Nov. 14 (Bloomberg) -- Weingarten Realty Investors, the manager of shopping centers in 23 U.S. states, agreed to sell a controlling stake in 12 malls to Hines Real Estate Investment Trust Inc. as retail sales falter in a slumping economy.

Closely held Hines will buy a 70 percent stake in the properties for $190 million, Hines Chief Executive Officer Charles Hazen said in an interview. Weingarten said in a statement that the total transaction is valued at $271 million. The centers are anchored by supermarkets and located in five states. Both companies are based in Houston.

``The bottom line is that these grocery-anchored centers are about as low-risk as you can get,'' said Hazen, who expects a ``challenging'' recession of up to 24 months. ``They are in-fill locations in well-established neighborhoods. This is necessity retail, not luxury retail.''

U.S. retail sales dropped the most on record last month, the fourth straight decline, as increasing job losses and falling stocks and home values sapped household finances. Retailers have now recorded the longest string of monthly declines since the Commerce Department's comparable data series began in 1992.

The Weingarten malls have a total of 1.5 million square feet of space and are set in neighborhoods including Buckhead in Atlanta and Bellaire in Houston. The supermarkets have average sales of more than $450 a square foot and the shopping centers are more than 96 percent leased, the company said.

``We believe this transaction will provide stable and growing returns to the joint venture while also meeting our objective of recycling capital and building our assets under management,'' Weingarten Chief Executive Officer Drew Alexander said in the statement.

Weingarten provided $134 million in preferred equity for the initial closing. A $100 million loan from an unspecified life insurance company, expected to close before the end of the year, will be used to reduce that position, according to the statement. Weingarten will be responsible for the management and leasing of the properties and receive fees under the agreement, the statement said.

Retailers in the centers include grocers Kroger Co., Randall's, H-E-B, Publix, B.J.'s Wholesale Club Inc. and Harris Teeter Inc. as well as Marshall's and Barnes & Noble Inc.

To contact the reporters on this story: Daniel Taub in Los Angeles at dtaub@bloomberg.net; Dan Levy in San Francisco at dlevy13@bloomberg.net

Last Updated: November 14, 2008 17:02 EST