As filed with the Securities and Exchange Commission on April 19, 2000
Registration No. 333-________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
________________
WEINGARTEN REALTY INVESTORS
(Exact name of registrant as specified in its charter)
TEXAS 74-1464203
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
2600 CITADEL PLAZA DRIVE, SUITE 300
HOUSTON, TEXAS 77008
(713) 866-6000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
________________
STANFORD ALEXANDER
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
WEINGARTEN REALTY INVESTORS
2600 CITADEL PLAZA DRIVE, SUITE 300
HOUSTON, TEXAS 77008
(713) 866-6000
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
________________
Copies to:
BRYAN L. GOOLSBY
GINA E. BETTS
LOCKE LIDDELL & SAPP LLP
2200 ROSS AVENUE, SUITE 2200
DALLAS, TEXAS 75201
(214) 740-8000
________________
Approximate date of commencement of proposed sale to the public: from time to
time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [x]
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<TABLE>
<CAPTION>
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CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------
Title of Each Class Amount Proposed Maximum Proposed Maximum Amount of
of Securities to be to be Aggregate Aggregate Registration
Registered Registered Price Per Share Offering Price Fee
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Shares of Beneficial Interest, 39,204 $ 38.78 $ 1,502,332 $ 402.00
.03 par value per share
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration for
pursuant to Rule 457(c) based on the high and low sales prices of the
common shares on the New York Stock Exchange on April 17, 2000
<PAGE>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
SUBJECT TO COMPLETION, DATED APRIL 19, 2000
PROSPECTUS
- ----------
WEINGARTEN REALTY INVESTORS
39,204 COMMON SHARES OF BENEFICIAL INTEREST
__________
By this prospectus, our selling shareholder is offering and selling up to
39,204 common shares of beneficial interest. We will not receive any proceeds
from the sale of shares. under the federal securities laws. The selling
shareholders will pay all costs associated with any sales of the common shares,
including any discounts, commissions and applicable transfer taxes.
The selling shareholder may offer the common shares through public or private
transactions, on the New York Stock Exchange at the prevailing market price, or
at privately negotiated prices. We will pay all of the costs and expenses
incurred with the registration of the resale of the common shares Our
common shares are listed on the New York Stock Exchange under the symbol "WRI."
On April 18, 2000, the closing sale price on the New York Stock Exchange for our
common shares was $38.75 per share.
____________
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THE SECURITIES DISCUSSED IN THE
PROSPECTUS, NOR HAVE THEY DETERMINED WHETHER THIS PROSPECTUS IS ACCURATE OR
ADEQUATE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE SELLING SHAREHOLDER MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SEC IS DECLARED EFFECTIVE. THIS PROSPECTUS IS NOT AN
OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
The date of this prospectus is April ___, 2000
<PAGE>
<PAGE>
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
SEC. This prospectus only provides you with a general description of the
securities being offered by the selling shareholder. You should read this
prospectus together with the additional information described under the heading
"WHERE YOU CAN FIND MORE INFORMATION" on page 15.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
We have made statements in this prospectus and may make statements in a
prospectus supplement that are "forward-looking" in that they do not discuss
historical fact, but instead note future expectations, projections, intentions
or other items relating to the future. These forward-looking statements include
those made in the documents incorporated by reference in this prospectus.
Forward-looking statements are subject to known and unknown risks,
uncertainties and other facts that may cause our actual results or performance
to differ materially from those contemplated by the forward-looking statements.
Many of those factors are noted in conjunction with the forward-looking
statements in the text. Other important factors that could cause actual results
to differ include:
- - Our inability to identify properties to acquire, effect acquisitions or
successfully integrate acquired properties and operations. This inability
could result in decreased market penetration, adverse effects on results of
operations and other adverse results. This same result could occur if the
results of our efforts to implement our property development strategy fail
or we experience public opposition to our development plans, construction
delays or cost overruns or if we are unable to obtain necessary permits.
- - The effect of economic conditions. If an economic downturn occurs, the demand
and rents for neighborhood and community shopping centers could fall and
adversely affect our financial condition and results of operations. Our
financial condition and results of operations could also be adversely
affected if our tenants are unable to make lease payments or fail to renew
their leases.
- - Failure to qualify as a REIT. We elected to be taxed as a REIT for federal
income tax purposes for our taxable year ended December 31, 1999, and expect
to continue to elect REIT status. Although we believe that we were organized
and have been operating in conformity with the requirements for qualification
as a REIT under the Internal Revenue Code, we cannot assure you that we will
continue to qualify as a REIT.
Qualification as a REIT involves the application of highly technical and
complex Internal Revenue Code provisions for which there are only
limited judicial or administrative interpretations. If in any taxable year
we fail to qualify as a REIT, we would not be allowed a deduction for
distributions to shareholders for computing taxable income and would be
subject to federal taxation at regular corporate rates. Unless entitled
to statutory relief, we would also be disqualified from treatment as a REIT
for the four taxable years following the year during which qualification was
lost. As a result, our ability to make distributions to our shareholders
would be adversely affected. See "Federal Income Tax Consequences - REIT
Qualification" on page 5.
- - The cost of capital. Our cost depends on many factors, some of which are
beyond our control, including interest rates, ratings, prospects and outlook.
- - Actions of our competitors. We seek to remain competitive in the
neighborhood and community shopping center real estate markets that we
currently serve. We do, however, compete with a number of other real
estate oriented companies, some of which have greater resources than
we do.
- - Changes in government regulations, tax rates and similar matters. For
example, changes in real estate and zoning laws, environmental uncertainties
and natural disasters could adversely affect our financial condition and
results of operations.
- - Other risks are detailed in our SEC reports or filings.
We do not promise to update forward-looking information to reflect actual
results or changes in assumptions or other factors that could affect those
statements.
<PAGE>
THE COMPANY
We are a real estate investment trust based in Houston, Texas. We develop,
acquire and own anchored neighborhood community shopping centers. To a lesser
degree, we develop, acquire and own industrial real estate. We have engaged in
these activities since 1948.
As of December 31, 1999, we owned or had an equity interest in 239
operating properties consisting of 27.8 million square feet of building area.
These properties consist of 187 shopping centers, generally in the 100,000 to
400,000 square foot range, 50 industrial projects, one multi-family residential
property and one office building. Our shopping centers are located in Texas
(131 properties) and in Louisiana, Arizona, Nevada, Arkansas, New Mexico,
Oklahoma, Tennessee, Kansas, Colorado, Maine, Missouri, Florida and Illinois.
Our industrial projects are located in Tennessee, Nevada and Texas. Our
shopping centers are anchored primarily by supermarkets, drugstores and other
retailers that sell basic necessity-type items. We currently lease to
approximately 3,300 different tenants under 4,200 separate leases. At December
31, 1999, our operating properties were 91.3% occupied.
Our executive offices are located at 2600 Citadel Plaza Drive, Suite 300,
Houston, Texas 77008, and our telephone number (713) 866-6000.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common shares offered
by this prospectus.
SELLING SHAREHOLDER
The following list sets forth (i) the name of the selling shareholder; (ii)
the amount of shares owned by it before this offering; and (iii) the amount of
shares being offered hereunder for the selling shareholder's account. The
selling shareholder will not hold 1% or more of our common shares after
completion of this offering. The selling shareholder has not been our
affiliate within the past three years. We granted registration rights to
Lincoln Place, Inc. in connection with its conversion of its limited partnership
interests into our common shares under the Amended and Restated Agreement of
Limited Partnership dated December 22, 1997, between us and Lincoln Place.
Shares Owned Before Shares Offered In Shares Owned After
Name this Offering this Offering this Offering(1)
---- ------------------- ----------------- ------------------
Lincoln Place, Inc. 39,204 39,204 -0-
__________
(1) Assumes that all of the shares being offering hereunder will be sold.
<PAGE>
PLAN OF DISTRIBUTION
The selling shareholder may offer the common shares through public or
private transactions, on the New York Stock Exchange at the prevailing market
price, or at privately negotiated or fixed prices. We will pay all of the costs
and expenses incurred with the registration of the resale of the common shares
under the Securities Act. If the selling shareholder uses a broker-dealer to
sell its common shares, either the selling shareholder or the purchasers will
pay all costs associated with any sales of the common shares, including any
discounts, commissions and applicable transfer or income taxes.
FEDERAL INCOME TAX CONSEQUENCES
GENERAL
The following summary of material federal income tax consequences that may
be relevant to a holder of common shares is based on current law, is for general
information only and is not intended as tax advice. The following discussion,
which is not exhaustive of all possible tax consequences, does not include a
detailed discussion of any state, local or foreign tax consequences. Nor does it
discuss all of the aspects of federal income taxation that may be relevant to a
prospective shareholder in light of his or her particular circumstances or to
certain types of shareholders (including insurance companies, tax-exempt
entities, financial institutions or broker-dealers, foreign corporations and
persons who are not citizens or residents of the United States and shareholders
holding securities as part of a conversion transaction, a hedging transaction or
as a position in a straddle for tax purposes) who are subject to special
treatment under the federal income tax laws.
