
Total	$	15,996		$	19,850		$	14,953		$	17,017

The decrease in net interest expense is attributable primarily to an increase in capitalized interest of $1.6 million associated with an increase in new development and redevelopment activities. Additionally, the decrease in gross interest expense of $.5 million is attributable primarily to a reduction in the weighted average debt outstanding due to the pay down of debt with proceeds from ~~our~~ dispositions and cash generated from operations. For the three months ended ~~September~~June 30, ~~2018,~~2019, the weighted average debt outstanding was $1.8 billion at a weighted average interest rate of ~~4.0%~~4.1% as compared to ~~$2.2~~$1.9 billion outstanding at a weighted average interest rate of ~~3.8%~~4.0% in the same period of ~~2017. Also the increase in capitalized interest~~2018.

Gain on Sale of ~~$.9 million is associated with an increase in new development activities.~~

~~Equity in Earnings of Real Estate Joint Ventures and Partnerships, net~~Property

The increase of $5.1 million in ~~net equity earnings~~gain on sale of ~~real estate joint ventures~~property is attributable primarily to the disposition of five centers and ~~partnerships~~other property in the second quarter of ~~$2.8 million is primarily attributable with gains on dispositions between~~2019 as compared to six centers and other property in the ~~respective periods.~~same period of 2018.

Comparison of the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2018~~2019 to the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2018

The following table is a summary of certain items in income from continuing operations from our Condensed Consolidated Statements of Operations, which we believe represent items that significantly changed during the ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 as compared to the same period in ~~2017~~2018:


	Nine Months Ended September 30,										Six Months Ended June 30,
	2018			2017		Change			% Change		2019		2018		Change			% Change
Revenues	$	403,328		$	433,796	$	(30,468	)	(7.0	)%	$	245,798	$	274,538	$	(28,740	)	(10.5	)%
Operating expenses	69,929			83,944		(14,015		)	(16.7	)
Depreciation and amortization											68,939		88,516		(19,577		)	(22.1	)
Real estate taxes, net	52,706			57,783		(5,077		)	(8.8	)	31,867		35,105		(3,238		)	(9.2	)
Impairment loss	2,398			15,012		(12,614		)	(84.0	)
General and administrative expenses	17,715			20,252		(2,537		)	(12.5	)	18,461		11,744		6,717			57.2
Interest expense, net	47,685			61,405		(13,720		)	(22.3	)	30,242		31,689		(1,447		)	(4.6	)
(Provision) benefit for income taxes	(1,368		)	2,035		(3,403		)	167.2
Interest and other income (expense)											6,305		2,888		3,417			118.3
Gain on sale of property											69,848		155,998		(86,150		)	(55.2	)

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Revenues

The decrease in revenues of ~~$30.5~~$28.7 million is attributable primarily ~~attributable~~ to the $22.0 million impact of dispositions, the $10.1 million below-market lease intangible write-off in the second quarter of 2018 from the termination of a tenant's lease, and $2.2 million of revenues for real estate taxes paid directly by our tenants in 2018, that ~~totaled $47.3 million.~~can no longer be recorded due to the adoption of the new lease accounting standard on January 1, 2019. Offsetting this decrease, the existing portfolio, including acquisition, new development and redevelopment properties, contributed ~~$6.7~~$5.6 million ~~due to~~resulting from increases in rental rates and changes in occupancy. ~~We also realized a $10.1~~

Depreciation and Amortization

The decrease in depreciation and amortization of $19.6 million ~~increase associated with~~is attributable primarily to the $13.1 million write-off of ~~a below-market~~an in-place lease intangible from the termination of a tenant's ~~lease.~~

~~Operating Expenses~~

~~The decrease~~lease in ~~operating expenses~~the second quarter of ~~$14.0~~2018 and disposition activities of $7.1 million, which is offset by an increase of $.6 million primarily ~~attributable to dispositions~~from acquisitions and other fees of $5.4 million, a $3.1 million lease termination fee paid in 2017, $3.4 million in management fees associated primarily with a reduction in compensation expense, $1.0 million in insurance costs associated primarily with hurricane and general liability claims and $1.1 million in costs associated with the deferred compensation plan.redevelopment centers.

Real Estate Taxes, net

The decrease in ~~net~~ real estate taxes, net of ~~$5.1~~$3.2 million is attributable primarily ~~attributable~~to dispositions and $2.2 million of real estate taxes paid directly by our tenants in 2018, that can no longer be recorded due to the ~~impact~~adoption of ~~dispositions between~~ the ~~respective periods.~~

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~~Impairment Loss~~

The decrease in impairment loss of $12.6 million is primarily attributable to losses recognized in 2017. The impairment loss in 2018 is associated with two centers that are held or under contract for sale as compared to the losses in 2017 associated with the disposition of four centers, one 50% unconsolidated joint venture interest and the disposition of an unimproved land parcel.new lease accounting standard on January 1, 2019.

General and Administrative Expenses

The ~~decrease~~increase in general and administrative expenses of ~~$2.5~~$6.7 million is attributable primarily ~~attributable~~ to a reduction in ~~salary expense associated with~~capitalized indirect leasing costs of $4.7 million due primarily to the adoption of the new lease accounting standard update on January 1, 2019, and a $1.7 million decrease into restricted share compensation ~~due to~~in the first quarter of 2018 associated with unanticipated reductions in our share ~~valuation, as well as a reduction in personnel.~~valuation.

