EX-99.2 3 exhibit992supplementaloper.htm EXHIBIT 99.2 Exhibit 99.2 Supplemental Operating Data, dated November 4, 2013







CORPORATE PROFILE
 
 
 
 
 
 
 
 
 
NYSE: WSR
 
Whitestone REIT (NYSE: WSR) is a fully integrated real estate investment trust that owns,
Common Shares
 
operates and redevelops Community Centered Properties TM, which are visibly located properties in
 
 
established or developing, culturally diverse neighborhoods. As of September 30, 2013, we owned
 
 
55 Community Centered Properties TM with approximately 4.6 million square feet of gross leasable
55 Community Centers
 
area, located in five of the top markets in the United States in terms of population growth: Houston,
4.6 Million Sq. Ft. of gross
 
Dallas, San Antonio, Phoenix and Chicago. Headquartered in Houston, Texas, we were founded
leasable area
 
in 1998.
1,168 Tenants
 
 
 
 
We focus on value creation in our properties, as we market, lease and manage our properties. We
5 Top Growth Markets
 
invest in properties that are or can become Community Centered Properties TM from which our
Houston
 
tenants deliver needed services to the surrounding community. We focus on niche properties with
Dallas
 
smaller rental spaces that present opportunities for attractive returns.
San Antonio
 
 
Phoenix
 
Our strategic efforts target entrepreneurial, service-oriented tenants at each property who provide
Chicago
 
services to their respective surrounding communities. Operations include an internal management
 
 
structure providing cost-effective services to locally-oriented, smaller space tenants. Multi-cultural
Fiscal Year End
 
community focus sets us apart from traditional commercial real estate operators. We value diversity
12/31
 
on our team and maintain in-house leasing, property management, marketing, construction and
 
 
maintenance departments with culturally diverse and multi-lingual associates who understand the
Common Shares &
 
particular needs of our tenants and neighborhoods.
Units Outstanding*:
 
 
Common Shares: 21.9 Million
 
We have a diverse tenant base concentrated on service offerings such as medical, educational, casual
Operating Partnership Units:
 
dining and convenience services. These tenants tend to occupy smaller spaces (less than 3,000 square
     0.6 Million
 
feet) and, as of September 30, 2013, provided a 53% premium rental rate compared to our larger
 
 
space tenants. The largest of our 1,168 tenants comprised less than 1.6% of our annualized base
 
 
rental revenues for the three months ended September 30, 2013.
 
 
 
 
 
 
 
 
 
Distribution (per share / unit):
 
Investor Relations:
 
 
 
 
 
 
Quarter: $ 0.2850
 
Whitestone REIT
 
 
 
 
 
 
Annualized: $ 1.1400
 
Suzy Taylor, Director of Investor Relations
Dividend Yield: 8.2%**
 
2600 South Gessner Suite 500, Houston, Texas 77063
 
 
 
 
713.435.2219 email: ir@whitestonereit.com
 
website: www.whitestonereit.com
Board of Trustees:
 
 
 
 
 
 
James C. Mastandrea
 
ICR Inc. - Brad Cohen 203.682.8211
 
 
Daryl J. Carter
 
Analyst Coverage:
 
 
 
 
 
 
Daniel G. DeVos
 
BMO Capital Markets Corp.
 
J.J.B. Hilliard, W.L. Lyons, LLC
 
JMP Securities
 
Robert W. Baird & Co.
Donald F. Keating
 
Paul Adornato, CFA
 
Carol L. Kemple
 
Mitch Germain
 
Jonathon Pong
Paul T. Lambert
 
212.885.4170
 
502.588.1839
 
212.906.3546
 
203.425.2740
Jack L. Mahaffey
 
Paul.Adornato@bmo.com
 
ckemple@hilliard.com
 
mgermain@jmpsecurities.com
 
jpong@rwbaird.com
 
 
 
 
 
 
 
 
 
* As of November 1, 2013
 
Wunderlich Securities, Inc.
 
 
 
 
 
 
** Based on common share price
 
Merril Ross
 
 
 
 
 
 
of $13.91 as of close of market on
 
703.669.9255
 
 
 
 
 
 
November 1, 2013
 
mross@wundernet.com
 
 
 
 
 
 

1

PRESS RELEASE
Contact Whitestone REIT:
Suzy Taylor, Director of Investor Relations
(713) 435-2219 STaylor@WhitestoneREIT.com
 

 
WHITESTONE REIT ANNOUNCES OPERATING RESULTS FOR THIRD QUARTER 2013
- Funds From Operations Core Increased 26%, to $0.29 per share -
- Revenue Grew 40% over Prior Year Quarter, to $16.3 Million -
- 35% Improvement in Quarterly Property Net Operating Income, to $9.5 Million -
- Leased 260,371 square feet Primarily to Tenants That Required Less Than 3,000 square feet -
- Refinanced $27 Million in Mortgage Debt for a Blended 4.4% Rate -

Houston, Texas, November 4, 2013 - Whitestone REIT (NYSE: WSR - “Whitestone” or the “Company”), a fully integrated real estate company that owns, re-develops, leases, manages, and operates Community Centered PropertiesTM, announced its financial results for the third quarter of 2013.

Highlights: Third Quarter 2013 Compared to Third Quarter of 2012  

•
Funds From Operations (“FFO”) increased 15%, to $4.1 million or $0.23 per share.
•
FFO Core increased 52%, or approximately $1.8 million, to $5.1 million.
•
FFO Core per diluted common share and unit of limited partnership interest in the Company's operating partnership ("OP unit") grew 26%, to $0.29 per share, as compared to $0.23 per share. FFO Core excludes non-cash share-based compensation expense of $834,000 and acquisition expenses of $130,000, and includes rent support agreement payments received from sellers on acquired assets of $91,000.
•
Property NOI increased 35%, or $2.5 million, to $9.5 million.
•
Net income attributable to Whitestone REIT more than doubled, to $614,000.

"Whitestone’s third quarter results represent strong year-over-year increases in revenue, NOI and FFO. This progress validates the success of our operating model - accretive acquisitions, lease-up of vacancies, rental rate growth, capital structure optimization and future ground up property development," said James C. Mastandrea, Chairman and Chief Executive Officer.

Mastandrea continued, "On an operational basis, during the quarter we commenced initiatives to reposition, redevelop and expand four of our existing Community Centers. These initiatives, in the short run, may cause some volatility in quarterly occupancy rates as we vacate certain spaces, refurbish them, and then re-lease them at higher rents. Our third quarter leasing results saw increases in both new and renewal leasing volumes, providing us with additional confidence that our target tenants are returning to the market to lease space."

Mastandrea concluded, "We expect continued improvement in our tenant mix and increased occupancies as highly sought-after services and dining options replace providers of hard-goods which are increasingly purchased on line."

Third Quarter 2013 Leasing Highlights

The Company's total occupancy was 85.0% as of the end of the third quarter of 2013, up 40 basis points from third quarter of 2012 and down 60 basis points from the second quarter of 2013, reflecting some property repositioning.

The occupancy of Whitestone's Operating Portfolio was 85.9% as of September 30, 2013, compared to 86.9% in the third quarter of 2012. The Company defines Operating Portfolio Occupancy Rate as physical occupancy in all properties, excluding new acquisitions through the earlier of attainment of 90% occupancy or 18 months of ownership, and properties that are undergoing significant redevelopment or re-tenanting.


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During the third quarter, the leasing team signed 98 leases totaling 260,371 square feet in new, expansion, and renewal leases. The average lease size was 2,657 square feet, consistent with Whitestone’s business model focused on small, service based tenants. For the third quarter of 2013, total lease value added was $13.0 million, up 69% from $7.7 million from the third quarter of 2012. For the nine months ended September 30, 3013, total lease value added was $33.4 million, up 40% when compared to the same period for 2012.

Subsequent to the end of the third quarter of 2013, Whitestone reached an agreement with an existing tenant that occupies an aggregate of 54,000 square feet in Whitestone’s Phoenix and Houston markets. The agreement will result in the tenant returning to market rental rates and enable Whitestone to add two high-quality tenants, who will occupy approximately 65,000 square feet in its centers. The two new tenants expect to take occupancy by year end. The impact of this agreement is expected to result in incremental annual revenue of approximately $850,000 and $1.1 million in 2014 and 2015, respectively. Approximately $75,000 from this agreement is expected to be realized in the fourth quarter of 2013.

