Logo of jester cap with thought bubble.

Image source: The Motley Fool.

Weingarten Realty Investors (NYSE:WRI)
Q2 2020 Earnings Call
Jul 30, 2020, 11:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good morning and welcome to the Weingarten Realty Inc. Second Quarter 2020 Earnings Call. My name is Brandon and I'll be your operator for today. [Operator Instructions] Please note this conference is being recorded.

And I will now turn it over to Michelle Wiggs. Michelle, you may begin.

Michelle Wiggs -- Vice President, Investor Relations

Good morning and welcome to our second quarter 2020 conference call. Joining me today is Drew Alexander, Johnny Hendrix, Steve Richter, Joe Shafer. As a reminder, certain statements made during the course of this call are forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results could differ materially from those projected in such forward-looking statements due to a variety of factors. More information about these factors is contained in the Company's SEC filings.

Also during this conference call management may make reference to certain non-GAAP financial measures, such as funds from operations or FFO, both core and NAREIT, which we believe help analysts and investors to better understand Weingarten's operating results. Reconciliation to these non-GAAP financial measures is available in our supplemental information package located under the Investor Relations tab of our website.

I will now turn the call over to Drew Alexander.

Andrew M. Alexander -- Chairman, President and Chief Executive Officer

Thank you, Michelle, and thanks to all of you for joining us. I want to stress our first priority is the safety and well-being of our associates, tenants, stakeholders and the broader community during these challenging times. Let me also remind you of the forward-looking disclosure Michelle just mentioned.

Considering the severity of the pandemic, I think WRI performed well this quarter. While we're pleased, relatively speaking with our cash collections and rent deferrals to date, the significant increase in COVID-19 cases in the last several weeks is obviously a cause for concern. Johnny will get into our ongoing efforts with our tenants. But I can assure you, the Company is engaged in extensive tenant communications as we do what we can to assist them in this difficult time.

Our collections were good for the quarter and July is continuing the upward trend. While we will have challenges as we move forward, the multi-year transformation of our portfolio has certainly made the road ahead easier. Our transformation resulted in a much higher percentage of grocery-anchored centers, a much improved tenant base and most importantly a much stronger balance sheet with little near-term debt maturities. And our 2020 dispositions have further strengthened our liquidity position, while further derisking the portfolio. While the timing of the recovery is uncertain, we are confident that we have more than adequate liquidity to weather the storm.

Consistent with our message in the first quarter, we announced a dividend of $0.18 per share for the second quarter. Given our dispositions of $131 million to date, it's likely that we will also pay a special dividend near year-end. Later in the year, we will know more about 2020 dispositions and the performance of the portfolio. We will carefully monitor our cash flow and liquidity and further adjust the dividend as appropriate.

All three of our new development projects are progressing nicely. There is minimal additional investment at Centro and West Alex and D.C. and leasing is continuing to progress. Construction is ongoing at The Driscoll and Houston with leasing recently under way. These are good projects and while there may be some short-term issues, longer term these are great properties.

Steve?

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

Thanks, Drew. Core FFO for the quarter ended June 30th, 2020 was $0.34 per share compared to $0.53 per share for the same quarter of the prior year. The decrease is primarily due to the impact of the pandemic, which resulted in a charge to income in the quarter of $19.3 million or $0.15 per share related to the collectability of revenue, which includes $4.8 million or $0.04 per share for non-cash straight-line rent receivables. As a reminder, we also recorded reserves for uncollectible revenue in the first quarter of $9.4 million, which included non-cash straight-line rent receivable of $7.6 million. A reconciliation of net income to core FFO is included in our press release.

Let me add a little color on our bad debt expense we realized for the quarter. From a business perspective, we look at operations on a pro-rata basis. At quarter-end on a pro rata basis, we recorded a reserve for bad debt of $14.7 million, which excludes reserves for straight-line rent and unbilled accruals. Our cash collections at quarter-end, again on a pro-rata basis, were 73%. So with the remaining 27% of uncollected rents, we reserved 46%, a little less than half of that rent, which includes deferrals. Subsequent to quarter-end, we collected an additional $4.4 million of cash, improving our pro rata cash collections for the second quarter to 77%. We have provided some additional details of our collections that can be found on Page 41 of the supplemental.

With respect to our balance sheet, during the second quarter we paid all amounts outstanding under our credit facility. Based on our current projections, we will have more than adequate liquidity even after the payment of dividends to comfortably sustain operations. I want to remind everyone that we have no material maturities till October of 2022. Currently we have $498 million of current capacity under the revolver and about $24 million of excess cash.

Johnny?