Interest Expense, net

Net interest expense decreased ~~$13.7~~$1.4 million or ~~22.3%~~4.6%. The components of net interest expense were as follows (in thousands):


	Nine Months Ended September 30,						Six Months Ended June 30,
	2018			2017			2019			2018
Gross interest expense	$	54,477		$	62,614		$	34,819		$	36,985
Gain on extinguishment of debt including related swap activity	(3,759		)	—			—			(3,759		)
Amortization of debt deferred costs, net	2,672			2,903			1,790			1,803
Over-market mortgage adjustment	(318		)	(798		)	(163		)	(237		)
Capitalized interest	(5,387		)	(3,314		)	(6,204		)	(3,103		)
Total	$	47,685		$	61,405		$	30,242		$	31,689

The decrease in net interest expense is attributable primarily ~~attributable~~ to a reduction in the weighted average debt outstanding due to the pay down of debt with proceeds from dispositions and cash generated from ~~operations,~~operations. For the six months ended June 30, 2019, the weighted average debt outstanding was $1.8 billion at a weighted average interest rate of 4.1% as compared to $2.0 billion outstanding at a weighted average interest rate of 3.9% in the same period of 2018. Additionally, net interest expense was impacted by an increase in capitalized interest of $3.1 million associated with an increase in new development and redevelopment activities, and a $3.8 million gain on extinguishment of debt ~~during~~in the first quarter of 2018, ~~which includes~~including the effect of a swap termination. For the nine months ended September 30, 2018, the weighted average debt outstanding was $1.9 billion at a weighted average interest rate of 4.0% as compared to $2.3 billion outstanding at a weighted average interest rate of 3.8% in the same period of 2017. Also the increase in capitalized interest of $2.1 million is associated with an increase in new development activities.

~~(Provision) Benefit for~~Interest and Other Income ~~Taxes~~(Expense)

The increase of $3.4 million in ~~the provision for~~interest and other income ~~taxes~~(expense) is attributable primarily to ~~disposition activities with $3.0~~a fair value increase of $2.2 million for assets held in a grantor trust related to deferred compensation and an increase of ~~the increase from our taxable REIT subsidiary and $.4~~$1.1 million in interest income associated with ~~state taxes.~~ our investments.

Gain on Sale of Property

The ~~increase at our taxable REIT subsidiary was due~~decrease of $86.2 million in gain on sale of property is attributable primarily ~~from~~to the ~~tax benefit~~disposition of eight centers and other property in ~~2017~~first six months of ~~$2.9 million associated with impairment losses~~2019 as compared to 14 centers and ~~an NOL carryforward.~~other property in the same period of 2018.

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Capital Resources and Liquidity

Our primary operating liquidity needs are paying our common share dividends, maintaining and operating our existing properties, paying our debt service costs, excluding debt maturities, and funding capital expenditures. Under our ~~2018~~2019 business plan, cash flows from operating activities are expected to meet these planned capital needs.

The primary sources of capital for funding any debt maturities, acquisitions, new developments and redevelopments are our excess cash flow generated by our operating properties; credit facilities; proceeds from both secured and unsecured debt issuances; proceeds from ~~common and preferred~~ equity issuances; and cash generated from the sale of property and the formation of joint ventures. Amounts outstanding under the unsecured revolving credit facility are retired as needed with proceeds from the issuance of long-term debt, ~~common and preferred~~ equity, cash generated from the disposition of properties and cash flow generated by our operating properties.

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As of ~~September~~June 30, ~~2018,~~2019, we had available borrowing capacity of $497.9 million under our unsecured revolving credit facility, and our debt maturities for the remainder of ~~2018~~2019 total ~~$1.6~~$69.8 million. As of ~~September~~June 30, ~~2018,~~2019, we had cash and cash equivalents available of ~~$24.4~~$118.2 million. ~~During the first nine months of 2018, we used excess cash on hand to~~ ~~prepay our $200 million unsecured term loan, to repay $51.0 million of outstanding debt, which included $14.2 million of unsecured debt purchased on the open market,~~ ~~to repurchase $18.5 million of our common shares and to invest $98.4 million in new development and redevelopment projects.~~ Currently, we anticipate our disposition activities to continue and estimate between ~~$525~~$350 million to ~~$625~~$450 million in dispositions for ~~all of 2018.~~2019. Our disposition program has resulted in significant gains that will require the payment of a special dividend before January 31, ~~2019~~2020 in order to retain our REIT status. The amount of this special dividend can vary significantly depending on the remaining disposition activity and other factors through the end of 2018. However, based upon the sales completed to-date and expected sales activity in the last quarter of the year given current market conditions, we currently expect that our special dividend will range from $160 million to $185 million.

We believe net proceeds from planned capital recycling, combined with our available capacity under the revolving credit and short-term borrowing facilities, will provide adequate liquidity to fund our capital needs, including acquisitions, ~~redevelopments,~~redevelopment and new development activities and, if necessary, special dividends. In the event our capital recycling program does not progress as expected, we believe other debt and equity alternatives are available to us. Although external market conditions are not within our control, we do not currently foresee any impediments to our entering the capital markets if needed.

During the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, our share of aggregate gross sales proceeds from our dispositions totaled ~~$393.9~~$200.2 million, which were owned by us either directly or through our interest in real estate joint ventures or partnerships. Operating cash flows from assets disposed are included in net cash from operating activities in our Condensed Consolidated Statements of Cash Flows, while proceeds from these disposals are included as investing activities.

We have non-recourse debt secured by acquired or developed properties held in several of our real estate joint ventures and partnerships. At ~~September~~June 30, ~~2018,~~2019, off-balance sheet mortgage debt for our unconsolidated real estate joint ventures and partnerships totaled ~~$270.4~~$265.0 million, of which our pro rata ownership was ~~$89.9~~$86.9 million. Scheduled principal mortgage payments on this debt, excluding deferred debt costs and non-cash related items totaling ~~$(.9)~~$(2.1) million, at 100% are as follows (in millions):


2018 remaining	$	1.6
2019	5.8
2019 remaining			$	1.5
2020	71.0		3.0
2021	173.0		173.0
2022	2.1		2.1
2023			2.2
Thereafter	17.8		85.3
Total	$	271.3	$	267.1

We generally have the right to sell or otherwise dispose of our assets except in certain cases where we are required to obtain our joint venture partners’ consent or a third party consent for assets held in special purpose entities that are 100% owned by us.