Community Centered PropertiesTM Portfolio Statistics

As of September 30, 2013, Whitestone owned 55 Community Centered PropertiesTM with approximately 4.6 million square feet of gross leasable area, including four development land parcels, located in five of the top markets in the United States in terms of population growth: Houston, Dallas, San Antonio, Phoenix and Chicago.  

The Company's strategic efforts target entrepreneurial tenants that provide services to the surrounding neighborhood at each Community Centered PropertyTM. These tenants tend to occupy smaller spaces (less than 3,000 square feet) and, as of September 30, 2013, provided a 53% premium rental rate compared to Whitestone's larger space tenants. As of September 30, 2013, the Company serviced approximately 1,200 tenants throughout its portfolio.  No single tenant accounted for more than 1.6% of the Company's annualized base rental revenues as of September 30, 2013.  

Balance Sheet 

Undepreciated real estate assets as of September 30, 2013 of $483.4 million increased 24%, or $94.1 million, as compared to September 30, 2012.

Whitestone had 33 properties unencumbered by mortgage debt as of September 30, 2013, with an undepreciated cost basis of $284.8 million. The total undepreciated value of the Company's real estate assets was $483.4 million and $389.3 million as of September 30, 2013 and 2012, respectively. As of September 30, 2013, $140.3 million, or approximately 53%, of the Company's debt was subject to fixed interest rates. The Company's weighted average interest rate on all debt as of the end of the third quarter of 2013 was 3.5% per annum compared to the weighted average of 4.7% for the same period last year. Real estate debt as a percentage of total market capitalization was 49% as of September 30, 2013 as compared to 41% as of September 30, 2012.

On September 26, 2013, the Company operating through a subsidiary, Whitestone Uptown Tower, LLC, entered into a $16.5 million mortgage loan with a fixed interest rate of 4.97% and a maturity of September 26, 2023. Proceeds from the loan were used to repay a portion of the Company's unsecured revolving credit facility.

On September 24, 2013, the Company, operating through a subsidiary, Whitestone Terravita Marketplace, LLC, entered into a $10.5 million mortgage loan, with an applicable interest rate of LIBOR plus 2.00%, and a maturity of September 24, 2018. On October 30, 2013, we entered into an interest rate swap which fixed the rate at 3.5475% for the term of the loan. Proceeds from the loan were used to repay a portion of the Company's unsecured revolving credit facility. The loan is a non-recourse loan secured by Whitestone's Terravita Marketplace property, located in Scottsdale, Arizona.

For the third quarter ended September 30, 2013, under the Company's on-going at-the-market equity distribution program, the Company sold 282,239 common shares, generating net proceeds of approximately $4.2 million.



3

Subsequent Events

In October 2013, the Company received total net proceeds of approximately $60 million, through the sale of 4.6 million common shares, at a price to the public of $13.54 per share, including the fully exercised underwriters’ over-allotment option to purchase an additional 600,000 common shares. The Operating Partnership intends to use the net proceeds from this offering for general corporate purposes, which may include acquisitions of additional properties, the repayment of outstanding indebtedness, capital expenditures (including tenant improvements), the expansion, redevelopment and/or re-tenanting of properties in the portfolio, working capital and other general purposes.

On October 7, 2013, the Company acquired Fountain Hills Plaza, a Community Centered Property, for approximately $20.6 million in cash and net prorations. The 111,289 square foot property was 87% leased at the time of purchase and is located in Fountain Hills, Arizona, a suburb of Phoenix.

On October 17, 2013, the Company acquired a 2.5 acre parcel for $2.8 million in cash and net prorations. The parcel has frontage on I-45 in Spring, Texas, a suburb north of Houston, and is contiguous to our Corporate Park Woodland property, which is currently 100% leased.

Dividend

The Company declared a quarterly cash distribution of $0.285 per common share and OP unit for the fourth quarter of 2013, paid or to be paid in three equal installments of $0.095 in October, November, and December 2013. The dividend amount per share has remained the same since the distribution paid on July 8, 2010.

Supplemental Financial Information

Further details regarding Whitestone REIT's results of operations, communities and tenants can be accessed at the Company's website at www.whitestonereit.com.

Webcast and Conference Call

Whitestone will host a webcast and conference call for investors and other interested parties on Tuesday, November 5, 2013 at 12:00 P.M. (Eastern Time). The call will be hosted by James Mastandrea, Chairman and Chief Executive Officer, and David Holeman, Chief Financial Officer.

Listen via Webcast

Interested parties can listen to the call live on the internet through the Investor Relations section of the Company's website, www.whitestonereit.com, using the News & Market Data - Press Releases tab. The call is also accessible via telephone by dialing 1-(888) 740-6142 for domestic participants or 1-(913) 312-1503 for international participants.

Listeners should go to the website at least 15 minutes prior to the call to download and install any necessary audio software. Those dialing in should call in at least five to ten minutes prior to the start.

The conference call will be recorded and a telephone replay will be available through November 19, 2013, by dialing 1-(877) 870-5176 for domestic participants or 1-(858) 384-5517 for international participants and entering the pass code 3667196. Additionally, a replay of the call will be available on the Company's website until its next earnings release.

The earnings release and supplemental data package will be located in the Investor Relations section of the website on the News & Market Data - Press Releases tab. For those without internet access, the third quarter earnings release and supplemental data package will be available by mail upon request. To receive a copy, please call the Company's Investor Relations line at (713) 435-2219.


4


About Whitestone REIT

Whitestone REIT(NYSE:WSR) is a fully integrated real estate investment trust that owns, operates and redevelops Community Centered PropertiesTM. Whitestone focuses on value creation in its community centers, concentrating on local service-oriented, smaller space tenants (less than 3,000 square feet). Whitestone has a diversified tenant base concentrated on service offerings including medical, education, casual dining, and convenience services. The largest of its approximately 1,200 tenants comprised less than 1.6% of its annualized base rental revenues as of September 30, 2013. Founded in 1998, the Company is internally managed with a portfolio of 55 commercial properties in Texas, Arizona, and Illinois. For additional information about the Company, please visit www.whitestonereit.com . The Investor Relations section of the Company's website contains filings made with the Securities and Exchange Commission, news releases, financial reports and investor newsletters.

Forward-Looking Statements

Certain statements contained in this press release constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We intend for all such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act, as applicable. Such information is subject to certain risks and uncertainties, as well as known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of our performance in future periods. Such forward-looking statements can generally be identified by our use of forward-looking terminology, such as "may," "will," "plan," "expect," "intend," "anticipate," "believe," "continue" or similar words or phrases that are predictions of future events or trends and which do not relate solely to historical matters. Examples of such statements in this press release include, but are not limited to, the strength of the Company's leasing portfolio and lease renewal activities.

The following are some of the factors that could cause the Company's actual results and its expectations to differ materially from those described in the Company's forward-looking statements: the Company's ability to successfully identify and consummate suitable acquisitions; current adverse market and economic conditions; lease terminations or lease defaults; the impact of competition on the Company's efforts to renew existing leases; changes in the economies and other conditions of the specific markets in which the Company operates; economic and regulatory changes; the success of the Company's real estate strategies and investment objectives; the Company's ability to continue to qualify as a REIT under the Internal Revenue Code; and other factors detailed in the Company's most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other documents the Company files with the Securities and Exchange Commission.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company cannot guarantee the accuracy of any such forward-looking statements contained in this press release, and the Company does not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Non-GAAP Financial Measures

This release contains the supplemental financial measures that are not calculated pursuant to U.S. generally accepted accounting principles ("GAAP") including FFO, FFO Core, and NOI. Following are explanations and reconciliations of these metrics to their most comparable GAAP metric.

FFO: Management believes that FFO is a useful measure of the Company's operating performance. The Company computes FFO as defined by the National Association of Real Estate Investment Trusts, or ("NAREIT"), which states that FFO should represent net income available to common shareholders (computed in accordance with GAAP) excluding gains or losses from sales of operating assets, impairment charges and extraordinary items, plus depreciation and amortization of operating properties, including the Company's share of unconsolidated real estate joint ventures

5

and partnerships. FFO does not represent cash flows from operating activities determined in accordance with GAAP and should not be considered an alternative to net income as an indication of the Company's performance or to cash flow from operations as a measure of liquidity or ability to make distributions and service debt.

Management considers FFO a useful additional measure of performance for an equity REIT because it facilitates an understanding of the operating performance of its properties without giving effect to real estate depreciation and amortization, which assumes that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, management believes that FFO provides a more meaningful and accurate indication of the Company's performance and useful information for the investment community to compare Whitestone to other REITs since FFO is generally recognized as the industry standard for reporting the operations of REITs.