The statements in this discussion are based on current provisions of the
Internal Revenue Code existing, temporary and currently proposed Treasury
Regulations under the Internal Revenue Code, the legislative history of the
Internal Revenue Code, existing administrative rulings and practices of the IRS
and judicial decisions. No assurance can be given that legislative, judicial or
administrative changes will not affect the accuracy of any statements in this
discussion with respect to transactions entered into or contemplated prior to
the effective date of such changes. Any such change could apply retroactively to
transactions preceding the date of the change. We do not plan to request any
rulings from the IRS concerning our tax treatment and the statements in this
discussion are not binding on the IRS or any court. Thus, we can provide no
assurance that these statements will not be challenged by the IRS or that such
challenge will not be sustained by a court.
THIS DISCUSSION IS NOT INTENDED AS A SUBSTITUTE FOR CAREFUL TAX PLANNING.
EACH PROSPECTIVE PURCHASER OF COMMON STOCK IS ADVISED TO CONSULT WITH HIS OR HER
OWN TAX ADVISOR REGARDING THE SPECIFIC TAX CONSEQUENCES TO HIM OR HER OF THE
PURCHASE, OWNERSHIP AND DISPOSITION OF COMMON STOCK IN AN ENTITY ELECTING TO BE
TAXED AS A REIT, INCLUDING THE FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX
CONSEQUENCES OF SUCH PURCHASE, OWNERSHIP, DISPOSITION AND ELECTION, AND OF
POTENTIAL CHANGES IN APPLICABLE TAX LAWS.
We have elected to be treated as a REIT under Sections 856 through 860 of
the Internal Revenue Code for federal income tax purposes commencing with our
taxable year ended December 31, 1985. We believe that we have been organized and
have operated in a manner that qualifies for taxation as a REIT under the
Internal Revenue Code. We also believe that we will continue to operate in a
manner that will preserve our status as a REIT. We cannot however, assure you
that such requirements will be met in the future.
We have received an opinion from Locke Liddell & Sapp LLP, our legal
counsel, to the effect that we qualified as a REIT under the Internal Revenue
Code for our taxable year ended December 31, 1999, we have been organized and
our manner of operation has been in conformity with the requirements for
qualification and taxation as a REIT as of the date of this prospectus and that
our proposed manner of operation and diversity of equity ownership will enable
us to continue to satisfy the requirements for qualification as a REIT in the
future if we operate in accordance with the methods of operations described
herein including our representations concerning our intended method of
operation. However, you should be aware that opinions of counsel are not binding
on the IRS or on the courts, and, if the IRS were to challenge these
conclusions, no assurance can be given that these conclusions would be sustained
in court. The opinion of Locke Liddell & Sapp LLP is based on various
assumptions as well as on certain representations made by us as to factual
matters, including a factual representation letter provided by us. The rules
governing REITs are highly technical and require ongoing compliance with a
variety of tests that depend, among other things, on future operating results,
asset diversification, distribution levels and diversity of stock ownership.
Locke Liddell & Sapp LLP will not monitor our compliance with these
requirements. While we expect to satisfy these tests, and will use our best
efforts to do so, no assurance can be given that we will qualify as a REIT for
any particular year, or that the applicable law will not change and adversely
affect us and our shareholders. See "Failure to Qualify as a REIT." The
following is a summary of the material federal income tax considerations
affecting us as a REIT and our shareholders. This summary is qualified in its
entirety by the applicable Internal Revenue Code provisions, relevant rules and
regulations promulgated under the Internal Revenue Code, and administrative and
judicial interpretations of the Internal Revenue Code and these rules and
regulations.
REIT QUALIFICATION
We must be organized as an entity that would, if we do not maintain our
REIT status, be taxable as a regular corporation. We cannot be a financial
institution or an insurance company. We must be managed by one or more trust
managers. Our taxable year must be the calendar year. Our beneficial ownership
must be evidenced by transferable shares. Our capital shares must be held by at
least 100 persons during at least 335 days of a taxable year of 12 months or
during a proportionate part of a taxable year of less than 12 months. Not more
than 50% of the value of the shares of our capital shares may be held, directly
or indirectly, applying the applicable constructive ownership rules of the
Internal Revenue Code, by five or fewer individuals at any time during the last
half of each of our taxable years. We must also meet certain other tests,
described below, regarding the nature of our income and assets and the amount of
our distributions.
Our outstanding common shares are owned by a sufficient number of investors
and in appropriate proportions to permit us to satisfy these share ownership
requirements. To protect against violations of these share ownership
requirements, our declaration of trust provides that no person is permitted to
own, applying constructive ownership tests set forth in the Internal Revenue
Code, more than 9.8% of our outstanding common shares, unless the trust managers
(including a majority of the independent trust managers) are provided evidence
satisfactory to them in their sole discretion that our qualification as a REIT
will not be jeopardized. In addition, our declaration of trust contains
restrictions on transfers of capital shares, as well as provisions that
automatically convert common shares into excess securities to the extent that
the ownership otherwise might jeopardize our REIT status. These restrictions,
however may not ensure that we will, in all cases, be able to satisfy the share
ownership requirements. If we fail to satisfy these share ownership
requirements, except as provided in the next sentence, our status as a REIT will
terminate. However, if we comply with the rules contained in applicable Treasury
Regulations that require us to ascertain the actual ownership of our shares and
we do not know, or would not have known through the exercise of reasonable
diligence, that we failed to meet the 50% requirement described above, we will
be treated as having met this requirement. See the section below entitled
"Failure to Qualify as a REIT."
To monitor our compliance with the share ownership requirements, we are
required to and we do maintain records disclosing the actual ownership of our
common shares. To do so, we will demand written statements each year from the
record holders of certain percentages of shares in which the record holders are
to disclose the actual owners of the shares (i.e., the persons required to
include in gross income the REIT dividends). A list of those persons failing or
refusing to comply with this demand will be maintained as part of our records.
Shareholders who fail or refuse to comply with the demand must submit a
statement with their tax returns disclosing the actual ownership of the shares
and certain other information.
We currently satisfy, and expect to continue to satisfy, each of these
requirements discussed above. We also currently satisfy, and expect to continue
to satisfy, the requirements that are separately described below concerning the
nature and amounts of our income and assets and the levels of required annual
distributions.
Sources of Gross Income. In order to qualify as a REIT for a particular
year, we also must meet two tests governing the sources of our income - a 75%
gross income test and a 95% gross income test. These tests are designed to
ensure that a REIT derives its income principally from passive real estate
investments. The Internal Revenue Code allows a REIT to own and operate a number
of its properties through wholly-owned subsidiaries which are "qualified REIT
subsidiaries." The Internal Revenue Code provides that a qualified REIT
subsidiary is not treated as a separate corporation, and all of its assets,
liabilities and items of income, deduction and credit are treated as assets,
liabilities and such items (as the case may be) of the REIT.
In the case of a REIT which is a partner in a partnership or any other
entity such as a limited liability company that is treated as a partnership for
federal income tax purposes, Treasury Regulations provide that the REIT will be
deemed to own its proportionate share of the assets of the partnership. Also,
the REIT will be deemed to be entitled to its proportionate share of the income
of the partnership. The character of the assets and gross income of the
partnership retains the same character in the hands of the REIT for purposes of
Section 856 of the Internal Revenue Code, including satisfying the gross income
tests and the asset tests. Thus, our proportionate share of the assets and items
of income of any partnership in which we own an interest are treated as our
assets and items of income for purposes of applying the requirements described
in this discussion, including the income and asset tests described below.
75% Gross Income Test. At least 75% of a REIT's gross income for each
taxable year must be derived from specified classes of income that principally
are real estate related. The permitted categories of principal importance to us
are:
- - rents from real property;
- - interest on loans secured by real property;
- - gains from the sale of real property or loans secured by real property
(excluding gain from the sale of property held primarily for sale to customers
in the ordinary course of our business, referred to below as "dealer
property");
- - income from the operation and gain from the sale of property acquired in
connection with the foreclosure of a mortgage securing that property
("foreclosure property");
- - distributions on, or gain from the sale of, shares of other qualifying
REITs;
- - abatements and refunds of real property taxes;
- - amounts received as consideration for entering into agreements to make
loans secured by real property or to purchase or lease real property; and
- - "qualified temporary investment income" (described below).