Investing Activities

Acquisitions

During the six months ended June 30, 2019, we acquired two grocery-anchored shopping centers with an aggregate gross purchase price of $53.7 million. Subsequent to June 30, 2019, a 51% unconsolidated real estate joint venture acquired a grocery-anchored shopping center for $52.6 million.

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Dispositions

During the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, we sold 17eight centers and other property, including real estate assets owned through our interest in unconsolidated real estate joint ventures and partnerships. Our share of aggregate gross sales proceeds from these transactions totaled ~~$393.9~~$200.2 million and generated our share of the gains of approximately ~~$168.7~~$70.8 million.

New Development/Redevelopment

At ~~September~~June 30, ~~2018,~~2019, we had ~~three~~two mixed-use projects ~~under development~~ and a 30-story, high-rise residential tower at our River Oaks Shopping Center under development with approximately .3.2 million of total square footage for retail and office space and 962 residential units, that were partially or wholly owned. We have funded ~~$217.5~~$297.0 million through ~~September~~June 30, ~~2018~~2019 on these projects. Upon completion, we expect our aggregate net investment in these multi-use projects to be ~~$513.0~~$485.0 million.

~~Table~~ Effective January 1, 2019, we stabilized the development in Seattle, Washington, moving it to our operating property portfolio, which added 62,427 square feet to the portfolio at an estimated cost per square foot of ~~Contents~~

$490.

At ~~September~~June 30, ~~2018,~~2019, we had 1411 redevelopment projects in which we plan to invest approximately ~~$78.2~~$86.6 million. Upon completion, the average projected stabilized return on our incremental investment on these redevelopment projects is expected to be between 8.0% and ~~14.0%~~12.0%.

~~We typically finance our new development and~~ During the six months ended June 30, 2019, we completed six redevelopment projects, which added approximately 49,000 square feet to the portfolio with proceeds from our unsecured revolving credit facility, as it is our general practice not to use third party construction financing. Management monitors amounts outstanding under our unsecured revolving credit facility and periodically pays down such balances using cash generated from operations, from debt issuances, from common and preferred share issuances and from the disposition of properties.an incremental investment totaling $12.4 million.

Capital Expenditures

Capital expenditures for additions to the existing portfolio, acquisitions, tenant improvements, new development, redevelopment and our share of investments in unconsolidated real estate joint ventures and partnerships are as follows (in thousands):


	Nine Months Ended September 30,				Six Months Ended June 30,
	2018		2017		2019		2018
Acquisitions					$	52,659	$	—
New Development	$	71,326	$	75,232	76,998		46,571
Redevelopment	27,069		24,322		14,548		13,125
Tenant Improvements	20,805		16,779		16,509		12,401
Capital Improvements	16,696		15,298		8,822		12,202
Other	4,027		2,762		3,373		2,350
Total	$	139,923	$	134,393	$	172,909	$	86,649

The increase in capital expenditures is attributable primarily to the acquisition of two centers and increased activity at our new development and redevelopment centers.

For 2019, we anticipate our acquisitions to total approximately $50 million to $150 million. Our new development and redevelopment investment for ~~2018~~2019 is estimated to be approximately ~~$125~~$175 million to ~~$175~~$225 million. For ~~2018,~~2019, capital and tenant improvements is generally expected to be consistent with ~~2017~~2018 expenditures. ~~For 2018, we anticipate our acquisitions to total between $25 million to $75 million.~~ No assurances can be provided that our planned ~~capital~~ activities will occur. Further, we have entered into commitments aggregating ~~$211.0~~$147.5 million comprised principally of construction contracts which are generally due in 12 to 36 months and anticipated to be funded under our unsecured revolving credit ~~facility.~~facility or through the use of cash generated from operations.

Capital expenditures for additions described above relate to cash flows from investing activities as follows (in thousands):


	Nine Months Ended September 30,				Six Months Ended June 30,
	2018		2017		2019		2018
Acquisition of real estate and land	$	1,265	$	1,902	$	52,659	$	1,265
Development and capital improvements	112,927		101,438		95,895		70,015
Real estate joint ventures and partnerships - Investments	25,731		31,053		24,355		15,369
Total	$	139,923	$	134,393	$	172,909	$	86,649

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Capitalized soft costs, including payroll and other general and administrative costs, interest, insurance and real estate taxes, totaled ~~$11.6~~$11.0 million and ~~$10.1~~$7.2 million for the ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, respectively.

Financing Activities

Debt

Total debt outstanding was $1.8 billion at ~~September~~June 30, ~~2018~~2019 and consists of ~~$17.7~~$17.6 million, which bears interest at variable rates and $1.8 billion, which bears interest at fixed rates. Additionally, of our total debt, ~~$337.9~~$334.0 million was secured by operating centers while the remaining $1.5 billion was unsecured.

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At ~~September~~June 30, ~~2018,~~2019, we have a $500 million unsecured revolving credit facility, which expires in March 2020 and provides borrowing rates that float at a margin over LIBOR plus a facility fee. At ~~September~~June 30, ~~2018,~~2019, the borrowing margin and facility fee, which are priced off a grid that is tied to our senior unsecured credit ratings, were 90 and 15 basis points, respectively. The facility also contains a competitive bid feature that allows us to request bids for up to $250 million. Additionally, an accordion feature allows us to increase the facility amount up to $850 million. As of ~~October 26, 2018,~~July 29, 2019, we had no amounts outstanding, and the available balance was $497.9 million, net of $2.1 million in outstanding letters of credit.