Johnny Hendrix -- Executive Vice President, Chief Operating Office

Thanks, Steve. First I'd like to take this opportunity to thank all our associates who produced the best results possible given very difficult circumstances. We have a highly motivated team along with a strong, diversified, transformed portfolio. 80% of our annual base rent comes from shopping centers with the supermarket component. Pre-pandemic those supermarkets averaged very strong sales of $712 per square foot.

Not only have our supermarkets been thriving during the pandemic, they are poised for the future. Over 75% of all our supermarkets have some sort of online component offering curbside pickup and/or delivery services and we worked with them to improve these logistics during the pandemic. We feel strongly that our team and our portfolio are positioned to withstand current headwinds and drive into the future.

For the second quarter, we collected 77% of the rent billed. This includes triple net charges billed monthly and base minimum rent. We've accounted for over 90% of the rent owed during the second quarter with either rent collected or some other agreement like deferrals. 13% of the second quarter rent was deferred.

In broad general terms one could think of two types of deferrals, strategic or lifeline. Strategic deferrals are generally with major tenants, mostly in our top 25, where we've been able to support their cash flow while negotiating beneficial amendments that will help Weingarten in the future. This could be suspending co-tenancy, loosening exclusives or restrictions or allowing future redevelopment. Lifeline deferrals are mostly with smaller tenants who just need help. About a third of our deferrals in this quarter are strategic deferrals. We feel strongly these will be repaid. It's challenging to estimate how much of the lifeline deferrals will ultimately be repaid.

Today, about 95% of our tenants are open. As a result, July collections have shown improvement. To date, we've collected cash for 82% of the July rent bill. We obviously are concerned about the bankruptcies over the last several months. We do not have a lot of exposure to any single tenant, but the collective weight of the bankruptcies is impactful. 24 Hour Fitness terminated three leases. We have three remaining. We had six Stage Stores, four in ventures and two, 100% owned. Initially they have closed one store and plan to liquidate the company over the next several months.

We have nine Tuesday Morning stores. None of those have been rejected today. We have three Sweet Tomatoes, all were rejected. We had 23 GNC stores, three have been terminated today. We also had 10 leases with the SINA [Phonetic]. Two leases are on the rejection list filed last week. Finally, we have one Sur La Table [Phonetic] which we think will be affirmed and one New York & Company store, which will be terminated. These bankruptcies represent $3.4 million in annual base minimum rent being terminated.

Going forward, we are particularly concerned about large health clubs, theaters and high-end restaurants. Fortunately, our exposure to these tenants is pretty small. Combined these three categories are only about 3% of our ABR. The Company currently has contractual commitments for leases signed and not commenced for $9.1 million that we expect to commence over the next four quarters. Some of these commencements have already been delayed. But together with our tenants, we continue to move forward plans and construction spaces.

During the quarter, we executed 27 new leases for $1.8 million in base minimum rent. While this is less than previous periods, we see some demand returning. Currently, we have 62 new leases being negotiated in our legal department. This is slightly higher than our 12-month trailing average, which is very encouraging.

We're working with discount clothing stores, hardware stores, banks, dollar stores like Five Below and Dollar Tree, restaurants, mainly QSRs, and medical tenants. The Company is already ramping up leasing production capabilities, adding leasing, construction and legal personnel so we will be prepared when we get to the other side of this pandemic. Weingarten has always excelled at leasing and we will again as we release our very strong properties.

Drew?

Andrew M. Alexander -- Chairman, President and Chief Executive Officer

Thanks, Johnny. For years Weingarten Realty has been known as a great operator of real estate. While our current situation is challenging, I'm confident that we will once again rise to the occasion. A heartfelt thanks goes out to all our associates who are working so very hard right now and a genuine thanks to our Board of Trust Managers who have provided constant quality feedback throughout these difficult times. Great people, great properties and a great platform equals great results. I thank all of you for joining the call today and for your continued interest in Weingarten.

Operator, we would now be happy to take questions.

Questions and Answers:

Operator

Thanks, Drew. [Operator Instructions] And from Citigroup we have Christy McElroy. Please go ahead.

Christy McElroy -- Citigroup -- Analyst

Hi. Good morning. Thanks. Just in thinking about the collections and what you have under deferral agreement, that leaves about 10% unresolved. And if you reserved about 30% against the deferrals and it sounds like the majority of that is the lifeline tenants, the balance implies that you've reserved close to 75% of the unresolved bucket. Just as we move into August and September collections, are you expecting that those under deferral agreement will pay rent in those months? And how much of that unresolved bucket could ultimately fall out and turn into vacancy?