In evaluating our compliance with the 75% gross income test, as well as the
95% gross income test described below, gross income does not include gross
income from "prohibited transactions." In general, a prohibited transaction is
one involving a sale of dealer property, not including foreclosure property and
not including certain dealer property we have held for at least four years.
We expect that substantially all of our operating gross income will be
considered rent from real property and interest income. Rent from real property
is qualifying income for purposes of the gross income tests only if certain
conditions are satisfied. Rent from real property includes charges for services
customarily rendered to tenants, and rent attributable to personal property
leased together with the real property so long as the personal property rent is
not more than 15% of the total rent received or accrued under the lease for the
taxable year. We do not expect to earn material amounts in these categories.
Rent from real property generally does not include rent based on the income
or profits derived from the property. However, rent based on a percentage of
gross receipts or sales is permitted as rent from real property and we will have
leases where rent is based on a percentage of gross receipts or sales. We
generally do not intend to lease property and receive rentals based on the
tenant's income or profit. Also excluded from "rents from real property" is rent
received from a person or corporation in which we (or any of our 10% or greater
owners) directly or indirectly through the constructive ownership rules
contained in Section 318 and Section 856(d)(5) of the Internal Revenue Code, own
a 10% or greater interest.
A third exclusion from qualifying rent income covers amounts received with
respect to real property if we furnish services to the tenants or manage or
operate the property, other than through an "independent contractor" from whom
we do not derive any income. The obligation to operate through an independent
contractor generally does not apply, however, if the services we provide are
"usually or customarily rendered" in connection with the rental of space for
occupancy only and are not considered rendered primarily for the convenience of
the tenant (applying standards that govern in evaluating whether rent from real
property would be unrelated business taxable income when received by a
tax-exempt owner of the property). Further, if the value of the non-customary
service income with respect to a property, valued at no less than 150% of our
direct cost of performing such services, is 1% or less of the total income
derived from the property, then the provision of such non-customary services
shall not prohibit the rental income (except the non-customary service income)
from qualifying as "rents from real property."
We believe that the only material services generally to be provided to
tenants will be those usually or customarily rendered in connection with the
rental of space for occupancy only. We do not intend to provide services that
might be considered rendered primarily for the convenience of the tenants, such
as hotel, health care or extensive recreational or social services.
Consequently, we believe that substantially all of our rental income will be
qualifying income under the gross income tests, and that our provision of
services will not cause the rental income to fail to be included under that
test.
Upon the ultimate sale of our properties, any gains realized also are
expected to constitute qualifying income, as gain from the sale of real property
(not involving a prohibited transaction).
95% Gross Income Test. In addition to earning 75% of our gross income from
the sources listed above, 95% of our gross income for each taxable year must
come either from those sources, or from dividends, interest or gains from the
sale or other disposition of stock or other securities that do not constitute
dealer property. This test permits a REIT to earn a significant portion of its
income from traditional "passive" investment sources that are not necessarily
real estate related. The term "interest" (under both the 75% and 95% tests) does
not include amounts that are based on the income or profits of any person,
unless the computation is based only on a fixed percentage of receipts or sales.
Failing the 75% or 95% Tests; Reasonable Cause. As a result of the 75% and
95% tests, REITs generally are not permitted to earn more than 5% of their gross
income from active sources, including brokerage commissions or other fees for
services rendered. We may receive certain types of that income. This type of
income will not qualify for the 75% test or 95% test but is not expected to be
significant and that income, together with other nonqualifying income, is
expected to be at all times less than 5% of our annual gross income. While we do
not anticipate that we will earn substantial amounts of nonqualifying income, if
nonqualifying income exceeds 5% of our gross income, we could lose our status as
a REIT. We may establish subsidiaries of which we will hold less than 10% of the
voting stock to hold assets generating non-qualifying income. The gross income
generated by these subsidiaries would not be included in our gross income.
However, dividends we receive from these subsidiaries would be included in our
gross income and qualify for the 95% income test.
If we fail to meet either the 75% or 95% income tests during a taxable
year, we may still qualify as a REIT for that year if (1) we report the source
and nature of each item of our gross income in our federal income tax return for
that year, (2) the inclusion of any incorrect information in our return is not
due to fraud with intent to evade tax, and (3) the failure to meet the tests is
due to reasonable cause and not to willful neglect. It is not possible, however,
to state whether in all circumstances we would be entitled to the benefit of
this relief provision. For example, if we fail to satisfy the gross income tests
because nonqualifying income that we intentionally accrue or receive causes us
to exceed the limits on nonqualifying income, the IRS could conclude that our
failure to satisfy the tests was not due to reasonable cause. If these relief
provisions do not apply to a particular set of circumstances, we will not
qualify as a REIT. As discussed below, even if these relief provisions apply,
and we retain our status as a REIT, a tax would be imposed with respect to our
non-qualifying income. We would be subject to a 100% tax based on the greater of
the amount by which we fail either the 75% or 95% income tests for that year
multiplied by a fraction intended to reflect profitability. See "- Taxation as a
REIT" on page 9.
Prohibited Transaction Income. Any gain that we realize on the sale of any
property held as inventory or other property held primarily for sale to
customers in the ordinary course of business (including our share of any such
gain realized by any subsidiary partnerships), will be treated as income from a
prohibited transaction that is subject to a 100% penalty tax. This prohibited
transaction income may also adversely affect our ability to satisfy the income
tests for qualification as a REIT. Under existing law, whether property is held
as inventory or primarily for sale to customers in the ordinary course of a
trade or business depends on all the facts and circumstances surrounding the
particular transaction. We intend to hold our and our subsidiary partnerships
intend to hold their properties for investment with a view to long-term
appreciation, to engage in the business of acquiring, developing and owning
properties, and to make occasional sales of the properties as are consistent
with their investment objectives. The IRS may contend, however, that one or more
of these sales is subject to the 100% penalty tax.
Character of Assets Owned. At the close of each calendar quarter of our
taxable year, we also must meet two tests concerning the nature of our
investments. First, at least 75% of the value of our total assets generally must
consist of real estate assets, cash, cash items (including receivables) and
government securities. For this purpose, "real estate assets" include interests
in real property, interests in loans secured by mortgages on real property or by
certain interests in real property, shares in other REITs and certain options,
but excluding mineral, oil or gas royalty interests. The temporary investment of
new capital in debt instruments also qualifies under this 75% asset test, but
only for the one-year period beginning on the date we receive the new capital.
Second, although the balance of our assets generally may be invested without
restriction, we will not be permitted to own (1) securities of any one
non-governmental issuer that represent more than 5% of the value of our total
assets or (2) more than 10% of the outstanding voting securities of any single
issuer. A REIT, however, may own 100% of the stock of a qualified REIT
subsidiary, in which case the assets, liabilities and items of income, deduction
and credit of the subsidiary are treated as those of the REIT. In evaluating a
REIT's assets, if the REIT invests in a partnership, it is deemed to own its
proportionate share of the assets of the partnership.
After initially meeting the asset tests at the close of any quarter, we
will not lose our status as a REIT for failure to satisfy the asset tests at the
end of a later quarter solely by reason of changes in asset values. If we fail
to satisfy the asset tests because we acquire securities or other property
during a quarter, we can cure this failure by disposing of sufficient
nonqualifying assets within 30 days after the close of that quarter. We intend
to take such action within the 30 days after the close of any quarter as may be
required to cure any noncompliance. If we fail to cure noncompliance with the
asset tests within this time period, we would cease to qualify as a REIT.
Annual Distributions to Shareholders. To maintain our REIT status, we
generally must distribute as a dividend to our shareholders in each taxable year
at least 95% of our net ordinary income. Capital gain is not required to be
distributed. More precisely, we must distribute an amount equal to (1) 95% of
the sum of (a) our "REIT Taxable Income" before deduction of dividends paid and
excluding any net capital gain and (b) any net income from foreclosure property
less the tax on such income, minus (2) certain limited categories of "excess
noncash income," including, income attributable to leveled stepped rents,
cancellation of indebtedness and original issue discount income. REIT Taxable
Income is defined to be the taxable income of the REIT, computed as if it were
an ordinary corporation, with certain modifications. For example, the deduction
for dividends paid is allowed, but neither net income from foreclosure property,
nor net income from prohibited transactions, is included. In addition, the REIT
may carry over, but not carry back, a net operating loss for 20 years following
the year in which it was incurred.
A REIT may satisfy the 95% distribution test with dividends paid during the
taxable year and with certain dividends paid after the end of the taxable year.