At ~~September~~June 30, ~~2018,~~2019, we have a $10 million unsecured short-term facility that we maintain for cash management purposes. The facility, which matures in March ~~2019,~~2020, provides for fixed interest rate loans at a 30-day LIBOR rate plus borrowing margin, facility fee and an unused facility fee of 125, 10, and 5 basis points, respectively. As of ~~October 26, 2018,~~July 29, 2019, we had no amounts outstanding under this facility.

For the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, the maximum balance and weighted average balance outstanding under both facilities combined were ~~$26.5~~$5.0 million and ~~$1.4~~$.2 million, respectively, at a weighted average interest rate of ~~2.8%~~3.3%.

~~For the~~ ~~nine~~ months ended September 30, 2018, we prepaid our $200 million unsecured variable-rate term loan, swapped to a fixed rate of 2.5%, and terminated the associated interest rate swap contracts (see Note 6 for additional information). Additionally during the nine months ended September 30, 2018, we paid at par $51.0 million of outstanding debt. These transactions resulted in a ~~net gain upon their extinguishment of $.4 million, excluding the effect of the swap termination.~~

Our five most restrictive covenants, composed from both our public debt and revolving credit facility, include debt to asset, secured debt to asset, fixed charge, unencumbered asset test and unencumbered interest coverage ratios. We are not aware of any non-compliance with our public debt and revolving credit facility covenants as of ~~September~~June 30, ~~2018.~~2019.

Our most restrictive public debt covenant ratios, as defined in our indenture and supplemental indenture agreements, were as follows at ~~September~~June 30, ~~2018:~~2019:



Covenant	Restriction	Actual
Debt to Asset Ratio	Less than 60.0%	~~36.4%~~37.2%
Secured Debt to Asset Ratio	Less than 40.0%	~~6.8%~~6.9%
Fixed Charge Ratio	Greater than 1.5	~~4.8~~4.7
Unencumbered Asset Test	Greater than 150%	~~299.8%~~291.3%

~~As of~~ ~~September 30, 2018~~, we had no active interest rate swap contracts. During the nine months ended September 30, 2018, associated with the prepayment of an unsecured note, we terminated three interest rate swap contracts that had an aggregate notional amount of $200 million, and we recognized a $3.4 million gain due to the probability that the related hedged forecasted transactions would no longer occur.

Equity

Our Board of Trust Managers approved the current quarter ~~2018~~2019 dividend of $.395 per common ~~share, an increase from $.385 per common share for the same quarter of 2017.~~share. Common share dividends paid totaled ~~$152.1~~$101.6 million for the ~~nine~~six months ended ~~September~~June 30, ~~2018.~~2019. Our dividend payout ratio (as calculated as dividends paid on common shares divided by core funds from operations attributable to common shareholders - basic) for the ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 approximated ~~68.4%~~75.3% (see Non-GAAP Financial Measures for additional information). Our disposition program has resulted in significant gains that will require the payment of a special dividend before January 31, ~~2019~~2020 in order to retain our REIT status. The amount of this special dividend can vary significantly depending on the remaining disposition activity and other factors through the end of 2018. However, based upon the sales completed to-date and expected sales activity in the last quarter of the year given current market conditions, we currently expect that our special dividend will range from $160 million to $185 million.

We have a $200 million share repurchase plan. Under this plan, we may repurchase common shares from time-to-time in open-market or in privately negotiated purchases. The timing and amount of any shares repurchased will be determined by management based on its evaluation of market conditions and other factors. The repurchase plan may be suspended or discontinued at any time, and we have no obligations to repurchase any amount of our common shares under the plan.

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~~For the nine months ended September~~ At June 30, ~~2018, we repurchased .7 million common shares at an average price of $27.10 per share. At September 30, 2018~~2019 and as of the date of this filing, $181.5 million of common shares remained available to be repurchased under this plan.

We have an effective universal shelf registration statement which expires in September 2020. We will continue to closely monitor both the debt and equity markets and carefully consider our available financing alternatives, including both public offerings and private placements.

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Contractual Obligations

We have debt obligations related to our mortgage loans and unsecured debt, including any draws on our credit facilities. We have shopping centers that are subject to ~~non-cancelable long-term~~ ground leases where a third party owns and has leased the underlying land to us to construct and/or operate a shopping center. ~~In addition, we have non-cancelable operating leases pertaining to office space from which we conduct our business.~~ The table below excludes obligations related to our new development projects because such amounts are not fixed or determinable, and commitments aggregating ~~$211.0~~$147.5 million comprised principally of construction contracts which are generally due in 12 to 36 ~~months (see Note 14 for additional information).~~months. The following table summarizes our primary contractual obligations as of ~~September~~June 30, ~~2018~~2019 (in thousands):


	Payments due by period										Payments due by period
	Total		Less than 1 year		1 - 3 years		3 - 5 years		More than 5 years		Total		Less than 1 year		1 - 3 years		3 - 5 years		More than 5 years
Mortgages and Notes Payable ⁽¹⁾
Unsecured Debt	$	1,727,111	$	27,486	$	106,750	$	106,750	$	1,486,125	$	1,691,227	$	42,912	$	106,750	$	687,030	$	854,535
Secured Debt	422,348		5,372		102,264		49,623		265,089		407,319		76,316		47,080		98,104		185,819
Lease Payments	111,357		680		4,990		4,314		101,373		110,371		1,214		5,037		4,768		99,352
Other Obligations ⁽²⁾	64,421		30,695		33,726						60,420		33,374		27,046
Total Contractual Obligations	$	2,325,237	$	64,233	$	247,730	$	160,687	$	1,852,587	$	2,269,337	$	153,816	$	185,913	$	789,902	$	1,139,706

_______________


(1)	Includes principal and interest with interest on variable-rate debt calculated using rates at ~~September~~June 30, ~~2018.~~2019. Also, excludes a ~~$64.1~~$60.9 million debt service guaranty liability. See Note 5 for additional information.