Other REITs may use different methodologies for calculating FFO, and accordingly, the Company's FFO may not be comparable to other REITs. The Company presents FFO per diluted share calculations that are based on the outstanding dilutive common shares plus the outstanding OP units for the periods presented.

FFO Core: Management believes that the computation of FFO in accordance with NAREIT's definition includes certain non-cash and non-comparable items that effect the Company's period-over-period performance. These items include, but are not limited to, legal settlements, non-cash share-based compensation expense, rent support agreement payments received from sellers on acquired assets and acquisition costs. In addition, the Company believes that FFO Core is a useful supplemental measure for the investing community to use in comparing the Company to other REITs as many REITs provide some form of adjusted or modified FFO. However, other REITs may use different adjustments, and the Company's FFO Core may not be comparable to the adjusted or modified FFO of other REITs.  

NOI: Management believes that NOI is a useful measure of the Company's property operating performance. The Company defines NOI as operating revenues (rental and other revenues) less property and related expenses (property operation and maintenance and real estate taxes). Because NOI excludes general and administrative expenses, depreciation and amortization, involuntary conversion, interest expense, interest income, provision for income taxes, gain or loss on sale or disposition of assets and capital expenditures and leasing costs, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate properties and the impact to operations from trends in occupancy rates, rental rates and operating costs, providing perspective not immediately apparent from net income. The Company uses NOI to evaluate its operating performance since NOI allows the Company to evaluate the impact of factors, such as occupancy levels, lease structure, lease rates and tenant base, have on the Company's results, margins and returns. In addition, management believes that NOI provides useful information to the investment community about the Company's property and operating performance when compared to other REITs since NOI is generally recognized as a standard measure of property performance in the real estate industry. However, NOI should not be viewed as a measure of the Company's overall financial performance since it does not reflect general and administrative expenses, depreciation and amortization, involuntary conversion, interest expense, interest income, provision for income taxes, gain or loss on sale or disposition of assets, and the level of capital expenditures and leasing costs necessary to maintain the operating performance of the Company's properties. Other REITs may use different methodologies for calculating NOI, and accordingly, the Company's NOI may not be comparable to that of other REITs.


6


Whitestone REIT and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)

 
 
September 30, 2013
 
December 31, 2012
 
 
(unaudited)
 
 
ASSETS
Real estate assets, at cost
 
 
 
 
Property
 
$
483,379

 
$
409,669

Accumulated depreciation
 
(62,737
)
 
(53,920
)
Total real estate assets
 
420,642

 
355,749

Cash and cash equivalents
 
9,506

 
6,544

Marketable securities
 
873

 
1,403

Escrows and acquisition deposits
 
6,129

 
6,672

Accrued rents and accounts receivable, net of allowance for doubtful accounts
 
9,169

 
7,947

Related party receivable
 
—

 
652

Unamortized lease commissions and loan costs
 
5,564

 
4,160

Prepaid expenses and other assets
 
2,749

 
2,244

Total assets
 
$
454,632

 
$
385,371

 
 
 
 
 
LIABILITIES AND EQUITY
Liabilities:
 
 
 
 
Notes payable
 
$
266,260

 
$
190,608

Accounts payable and accrued expenses
 
13,505

 
13,824

Tenants' security deposits
 
3,360

 
3,024

Dividends and distributions payable
 
5,109

 
5,028

Total liabilities
 
288,234

 
212,484

Commitments and contingencies:
 
—

 
—

Equity:
 
 
 
 
Preferred shares, $0.001 par value per share; 50,000,000 shares authorized; none issued and outstanding as of September 30, 2013 and December 31, 2012
 
—

 
—

Common shares, $0.001 par value per share; 400,000,000 shares authorized; 17,341,947 and 16,943,098 issued and outstanding as of September 30, 2013 and December 31, 2012, respectively
 
17

 
16

Additional paid-in capital
 
231,001

 
224,237

Accumulated deficit
 
(69,879
)
 
(57,830
)
Accumulated other comprehensive loss
 
(68
)
 
(392
)
Total Whitestone REIT shareholders' equity
 
161,071

 
166,031

Noncontrolling interest in subsidiary
 
5,327

 
6,856

Total equity
 
166,398

 
172,887

Total liabilities and equity
 
$
454,632

 
$
385,371









7

Whitestone REIT and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(unaudited)
(in thousands, except per share data)


 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2013
 
2012
 
2013
 
2012
Property revenues
 
 
 
 
 
 
 
 
Rental revenues
 
$
12,594

 
$
8,992

 
$
35,407

 
$
25,643

Other revenues
 
3,697

 
2,626

 
9,548

 
7,388

Total property revenues
 
16,291

 
11,618

 
44,955

 
33,031

 
 
 
 
 
 
 
 
 
Property expenses
 
 
 
 
 
 
 
 
Property operation and maintenance
 
4,145

 
2,969

 
10,558

 
8,080

Real estate taxes
 
2,673

 
1,629

 
6,483

 
4,442

Total property expenses
 
6,818

 
4,598

 
17,041

 
12,522

 
 
 
 
 
 
 
 
 
Other expenses (income)
 
 
 
 
 
 
 
 
General and administrative
 
2,722

 
1,888

 
7,682

 
5,392

Depreciation and amortization
 
3,450

 
2,683

 
9,783

 
7,256

Interest expense
 
2,602

 
2,244

 
7,664

 
6,324

Interest, dividend and other investment income
 
(26
)
 
(121
)
 
(114
)
 
(274
)
Total other expenses
 
8,748

 
6,694

 
25,015

 
18,698

 
 
 
 
 
 
 
 
 
Income before loss on sale or disposal of assets and income taxes
 
725

 
326

 
2,899

 
1,811

 
 
 
 
 
 
 
 
 
Provision for income taxes
 
(90
)
 
(77
)
 
(227
)
 
(212
)
Loss on sale or disposal of assets
 
—

 
(77
)
 
(48
)
 
(105
)
 
 
 
 
 
 
 
 
 
Net income
 
635

 
172

 
2,624

 
1,494

 
 
 
 
 
 
 
 
 
Less: Net income attributable to noncontrolling interests
 
21

 
9

 
91

 
99

 
 
 
 
 
 
 
 
 
Net income attributable to Whitestone REIT
 
$
614

 
$
163

 
$
2,533

 
$
1,395






8


Whitestone REIT and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(unaudited)
(in thousands, except per share data)



 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2013
 
2012
 
2013
 
2012
Basic Earnings Per Share:
 
 
 
 
 
 
 
 
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares
 
$
0.04

 
$
0.01

 
$
0.15

 
$
0.11

Diluted Earnings Per Share:
 
 
 
 
 
 
 
 
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares
 
$
0.03

 
$
0.01

 
$
0.15

 
$
0.11

 
 
 
 
 
 
 
 
 
Weighted average number of common shares outstanding:
 
 
 
 
 
 
 
 
Basic
 
17,036

 
13,842

 
16,916

 
12,409

Diluted
 
17,331

 
13,961

 
17,156

 
12,526

 
 
 
 
 
 
 
 
 
Distributions declared per common share / OP unit
 
$
0.2850

 
$
0.2850

 
$
0.8550

 
$
0.8550

 
 
 
 
 
 
 
 
 
Consolidated Statements of Comprehensive Income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
 
$
635

 
$
172

 
$
2,624

 
$
1,494

 
 
 
 
 
 
 
 
 
Other comprehensive gain (loss)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrealized gain (loss) on cash flow hedging activities
 
(331
)
 
(9
)
 
162

 
(9
)
Unrealized gain (loss) on available-for-sale marketable securities
 
(39
)
 
92

 
176

 
891

 
 
 
 
 
 
 
 
 
Comprehensive income
 
265

 
255

 
2,962

 
2,376

 
 
 
 
 
 
 
 
 
Less: Comprehensive income attributable to noncontrolling interests
 
8

 
14

 
103

 
158

 
 
 
 
 
 
 
 
 
Comprehensive income attributable to Whitestone REIT
 
$
257

 
$
241

 
$
2,859

 
$
2,218








9

Whitestone REIT and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)

 
 
Nine Months Ended September 30,
 
 
2013
 
2012
 
 
 
 
 
Cash flows from operating activities:
 
 
 
 
Net income
 
$
2,624

 
$
1,494

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
9,783

 
7,255

Amortization of deferred loan costs
 
823

 
1,064

Amortization of notes payable discount
 
387

 
86

Gain on sale of marketable securities
 
(41
)
 