Andrew M. Alexander -- Chairman, President and Chief Executive Officer

Hey, Christy. It's Drew. I'll start out here and I think Steve and perhaps even Johnny will attempt to opine. It's so challenging to say. We've got a good tenant profile. We -- a lot of the tenants are paying on their deferrals. 95% of our tenant base is open. Many tenants report good sales, all things considered, the exceptions Johnny cited in some of the upscale restaurants and then those tenants who are closed. So we're optimistic about it.

So, Steve, if you want to chime in that would be great.

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

The only thing I could add to that, Christy, is that as we go through the amount of deferrals that we're now executing is going down. So you have a little bit of mixture in there. And as Drew mentioned, it's just too tough to understand exactly how this thing will roll out, especially with, what I call, the second surge and so forth going forward. So I think that you can draw some. You can get some feeling from history, but I think going forward it's still a challenge.

Christy McElroy -- Citigroup -- Analyst

So I guess just to get a better sense for the moving parts and thinking about the upward trend of collections in sort of throughout Q2 but also into July, is there anything changing in the calculation that we should be aware of? So just trying to get a sense for how much of the rise in collections has been driven by tenants paying that weren't before versus any change in the denominator that's been impacted by occupancy loss or rent abatement.

Andrew M. Alexander -- Chairman, President and Chief Executive Officer

We really haven't factored in the denominator change yet. That's something we've talked about and as Johnny alluded to, as the bankruptcies progress we will. So it is definitely mostly tenants paying rent, which is certainly tied to almost all of them are open.

So I don't Steve if there is anything to add on that.

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

I think it gets a little granular. But I think the thing that one has to think about is the deferrals you are reserving for rent earlier and Q2 then and some of those tenants have opened back up and that's where you see the collections going forward in July improving. So I think how much of that we collect going forward of those deferrals is a question and we reserved a good chunk of that. So I think it's a little bit of a moving target, but also realizing that as those tenants open back up they are able to pay rent going forward.

Andrew M. Alexander -- Chairman, President and Chief Executive Officer

Hey, Christy. One other thing. It's Drew again. It might help and I'll ask Johnny to jump in on this. But this might help you also understand the vast majority I think, Johnny, of the tenants that we haven't resolved things with are the tenants in the categories that you talked about where there is just no visibility to things, theaters, health clubs, upscale restaurants.

Johnny Hendrix -- Executive Vice President, Chief Operating Office

Right. There are a few of the tenants that we are working through, we may have a handshake agreement, we don't have a legal agreement yet. Some of that 10% are those tenants. Others are tenants where there is just no visibility as to how eventually this thing will turn out. And we are really just waiting to resolve that. There are some tenants, the smaller tenants that in their own mind having come to grips with how this thing ends, what it looks like on the other side and have just not been willing to agree to anything.

Christy McElroy -- Citigroup -- Analyst

All right. Thanks for the time, guys. Appreciate it.

Andrew M. Alexander -- Chairman, President and Chief Executive Officer

Thank you.

Operator

From Scotiabank we have Greg McGinniss. Please go ahead.

Greg McGinniss -- Scotiabank -- Analyst

Hey. Good morning. I just wanted to dig into the cash based discounting a little bit. So I'm curious how many tenants or what percent of rent has been shifted to cash accounting since the beginning of the year. What's that level of contractual rent from cash basis tenants? And then what percent of rent from the cash basis tenants was paid in Q2 and in July so far?

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

Good morning, Greg. This is Steve. At June 30th, at quarter-end, 15% of our Q2 billings were categorized as cash basis under the new accounting rules. We had collected as of quarter-end, about 31% of that and that's grown since quarter-end to about 43%. So that gives you some feeling kind of back to Christy's question as we go forward things have gotten a little better. And then the only other thing I would add to that is, of that group, we have reserved about 86% of the amount that were unpaid at quarter-end. That gives you a perspective of reserving of the cash-basis tenants at this point.

Greg McGinniss -- Scotiabank -- Analyst

So just to clarify, you are reserving rent on previously accrued rent from the cash basis tenants, I guess.

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

And I have pulled all the receivables. It's basically whatever they have sitting as a receivable. That's correct.

Greg McGinniss -- Scotiabank -- Analyst

Okay. And then I guess maybe for Johnny real quick here. So rent spreads still seem decently healthy this quarter. So I'm just curious how much of that was due to leases already in discussion ahead of the pandemic. And then based on the new leases that are currently sitting with the legal department, kind of what are your expectations for rent spreads into the back half of the year?

Johnny Hendrix -- Executive Vice President, Chief Operating Office

Good morning, Greg. I wouldn't read a whole lot through the rent spreads that we reported this quarter. A significant number of those were renewals that were actually completed prior to the pandemic and are commencing this quarter. Some of those are new leases that were agreed to prior. I think going forward, very difficult to understand what will happen to rent growth. I think it will be more negative than it was this quarter.