Dividends paid in January that were declared during the last calendar quarter of
the prior year and were payable to shareholders of record on a date during the
last calendar quarter of that prior year are treated as paid on December 31 of
the prior year. Other dividends declared before the due date of our tax return
for the taxable year, including extensions, also will be treated as paid in the
prior year if they are paid (1) within 12 months of the end of that taxable year
and (2) no later than our next regular distribution payment. Dividends that are
paid after the close of a taxable year that do not qualify under the rule
governing payments made in January (described above) will be taxable to the
shareholders in the year paid, even though we may take them into account for a
prior year. A nondeductible excise tax equal to 4% will be imposed for each
calendar year to the extent that dividends declared and distributed or deemed
distributed before December 31 are less than the sum of (a) 85% of our "ordinary
income" plus (b) 95% of our capital gain net income plus (c) any undistributed
income from prior periods.
To be entitled to a dividends paid deduction, the amount distributed by a
REIT must not be preferential. For example, every shareholder of the class of
shares to which a distribution is made must be treated the same as every other
shareholder of that class, and no class of shares may be treated otherwise than
in accordance with its dividend rights as a class.
We will be taxed at regular corporate rates to the extent that we retain
any portion of our taxable income. For example, if we distribute only the
required 95% of our taxable income, we would be taxed on the retained 5%. Under
certain circumstances we may not have sufficient cash or other liquid assets to
meet the distribution requirement. This could arise because of competing demands
for our funds, or due to timing differences between tax reporting and cash
receipts and disbursements (i.e., income may have to be reported before cash is
received, or expenses may have to be paid before a deduction is allowed).
Although we do not anticipate any difficulty in meeting this requirement, no
assurance can be given that necessary funds will be available. In the event
these circumstances do occur, then in order to meet the 95% distribution
requirement, we may cause our operating partnership to arrange for short-term,
or possibly long-term, borrowings to permit the payment of required dividends.
If we fail to meet the 95% distribution requirement because of an
adjustment to our taxable income by the IRS, we may be able to cure the failure
retroactively by paying a "deficiency dividend," as well as applicable interest
and penalties, within a specified period.
TAXATION AS A REIT
As a REIT, we generally will not be subject to corporate income tax to the
extent we currently distribute our REIT taxable income to our shareholders. This
treatment effectively eliminates the "double taxation" imposed on investments in
most corporations. Double taxation refers to taxation that occurs once at the
corporate level when income is earned and once again at the shareholder level
when such income is distributed. We generally will be taxed only on the portion
of our taxable income that we retain, which will include any undistributed net
capital gain, because we will be entitled to a deduction for dividends paid to
shareholders during the taxable year. A dividends paid deduction is not
available for dividends that are considered preferential within any given class
of shares or as between classes except to the extent that class is entitled to a
preference. We do not anticipate that we will pay any of those preferential
dividends. Because excess shares will represent a separate class of outstanding
shares, the fact that those shares will not be entitled to dividends should not
adversely affect our ability to deduct our dividend payments.
Even as a REIT, we will be subject to tax in certain circumstances as
follows:
- - we would be subject to tax on any income or gain from foreclosure property
at the highest corporate rate (currently 35%). Foreclosure property is generally
defined as property acquired through foreclosure or after a default on a loan
secured by the property or a lease of the property;
- - a confiscatory tax of 100% applies to any net income from prohibited
transactions which are, in general, certain sales or other dispositions of
property held primarily for sale to customers in the ordinary course of
business;
- - if we fail to meet either the 75% or 95% source of income tests described
above, but still qualify for REIT status under the reasonable cause exception to
those tests, a 100% tax would be imposed equal to the amount obtained by
multiplying (a) the greater of the amount, if any, by which we failed either the
75% income test or the 95% income test, times (b) a fraction intended to reflect
our profitability;
- - we will be subject to the alternative minimum tax on items of tax
preference, excluding items specifically allocable to our shareholders;
- - if we should fail to distribute with respect to each calendar year at
least the sum of (a) 85% of our REIT ordinary income for that year, (b) 95% of
our REIT capital gain net income for that year, and (c) any undistributed
taxable income from prior years, we would be subject to a 4% excise tax on the
excess of the required distribution over the amounts actually distributed;
- - under temporary regulations, we also may be taxed at the highest regular
corporate tax rate on any built-in gain attributable to assets that we acquire
in certain tax-free corporate transactions, to the extent the gain is recognized
during the first ten years after we acquire those assets. Built-in gain is the
excess of (a) the fair market value of the asset over (b) our adjusted basis in
the asset, in each case determined as of the beginning of the ten-year
recognition period. The results described in this paragraph with respect to the
recognition of built-in gain assume that we will make an election pursuant to
the temporary regulations; and
- - we will be taxed at regular corporate rates on any undistributed REIT
taxable income, including undistributed net capital gains.
FAILURE TO QUALIFY AS A REIT
For any taxable year in which we fail to qualify as a REIT and certain
relief provisions do not apply, we would be taxed at regular corporate rates,
including alternative minimum tax rates on all of our taxable income.
Distributions to our shareholders would not be deductible in computing that
taxable income, and distributions would no longer be required to be made. Any
corporate level taxes generally would reduce the amount of cash available for
distribution to our shareholders and, because the shareholders would continue to
be taxed on the distributions they receive, the net after tax yield to the
shareholders from their investment likely would be reduced substantially. As a
result, failure to qualify as a REIT during any taxable year could have a
material adverse effect on an investment in our common shares. If we lose our
REIT status, unless certain relief provisions apply, we would not be eligible to
elect REIT status again until the fifth taxable year which begins after the
taxable year during which our election was terminated. It is not possible to
state whether in all circumstances we would be entitled to this statutory
relief.
TAXATION OF TAXABLE U.S. SHAREHOLDERS
Except as discussed below, distributions generally will be taxable to
taxable U.S. shareholders as ordinary income to the extent of our current or
accumulated earnings and profits. We may generate cash in excess of our net
earnings. If we distribute cash to shareholders in excess of our current and
accumulated capital earnings and profits (other than as a capital gain
dividend), the excess cash will be deemed to be a return of capital to each
shareholder to the extent of the adjusted tax basis of the shareholder's shares.
Distributions in excess of the adjusted tax basis will be treated as gain from
the sale or exchange of the shares. A shareholder who has received a
distribution in excess of current and our accumulated earnings and profits may,
upon the sale of the shares, realize a higher taxable gain or a smaller loss
because the basis of the shares as reduced will be used for purposes of
computing the amount of the gain or loss. Distributions we make, whether
characterized as ordinary income or as capital gains, are not eligible for the
dividends received deduction for corporations. For purposes of determining
whether distributions to holders of common shares are out of current or
accumulated earnings and profits, our earnings and profits will be allocated
first to the outstanding preferred shares, if any, and then to the common
shares.
Dividends we declare in October, November, or December of any year and
payable to a shareholder of record on a specified date in any of these months
shall be treated as both paid by us and received by the shareholder on December
31 of that year, provided we actually pay the dividend on or before January 31
of the following calendar year. Shareholders may not include in their own income
tax returns any of our net operating losses or capital losses.
Distributions that we properly designate as capital gain dividends will be
taxable to taxable U.S. shareholders as gains from the sale or disposition of a
capital asset to the extent that they do not exceed our actual net capital gain
for the taxable year. Depending on the period of time the tax characteristics of
the assets which produced these gains, and on certain designations, if any,
which we may make, these gains may be taxable to non-corporate U.S. shareholders
as long term gains at a 20% or 25% rate. U.S. shareholders that are
corporations may, however, be required to treat up to 20% of certain capital
gain dividends as ordinary income.
We may elect to retain, rather than distribute as a capital gain dividend,
our net long-term capital gains. If we make this election, we would pay tax on
our retained net long-term capital gains. In addition, to the extent we
designate, a U.S. shareholder generally would:
- - include its proportionate share of our undistributed long-term capital
gains in computing its long-term capital gains in its return for its taxable
year in which the last day of our taxable year falls;
- - be deemed to have paid the capital gains tax imposed on us on the
designated amounts included in the U.S. shareholder's long-term capital gains;
- - receive a credit or refund for the amount of tax deemed paid by it;
- - increase the adjusted basis of its common stock by the difference between
the amount of includable gains and the tax deemed to have been paid by it; and
- - in the case of a U.S. shareholder that is a corporation, appropriately
adjust its earnings and profits for the retained capital gains in accordance
with Treasury Regulations to be prescribed by the IRS.
Distributions we make and gain arising from the sale or exchange by a U.S.
shareholder of our shares will not be treated as income from a passive activity,
within the meaning of Section 469 of the Internal Revenue Code, since income
from a passive activity generally does not include dividends and gain
attributable to the disposition of property that produces dividends. As a
result, U.S. shareholders subject to the passive activity rules will generally
be unable to apply any "passive losses" against this income or gain.