(2)	Other obligations include income and real estate tax payments, ~~and~~ commitments associated with our secured ~~debt.~~debt and other employee payments. Contributions to our retirement plan were fully funded for ~~2018,~~2019, and therefore are excluded from the above table. See Note 12 for additional information.

Related to a development project in Sheridan, Colorado, we have provided a guaranty for the payment of any debt service shortfalls on tax increment revenue bonds issued in connection with the project. The Sheridan Redevelopment Agency issued Series A bonds used for an urban renewal project, of which ~~$64.1~~$60.9 million remain outstanding at ~~September~~June 30, ~~2018.~~2019. The bonds are to be repaid with incremental sales and property taxes and a PIF to be assessed on current and future retail sales and, to the extent necessary, any amounts we may have to provide under a guaranty. The incremental taxes and PIF are to remain intact until the earlier of the payment of the bond liability in full or 2040. The debt associated with this guaranty has been recorded in our condensed consolidated financial statements as of ~~September~~June 30, ~~2018.~~2019.

Off Balance Sheet Arrangements

As of ~~September~~June 30, ~~2018,~~2019, none of our off-balance sheet arrangements had a material effect on our liquidity or availability of, or requirement for, our capital resources. Letters of credit totaling $7.0 million were outstanding at ~~September~~June 30, ~~2018.~~2019.

We have entered into several unconsolidated real estate joint ventures and partnerships. Under many of these agreements, we and our joint venture partners are required to fund operating capital upon shortfalls in working capital. As operating manager of most of these entities, we have considered these funding requirements in our business plan.

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Reconsideration events, including changes in variable interests, could cause us to consolidate these joint ventures and partnerships. We continuously evaluate these events as we become aware of them. Some triggers to be considered are additional contributions required by each partner and each partner’s ability to make those contributions. Under certain of these circumstances, we may purchase our partner’s interest. Our material unconsolidated real estate joint ventures are with entities which appear sufficiently stable; however, if market conditions were to deteriorate and our partners are unable to meet their commitments, there is a possibility we may have to consolidate these entities. If we were to consolidate all of our unconsolidated real estate joint ventures, we would continue to be in compliance with our debt covenants.

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As of ~~September~~June 30, ~~2018,~~2019, one unconsolidated real estate joint venture was determined to be a VIE through the issuance of a secured loan, since the lender had the ability to make decisions that could have a significant impact on the profitability of the entity. Our maximum risk of loss associated with this VIE was limited to $34.0 million at ~~September~~June 30, ~~2018.~~2019. Also at ~~September~~June 30, ~~2018,~~2019, another joint venture arrangement for the future development of a mixed-use project was determined to be a VIE. We are not the primary beneficiary as the substantive participating rights associated with the entity are shared, and we do not have the power to direct the significant activities of the entity. We anticipate future funding of approximately ~~$69~~$32 million associated with the mixed-use project through 2020.

Effective ~~January 1,~~December 31, 2018, a real estate limited partnership agreement with a foreign institutional investor was amended to include potential acquisitions of real estate approved by the institutional investor of up to $61 million through December 31, ~~2018, which period may be extended~~2019 with an option to extend for ~~up to two~~an additional one-year ~~periods~~period with the consent of the institutional investor. Our ownership in this unconsolidated real estate limited partnership agreement is 51%, and assubsequent to June 30, 2019, one grocery-anchored shopping center was purchased with a gross purchase price of ~~the date of~~$52.6 million by this ~~filing, no additional assets have been purchased under this agreement.~~real estate limited partnership.

Non-GAAP Financial Measures

Certain of our key performance indicators are considered non-GAAP financial measures. Management uses these measures along with our GAAP financial statements in order to evaluate our operating results. We believe these additional measures provide users of our financial information additional comparable indicators of our industry, as well as, our performance.

Funds from Operations Attributable to Common Shareholders

~~The~~Effective January 1, 2019, the National Association of Real Estate Investment Trusts ~~(“NAREIT”~~("NAREIT") defines ~~funds from operations attributable to common shareholders ("~~NAREIT ~~FFO")~~FFO as net income (loss) attributable to common shareholders computed in accordance with GAAP, excluding ~~extraordinary items and~~ gains or losses from sales of ~~operating~~certain real estate assets (including: depreciable real estate with land, land development property and securities), change in control, and interests in real estate equity investments and their applicable taxes, plus depreciation and amortization ~~of operating properties~~related to real estate and impairment of ~~depreciable~~certain real estate assets and in substance real estate equity investments, including our share of unconsolidated real estate joint ventures and partnerships. We calculate NAREIT FFO in a manner consistent with the NAREIT definition.

~~We believe~~Management believes NAREIT FFO is a widely recognized measure of REIT operating performance which provides our shareholders with a relevant basis for comparison among other REITs. Management uses NAREIT FFO as a supplemental internal measure to conduct and evaluate our business because there are certain limitations associated with using GAAP net income by itself as the primary measure of our operating performance. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, management believes that the presentation of operating results for real estate companies that uses historical cost accounting is insufficient by itself. There can be no assurance that NAREIT FFO presented by us is comparable to similarly titled measures of other REITs.

We also present ~~core funds from operations attributable to common shareholders (“~~Core ~~FFO”)~~FFO as an additional supplemental measure as it is more reflective of the core operating performance of our portfolio of properties. Core FFO is defined as NAREIT FFO excluding charges and gains related to non-cash, non-operating assets and other transactions or events that hinder the comparability of operating results. Specific examples of items excluded from Core FFO include, but are not limited to, gains or losses associated with the extinguishment of debt or other liabilities ~~impairments of land,~~and transactional costs associated with ~~acquisition and~~unsuccessful development ~~activities, certain deferred tax provisions/benefits, redemption costs of preferred shares and gains on the disposal of non-real estate assets.~~activities.