For the leases that we have in process today, there is not a lot of growth, there is not -- it's not low either. So I don't see that we really have much visibility even with the new leases that we're working on right now. And a lot of it ultimately will depend which ones end up getting signed.

Traditionally we've got somewhere around a 95% hit ratio. We complete about 95% of the leases that go into my legal department. I think today we're probably more in the 75% to 80% range. So, who knows, which ones of those leases actually get signed and completed.

Greg McGinniss -- Scotiabank -- Analyst

I appreciate the color. Thank you very much.

Johnny Hendrix -- Executive Vice President, Chief Operating Office

Thank you.

Operator

From Bank of America we have Craig Schmidt. Please go ahead.

Craig Schmidt -- Bank of America / Merrill Lynch -- Analyst

Yes. Thank you. I'm just wondering in terms of the states that have shown a spike up, Texas, California, Arizona and Florida, is there a potential that your 95% tenants open may decrease given newer mandates in those states or are you thinking you're going to stay with that 95% open?

Andrew M. Alexander -- Chairman, President and Chief Executive Officer

Hey, Craig. Good morning. It's Drew. I'll give you my thoughts and then Johnny can give you his. But -- anything is possible. We have seen fortunately here in Texas cases moderate and that's true in a lot of places. My personal feeling, reading a lot being a little involved in medical stuff, is I think that there won't be significant shutdowns.

There are, obviously, issues around bars and gathering and sports and other things, because when you just look across the world there is a big economic impact to it. So it's certainly possible. We are 63% essential services, which we think is a good thing. Limited exposure to the things that are really at risk. Don't think it will happen, but it's certainly possible. And we encourage people to stay safe and pleased to see the numbers getting better.

Anything to add, Johnny?

Johnny Hendrix -- Executive Vice President, Chief Operating Office

Hey, Craig. Good morning. Most -- if really California is the guide, most of the focus on kind of closing back down is on the bars, restaurants, gyms. For the most part, our exposure there is fairly limited. And so long as that remains the case, I think 95% is probably a number. Does it go to 90%? Maybe. But I think we'll probably be in pretty good shape unless it becomes more severe.

Craig Schmidt -- Bank of America / Merrill Lynch -- Analyst

Great. And then just out of curiosity, the sporting goods rent collection was relatively lower than the other essential uses. Was there anything that explain that lower percent for sporting goods?

Andrew M. Alexander -- Chairman, President and Chief Executive Officer

I think that was a strategic deferral, Johnny.

Johnny Hendrix -- Executive Vice President, Chief Operating Office

Yes.

Craig Schmidt -- Bank of America / Merrill Lynch -- Analyst

Okay. So there is one -- perhaps one or more tenants that you've made a strategic decision on?

Andrew M. Alexander -- Chairman, President and Chief Executive Officer

Right. And as Johnny said, a lot of that is around trade that it's creditworthy. So it doesn't hurt us. And we make improvements to the lease. So these are things that we really look to win-win to help strong merchants with inventory and improve our position for co-tenancies, exclusives redevelopments, etc.

Craig Schmidt -- Bank of America / Merrill Lynch -- Analyst

Okay. Thank you.

Operator

From Green Street we have Vince Tibone. Please go ahead.

Vince Tibone -- Green Street Advisors -- Analyst

Hi. Good morning. For the transactions that closed in the second or third quarter -- second and third quarter, I'm curious are these deals that were negotiated pre-COVID and you got across the finish line or are these new properties that you put on the market since March? And also if you could just share some color on current trends on secured debt availability and the private transactions market.

Andrew M. Alexander -- Chairman, President and Chief Executive Officer

Good morning, Vince. It's Drew. So, I'll certainly take the first part and give you a little bit on the debt and then Steve can give you more accuracy on the debt and my high-level comments. So good morning, Steve. [Phonetic]

So the things especially that we closed earlier this month were done post the crisis that what we did in the quarter was a little bit of a blend. We have been very selective about what we're selling, looking at non-supermarkets to sell and I think I can say to you also looking at lower TAP scores as part of it.

Very pleased to exit Utah, which is something that we've been working on for a long time. And I like Utah as a place to ski and visit etc, but happy to be focused in other places and not doing business there. So, as mentioned, we are looking at continuing to hone the map to derisk where we can to focus on the better markets stronger tenants. So there are issues around financing. It seems to be mostly timing issues that everything takes longer. A lot of it's just the logistics around travel with inspections, surveys, etc. We do find people able to get financing generally. So things are functioning OK. Certainly much better than the GFC.