Distributions we make, to the extent they do not constitute a return of capital,
generally will be treated as investment income for purposes of computing the
investment interest limitation. Gain arising from the sale or other disposition
of our shares, however, will be treated as investment income if a shareholder so
elects, in which case the capital gain is taxed at ordinary income rates.
Generally, gain or loss realized by a shareholder upon the sale of shares
will be reportable as capital gain or loss. If a shareholder receives a
long-term capital gain dividend from us and has held the shares for six months
or less, any loss incurred on the sale or exchange of the shares is treated as a
long-term capital loss to the extent of the corresponding long-term capital gain
dividend received.
In any year in which we fail to qualify as a REIT, the shareholders
generally will continue to be treated in the same fashion described above,
except that none of our dividends will be eligible for treatment as capital
gains dividends, corporate shareholders will qualify for the dividends received
deduction and the shareholders will not be required to report any share of our
tax preference items.
RECENT LEGISLATION
The rules dealing with Federal income taxation are constantly under review
by Congress, the IRS and the Treasury Department. For example, on December 17,
1999, the President signed into law the Ticket to Work and Work Incentives
Improvement Act of 1999, which contains changes in federal income tax laws that,
beginning after December 31, 2000, will affect REITs. Under the new
legislation, REITs may own stock in "taxable REIT subsidiaries," corporations
that may provide services to tenants of the REIT and others without
disqualifying the rents that the REIT receives from its tenants. A taxable REIT
subsidiary is a corporation in which a REIT owns stock, directly or indirectly,
and with respect to which the corporation and the REIT have made a joint
election to treat the corporation as a taxable REIT subsidiary. Although a REIT
may own up to 100% of the stock of a taxable REIT subsidiary, (i) the value of
all securities in taxable REIT subsidiaries held by the REIT may not exceed 20%
of the value of the total assets of the REIT; and (ii) any dividends received
by the REIT from its taxable REIT subsidiaries will not constitute qualifying
income under the 75% income test. In addition, the new legislation limits the
deduction of interest paid by a taxable REIT subsidiary to the REIT and limits
the amount of rental payments that may be made by a taxable REIT subsidiary to
the REIT.
The new legislation imposes a tax on a REIT equal to 100% of redetermined
rents, redetermined deductions and excess interest. Redetermined rents are
generally rents from real property which would otherwise be reduced on
distribution, apportionment or allocation to clearly reflect income as a result
of services furnished or rendered by a taxable REIT subsidiary to tenants of the
REIT. There are a number of exceptions with regard to redetermined rents, which
are summarized below.
- - Redetermined rents do not include amounts received directly or indirectly
by a REIT for customary services.
- - Redetermined rents do not include de minimus payments received by the REIT
with respect to non-customary services rendered to the tenants of a property
owned by the REIT that do not exceed 1% of all amounts received by the REIT with
respect to the property.
- - The redetermined rent provisions do not apply with respect to any services
rendered by a taxable REIT subsidiary to the tenants of the REIT, as long as the
taxable REIT subsidiary renders a significant amount of similar services to
persons other than the REIT and to tenants who are unrelated to the REIT or the
taxable REIT subsidiary or the REIT tenants, and the charge for these services
is substantially comparable to the charge for similar services rendered to such
unrelated persons.
- - The redetermined rent provisions do not apply to any services rendered by
a taxable REIT subsidiary to a tenant of a REIT if the rents paid by tenants
leasing at least 25% of the net leasable space in the REIT's property who are
not receiving such services are substantially comparable to the rents paid by
tenants leasing comparable space who are receiving the services and the charge
for the services is separately stated.
- - The redetermined rent provisions do not apply to any services rendered by
a taxable REIT subsidiary to tenants of a REIT if the gross income of the
taxable REIT subsidiary from these services is at least 150% of the taxable REIT
subsidiary's direct cost of rendering the services.
- - The Secretary has the power to waive the tax that would otherwise be
imposed on redetermined rents if the REIT establishes to the satisfaction of the
Secretary that rents charged to tenants were established on an arms' length
basis even though a taxable REIT subsidiary provided services to the tenants.
Redetermined deductions are deductions, other than redetermined rents, of a
taxable REIT subsidiary if the amount of these deductions would be decreased on
distribution, apportionment or allocation to clearly reflect income between the
taxable REIT subsidiary and the REIT. Excess interest means any deductions for
interest payments made by a taxable REIT subsidiary to the REIT to the extent
that the interest payments exceed a commercially reasonable rate of interest.
Under the new legislation, a REIT will be prohibited from owning more than
10%, by vote or by value, of the securities, other than specified debt
securities, of a non-REIT C corporation. This does not, however, apply to
taxable REIT subsidiaries, qualified REIT subsidiaries and non-qualified
corporate subsidiaries in which the REIT does not own more than 10% of the
voting securities, provided the non-qualified subsidiary was established on or
before July 12, 1999, does not engage in a new line of business or acquire any
substantial asset (other than pursuant to a binding contract in effect as of
July 12, 1999, a tax-free exchange, an involuntary conversion or a
reorganization with another non-qualified corporate subsidiary) and the REIT
does not acquire any new securities in such subsidiary (other than pursuant to a
binding contract in effect as of July 12, 1999 or a reorganization with another
non-qualified corporate subsidiary). Under the new legislation, a REIT may
convert existing non-qualified corporate subsidiaries into taxable REIT
subsidiaries in a tax-free reorganization at any time prior to January 1, 2004.
Under the new legislation, the 95% distribution requirement discussed above
is reduced to 90% of REIT taxable income.
Under the new legislation, the basis for determining whether more than 15%
of the rents is received by a REIT from a property are attributable to personal
property is based upon a comparison of the fair market value of the personal
property leased by the tenant as compared to the fair market value of all of the
property leased by the tenant, rather than the adjusted basis of such personal
property compared to the adjusted basis of all such property.
Changes to the Federal laws and interpretations thereof could adversely
affect the tax consequences of an investment in our common shares. We cannot
predict whether, when, in what forms, or with what effective dates, these or any
other provisions could become effective.
BACKUP WITHHOLDING
We will report to our shareholders and the IRS the amount of dividends paid
during each calendar year and the amount of tax withheld, if any. If a
shareholder is subject to backup withholding, we will be required to deduct and
withhold from any dividends payable to that shareholder a tax of 31%. These
rules may apply (1) when a shareholder fails to supply a correct taxpayer
identification number, (2) when the IRS notifies us that the shareholder is
subject to the rules or has furnished an incorrect taxpayer identification
number, or (3) in the case of corporations or others within certain exempt
categories, when they fail to demonstrate that fact when required. A shareholder
that does not provide a correct taxpayer identification number may also be
subject to penalties imposed by the IRS. Any amount withheld as backup
withholding may be credited against the shareholder's federal income tax
liability. We also may be required to withhold a portion of capital gain
distributions made to shareholders who fail to certify their non-foreign status.
TAXATION OF TAX-EXEMPT ENTITIES
In general, a tax-exempt entity that is a shareholder will not be subject
to tax on distributions or gain realized on the sale of shares. A tax-exempt
entity may be subject to unrelated business taxable income, however, to the
extent that it has financed the acquisition of its shares with "acquisition
indebtedness" within the meaning of the Internal Revenue Code. In determining
the number of shareholders a REIT has for purposes of the "50% test" described
above under "-REIT Qualification," generally, any shares held by tax-exempt
employees' pension and profit sharing trusts which qualify under Section 401(a)
of the Internal Revenue Code and are exempt from tax under Section 501(a) of the
Internal Revenue Code ("qualified trusts") will be treated as held directly by
its beneficiaries in proportion to their interests in the trust and will not be
treated as held by the trust.
A qualified trust owning more than 10% of a REIT may be required to treat a
percentage of dividends from the REIT as UBTI. The percentage is determined by
dividing the REIT's gross income (less direct expenses related thereto) derived
from an unrelated trade or business for the year (determined as if the REIT were
a qualified trust) by the gross income of the REIT for the year in which the
dividends are paid. However, if this percentage is less than 5%, dividends are
not treated as UBTI. These UBTI rules apply only if the REIT qualifies as a REIT
because of the "look-thru" rule with respect to the 50% test discussed above and
if the trust is "predominantly held" by qualified trusts. A REIT is
predominantly held by qualified trusts if at least one pension trust owns more
than 25% of the value of the REIT or a group of pension trusts each owning more
than 10% of the value of the REIT collectively own more than 50% of the value of
the REIT. We do not currently meet either of these requirements.