(110
)
Loss on sale or disposal of assets
 
48

 
105

Bad debt expense
 
1,431

 
720

Share-based compensation
 
1,501

 
384

Changes in operating assets and liabilities:
 
 
 
 
Escrows and acquisition deposits
 
886

 
29

Accrued rent and accounts receivable
 
(2,653
)
 
(1,876
)
Related party receivable
 
652

 
—

Unamortized lease commissions
 
(993
)
 
(674
)
Prepaid expenses and other assets
 
336

 
630

Accounts payable and accrued expenses
 
(393
)
 
200

Tenants' security deposits
 
336

 
614

Net cash provided by operating activities
 
14,727

 
9,921

 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
Acquisitions of real estate
 
(58,403
)
 
(79,400
)
Additions to real estate
 
(3,925
)
 
(9,297
)
Investments in marketable securities
 
—

 
(750
)
Proceeds from sales of marketable securities
 
747

 
5,509

Net cash used in investing activities
 
(61,581
)
 
(83,938
)
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
Distributions paid to common shareholders
 
(14,504
)
 
(10,543
)
Distributions paid to OP unit holders
 
(528
)
 
(783
)
Proceeds from issuance of common shares, net of offering costs
 
4,184

 
58,679

Payments of exchange offer costs
 
(23
)
 
(249
)
Proceeds from notes payable
 
47,150

 
—

Proceeds from revolving credit facility, net
 
73,400

 
33,956

Repayments of notes payable
 
(57,936
)
 
(2,853
)
Payments of loan origination costs
 
(1,927
)
 
(1,546
)
Net cash provided by financing activities
 
49,816

 
76,661

 
 
 
 
 
Net increase in cash and cash equivalents
 
2,962

 
2,644

Cash and cash equivalents at beginning of period
 
6,544

 
5,695

Cash and cash equivalents at end of period
 
$
9,506

 
$
8,339


10

Whitestone REIT and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)

 
 
Nine Months Ended September 30,
 
 
2013
 
2012
Supplemental disclosure of cash flow information:
 
 
 
 
Cash paid for interest
 
$
6,950

 
$
5,250

Cash paid for taxes
 
$
237

 
$
225

Non cash investing and financing activities:
 
 
 
 
Disposal of fully depreciated real estate
 
$
194

 
$
523

Financed insurance premiums
 
$
883

 
$
856

Value of shares issued under dividend reinvestment plan
 
$
72

 
$
68

Debt assumed with acquisitions of real estate
 
$
11,100

 
$
9,166

Interest supplement assumed with acquisition of real estate
 
$
932

 
$
—

Acquired interest rate swap
 
$
—

 
$
1,901

Debt discount on acquired note payable
 
$
—

 
$
(1,329
)
Accrued offering costs
 
$
15

 
$
85

Value of common shares exchanged for OP units
 
$
1,132

 
$
6,224

Change in fair value of available-for-sale securities
 
$
176

 
$
891

Change in fair value of cash flow hedge
 
$
162

 
$
(9
)




11

Whitestone REIT and Subsidiaries
RECONCILIATION OF NON-GAAP MEASURES
(in thousands, except per share and per unit data)

 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2013
 
2012
 
2013
 
2012
FFO AND FFO CORE
 
 
 
 
 
 
 
 
Net income attributable to Whitestone REIT
 
$
614

 
$
163

 
$
2,533

 
$
1,395

Depreciation and amortization of real estate assets
 
3,427

 
2,657

 
9,716

 
7,160

Loss on disposal of assets
 
—

 
77

 
48

 
105

Net income attributable to noncontrolling interests
 
21

 
9

 
91

 
99

FFO
 
4,062

 
2,906

 
12,388

 
8,759

 
 
 
 
 
 
 
 
 
Non cash share-based compensation expense
 
834

 
118

 
1,501

 
384

Acquisition costs
 
130

 
338

 
612

 
532

Rent support agreement payments received
 
91

 
—

 
91

 
—

Legal settlement
 
—

 
—

 
—

 
(131
)
FFO Core
 
$
5,117

 
$
3,362

 
$
14,592

 
$
9,544

 
 
 
 
 
 
 
 
 
FFO PER SHARE AND OP UNIT CALCULATION:
 
 
 
 
 
 
 
 
Numerator:
 
 
 
 
 
 
 
 
FFO
 
$
4,062

 
$
2,906

 
$
12,388

 
$
8,759

Distributions paid on unvested restricted common shares
 
(10
)
 
(5
)
 
(32
)
 
(11
)
FFO excluding amounts attributable to unvested restricted common shares
 
$
4,052

 
$
2,901

 
$
12,356

 
$
8,748

FFO Core excluding amounts attributable to unvested restricted common shares
 
$
5,107

 
$
3,357

 
$
14,560

 
$
9,533

 
 
 
 
 
 
 
 
 
Denominator:
 
 
 
 
 
 
 
 
Weighted average number of total common shares - basic
 
17,036

 
13,842

 
16,916

 
12,409

Weighted average number of total noncontrolling OP units - basic
 
577

 
786

 
605

 
886

Weighted average number of total commons shares and noncontrolling OP units - basic
 
17,613

 
14,628

 
17,521

 
13,295

 
 
 
 
 
 
 
 
 
Effect of dilutive securities:
 
 
 
 
 
 
 
 
Unvested restricted shares
 
295

 
119

 
240

 
117

Weighted average number of total common shares and noncontrolling OP units - dilutive
 
17,908

 
14,747

 
17,761

 
13,412

 
 
 
 
 
 
 
 
 
FFO per common share and OP unit - basic
 
$
0.23

 
$
0.20

 
$
0.71

 
$
0.66

FFO per common share and OP unit - diluted
 
$
0.23

 
$
0.20

 
$
0.70

 
$
0.65

 
 
 
 
 
 
 
 
 
FFO Core per common share and OP unit - basic
 
$
0.29

 
$
0.23

 
$
0.83

 
$
0.72

FFO Core per common share and OP unit - diluted
 
$
0.29

 
$
0.23

 
$
0.82

 
$
0.71



12

Whitestone REIT and Subsidiaries
RECONCILIATION OF NON-GAAP MEASURES
(in thousands, except per share and per unit data)
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2013
 
2012
 
2013
 
2012
PROPERTY NET OPERATING INCOME
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to Whitestone REIT
 
$
614

 
$
163

 
$
2,533

 
$
1,395

General and administrative expenses
 
2,722

 
1,888

 
7,682

 
5,392

Depreciation and amortization
 
3,450

 
2,683

 
9,783

 
7,256

Interest expense
 
2,602

 
2,244

 
7,664

 
6,324

Interest, dividend and other investment income
 
(26
)
 
(121
)
 
(114
)
 
(274
)
Provision for income taxes
 
90

 
77

 
227

 
212

Loss on disposal of assets
 
—

 
77

 
48

 
105

Net income attributable to noncontrolling interests
 
21

 
9

 
91

 
99

NOI
 
$
9,473

 
$
7,020

 
$
27,914

 
$
20,509

 
 
 
 
 
 
 
 
 
EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTIZATION
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to Whitestone REIT
 
$
614

 
$
163

 
$
2,533

 
$
1,395

Depreciation and amortization
 
3,450

 
2,683

 
9,783

 
7,256

Interest expense
 
2,602

 
2,244

 
7,664

 
6,324

Provision for income taxes
 
90

 
77

 
227

 
212

Loss on disposal of assets
 
—

 
77

 
48

 
105

Net income attributable to noncontrolling interests
 
21

 
9

 
91

 
99

EBITDA (1)
 
$
6,777

 
$
5,253

 
$
20,346

 
$
15,391

 
 
Three Months Ended
 
 
September 30, 2013
 
June 30, 2013
 
March 31, 2013
 
December 31, 2012
Net income (loss) attributable to Whitestone REIT
 
$
614

 
$
970

 
$
949

 
$
(1,380
)
Depreciation and amortization
 
3,450

 
3,260

 
3,073

 
2,973

Executive relocation expense
 
—

 
—

 
—

 
2,177

Interest expense
 
2,602

 
2,613

 
2,449

 
2,408

Provision for income taxes
 
90

 
72

 
65

 
74

Loss on disposal of assets
 
—

 
40

 
8

 
7

Net income (loss) attributable to noncontrolling interests
 
21

 
33

 
37

 
(61
)
EBITDA (1)
 
$
6,777

 
$
6,988

 
$
6,581

 
$
6,198


(1) 
Earnings Before Interest, Tax, Depreciation and Amortization ("EBITDA"): Management believes that EBITDA is an appropriate supplemental measure of operating performance to net income attributable to the Company. The Company defines EBITDA as operating revenues (rental and other revenues) less property and related expenses (property operation and maintenance and real estate taxes) and general and administrative expenses, excluding executive relocation costs related to the disposition of the Chief Executive Officer's residence in Cleveland, Ohio pursuant to the executive relocation arrangement approved by the Company's Compensation Committee. Management believes that EBITDA provides useful information to the investment community about the Company's operating performance when compared to other REITs since EBITDA is generally recognized as a standard measure. However, EBITDA should not be viewed as a measure of the Company's overall financial performance since it does not reflect depreciation and amortization, involuntary conversion, interest expense, provision for income taxes, gain or loss on sale or disposition of assets, and the level of capital expenditures and leasing costs necessary to maintain the operating performance of the Company's properties. Other REITs may use different methodologies for calculating EBITDA and, accordingly, the Company's EBITDA may not be comparable to other REITs.