So, Steve, any other more detailed observations?

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

Yeah. Good morning, Vince. The comments I would make is the San Beam S [Phonetic] market is -- I have not heard of any retail deals recently being priced into that market. We're not that close to it. We don't finance. But obviously some of the sellers -- excuse me, some of the buyers that we're selling to do. But I'm not aware of anything there.

The Lica [Phonetic] market is I think still open. They are very focused on grocery-anchored centers that you can get your arms around the NOI of the center with a lot of strong tenancy there that you can get deals done. I think most of the transactions that I've heard about or seen are really more bank relationship type financing that is just short term bridging type stuff. So I think money is out there. I think it would be fair to say retail is not the most favorite class today. Having said that, I don't think the market is totally shut down.

Vince Tibone -- Green Street Advisors -- Analyst

That's helpful color. Maybe one follow-up on that. Just curious on the sales in the third quarter. In your mind was there a big decline in value on these marks compared to what you could have sold these things at, let's say, six months ago?

Andrew M. Alexander -- Chairman, President and Chief Executive Officer

No, Vince. In fact one of the things we're very pleased with, we review this with our Board, is we look at sales price relative to our internal estimates of NAV. And so far we've been very successful at selling properties that makes strategic sense to sell often in the bottom of the portfolio at equal to or, in many cases, better than our pre-COVID NAV.

So do appreciate it causes some short-term pain, the dilution. But given the discount the stock is to current estimates of NAV and the significant discount to the stock would be at pre-COVID NAV to sell strategically improving properties at pre-COVID NAV or better is a very desirable thing for us long term. I can't warrant that that condition will continue or continue to look at each sale, but so far so good.

Vince Tibone -- Green Street Advisors -- Analyst

Great. Thanks for the time.

Andrew M. Alexander -- Chairman, President and Chief Executive Officer

Thank you.

Operator

From the Compass Point we have Floris van Dijkum. Please go ahead.

Floris van Dijkum -- Compass Point LLC -- Analyst

Great. Thank you for taking my question. Steve, maybe if you could -- are you cash rent accounting for all of your restaurant exposure?

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

No, not -- good morning. Not all of it. No. We specifically identified some restaurants that are obviously on the list, but not every restaurant is on there. We came up with categorizations and so forth, but no not all the restaurants are on.

Andrew M. Alexander -- Chairman, President and Chief Executive Officer

Floris, it's Drew. I mean a lot of our restaurants are ground leases, a lot of them are big chains, like Darden and others. So, as Steve said, we went through, looked at every specific situation.

Floris van Dijkum -- Compass Point LLC -- Analyst

Yeah, I was pleasantly surprised by the cash rent collection number there. It looked pretty good. Maybe if I can ask another question. Can you maybe talk about the yield expectations on your development? Have they changed or do you expect yields to come down a bit and maybe also talk about your views on cap rates? I know you just said you sold your assets this past quarter at prices akin to what you thought you would have gotten before COVID. Have cap rates stayed pretty steady for your assets in your view?

Andrew M. Alexander -- Chairman, President and Chief Executive Officer

Good morning, Floris. This is Drew. So cap rates, we think it stayed fairly steady for most of the portfolio and Johnny can chime in if [Phonetic] he wants. We haven't really tried selling too much of the really good stuff, but from what we hear those cap rates are likely down and what we see in the acquisition market would support that really good qualities down just because interest rates are so low.

There does seem to be possibly some widening and significant widening if there is appreciable risk. A watch list tenant that is at the top of market or over market whose lease is up in the next 18 months, that's something that I would think there is a widening of the cap rate. That's something that we probably wouldn't sell because strategically for us it's about derisking. It's not about what I call locking in a worst-case scenario. So we would probably try to work through that and just not go into the teeth of that kind of problem because we don't -- we don't -- we are only interested in selling if we can improve things strategically and derisk.

On the developments, it's hard to say. Yeah, there could be some slippage, but I don't think it will be significant. Things are taking longer. We have made a lot of progress in the two D.C. projects. In fact at West Alex we've increased our leasing by a few units since we reported up almost to 27%, it's continuing to make good progress at Centro, up over 91% leased there. Harris Teeter is in for permits at West Alex. It's on the schedule for them to open in November '21. There's been a lot of internal talk that they might open early, perhaps say 13 months from now, which would certainly help the project. So it might move in a little bit as everything has taken longer with the permits and everything. But generally speaking, good.