NAREIT FFO and Core FFO should not be considered as alternatives to net income or other measurements under GAAP as indicators of ~~our~~ operating performance or to cash flows from operating, investing or financing activities as measures of liquidity. NAREIT FFO and Core FFO do not reflect working capital changes, cash expenditures for capital improvements or principal payments on indebtedness.

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NAREIT FFO and Core FFO is calculated as follows (in thousands):


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017			2019			2018			2019			2018
Net income attributable to common shareholders	$	42,981		$	72,629		$	268,094		$	167,307		$	83,809		$	78,289		$	133,475		$	225,113
Depreciation and amortization of real estate	37,784			41,240			125,659			125,379			34,732			50,110			68,475			87,875
Depreciation and amortization of real estate of unconsolidated real estate joint ventures and partnerships	3,035			3,453			9,480			10,640			2,789			3,261			5,741			6,445
Impairment of operating properties and real estate equity investments	2,398			—			2,398			12,007
Gain on sale of property and interests in real estate equity investments	(16,541		)	(38,548		)	(172,280		)	(86,266		)
Impairment of properties and real estate equity investments													—			—			74			—
Gain on sale of property, investment securities and interests in real estate equity investments													(51,605		)	(46,701		)	(70,554		)	(155,739		)
Gain on dispositions of unconsolidated real estate joint ventures and partnerships	(2,714		)	(28		)	(6,296		)	(1,978		)	(1,106		)	(1,219		)	(1,380		)	(3,582		)
Provision (benefit) for income taxes ⁽¹⁾	1,296			71			1,779			(1,943		)
Provision for income taxes ⁽¹⁾													44			322			44			483
Noncontrolling interests and other ⁽²⁾	7,723			(451		)	8,848			5,955			(484		)	(85		)	(973		)	1,125
NAREIT FFO – basic(3)	75,962			78,366			237,682			231,101			68,179			83,977			134,902			161,720
Income attributable to operating partnership units	528			515			1,584			1,567			528			528			1,056			1,056
NAREIT FFO – diluted(3)	76,490			78,881			239,266			232,668			68,707			84,505			135,958			162,776
Adjustments to Core FFO:
Other impairment loss	—			—			—			3,029
(Benefit) provision for income taxes ⁽³⁾	(1,494		)	—			(1,494		)	(952		)
Adjustments for Core FFO:
Loss (gain) on extinguishment of debt including related swap activity	368			—			(3,090		)	—			—			99			—			(3,458		)
Lease terminations	—			—			(10,023		)	—			—			(10,023		)	—			(10,023		)
Storm damage costs	—			804			—			804
Other	(535		)	—			(775		)	2,904			—			(240		)	—			(240		)
Core FFO – diluted	$	74,829		$	79,685		$	223,884		$	238,453		$	68,707		$	74,341		$	135,958		$	149,055

FFO weighted average shares outstanding – basic	127,525			127,801			127,651			127,734			127,856			127,505			127,807			127,714
Effect of dilutive securities:
Share options and awards	792			844			809			877			847			813			841			799
Operating partnership units	1,432			1,432			1,432			1,450			1,432			1,432			1,432			1,432
FFO weighted average shares outstanding – diluted	129,749			130,077			129,892			130,061			130,135			129,750			130,080			129,945

NAREIT FFO per common share – basic	$	.60		$	.61		$	1.86		$	1.81		$	.53		$	.66		$	1.06		$	1.27

NAREIT FFO per common share – diluted	$	.59		$	.61		$	1.84		$	1.79		$	.53		$	.65		$	1.05		$	1.25

Core FFO per common share – diluted	$	.58		$	.61		$	1.72		$	1.83		$	.53		$	.57		$	1.05		$	1.15

_______________

(1) The applicable taxes related to gains and impairments of ~~operating~~ properties.

(2) Related to gains, impairments and depreciation on operating properties and unconsolidated real estate joint ventures, where applicable.

(3) ~~The applicable taxes related to gains and impairments~~2019 NAREIT FFO is presented in accordance with 2018 Restatement of ~~non-operating assets.~~"Nareit's Funds from Operations White Paper."

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Same Property Net Operating Income

We consider SPNOI an important additional financial measure because it reflects only those income and expense items that are incurred at the property level, and when compared across periods, reflects the impact on operations from trends in occupancy rates, rental rates and operating costs. We calculate this most useful measurement by determining our proportional share of SPNOI from all owned properties, including our share of SPNOI from unconsolidated joint ventures and partnerships, which cannot be readily determined under GAAP measurements and presentation. Although SPNOI is a widely used measure among REITs, there can be no assurance that SPNOI presented by us is comparable to similarly titled measures of other REITs. Additionally, we do not control these unconsolidated joint ventures and partnerships, and the assets, liabilities, revenues or expenses of these joint ventures and partnerships, as presented, do not represent our legal claim to such items.

Properties are included in the SPNOI calculation if they are owned and operated for the entirety of the most recent two fiscal year periods, except for properties for which significant redevelopment or expansion occurred during either of the periods presented, and properties that have been sold. While there is judgment surrounding changes in designations, we move new development and redevelopment properties once they have stabilized, which is typically upon attainment of 90% occupancy. A rollforward of the properties included in our same property designation is as follows:


	Three Months Ended September 30, 2018		Nine Months Ended September 30, 2018		Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Beginning of the period	179		183		168		171
Properties added:
Acquisitions	—		6
New Developments	—		1		—		1
Redevelopments	2		4
Properties removed:
Dispositions	(4	)	(17	)	(4	)	(8	)
Other	(1	)	(1	)
End of the period	176		176		164		164