13

Whitestone REIT and Subsidiaries
OTHER FINANCIAL INFORMATION
(in thousands, except number of properties and employees)

 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2013
 
2012
 
2013
 
2012
 
 
 
 
 
 
 
 
 
Other Financial Information:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tenant improvements (1)
 
$
939

 
$
556

 
$
2,644

 
$
1,475

Leasing commissions (1)
 
$
544

 
$
211

 
$
1,100

 
$
596

Scheduled debt principal payments
 
$
480

 
$
750

 
$
2,006

 
$
2,167

Straight line rent income (loss)
 
$
504

 
$
218

 
$
971

 
$
265

Market rent amortization income (loss) from acquired leases
 
$
14

 
$
(18
)
 
$
63

 
$
(7
)
Non-cash share-based compensation expense
 
$
834

 
$
118

 
$
1,501

 
$
384

Non-real estate depreciation and amortization
 
$
23

 
$
27

 
$
67

 
$
96

Amortization of loan fees
 
$
269

 
$
429

 
$
823

 
$
1,063

Acquisition costs
 
$
130

 
$
338

 
$
612

 
$
532

Undepreciated value of unencumbered properties
 
$
284,796

 
$
187,375

 
$
284,796

 
$
187,375

Number of unencumbered properties
 
33

 
23

 
33

 
23

Full time employees
 
69

 
59

 
69

 
59


(1)
Does not include first generation costs for tenant improvements and leasing commission costs needed for new acquisitions or redevelopment of a property to bring the property to operating standards for its intended use.



14

Whitestone REIT and Subsidiaries
MARKET CAPITALIZATION AND SELECTED RATIOS
(in thousands, except per share amounts and percentages)
 
 
As of September 30, 2013
MARKET CAPITALIZATION:
 
Percent of Total Equity
 
Total Market Capitalization
 
Percent of Total Market Capitalization
Equity Capitalization:
 
 
 
 
 
 
Common shares outstanding
 
96.8
%
 
17,342

 
 
Operating partnership units outstanding
 
3.2
%
 
572

 
 
Total
 
100.0
%
 
17,914

 
 
 
 
 
 
 
 
 
Market price of common shares as of
 
 
 
 
 
 
September 30, 2013
 
 
 
$
14.73

 
 
 
 
 
 
 
 
 
Total equity capitalization
 
 
 
263,873

 
51
%
 
 
 
 
 
 
 
Debt Capitalization:
 
 
 
 
 
 
Outstanding debt
 
 
 
$
266,260

 
 
Less: Cash and cash equivalents
 
 
 
(9,506
)
 
 
 
 
 
 
256,754

 
49
%
 
 
 
 
 
 
 
Total Market Capitalization as of
 
 
 
 
 
 
September 30, 2013
 
 
 
$
520,627

 
100
%


SELECTED RATIOS:  (dollars in thousands)
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
September 30, 2013
 
June 30, 2013
 
March 31, 2013
 
December 31, 2012
INTEREST COVERAGE RATIO
 
 
 
 
 
 
 
 
EBITDA/Interest Expense
 
 
 
 
 
 
 
 
EBITDA
 
$
6,777

 
$
6,988

 
$
6,581

 
$
6,198

Interest expense, excluding amortization of loan fees
 
2,334

 
2,331

 
2,176

 
2,101

Ratio of interest expense to EBITDA
 
2.9

 
3.0

 
3.0

 
3.0

 
 
 
 
 
 
 
 
 
LEVERAGE RATIO
 
 
 
 
 
 
 
 
Debt/Undepreciated Book Value
 
 
 
 
 
 
 
 
Undepreciated real estate assets
 
$
483,379

 
$
481,939

 
$
436,331

 
$
409,669

 
 
 
 
 
 
 
 
 
Outstanding debt
 
$
266,260

 
$
266,401

 
$
216,935

 
$
190,608

Less: Cash
 
(9,506
)
 
(6,020
)
 
(2,843
)
 
(6,544
)
Outstanding debt after cash
 
$
256,754

 
$
260,381

 
$
214,092

 
$
184,064

Ratio of debt to real estate assets
 
53
%
 
54
%
 
49
%
 
45
%

15

 Whitestone REIT and Subsidiaries
SUMMARY OF OUTSTANDING DEBT AND DEBT MATURITIES

TOTAL OUTSTANDING DEBT
(in thousands)

Description
 
September 30, 2013
 
December 31, 2012
Fixed rate notes
 
 
 
 
$1.1 million 4.71% Note, due December 31, 2013
 
$
1,087

 
$
1,087

$20.2 million 4.2805% Note, due June 6, 2023 (1)
 
20,200

 
13,850

$3.0 million 6.00% Note, due March 31, 2021 (2)
 
2,914

 
2,943

$10.0 million 6.04% Note, due March 1, 2014
 
8,998

 
9,142

$1.5 million 6.50% Note, due March 1, 2014
 
1,423

 
1,444

$11.2 million 6.52% Note, due September 1, 2015
 
10,487

 
10,609

$21.4 million 6.53% Notes, due October 1, 2013 (3)
 
—

 
18,865

$24.5 million 6.56% Note, due October 1, 2013 (3)
 
—

 
23,135

$9.9 million 6.63% Notes, due March 1, 2014
 
8,690

 
8,925

$9.2 million, Prime Rate less 2.00%, due December 29, 2017 (4)
 
7,869

 
7,854

$11.1 million 5.87% Note, due August 6, 2016
 
11,972

 
—

$16.5 million 4.97% Note, due September 26, 2023
 
16,450

 
—

$0.9 million 2.97% Note, due November 28, 2013
 
163

 
15

Floating rate notes
 
 
 
 

Unsecured credit facility, LIBOR plus 1.75% to 2.50%, due February 3, 2017 (5)
 
142,400

 
69,000

$26.9 million, LIBOR plus 2.86% Note, due December 1, 2013
 
23,107

 
23,739

$10.5 million, LIBOR plus 2.00% Note, due September 24, 2018
 
$
10,500

 
$
—

 
 
$
266,260

 
$
190,608


(1) 
Promissory note had an original balance of $14.1 million and an interest rate of 5.695%, due in 2013, which was refinanced in May 2013.

(2) 
The 6.00% interest rate is fixed through March 30, 2016. On March 31, 2016, the interest rate will reset to the rate of interest for a five-year balloon note with a thirty-year amortization as published by the Federal Home Loan Bank.

(3) 
This promissory note was paid in full in August 2013.

(4) 
Promissory note includes an interest rate swap that fixed the interest rate at 5.72% for the duration of the term.

(4) 
We have entered into an interest rate swap that fixed the LIBOR portion of our $50 million term loan under our unsecured credit facility at 0.84%. The swap will begin on January 7, 2014 and will mature on February 3, 2017.