At The Driscoll here in Houston, we have started leasing. We've leased 15 units, obviously between COVID and oil, there are some concerns. But so far the quality locations in and around The Driscoll have held up real well on the market rents. The project was always envisioned to more of an empty-nester who was selling their home and want a lock-and-leave lifestyle. So it's not as affected as some other things. Great locations and with the apartment rents we can reprice. So we're pleased with things. Might move a little bit, but very good long-term locations and we'll be enjoying them for a while.

Any other cap rate thoughts, Johnny?

Johnny Hendrix -- Executive Vice President, Chief Operating Office

Drew, just really maybe repeating what you said, when one can -- when an investor can see and understand the NOI, they are -- they are seemingly willing to pay a cap rate that is at least pre-COVID, maybe even lower. It really -- when you look at the cap rate at a project where the NOI is not easily determined, that's where I think we're going to see some real rise in cap rates over time.

Floris van Dijkum -- Compass Point LLC -- Analyst

Great. Thanks, guys.

Andrew M. Alexander -- Chairman, President and Chief Executive Officer

Thank you.

Operator

From JP Morgan we have Mike Mueller. Please go ahead.

Michael Mueller -- JP Morgan -- Analyst

Yeah. Hi. Couple of questions. First of all for the uncollectible reserve, I mean how do you see that trending in Q3 just given the cash collections have been picking up recently? Any material changes?

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

Good morning, Mike. That's a tough question going forward. It depends on so many things. The reserve is obviously evaluated at quarter-end each quarter and we go through that valuation at that time given that set of circumstances. So I think when we get to September, we'll have obviously a better feel. But that's a tough one to really predict at this point.

Michael Mueller -- JP Morgan -- Analyst

Got it. Okay. And then can you talk about what you're seeing on the ground in terms of sales levels at -- for the local tenants that have reopened regardless they're not paying rent, but just how consumers have been -- traffic been there, people have been spending money or not?

Johnny Hendrix -- Executive Vice President, Chief Operating Office

Hey. Good morning, Mike. It's a mixed bag. There are some retailers who have been creative and are creating tremendous sales with the opportunities that they have available. There are some that are trying to basically do business the same way they've had historically and aren't doing as well.

Overall, I would tell you that sales are generally lower, particularly as it related to the service businesses, the hair salons, the dry cleaners. And there is some concern on my part that over time that would be a more permanent situation. But again it's really mixed. A lot of the restaurants seem to be doing well, some of them not so much. But most of our tenants we're out there working with them in trying to encourage them to keep on pushing.

Michael Mueller -- JP Morgan -- Analyst

Got it. Okay. That was it. Thank you.

Operator

From Jefferies we have Linda Tsai. Please go ahead.

Linda Tsai -- Jefferies -- Analyst

Hi. Were some credit deposits procured for rent collections in 2Q or in July?

Johnny Hendrix -- Executive Vice President, Chief Operating Office

Hi, Linda. This is Johnny. No is the very short answer to that. We -- I think one lease that was a couple of thousand dollars, we took a tenant security deposit as part of a renewal agreement. But, no, we have not taken security deposits and applied them.

Linda Tsai -- Jefferies -- Analyst

Got it. And then in terms of the lifeline tenants maybe they are fairly obvious, it sounds like there was some smaller businesses there. Could you just give us more color on the composition?

Johnny Hendrix -- Executive Vice President, Chief Operating Office

I'm sorry, what kind of tenants?

Andrew M. Alexander -- Chairman, President and Chief Executive Officer

The lifeline.

Johnny Hendrix -- Executive Vice President, Chief Operating Office

Oh, yeah, yeah.

Linda Tsai -- Jefferies -- Analyst

Oh, the lifeline tenants.

Johnny Hendrix -- Executive Vice President, Chief Operating Office

Yeah, yeah, I would say that that's more of the services, nail salons, dry cleaners, folks that just didn't have the resources. One of the things that we tried to emphasize is the first thing we need to do as a company is be compassionate toward these smaller tenants who through no fault of their own have had problems. We've tried to get together with them and work out solutions that work for us, for them and for our shareholders. And in a lot of cases that has just been a deferment of rent and hopefully things will get better for them later on.

Linda Tsai -- Jefferies -- Analyst

And then in your earlier remarks, you said there is no guarantee that these rents can be collected. But how do you go about stratifying collectability internally?

Johnny Hendrix -- Executive Vice President, Chief Operating Office

It's hard. We're just trying to look at every single tenant, trying to understand what their financial condition is, what type of business they have, where they're at and try to make the best estimates we possibly can.

Linda Tsai -- Jefferies -- Analyst

Do you have any sense of how much of them have received loans?

Johnny Hendrix -- Executive Vice President, Chief Operating Office

I don't think we have any hard data on what percent of our retailers have received loans. We were working with them early on to -- for them to file etc. and assisted them with information. But I don't think we have data on exactly who received loans.