For social clubs, voluntary employee benefit associations, supplemental
unemployment benefit trusts and qualified group legal services plans exempt from
federal income taxation under Sections 501(c)(7), (c)(9), (c)(17) and (c)(20) of
the Internal Revenue Code, respectively, income from an investment in our
capital stock will constitute UBTI unless the organization is able to deduct an
amount properly set aside or placed in reserve for certain purposes so as to
offset the UBTI generated by the investment in our capital stock. These
prospective investors should consult their own tax advisors concerning the "set
aside" and reserve requirements.
TAXATION OF FOREIGN INVESTORS
The rules governing federal income taxation of nonresident alien
individuals, foreign corporations, foreign partnerships and other foreign
shareholders are complex and no attempt will be made herein to provide more than
a summary of such rules. Prospective non-U.S. shareholders should consult with
their own tax advisors to determine the impact of federal, state and local
income tax laws with regard to an investment in common shares, including any
reporting requirements, as well as the tax treatment of such an investment under
the laws of their home country.
Dividends that are not attributable to gain from any sales or exchanges we
make of United States real property interests and which we do not designate as
capital gain dividends will be treated as dividends of ordinary income to the
extent that they are made out of our current or accumulated earnings and
profits. Those dividends ordinarily will be subject to a withholding tax equal
to 30% of the gross amount of the dividend unless an applicable tax treaty
reduces or eliminates that tax. However, if income from the investment in the
common shares is treated as effectively connected with the non-U.S.
shareholder's conduct of a United States trade or business, the non-U.S.
shareholder generally will be subject to a tax at graduated rates, in the same
manner as U.S. shareholders are taxed with respect to those dividends, and may
also be subject to the 30% branch profits tax in the case of a shareholder that
is a foreign corporation. For withholding tax purposes, we are currently
required to treat all distributions as if made out of our current and
accumulated earnings and profits and thus we intend to withhold at the rate of
30%, or a reduced treaty rate if applicable, on the amount of any distribution
(other than distributions designated as capital gain dividends) made to a
non-U.S. shareholder unless (1) the non-U.S. shareholder files on IRS Form 1001
claiming that a lower treaty rate applies or (2) the non-U.S. shareholder files
an IRS Form 4224 claiming that the dividend is effectively connected income.
Under the final regulations, generally effective for distributions on or
after January 1, 2001, we would not be required to withhold at the 30% rate on
distributions we reasonably estimate to be in excess of our current and
accumulated earnings and profits. Dividends in excess of our current and
accumulated earnings and profits will not be taxable to a shareholder to the
extent that they do not exceed the adjusted basis of the shareholder's shares,
but rather will reduce the adjusted basis of those shares. To the extent that
those dividends exceed the adjusted basis of a non-U.S. shareholder's shares,
they will give rise to tax liability if the non-U.S. shareholder would otherwise
be subject to tax on any gain from the sale or disposition of his shares, as
described below. If it cannot be determined at the time a dividend is paid
whether or not a dividend will be in excess of current and accumulated earnings
and profits, the dividend will be subject to such withholding. We do not intend
to make quarterly estimates of that portion of dividends that are in excess of
earnings and profits, and, as a result, all dividends will be subject to such
withholding. However, the non-U.S. shareholder may seek a refund of those
amounts from the IRS.
For any year in which we qualify as a REIT, distributions that are
attributable to gain from our sales or exchanges of United States real property
interests will be taxed to a non-U.S. shareholder under the provisions of the
Foreign Investment in Real Property Tax Act of 1980, commonly known as "FIRPTA."
Under FIRPTA, those dividends are taxed to a non-U.S. shareholder as if the gain
were effectively connected with a United States business. Non-U.S. shareholders
would thus be taxed at the normal capital gain rates applicable to U.S.
shareholders subject to applicable alternative minimum tax and a special
alternative minimum tax in the case of nonresident alien individuals. Also,
dividends subject to FIRPTA may be subject to a 30% branch profits tax in the
hands of a corporate non-U.S. shareholder not entitled to treaty exemption. We
are required by the Code and applicable Treasury Regulations to withhold 35% of
any dividend that could be designated as a capital gain dividend. This amount is
creditable against the non-U.S. shareholder's FIRPTA tax liability.
Gain recognized by a non-U.S. shareholder upon a sale of shares generally
will not be taxed under FIRPTA if we are a "domestically controlled REIT,"
defined generally as a REIT in which at all times during a specified testing
period less than 50% in value of the shares was held directly or indirectly by
foreign persons. It is currently anticipated that we will be a "domestically
controlled REIT," and therefore the sale of shares will not be subject to
taxation under FIRPTA. Because the common shares will be publicly traded,
however, no assurance can be given that we will remain a "domestically
controlled REIT." However, gain not subject to FIRPTA will be taxable to a
non-U.S. shareholder if (1) investment in the common shares is effectively
connected with the non-U.S. shareholder's United States trade or business, in
which case the non-U.S. shareholder will be subject to the same treatment as
U.S. shareholders with respect to that gain, and may also be subject to the 30%
branch profits tax in the case of a corporate non-U.S. shareholder, or (2) the
non-U.S. shareholder is a nonresident alien individual who was present in the
United States for 183 days or more during the taxable year and has a "tax home"
in the United States, in which case the nonresident alien individual will be
subject to a 30% tax on the individual's capital gains. If we were not a
domestically controlled REIT, whether or not a non-U.S. shareholder's sale of
shares would be subject to tax under FIRPTA would depend on whether or not the
common shares were regularly traded on an established securities market (such as
the NYSE) and on the size of selling non-U.S. shareholder's interest in our
capital shares. If the gain on the sale of shares were to be subject to taxation
under FIRPTA, the non-U.S. shareholder will be subject to the same treatment as
U.S. shareholders with respect to that gain (subject to applicable alternative
minimum tax and a special alternative minimum tax in the case of nonresident
alien individuals and the possible application of the 30% branch profits tax in
the case of foreign corporations) and the purchaser of our common shares may be
required to withhold 10% of the gross purchase price.
<PAGE>
STATE AND LOCAL TAXES
We, and our shareholders, may be subject to state or local taxation in
various state or local jurisdictions, including those in which it or they
transact business or reside. Consequently, prospective shareholders should
consult their own tax advisors regarding the effect of state and local tax laws
on an investment in our capital shares.
LEGAL MATTERS
Unless otherwise noted in a prospectus supplement, Locke Liddell & Sapp
LLP, Dallas, Texas, will pass on the legality of the securities offered through
this prospectus.
Counsel for any underwriters or agents will be noted in the applicable
prospectus supplement.
EXPERTS
The financial statements and the related financial statement schedules
incorporated in this prospectus by reference from the Company's Annual Report on
Form 10-K for the year ended December 31, 1999 have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their report, which is
incorporated hereby by reference, and have been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.
WHERE YOU CAN FIND MORE INFORMATION
We are a public company and file annual, quarterly and special reports,
proxy statements and other information with the SEC. You may read and copy any
document we file at the SEC's public reference room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. You can request copies of these documents by writing to
the SEC and paying a fee for the copying cost. Please call the SEC at
1-800-SEC-0330 for more information about the operation of the public reference
room. Our SEC filings are also available to the public at the SEC's web site at
http://www.sec.gov. In addition, you may read and copy our SEC filings at the
- -------------------
offices of the New York Stock Exchange, 20 Broad Street, New York, New York
10005. Our website address is http://www.weingarten.com.
--------------------------
This prospectus is only part of a registration statement we filed with the
SEC under the Securities Act of 1933, as amended, and therefore omits certain
information contained in the registration statement. We have also filed exhibits
and schedules to the registration statement that we have excluded from this
prospectus, and you should refer to the applicable exhibit or schedule for a
complete description of any statement referring to any contract or document. You
may inspect or obtain a copy of the registration statement, including exhibits
and schedules, as described in the previous paragraph.
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with it. This means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus and the information we file later with
the SEC will automatically update and supersede this information.
We incorporate by reference the documents listed below and any future
filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 until this offering is completed:
<PAGE>
- - Annual Report on Form 10-K for the year ended December 31, 1999 (File No.
001-09876).
- - The description of our common shares of beneficial interest contained in
our registration statement on Form 8-B filed March 17, 1988 (File No.
001-09876).