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We calculate SPNOI using ~~operating~~net income ~~as defined by GAAP excluding~~attributable to common shareholders and adjusted for net income attributable to noncontrolling interests, other income (expense), income taxes and equity in earnings of real estate joint ventures and partnerships. Additionally to reconcile to SPNOI, we exclude the effects of property management fees, certain non-cash revenues and expenses such as straight-line rental revenue and the related reversal of such amounts upon early lease termination, depreciation and amortization, impairment losses, general and administrative expenses ~~acquisition costs~~ and other items such as lease cancellation income, environmental abatement costs, demolition expenses, and lease termination fees. Consistent with the capital treatment of such costs under GAAP, tenant improvements, leasing commissions and other direct leasing costs are excluded from SPNOI. A reconciliation of net income attributable to common shareholders to SPNOI is as follows (in thousands):


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017			2019			2018			2019			2018
Net income attributable to common shareholders	$	42,981		$	72,629		$	268,094		$	167,307		$	83,809		$	78,289		$	133,475		$	225,113
Add:
Net income attributable to noncontrolling interests	10,293			1,844			14,020			12,755			1,711			1,582			3,299			3,727
(Benefit) provision for income taxes	(99		)	577			1,368			(2,035		)
Provision for income taxes													484			684			661			1,467
Interest expense, net	15,996			19,850			47,685			61,405			14,953			17,017			30,242			31,689
Less:
Gain on sale of property	(17,079		)	(38,579		)	(173,077		)	(86,566		)
Equity in earnings of real estate joint ventures and partnership interests	(8,022		)	(5,219		)	(19,333		)	(17,966		)
Interest and other income/expense	(1,847		)	(1,398		)	(4,735		)	(4,210		)
Operating Income	42,223			49,704			134,022			130,690
Less:
Revenue adjustments ⁽¹⁾	(3,945		)	(4,349		)	(21,985		)	(12,569		)
Add:
Property management fees	722			672			2,219			2,252			683			630			1,556			1,497
Depreciation and amortization	38,042			41,509			126,558			126,115			34,967			50,421			68,939			88,516
Impairment loss	2,398			—			2,398			15,012			—			—			74			—
General and administrative	5,971			6,450			17,715			20,252			8,880			6,149			18,461			11,744
Acquisition costs	—			—			—			1
Other ⁽²⁾	279			1,103			(33		)	4,384
Net Operating Income	85,690			95,089			260,894			286,137
Less: NOI related to consolidated entities not defined as same property and noncontrolling interests	(2,866		)	(14,131		)	(13,148		)	(44,733		)
Other ⁽¹⁾													743			218			1,989			1,018
Less:
Gain on sale of property													(52,061		)	(46,953		)	(69,848		)	(155,998		)
Equity in earnings of real estate joint ventures and partnership interests, net													(6,665		)	(5,318		)	(12,082		)	(11,311		)
Interest and other income/expense													(1,921		)	(1,355		)	(6,305		)	(2,888		)
Revenue adjustments ⁽²⁾													(3,060		)	(14,108		)	(6,279		)	(18,040		)
Adjusted income													82,523			87,256			164,182			176,534
Less: Adjusted income related to consolidated entities not defined as same property and noncontrolling interests													(2,828		)	(10,816		)	(5,285		)	(23,756		)
Add: Pro rata share of unconsolidated entities defined as same property	8,685			8,551			25,424			25,837			8,621			8,345			16,908			16,699
Same Property Net Operating Income	91,509			89,509			273,170			267,241			88,316			84,785			175,805			169,477
Less: Redevelopment Net Operating Income	(8,411		)	(8,166		)	(25,819		)	(24,576		)	(8,219		)	(6,839		)	(15,991		)	(13,902		)
Same Property Net Operating Income excluding Redevelopments	$	83,098		$	81,343		$	247,351		$	242,665		$	80,097		$	77,946		$	159,814		$	155,575

___________________


(1)	Other includes items such as environmental abatement costs, demolition expenses, lease termination fees and ground rent.


(2)	Revenue adjustments consist primarily of straight-line rentals, lease cancellation income and fee income primarily from real estate joint ventures and partnerships.


~~(2)~~	~~Other includes items such as environmental abatement costs, demolition expenses and lease termination fees.~~

Newly Issued Accounting Pronouncements

See Note 2 to our condensed consolidated financial statements in Item 1 for additional information related to recent accounting pronouncements.

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ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

We use fixed and floating-rate debt to finance our capital requirements. These transactions expose us to market risk related to changes in interest rates. Derivative financial instruments may be used to manage a portion of this risk, primarily interest rate contracts with major financial institutions. These agreements expose us to credit risk in the event of non-performance by the counter-parties. We do not engage in the trading of derivative financial instruments in the normal course of business. At ~~September~~June 30, ~~2018~~2019, we had fixed-rate debt of $1.8 billion, and variable-rate debt of $~~17.7~~17.6 million. In the event interest rates were to increase 100 basis points and holding all other variables constant, annual net income and cash flows for the following year would decrease by approximately $.2 million associated with our variable-rate debt. The effect of the 100 basis points increase would decrease the fair value of our variable-rate and fixed-rate debt by approximately $.01 million and ~~$90.2~~$82.8 million, respectively.

ITEM 4. Controls and Procedures

Under the supervision and with the participation of our principal executive officer and principal financial officer, management has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) as of ~~September~~June 30, ~~2018~~2019. Based on that evaluation, our principal executive officer and our principal financial officer have concluded that our disclosure controls and procedures were effective as of ~~September~~June 30, ~~2018~~2019.

There has been no change to our internal control over financial reporting during the quarter ended ~~September~~June 30, ~~2018~~2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II-OTHER INFORMATION

ITEM 1. Legal Proceedings

We are involved in various matters of litigation arising in the normal course of business. While we are unable to predict the amounts involved, our management and counsel believe that when such litigation is resolved, our resulting liability, if any, will not have a material effect on our condensed consolidated financial statements.