Linda Tsai -- Jefferies -- Analyst

Thanks.

Johnny Hendrix -- Executive Vice President, Chief Operating Office

Thank you.

Operator

From SunTrust we have Ki Bin Kim. Please go ahead.

Ki Bin Kim -- SunTrust Robinson Humphrey -- Analyst

Thank you. Good morning. So for the 10% of tenants that are unresolved, how would you think about that bucket because I'm guessing that probably evolved over time, meaning there are quite some opportunistic tenants that didn't agree to deferral, but just didn't pay. And today, maybe that's changed to just tenants that really are in trouble. So how do you think about that bucket?

Johnny Hendrix -- Executive Vice President, Chief Operating Office

Hi, Ki Bin, Johnny. It's just such a mixed bag. There are so many stories involved in each and every one where we had something in legal. We think we're close to an agreement trying to work out that last location out of a portfolio. Generally, I would tell you they're difficult situations. If you look at the entire 10% of tenants, people have not agreed with us because they don't want to. There are a little bit confused about what they're doing. Some of these tenants may be almost in bankruptcy.

I would generally say that that 10% of tenants is in some amount of trouble and the collectability of those things would be difficult.

Ki Bin Kim -- SunTrust Robinson Humphrey -- Analyst

Okay. And from the deferral segment, the two-third that you consider lifeline tenants, just approximately how much -- how many of those tenants were money good and doing fine pre-COVID versus the segment that might have been already living on the ledge?

Johnny Hendrix -- Executive Vice President, Chief Operating Office

I'd say almost all of them were money good pre-COVID.

Ki Bin Kim -- SunTrust Robinson Humphrey -- Analyst

Okay. Well that's a positive data point.

Johnny Hendrix -- Executive Vice President, Chief Operating Office

Yeah.

Ki Bin Kim -- SunTrust Robinson Humphrey -- Analyst

And just last question --

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

Hey, Ki Bin, let me point out to you, one of the things that we are working through here is these tenants were good tenants and again through no fault of their own, they are in some amount of trouble. And it may be that we have to do some things differently. We have to do some abatements later on or do some longer term deferrals to get them to the other side. And I think it's to our benefit to help these smaller tenants get to the other side because they are better than other tenants that we don't know about yet.

And by the time -- it takes us a year to release, get the space reopen, pay some more money. So we are not saying that we won't end up doing some things that we haven't really done yet and we are going to try to get the tenants who were good tenants prior to the time that this came about to the other side.

Ki Bin Kim -- SunTrust Robinson Humphrey -- Analyst

Yeah, that's an important point. And just last question. I know it's early, but how do you see private operators behaving in this kind of COVID era because I could see you guys being responsible and you have good quality assets and trying to maintain the integrity, but if everyone around you isn't that makes an impact.

Andrew M. Alexander -- Chairman, President and Chief Executive Officer

So Ki Bin, Drew. You're talking about private owners or tenants?

Ki Bin Kim -- SunTrust Robinson Humphrey -- Analyst

Other competing shopping centers.

Andrew M. Alexander -- Chairman, President and Chief Executive Officer

I'll give you my thoughts and [Indecipherable] anything else to add he can. I think most private folks have operated pretty much like us because it's pretty much the right thing to do from a lot of perspectives. As Johnny said if a tenant was in good standing before the crisis, it's probably in the landlord's best interest to keep them and work with them versus dealing with the downtime and the change.

So just talking to my friends directly and also hearing from our leasing people, I think it's pretty consistent as to how the folks are behaving. It all comes down to the quality of the real estate and the tenant make-up. And that's where I have friends who have great quality real estate and friends not so much good quality real estate. I think generally speaking, the public REITs have way better than average of the 30,000 shopping centers. So the Weingarten portfolio, I think, is good within the REITs. But all the REITs together are better than the average center. So I don't see too much differences and the differences I do see would be more around the quality of the real estate. Anything to add Johnny?

Ki Bin Kim -- SunTrust Robinson Humphrey -- Analyst

But again --

Andrew M. Alexander -- Chairman, President and Chief Executive Officer

Go ahead.

Ki Bin Kim -- SunTrust Robinson Humphrey -- Analyst

So I was more referring to not -- given deferrals or work on the tenants, I was more referring to kind of live leasing. All right. If other shopping center owners are starting to undercut rents or give much bigger TI packages things that you would probably expect to see and if that creates undue pressure on your own operations going forward.