16

SCHEDULE OF DEBT MATURITIES AS OF SEPTEMBER 30, 2013
(in thousands)
 
Year
 
Scheduled Amortization Payments
 
Scheduled Maturities
 
Total Scheduled Maturities
 
Percentage of Debt Maturing
 
 
 
 
 
 
 
 
 
2013 (remainder of year)
 
$
478

 
$
24,123

 
$
24,601

 
9.2
%
2014
 
625

 
18,879

 
19,504

 
7.3
%
2015
 
880

 
10,146

 
11,026

 
4.1
%
2016
 
1,026

 
11,100

 
12,126

 
4.6
%
2017
 
947

 
150,238

 
151,185

 
56.8
%
2018 and thereafter
 
4,307

 
43,511

 
47,818

 
18.0
%
Total
 
$
8,263

 
$
257,997

 
$
266,260

 
100.0
%

17

Whitestone REIT and Subsidiaries
SUMMARY OF OCCUPANCY AND TOP TENANTS

 
 
Gross Leasable Area as of
 
Occupancy % as of
Community Centered Properties
 
September 30, 2013
 
September 30, 2013
 
June 30,
2013
 
March 31,
 2013
 
December 31,
 2012
Retail
 
2,291,617

 
87
%
 
89
%
 
87
%
 
88
%
Office/Flex
 
1,201,672

 
88
%
 
87
%
 
87
%
 
89
%
Office
 
633,534

 
77
%
 
79
%
 
77
%
 
78
%
Total - Operating Portfolio
 
4,126,823

 
86
%
 
87
%
 
86
%
 
87
%
Redevelopment, New Acquisitions (1)
 
470,718

 
77
%
 
74
%
 
72
%
 
70
%
Total
 
4,597,541

 
85
%
 
86
%
 
84
%
 
85
%
 
(1) 
Includes new acquisitions through the earlier of attainment of 90% occupancy or 18 months of ownership, and properties that are undergoing significant redevelopment or re-tenanting.

Tenant Name
 
Location
 
Annualized Base Rental Revenue (in thousands)
 
Percentage of Total Annualized Base Rental Revenues (1)
 
Initial Lease Date
 
Year Expiring
 
 
 
 
 
 
 
 
 
 
 
Safeway Stores, Incorporated (2)
 
Phoenix
 
$
770

 
1.6
%
 
07/12/2000 and 05/08/1991
 
2020 and 2021
University of Phoenix
 
San Antonio
 
500

 
1.0
%
 
10/18/2010
 
2018
Sports Authority
 
San Antonio
 
495

 
1.0
%
 
1/1/2004
 
2015
Walgreens Co. (3)
 
Phoenix
 
448

 
0.9
%
 
11/05/1996 and 11/02/1987
 
2049 and 2027
Super Bravo, Inc
 
Houston
 
349

 
0.7
%
 
6/15/2011
 
2023
Rock Solid Images
 
Houston
 
342

 
0.7
%
 
4/1/2004
 
2013
Sterling Jewelers Inc
 
Phoenix
 
326

 
0.7
%
 
11/23/2004
 
2020
KinderCare Learning Centers LLC (4)
 
Phoenix
 
322

 
0.7
%
 
05/07/2001 and 09/14/1999
 
2021 and 2035
Barnes & Noble Booksellers, Inc
 
Phoenix
 
314

 
0.6
%
 
4/5/2004
 
2014
X-Ray Press Corporation
 
Houston
 
291

 
0.6
%
 
7/1/1998
 
2019
Air Liquide America, L.P.
 
Dallas
 
275

 
0.6
%
 
8/1/2001
 
2013
Ross Stores, Inc. (5)
 
Houston, San Antonio and Phoenix
 
268

 
0.5
%
 
02/07/2013, 06/18/2012 and 11/01/2010
 
2023 and 2020
Marshall's
 
Houston
 
264

 
0.5
%
 
5/12/1983
 
2018
Merrill Corporation
 
Dallas
 
261

 
0.5
%
 
12/10/2001
 
2014
Mini Skool Early Learning Centers, Inc.
 
Phoenix
 
254

 
0.5
%
 
7/1/2009
 
2019
 
 
 
 
$
5,479

 
11.1
%
 
 
 
 

(1) 
Annualized Base Rental Revenues represents the monthly base rent as of September 30, 2013 for each applicable tenant multiplied by 12.


18

(2) 
As of September 30, 2013, we had two leases with the same tenant occupying space at properties located in Phoenix. The annualized rental revenue for the lease that commenced on July 12, 2000, and is scheduled to expire in 2020, was $425,000, which represents 0.9% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on May 8, 1991, and is scheduled to expire in 2021, was $344,000, which represents 0.7% of our total annualized base rental revenue.

(3) 
As of September 30, 2013, we had two leases with the same tenant occupying space at properties located in Phoenix. The annualized rental revenue for the lease that commenced on November 5, 1996, and is scheduled to expire in 2049, was $279,000, which represents 0.6% of out total annualized base rental revenue. The annualized rental revenue for the lease that commenced on November 2, 1987, and is scheduled to expire in 2027, was $169,000, which represents 0.3% of our total annualized base rental revenue.

(4) 
As of September 30, 2013, we had two leases with the same tenant occupying space at properties located in Phoenix. The annualized rental revenue for the lease that commenced on May 7, 2001, and is scheduled to expire in 2021, was $270,000, which represents 0.6% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on September 14, 1999, and is scheduled to expire in 2035, was $55,000, which represents 0.1% of our total annualized base rental revenue.

(5) 
As of September 30, 2013, we had three leases with the same tenant occupying space at properties located in Houston, San Antonio and Phoenix. The Houston lease commenced on February 7, 2013 and is scheduled to expire in 2023. The annualized rental revenue for this location was $158,000, which represents 0.3% of our total annualized base rental revenue. The San Antonio lease commenced on June 18, 2012 and is scheduled to expire in 2023. Due to a co-tenancy clause in the lease, the annualized rental revenue for this location was $0. The Phoenix lease commenced on November 1, 2010 and is scheduled to expire in 2020. The annualized rental revenue was $110,000, which represents 0.2% of our total annualized base rental revenue.

19

Whitestone REIT and Subsidiaries
SUMMARY OF LEASING ACTIVITY

 
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
 
2013
 
2012
 
2013
 
2012
RENEWALS
 
 
 
 
 
 
 
 
Number of Leases
 
34

 
24

 
116

 
114

Total Square Feet (1)
 
125,277

 
59,099

 
287,325

 
240,943

Average Square Feet
 
3,685

 
2,462

 
2,477

 
2,114

Total Lease Value
 
$
4,473,000

 
$
1,910,000

 
$
13,395,000

 
$
10,624,000

NEW LEASES
 
 
 
 
 
 
 
 
Number of Leases
 
64

 
39

 
140

 
131

Total Square Feet (1)
 
135,094

 
84,823

 
311,552

 
251,711

Average Square Feet
 
2,111

 
2,175

 
2,225

 
1,921

Total Lease Value
 
$
8,538,000

 
$
5,763,000

 
$
20,006,000

 
$
13,346,000

TOTAL LEASES
 
 
 
 
 
 
 
 
Number of Leases
 
98

 
63

 
256

 
245

Total Square Feet (1)
 
260,371

 
143,922

 
598,877

 
492,654

Average Square Feet
 
2,657

 
2,284

 
2,339

 
2,011

Total Lease Value
 
$
13,011,000

 
$
7,673,000

 
$
33,401,000

 
$
23,970,000


(1) 
Represents the square footage as the result of new, renewal, expansion and contraction leases.


20

Whitestone REIT and Subsidiaries
SUMMARY OF LEASING ACTIVITY

Type
 
Number of Leases Signed
 
Lease Value Signed
 
GLA Signed
 
Weighted Average Lease Term (2)
 
TI and Incentives (3)
 
TI and Incentives per Sq. Ft.
 
Contractual Rent Per Sq. Ft. (4)
 
Prior Contractual Rent Per Sq. Ft. (5)
 
Annual Increase (Decrease) in Contractual Rent
 
Cash Basis Increase (Decrease) Over Prior Rent
 
Annual Increase (Decrease) in Straight-lined Rent
 
Straight-lined Basis Increase (Decrease) Over Prior Rent
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Comparable: (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Comparable Total Leases:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3rd Quarter 2013
 
53

 
$
5,753,820

 
156,660

 
2.9

 
$
534,534

 
$
3.41

 
$
12.91

 
$
13.72

 
$
(127,771
)
 
(5.9
)%
 
$
(60,495
)
 
(2.9
)%
2nd Quarter 2013
 
28

 
3,059,381

 
48,620

 
3.2

 
117,774

 
2.42

 
14.44

 
14.89

 
(21,921
)
 
(3.0
)%
 
44,137

 
6.3
 %
1st Quarter 2013
 
44

 
2,177,934

 
64,759

 
2.5

 
79,790

 
1.23

 
12.95

 
13.12

 
(11,028
)
 
(1.3
)%
 
40,186

 
4.9
 %
4th Quarter 2012
 
45

 
3,137,053

 
125,999

 
3.2

 
398,310

 
3.16

 
11.36

 
11.62

 
(32,232
)
 
(2.2
)%
 
39,065

 
3.3
 %
Total - 12 months
 
170

 
$
14,128,188

 
396,038

 
3.0

 
$
1,130,408

 
$
2.85

 
$
12.61

 
$
13.10

 
$
(192,952
)
 