ITEM 1A. Risk Factors

We have no material changes to the risk factors discussed in our Annual Report on Form 10-K for the year ended December 31, ~~2017~~2018.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

~~Table of Contents~~

Repurchases of our common shares for the quarter ended ~~September~~June 30, ~~2018~~2019 are as follows (in thousands, except per share amounts):

(a) (b) (c) (d)
Period
Total Number of Shares Purchased ⁽¹⁾
Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Program Maximum Dollar Value of Shares that May Yet be Purchased Under the Program
July 1, 2018 to July 31, 2018 28
$ 30.32

August 1, 2018 to August 31, 2018 13
31.08

Total 41
$ 30.56



	(a)	(b)		(c)	(d)
Period	Total Number of Shares Purchased ⁽¹⁾	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Maximum Dollar Value of Shares that May Yet be Purchased Under the Program
May 1, 2019 to May 31, 2019	3,346	$	27.84

___________________


(1)	Common shares surrendered or deemed surrendered to us to satisfy such employees' tax withholding obligations in connection with the vesting and/or exercise of awards under our equity-based compensation plans.

(1) Common shares surrendered or deemed surrendered to us to satisfy such employees' tax withholding obligations in connection with the vesting and/or exercise of awards under our equity-based compensation plans.

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ITEM 3. Defaults Upon Senior Securities

None.

ITEM 4. Mine Safety Disclosures

Not applicable.

ITEM 5. Other Information

Not applicable.

ITEM 6. Exhibits

The exhibits required by this item are set forth on the Exhibit Index attached hereto.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	WEINGARTEN REALTY INVESTORS
	(Registrant)

	By:	/s/ Andrew M. Alexander
		Andrew M. Alexander
		~~President and~~ Chairman/President/Chief Executive Officer

	By:	/s/ Joe D. Shafer
		Joe D. Shafer
		Senior Vice President/Chief Accounting Officer
		(Principal Accounting Officer)

DATE: ~~October 31, 2018~~August 7, 2019

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EXHIBIT INDEX



(a)		Exhibits:
10.1*	—	~~Third Amendment to the Weingarten Realty Investors Retirement Plan dated July 2, 2018.~~
10.2*	—	~~Amendment No.6 to the Weingarten Realty Investors Supplemental Executive Retirement Plan dated July 2, 2018.~~
31.1*	—	Certification pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer).
31.2*	—	Certification pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer).
32.1**	—	Certification pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer).
32.2**	—	Certification pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer).
101.INS**	—	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH**	—	XBRL Taxonomy Extension Schema Document
101.CAL**	—	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF**	—	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB**	—	XBRL Taxonomy Extension Labels Linkbase Document
101.PRE**	—	XBRL Taxonomy Extension Presentation Linkbase Document




*	Filed with this report.
**	Furnished with this report.



	September 30, 2018		December 31, 2017
Restricted deposits ⁽¹⁾	$	21,909	$	6,291
Mortgage escrows	460		1,824
Total	$	22,369	$	8,115



2018 remaining	$	1,599
2019	72,962
2020	5,296
2021	18,434
2022	307,922
2023	347,815
2024	252,153
2025	293,807
2026	277,291
2027	38,288
Thereafter	102,594
Total	$	1,718,161



							Gross Amounts Not Offset in Balance Sheet
	Gross Amounts Recognized		Gross Amounts Offset in Balance Sheet		Net Amounts Presented in Balance Sheet		Financial Instruments		Cash Collateral Received		Net Amount
September 30, 2018
Assets	$	—	$	—	$	—	$	—	$	—	$	—
December 31, 2017
Assets	2,035		—		2,035		—		—		2,035



Derivatives in Cash Flow Hedging Relationships	Amount of (Gain) Loss Recognized in Other Comprehensive Income (Loss) on Derivative			Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income	Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income			Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income as a Result That a Forecasted Transaction is No Longer Probable of Occurring	Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income as a Result That a Forecasted Transaction is No Longer Probable of Occurring		Total Amount of Interest Expense, net Presented in the Condensed Consolidated Statement of Operations
Three Months Ended September 30, 2018	$	—		Interest expense, net	$	224		Interest expense, net	$	—	$	(15,996	)
Nine Months Ended September 30, 2018	(1,379		)	Interest expense, net	688			Interest expense, net	3,390		(47,685		)
Three Months Ended September 30, 2017	(77		)	Interest expense, net	90			Interest expense, net	—		(19,850		)
Nine Months Ended September 30, 2017	29			Interest expense, net	(74		)	Interest expense, net	—		(61,405		)



	September 30, 2018		September 30, 2017
Cash and cash equivalents	$	24,412	$	39,246
Restricted deposits and mortgage escrows (see Note 1)	22,369		4,973
Total	$	46,781	$	44,219



	Unvested Share Awards		Weighted Average Grant Date Fair Value
Outstanding, January 1, 2018	619,606		$	33.81
Granted:
Service-based awards	133,125		28.12
Market-based awards relative to FTSE NAREIT U.S. Shopping Center Index	60,909		29.69
Market-based awards relative to three-year absolute TSR	60,908		13.68
Trust manager awards	34,328		27.95
Vested	(226,448	)	33.63
Forfeited	(9,605	)	32.40
Outstanding, September 30, 2018	672,823		$	30.27



Description	Fair Value at		Valuation Technique	Unobservable Inputs	Range
	December 31, 2017				Minimum			Maximum
	(in thousands)				2017			2017
Property	$	4,184	Discounted cash flows	Discount rate	10.5		%	12.0		%
				Capitalization rate	8.8		%	10.0		%
				Holding period (years)	5			10
				Expected future inflation rate ⁽¹⁾				2.0		%
				Market rent growth rate ⁽¹⁾				3.0		%
				Expense growth rate ⁽¹⁾				2.0		%
				Vacancy rate ⁽¹⁾				20.0		%
				Renewal rate ⁽¹⁾				70.0		%
				Average market rent rate ⁽¹⁾	$	11.00		$	16.00
				Average leasing cost per square foot ⁽¹⁾	$	10.00		$	35.00