Andrew M. Alexander -- Chairman, President and Chief Executive Officer

I haven't seen it yet. And we will respond and lease to market in a lot of cases the private folks have partners, loans and we can oftentimes be more nimble. The nice thing about retail is it is not a commodity. Rent for a retailer is pretty low cost vis-a-vis their sale. So you might be competing for one of the secondary uses just looking at just cheap rent. But in most of our centers, people will pay a fair rent for some place, they'll do the sale. [Phonetic]

Johnny Hendrix -- Executive Vice President, Chief Operating Office

Yeah, I think that you look to be -- you will start to see some bouncing around of tenants from C centers to B to A. And I think that's where the opportunity for us will be is to take some tenants who want to upgrade their environment.

Ki Bin Kim -- SunTrust Robinson Humphrey -- Analyst

Okay. Thank you.

Operator

[Operator Instructions] And from Capital One we have Chris Lucas. Please go ahead.

Christopher Lucas -- Capital One -- Analyst

Yeah. Hey, Johnny you sort of started to answer the question I was going to ask. I guess I was thinking about in the past, particularly like the great financial crisis and even going back to the mid '80s with the oil depression, you guys have been known to react very quickly to market conditions and really move on getting deadbeat tenants out fast and sort of looking to replacement. But it sounds like the environment is a bit different today than those other two crisis. And so is there a point in time we should be thinking about a change in mindset as it relates to how you're working with tenants today, but will need to move on to other tenants at some point?

Johnny Hendrix -- Executive Vice President, Chief Operating Office

Chris, I don't know that I can define that today. Like you said, we've got a team that's worked together a long time through a lot of these issues. I think me, Drew and Steve probably average somewhere over 30 years. The regional leaders on our team are with the Company for over 17 years and we have a lot of confidence in each other and we're able to delegate responsibility and communicate very effectively with each other.

I think the great thing that we have is this regional series of footprints where we have individual leaders making decisions that are in the best interest of the shopping center and the retailers. And it's really going to be them who make that decision do we change path today or is it a month from now. But at some point we'll have to see where we are with individual tenants, with their occupancy and those sorts of things. And I think it will be -- I think hopefully we could be -- somewhere in the next six months, we'd be in a position to be able to understand that better.

Christopher Lucas -- Capital One -- Analyst

Okay. And then, Steve, a couple of specific questions. Just as it relates to the G&A, it sounds like you're adding some headcount. Is there some shifting pieces so that the G&A run rate on a cash basis is going to be flat or should we expect some increase in G&A as you guys staff up?

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

Yeah. Good morning, Chris. The G&A, I think the run rate that you see about $8.5 million a quarter is a good number going forward as a run rate. There was some movement. Obviously we didn't have T&E, people weren't traveling in Q2, ICSC [Phonetic] cost etc.

And as you noted, we have -- we are leasing -- or adding some leasing staff, legal staff, collections, etc. So all that there is a little bit of mixing going on, but I think the $8.5 million is a good run rate going forward.

Christopher Lucas -- Capital One -- Analyst

Okay. And then my last question. Just as it relates to the $4.4 million of cash rent that was received in July. How much of that was from tenants that are on a cash accounting basis?

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

I don't have that at my fingertips, Chris. We'll get back to you with that after the call.

Christopher Lucas -- Capital One -- Analyst

Okay, great. Thank you. That's all I have.

Andrew M. Alexander -- Chairman, President and Chief Executive Officer

Thank you, Chris.

Operator

Thank you. And we will now turn it back to Drew for closing comments.

Andrew M. Alexander -- Chairman, President and Chief Executive Officer

Thank you, Brandon. Appreciate it. So I wish everybody the best. Thank you very much for your interest in Weingarten. We're certainly available if there are more questions. As mentioned, I think all things considered, we had a good quarter and I appreciate your interest in Weingarten and wish everybody stay safe and good luck to all. Thanks again.

Operator

[Operator Closing Remarks]

Duration: 48 minutes

Call participants:

Michelle Wiggs -- Vice President, Investor Relations

Andrew M. Alexander -- Chairman, President and Chief Executive Officer

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

Johnny Hendrix -- Executive Vice President, Chief Operating Office

Christy McElroy -- Citigroup -- Analyst

Greg McGinniss -- Scotiabank -- Analyst

Craig Schmidt -- Bank of America / Merrill Lynch -- Analyst

Vince Tibone -- Green Street Advisors -- Analyst

Floris van Dijkum -- Compass Point LLC -- Analyst

Michael Mueller -- JP Morgan -- Analyst

Linda Tsai -- Jefferies -- Analyst

Ki Bin Kim -- SunTrust Robinson Humphrey -- Analyst

Christopher Lucas -- Capital One -- Analyst

More WRI analysis

All earnings call transcripts

AlphaStreet Logo