You may request copies of these filings at no cost by writing or
telephoning our Investor Relations Department at the following address and
telephone number:
Weingarten Realty Investors
2600 Citadel Plaza Drive
Suite 300
Houston, Texas 77008
(713) 866-6000.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses in connection with
the offering contemplated by this Registration Statement:
<TABLE>
<CAPTION>
<S> <C>
SEC Registration Fee . . . . . . . $ 402
Accounting Fees and Expenses . . . 6,000
Printing and Engraving Costs . . . 15,000
Miscellaneous. . . . . . . . . . . 2,500
--------
Total. . . . . . . . . . . . . . . $ 23,902
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Subsection (B) of Section 9.20 of the Texas Real Estate Investment Trust
Act, as amended (the "Act"), empowers a real estate investment trust to
indemnify any person who was, is, or is threatened to be made a named defendant
or respondent in any threatened, pending, or completed action, suit, or
proceeding, whether civil, criminal, administrative, arbitrative, or
investigative, any appeal in such an action, suit, or proceeding, or any inquiry
or investigation that can lead to such an action, suit or proceeding because the
person is or was a trust manager, officer, employee or agent of the real estate
investment trust or is or was serving at the request of the real estate
investment trust as a trust manager, director, officer, partner, venturer,
proprietor, trustee, employee, agent, or similar functionary of another real
estate investment trust, corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan, or other enterprise against
expenses (including court costs and attorney fees), judgments, penalties, fines
and settlements if he conducted himself in good faith and reasonably believed
his conduct was in or not opposed to the best interests of the real estate
investment trust and, in the case of any criminal proceeding, had no reasonable
cause to believe that his conduct was unlawful.
The Act further provides that, except to the extent otherwise permitted by
the Act, a person may not be indemnified in respect of a proceeding in which the
person is found liable on the basis that personal benefit was improperly
received by him or in which the person is found liable to the real estate
investment trust. Indemnification pursuant to Subsection (B) of Section 9.20 of
the Act is limited to reasonable expenses actually incurred and may not be made
in respect of any proceeding in which the person has been found liable for
willful or intentional misconduct in the performance of his duty to the real
estate investment trust.
Subsection (C) of Section 15.10 of the Act provides that a trust manager
shall not be liable for any claims or damages that may result from his acts in
the discharge of any duty imposed or power conferred upon him by the real estate
investment trust, if, in the exercise of ordinary care, he acted in good faith
and in reliance upon information, opinions, reports, or statements, including
financial statements and other financial data, concerning the real estate
investment trust, that were prepared or presented by officers or employees of
the real estate investment trust, legal counsel, public accountants, investment
bankers, or certain other professionals, or a committee of trust manager of
which the trust manager is not a member. In addition, no trust manager shall be
liable to the real estate investment trust for any act, omission, loss, damage,
or expense arising from the performance of his duty to a real estate investment
trust, save only for his own willful misfeasance, willful malfeasance or gross
negligence.
Article Sixteen of our Amended and Restated Declaration of Trust provides
that we shall indemnify officers and trust managers, as set forth below:
(a) We shall indemnify, to the extent provided in our Bylaws, every
person who is or was serving as our or our Corporate predecessor's trust manager
or officer and any person who is or was serving at our request as a trust
manager, officer, partner, venturer, proprietor, trustee, employee, agent or
similar functionary of another real estate investment trust, partnership, joint
venture, sole proprietorship, trust, employee benefit plan or other enterprise
with respect to all costs and expenses incurred by such person as a result of
such person being made or threatened to be made a defendant or respondent in a
proceeding by reason of his holding or having held a position named above in
this paragraph.
(b) If the indemnification provided in paragraph (a) is either (i)
insufficient to cover all costs and expenses incurred by any person named in
such paragraph as a result of such person being made or threatened to be made a
defendant or respondent in a proceeding by reason of his holding or having held
a position named in such paragraph or (ii) not permitted by Texas law, we shall
indemnify, to the fullest extent that indemnification is permitted by Texas law,
every person who is or was serving as our trust manager or officer and any
person who is or was serving at our request as a trust manager, officer,
partner, venturer, proprietor, trustee, employee, agent or similar functionary
of another real estate investment trust, partnership, joint venture, sole
proprietorship, trust, employee benefit plan or other enterprise with respect to
all costs and expenses incurred by such person as a result of such person being
made or threatened to be made a defendant or respondent in a proceeding by
reason of his holding or having held a position named above in this paragraph.
Our Bylaws provide that we may indemnify any trust manager or officer who
was, is or is threatened to be made a party to any suit or proceeding, whether
civil, criminal, administrative, arbitrative or investigative, because the
person is or was serving as our trust manager, officer, employee or agent, or is
or was serving at our request in the same or another capacity in another
corporation or business association, against judgments, penalties, fines,
settlements and reasonable expenses actually incurred if it is determined that
the person: (i) conducted himself in good faith, (ii) reasonably believed that,
in the case of conduct in his official capacity, his conduct was in our best
interests, and that, in all other cases, his conduct was at least not opposed to
our best interests, and (iii) in the case of any criminal proceeding, had no
reasonable cause to believe his conduct was unlawful; provided that, if the
person is found liable to us, or is found liable on the basis that personal
benefit was improperly received by the person, the indemnification (A) is
limited to reasonable expenses actually incurred by the person in connection
with the proceeding and (B) will not be made in respect of any proceeding in
which the person shall have been found liable to us for willful or intentional
misconduct in the performance of his duty.
ITEM 16. EXHIBITS.
3.1 Amended and Restated Declaration of Trust, as amended (filed as Exhibit
to our Registration Statement on Form S-3 (No. 33-49206) and incorporated
herein by reference).
3.2 Amendment to the Restated Declaration of Trust (filed as Exhibit 3.2 to
our Registration Statement on Form 8-A filed January 19, 1999 and
incorporated herein by reference).
3.3 Second Amendment to the Restated Declaration of Trust (filed as Exhibit
to our Registration Statement on Form 8-A filed January 19, 1999 and
incorporated herein by reference).
3.4 Third Amendment to the Restated Declaration of Trust (filed as Exhibit
to our Registration Statement on Form 8-A filed January 19, 1999
and incorporated herein by reference).
3.5 Amended and Restated Bylaws (filed as Exhibit 3.2 to our Registration
Statement on Form S-3 (No. 33-49206) and incorporated herein by
reference).
5.1 Opinion of Locke Liddell & Sapp LLP as to the legality of the securities
being registered.
8.1 Form of opinion of Locke Liddell & Sapp LLP as to certain tax matters.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Locke Liddell & Sapp LLP (included in Exhibit 5.1 hereto).
23.3 Consent of Locke Liddell & Sapp LLP (included in Exhibit 8.1 hereto).
24.1 Power of Attorney (included on signature page).
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the Registration
Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 15 of this Registration
Statement or otherwise, the registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
in payment by the registrant of expenses incurred or paid by a trust manager,
director, officer or controlling person in the successful defense of any action,
suit or proceeding) is asserted against the registrant by such trust manager,
director, officer or controlling person in connection with the securities being
registered hereby, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on the 13th day of April,
2000.
WEINGARTEN REALTY INVESTORS
By: /s/ Stanford Alexander
-----------------------------------------
Stanford Alexander, Chairman of the Board
and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Stanford Alexander, Martin Debrovner and
Andrew M. Alexander, and each of them, with the full power to act without the
other, such person's true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign, execute and file this Registration
Statement, and any or all amendments thereto (including, without limitation,
post-effective amendments), any subsequent Registration Statements pursuant to
Rule 462 of the Securities Act of 1933, as amended, and any amendments thereto
and to fill the same, with all exhibits and schedules thereto, and other
documents in connection therewith with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing necessary or
desirable to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their substitute or
substitutes, may lawfully do or cause to be done.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
- ---------------------------- ------------------------------------- ----------------
<S> <C> <C>
/s/ Standord Alexander Chairman of the Board, Trust Manager April 13, 2000
- ----------------------------
Stanford Alexander (Chief Executive Officer)
/s/ Andrew M. Alexander President and Trust Manager April 13, 2000
- ----------------------------
Andrew M. Alexander
/s/ Robert J. Cruikshank Trust Manager April 13, 2000
- ----------------------------
Robert J. Cruikshank
/s/ Martin Debrovner Vice Chairman and Trust Manager April 13, 2000
- ----------------------------
Martin Debrovner
/s/ Melvin A. Dow Trust Manager April 13, 2000
- ----------------------------
Melvin A. Dow
/s/ Stephen A. Lasher Trust Manager April 13, 2000
- ----------------------------
Stephen A. Lasher
/s/ Jospeh W. Robertson, Jr. Executive Vice President and Trust April 13, 2000
- ----------------------------
Joseph W. Robertson, Jr. Manager (Chief Financial Officer)
/s/ Douglas W. Schnitzer Trust Manager April 13, 2000
- ----------------------------
Douglas W. Schnitzer
/s/ Marc J. Shapiro Trust Manager April 13, 2000
- ----------------------------
Marc J. Shapiro
/s/ J.T. Trotter Trust Manager April 13, 2000
- ----------------------------
J.T. Trotter
/s/ Stephen C. Richter Senior Vice President & Treasurer April 13, 2000
- ----------------------------
Stephen C. Richter (Principal Accounting Officer)
</TABLE>
<PAGE>
EXHIBIT INDEX
Exhibit
Number
- ------
3.1 Amended and Restated Declaration of Trust, as amended (filed as Exhibit
to our Registration Statement on Form S-3 (No. 33-49206) and
incorporated herein by reference).