(3.7
)%
 
$
62,893

 
1.3
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Comparable New Leases:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3rd Quarter 2013
 
21

 
$
1,313,538

 
34,583

 
3.0

 
$
117,321

 
$
3.39

 
$
10.99

 
$
12.30

 
$
(45,062
)
 
(10.7
)%
 
$
(28,611
)
 
(7.0
)%
2nd Quarter 2013
 
9

 
524,647

 
15,182

 
2.2

 
64,652

 
4.26

 
9.08

 
10.22

 
(17,280
)
 
(11.2
)%
 
9,852

 
6.9
 %
1st Quarter 2013
 
8

 
456,268

 
12,577

 
2.8

 
20,581

 
1.64

 
11.41

 
11.48

 
(948
)
 
(0.6
)%
 
19,284

 
14.6
 %
4th Quarter 2012
 
11

 
735,111

 
19,142

 
3.2

 
117,495

 
6.14

 
11.45

 
13.15

 
(32,549
)
 
(12.9
)%
 
(15,744
)
 
(6.6
)%
Total - 12 months
 
49

 
$
3,029,564

 
81,484

 
2.9

 
$
320,049

 
$
3.93

 
$
10.81

 
$
11.98

 
$
(95,839
)
 
(9.8
)%
 
$
(15,219
)
 
(1.6
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


 
 
 
 
 
 
 
 
Comparable Renewal Leases:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3rd Quarter 2013
 
32

 
$
4,440,282

 
122,077

 
2.9

 
$
417,213

 
$
3.42

 
$
13.45

 
$
14.13

 
$
(82,709
)
 
(4.8
)%
 
$
(31,884
)
 
(1.9
)%
2nd Quarter 2013
 
19

 
2,534,734

 
33,438

 
3.7

 
53,122

 
1.59

 
16.88

 
17.02

 
(4,641
)
 
(0.8
)%
 
34,285

 
6.2
 %
1st Quarter 2013
 
36

 
1,721,666

 
52,182

 
2.4

 
59,209

 
1.13

 
13.32

 
13.51

 
(10,080
)
 
(1.4
)%
 
20,902

 
3.1
 %
4th Quarter 2012
 
34

 
2,401,942

 
106,857

 
3.2

 
280,815

 
2.63

 
11.34

 
11.34

 
317

 
—
 %
 
54,809

 
5.8
 %
Total - 12 months
 
121

 
$
11,098,624

 
314,554

 
3.0

 
$
810,359

 
$
2.58

 
$
13.08

 
$
13.39


$
(97,113
)
 
(2.3
)%
 
$
78,112

 
2.0
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

21

Whitestone REIT and Subsidiaries
SUMMARY OF LEASING ACTIVITY
(continued)
Type
 
Number of Leases Signed
 
Lease Value Signed
 
GLA Signed
 
Weighted Average Lease Term (2)
 
TI and Incentives (3)
 
TI and Incentives per Sq. Ft.
 
Contractual Rent Per Sq. Ft. (4)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-comparable:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-Comparable Total Leases:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3rd Quarter 2013
 
45

 
$
7,256,999

 
109,219

 
3.9

 
$
1,120,481

 
$
10.26

 
$
12.48

 
 
 
 
 
 
 
 
 
 
2nd Quarter 2013
 
59

 
10,250,630

 
220,446

 
4.2

 
1,131,700

 
5.13

 
10.42

 
 
 
 
 
 
 
 
 
 
1st Quarter 2013
 
27

 
4,902,083

 
87,641

 
4.9

 
637,970

 
7.28

 
11.21

 
 
 
 
 
 
 
 
 
 
4th Quarter 2012
 
33

 
8,116,860

 
116,384

 
4.9

 
1,351,377

 
11.61

 
13.70

 
 
 
 
 
 
 
 
 
 
Total - 12 months
 
164

 
$
30,526,572

 
533,690

 
4.5

 
$
4,241,528

 
$
7.95

 
$
11.69

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-Comparable New Leases:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3rd Quarter 2013
 
43

 
$
7,223,892

 
106,019

 
4.0

 
$
1,120,170

 
$
10.57

 
$
12.53

 
 
 
 
 
 
 
 
 
 
2nd Quarter 2013
 
41

 
7,412,645

 
137,293

 
4.4

 
803,627

 
5.85

 
11.22

 
 
 
 
 
 
 
 
 
 
1st Quarter 2013
 
18

 
3,074,881

 
57,506

 
5.3

 
370,645

 
6.45

 
9.90

 
 
 
 
 
 
 
 
 
 
4th Quarter 2012
 
30

 
7,206,883

 
103,297

 
4.9

 
1,217,136

 
11.78

 
13.67

 
 
 
 
 
 
 
 
 
 
Total - 12 months
 
132

 
$
24,918,301

 
404,115

 
4.6

 
$
3,511,578

 
$
8.69

 
$
12.00

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-Comparable Renewal Leases:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3rd Quarter 2013
 
2

 
$
33,107

 
3,200

 
0.9

 
$
311

 
$
0.10

 
$
10.50

 
 
 
 
 
 
 
 
 
 
2nd Quarter 2013
 
18

 
2,837,985

 
83,153

 
3.9

 
328,073

 
3.95

 
9.11

 
 
 
 
 
 
 
 
 
 
1st Quarter 2013
 
9

 
1,827,202

 
30,135

 
4.2

 
267,325

 
8.87

 
13.71

 
 
 
 
 
 
 
 
 
 
4th Quarter 2012
 
3

 
909,977

 
13,087

 
4.7

 
134,241

 
10.26

 
13.95

 
 
 
 
 
 
 
 
 
 
Total - 12 months
 
32

 
$
5,608,271

 
129,575

 
4.0

 
$
729,950

 
$
5.63

 
$
10.70

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

22

Whitestone REIT and Subsidiaries
SUMMARY OF LEASING ACTIVITY
(continued)
Type
 
Number of Leases Signed
 
Lease Value Signed
 
GLA Signed
 
Weighted Average Lease Term (2)
 
TI and Incentives (3)
 
TI and Incentives per Sq. Ft.
 
Contractual Rent Per Sq. Ft. (4)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New & Renewal
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3rd Quarter 2013
 
98

 
$
13,010,819

 
265,879

 
3.3

 
$
1,655,015

 
$
6.22

 
$
12.73

 
 
 
 
 
 
 
 
 
 
2nd Quarter 2013
 
87

 
13,310,011

 
269,066

 
4.1

 
1,249,474

 
4.64

 
11.15

 
 
 
 
 
 
 
 
 
 
1st Quarter 2013
 
71

 
7,080,017

 
152,400

 
3.9

 
717,760

 
4.71

 
11.95

 
 
 
 
 
 
 
 
 
 
4th Quarter 2012
 
78

 
11,253,913

 
242,383

 
4.0

 
1,749,687

 
7.22

 
12.48

 
 
 
 
 
 
 
 
 
 
Total - 12 months
 
334

 
$
44,654,760

 
929,728

 
3.8

 
$
5,371,936

 
$
5.78

 
$
12.08

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3rd Quarter 2013
 
64

 
$
8,537,430

 
140,602

 
3.7

 
$
1,237,491

 
$
8.80

 
$
12.16

 
 
 
 
 
 
 
 
 
 
2nd Quarter 2013
 
50

 
7,937,292

 
152,475

 
4.2

 
868,279

 
5.69

 
11.01

 
 
 
 
 
 
 
 
 
 
1st Quarter 2013
 
26

 
3,531,149

 
70,083

 
4.9

 
391,226

 
5.58

 
10.17

 
 
 
 
 
 
 
 
 
 
4th Quarter 2012
 
41

 
7,941,994

 
122,439

 
4.6

 
1,334,631

 
10.90

 
13.32

 
 
 
 
 
 
 
 
 
 
Total - 12 months
 
181

 
$
27,947,865

 
485,599

 
4.3

 
$
3,831,627

 
$
7.89

 
$
11.80

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Renewal
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3rd Quarter 2013
 
34

 
$
4,473,389

 
125,277

 
2.9

 
$
417,524

 
$
3.33

 
$
13.38

 
 
 
 
 
 
 
 
 
 
2nd Quarter 2013
 
37

 
5,372,719

 
116,591

 
3.9

 
381,195

 
3.27

 
11.34

 
 
 
 
 
 
 
 
 
 
1st Quarter 2013
 
45

 
3,548,868

 
82,317

 
3.0

 
326,534

 
3.97

 
13.46

 
 
 
 
 
 
 
 
 
 
4th Quarter 2012
 
37

 
3,311,919

 
119,944

 
3.3

 
415,056

 
3.46

 
11.63

 
 
 
 
 
 
 
 
 
 
Total - 12 months
 
153

 
$
16,706,895

 
444,129

 
3.3

 
$
1,540,309

 
$
3.47

 
$
12.38

 
 
 
 
 
 
 
 
 
 

(1) 
Comparable leases represent leases signed on spaces for which there was a former tenant within the last twelve months and the new or renewal square footage was within 25% of the expired square footage.
(2) 
Weighted average of tenant improvements (TI) and incentives is determined on the basis of square footage.
(3) 
Estimated amount per signed lease. Actual cost of construction may vary. Does not include first generation costs for TI and leasing commission costs needed for new acquisitions or redevelopment of a property to bring the property to operating standards for its intended use.
(4) 
Contractual rent represents contractual minimum rent under the new lease for the first month, excluding concessions.
(5) 
Prior contractual rent represents contractual minimum rent under the prior lease for the final month.