3.2 Amendment to the Restated Declaration of Trust (filed as Exhibit 3.2 to
our Registration Statement on Form 8-A filed January 19, 1999 and
incorporated herein by reference).
3.3 Second Amendment to the Restated Declaration of Trust (filed as Exhibit
to our Registration Statement on Form 8-A filed January 19, 1999
and incorporated herein by reference).
3.4 Third Amendment to the Restated Declaration of Trust (filed as Exhibit
to our Registration Statement on Form 8-A filed January 19, 1999 and
incorporated herein by reference).
3.5 Amended and Restated Bylaws (filed as Exhibit 3.2 to our Registration
Statement on Form S-3 (No. 33-49206) and incorporated herein by
reference).
5.1 Opinion of Locke Liddell & Sapp LLP as to the legality of the securities
being registered.
8.1 Form of opinion of Locke Liddell & Sapp LLP as to certain tax matters.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Locke Liddell & Sapp LLP (included in Exhibit 5.1 hereto).
23.3 Consent of Locke Liddell & Sapp LLP (included in Exhibit 8.1 hereto).
24.1 Power of Attorney (included on signature page).
EXHIBIT 5.1
Locke Liddell & Sapp LLP
Attorneys & Counselors
2200 Ross Avenue (214) 740-8000
Suite 2200 Fax: (214) 740-8800
Dallas, Texas 75201-6776 Austin Dallas Houston New Orleans www.lockeliddell.com
April 11, 2000
Direct Dial (214) 740-8515
[email protected]
Weingarten Realty Investors
2600 Citadel Plaza Drive
Suite 300
Houston, Texas 77008
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel to Weingarten Realty Investors, a Texas real
estate investment trust (the "Company"), in connection with the Company's
Registration Statement on Form S-3 ("Registration Statement"), filed with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended (the "Securities Act"), and the sale of 39,204 of the
Company's common shares of beneficial interest (the "Securities") by the selling
shareholder named in the Registration Statement pursuant to the Registration
Statement.
In this capacity, we have examined the Company's declaration of trust and
bylaws, the proceedings of the Board of Trust Managers of the Company relating
to the registration of the Securities and such other statutes, certificates,
instruments and documents relating to the Company and matters of law as we have
deemed necessary to the issuance of this opinion.
Based upon the foregoing, we are of the opinion that the Securities have
been duly authorized and are validly issued, fully paid and nonassessable.
The opinion expressed herein is as of the date hereof and is based on the
assumptions set forth herein and the laws and regulations currently in effect,
and we do not undertake and hereby disclaim any obligations to advise you of any
change with respect to any matter set forth herein. To the extent that the
opinion set forth herein is governed by laws other than the federal laws of the
United States, our opinion is based solely upon our review of the Texas Real
Estate Investment Trust Act and upon certificates from public officials or
governmental offices of such state. We express no opinion as to any matter
other than as expressly set forth herein, and no opinion is to, or may, be
inferred or implied herefrom.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and the reference to us under the heading "Legal Matters"
in the Prospectus contained therein. In giving our consent, we do not hereby
admit that we are in the category of persons whose consent is required under
Section 7 of the Securities Act or the rules and regulations of the Commission
thereunder.
Very truly yours,
LOCKE LIDDELL & SAPP LLP
By: /s/ Gina E. Betts
-------------------------
Locke Liddell & Sapp LLP
Attorneys & Counselors
2200 Ross Avenue (214) 740-8000
Suite 2200 Fax: (214) 740-8800
Dallas, Texas 75201-6776 Austin Dallas Houston New Orleans www.lockeliddell.com
April 12, 2000
Weingarten Realty Investors
2600 Citadel Plaza Drive, Suite 300
Houston, Texas 77008
Ladies and Gentlemen:
We have acted as counsel to Weingarten Realty Investors (the "Company"), a
Texas real estate investment trust, in connection with the sale of 39,204 common
shares of beneficial interest, par value $.03 per share (the "Common Shares"),
to be sold by the selling stockholder named in and in accordance with the
Registration Statement of the Company on Form S-3 (the "Registration Statement")
and related prospectus with respect to the Common Shares (the "Prospectus"),
which Form S-3 was filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Securities
Act").
In rendering the following opinions, we have examined the Restated
Declaration of Trust, as amended, and bylaws of the Company, as amended to date,
an officer's certificate to counsel for Weingarten Realty Investors regarding
certain income tax and factual matters signed by an appropriate officer and
dated as of the date hereof, and such other records, certificates and documents
as we have deemed necessary or appropriate for purposes of rendering the
opinions set forth herein.
We have reviewed the descriptions set forth in the Registration Statement
of the Company and its investments, activities, operations and governance. We
have relied upon the facts set forth in the Registration Statement and upon the
representations of officers of the Company that the Company has been and will be
owned and operated in such a manner that the Company has and will continue to
satisfy the requirements for qualification as a real estate investment trust
("REIT") under the Internal Revenue Code of 1986, as amended (the "Code"). In
addition, we have relied on certain additional facts and assumptions described
below.
<PAGE>
In rendering the opinions set forth herein, we have assumed (i) the genuineness
of all signatures on documents we have examined, (ii) the authenticity of all
documents submitted to us as originals, (iii) the conformity to the original
documents of all documents submitted to us as copies, (iv) the conformity of
final documents to all documents submitted to us as drafts, (v) the authority
and capacity of the individual or individuals who executed any such documents on
behalf of any party, (vi) the accuracy and completeness of all records made
available to us, (vii) the factual accuracy of all representations, warranties
and other statements made by all parties and (viii) that the Company has been
and will be operated in accordance with applicable laws and in accordance with
the terms and conditions of the organizational documents of the Company and all
agreements to which it is a party. We have also assumed, without investigation,
that all documents, certificates, representations, warranties and covenants upon
which we have relied in rendering the opinions set forth below and that were
given or dated earlier than the date of this letter continue to remain accurate,
insofar as relevant to the opinions set forth herein, from such earlier date
through and including the date of this letter.
The discussion and conclusions set forth below are based upon the Code, the
Income Tax Regulations and procedural and administration rules, regulations and
pronouncements promulgated thereunder and existing administrative and judicial
interpretations thereof, all of which are subject to change (possibly with
retroactive effect). No assurance can therefore be given that the federal
income tax consequences described below will not be altered in the future.
Based upon and subject to the foregoing discussion and the discussion of
the federal income tax considerations that relate to the tax treatment of the
Company and its shareholders as set forth under the caption "Federal Income Tax
Consequences" in the Prospectus, as of the date hereof we are of the opinion
that the Company's form of organization, its diversity of equity ownership and
its manner of operations have been in conformity with the requirements for
qualification and taxation as a REIT for its taxable year ended December 31,
1985 and all years thereafter through its taxable year ended December 31, 1999.
Furthermore, we are of the opinion that the Company's proposed diversity of
equity ownership and manner of operation should enable the Company to continue
to satisfy the requirements to qualify to be treated as a REIT for the calendar
year 2000.
We express no opinion with respect to the transactions described herein, or
in the Registration Statement or the Prospectus other than those expressly set
forth herein. You should recognize that our opinions are not binding on the
Internal Revenue Service (the "IRS") and that the IRS may disagree with the
opinions contained herein. Although we believe that our opinions will be
sustained if challenged, there can be no assurance that this will be the case.
Except as specifically discussed above, the opinions expressed herein are based
upon the law as it currently exists. Consequently, future changes in the law
may cause the federal income tax treatment of the transactions described herein
to be materially and adversely different from that described above.
This opinion is intended solely for the purposes set forth in the
Registration Statement; it may not be relied upon for any other purpose or by
any other person or entity, and may not be made available to any other person or
entity without our prior written consent.
We hereby consent to the filing of this opinion letter as an exhibit to the
Prospectus and to the reference to this firm under the caption "Federal Income
Tax Consequences" in the Prospectus. In giving the consent, we do not thereby
admit that we are an "expert" within the meaning of the Securities Act of 1933,
as amended.
LOCKE LIDDELL & SAPP LLP
By: /s/ Don A. Hammett, Jr.
-------------------------
Don A. Hammett, Jr.
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Weingarten Realty Investors on Form S-3 of our report dated February 22, 2000,
appearing in the Annual Report on Form 10-K of Weingarten Realty Investors for
the year ended December 31, 1999, and to the reference to us under the heading
"Experts" in the Prospectus, which is part of this Registration Statement.
DELOITTE & TOUCHE LLP
Houston, Texas
April ___, 2000