23

Whitestone REIT and Subsidiaries
LEASE EXPIRATIONS(1) 

 
 
 
 
 
 
 
 
Annualized Base Rent(2)
 
 
 
 
Gross Leasable Area
 
as of September 30, 2013
Year
 
Number of
Leases
 
Square Feet
 
Percent
of Gross Leasable Area
 
Amount
(in thousands)
 
Percent of
Total
 
Per Square Foot
2013
 
152

 
279,232

 
6.1
%
 
$
3,487

 
12.4
%
 
$
12.49

2014
 
302

 
757,377

 
16.5
%
 
9,504

 
20.9
%
 
12.55

2015
 
214

 
668,680

 
14.5
%
 
7,842

 
13.9
%
 
11.73

2016
 
173

 
505,124

 
11.0
%
 
6,549

 
12.7
%
 
12.97

2017
 
122

 
409,305

 
8.9
%
 
5,945

 
12.2
%
 
14.52

2018
 
99

 
458,228

 
10.0
%
 
5,378

 
9.0
%
 
11.74

2019
 
30

 
173,182

 
3.8
%
 
2,501

 
4.8
%
 
14.44

2020
 
16

 
130,932

 
2.8
%
 
1,720

 
3.6
%
 
13.14

2021
 
15

 
141,184

 
3.1
%
 
1,721

 
3.6
%
 
12.19

2022
 
19

 
151,571

 
3.3
%
 
1,758

 
3.6
%
 
11.60

Total
 
1,142

 
3,674,815

 
80.0
%
 
$
46,405

 
96.7
%
 
$
12.63


(1) 
Lease expirations table reflects rents in place as of September 30, 2013, and does not include option periods.
(2) 
Annualized Base Rent represents the monthly base rent as of September 30, 2013 for each tenant multiplied by 12.


24


Whitestone REIT and Subsidiaries
Property Details
As of September 30, 2013
 
 
Community Name
 
 
 
Location
 
 
Year Built/
Renovated
 
Gross Leasable Area
 
Percent
Occupied
 
Annualized Base
Rental Revenue 
(in thousands) (1)
 
Average
Base Rental
Revenue Per
Sq. Ft. (2)
 
Average Net Effective Annual Base Rent Per Leased Sq. Ft.(3)
Retail Communities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ahwatukee Plaza
 
Phoenix
 
1979
 
72,650

 
100
%
 
$
896

 
$
12.33

 
$
13.19

Anthem Marketplace
 
Phoenix
 
2000
 
113,293

 
100
%
 
1,501

 
13.25

 
13.25

Bellnott Square
 
Houston
 
1982
 
73,930

 
39
%
 
302

 
10.47

 
10.46

Bissonnet/Beltway
 
Houston
 
1978
 
29,205

 
100
%
 
329

 
11.27

 
10.92

Centre South
 
Houston
 
1974
 
39,134

 
94
%
 
288

 
7.83

 
7.76

The Citadel
 
Phoenix
 
1985
 
28,547

 
80
%
 
367

 
16.07

 
15.64

Desert Canyon
 
Phoenix
 
2000
 
62,533

 
77
%
 
533

 
11.07

 
11.79

Gilbert Tuscany Village
 
Phoenix
 
2009
 
49,415

 
49
%
 
410

 
16.93

 
18.18

Holly Knight
 
Houston
 
1984
 
20,015

 
100
%
 
324

 
16.19

 
18.17

Headquarters Village
 
Dallas
 
2009
 
89,134

 
94
%
 
2,191

 
26.15

 
27.55

Kempwood Plaza
 
Houston
 
1974
 
101,008

 
94
%
 
802

 
8.45

 
8.70

Lion Square
 
Houston
 
1980
 
117,592

 
78
%
 
979

 
10.67

 
10.89

MarketPlace At Central
 
Phoenix
 
2000
 
111,130

 
47
%
 
418

 
8.00

 
8.69

Mercado at Scottsdale Ranch
 
Phoenix
 
1987
 
118,730

 
100
%
 
1,631

 
13.74

 
13.74

Paradise Plaza
 
Phoenix
 
1993
 
125,898

 
93
%
 
1,596

 
13.63

 
14.39

Pinnacle of Scottsdale
 
Phoenix
 
1991
 
113,108

 
94
%
 
1,828

 
17.19

 
18.04

Providence
 
Houston
 
1980
 
90,327

 
83
%
 
652

 
8.70

 
8.06

Shaver
 
Houston
 
1978
 
21,926

 
93
%
 
259

 
12.70

 
12.13

Shops at Pecos Ranch
 
Phoenix
 
2009
 
78,767

 
97
%
 
1,631

 
21.35

 
21.41

Shops at Starwood
 
Dallas
 
2006
 
55,385

 
97
%
 
1,396

 
25.98

 
27.53

South Richey
 
Houston
 
1980
 
69,928

 
98
%
 
626

 
9.13

 
11.57

Spoerlein Commons
 
Chicago
 
1987
 
41,455

 
91
%
 
771

 
20.44

 
20.01

SugarPark Plaza
 
Houston
 
1974
 
95,032

 
100
%
 
1,035

 
10.89

 
10.73

Sunridge
 
Houston
 
1979
 
49,359

 
89
%
 
421

 
9.58

 
9.37

Terravita Marketplace
 
Phoenix
 
1997
 
102,733

 
95
%
 
1,315

 
13.47

 
13.57

Torrey Square
 
Houston
 
1983
 
105,766

 
88
%
 
734

 
7.89

 
7.60

Town Park
 
Houston
 
1978
 
43,526

 
100
%
 
818

 
18.79

 
18.59

Webster Point
 
Houston
 
1984
 
26,060

 
79
%
 
223

 
10.83

 
10.79

Westchase
 
Houston
 
1978
 
49,573

 
88
%
 
543

 
12.45

 
12.30

Windsor Park
 
San Antonio
 
1992
 
196,458

 
85
%
 
1,653

 
9.90

 
9.48

 
 
 
 
 
 
2,291,617

 
87
%
 
26,472

 
13.28

 
13.53

Office/Flex Communities:
 
 
 
 
 
  
 
 
 
  
 
  
 
 
Brookhill
 
Houston
 
1979
 
74,757

 
87
%
 
$
243

 
$
3.74

 
$
3.73

Corporate Park Northwest
 
Houston
 
1981
 
185,627

 
77
%
 
1,498

 
10.48

 
10.98

Corporate Park West
 
Houston
 
1999
 
175,665

 
94
%
 
1,503

 
9.10

 
9.18

Corporate Park Woodland
 
Houston
 
2000
 
99,937

 
100
%
 
945

 
9.46

 
9.49

Dairy Ashford
 
Houston
 
1981
 
42,902

 
99
%
 
237

 
5.58

 
5.75

Holly Hall
 
Houston
 
1980
 
90,000

 
100
%
 
757

 
8.41

 
8.26

Interstate 10
 
Houston
 
1980
 
151,000

 
82
%
 
683

 
5.52

 
5.48


25

 Whitestone REIT and Subsidiaries
Property Details
As of September 30, 2013
(continued)

 
 
Community Name
 
 
 
Location
 
 
Year Built/
Renovated
 
Gross Leasable Area
 
Percent
Occupied
 
Annualized Base
Rental Revenue 
(in thousands) (1)
 
Average
Base Rental
Revenue Per
Sq. Ft. (2)
 
Average Net Effective Annual Base Rent Per Leased Sq. Ft.(3)
Main Park
 
Houston
 
1982
 
113,410

 
100
%
 
762

 
6.72

 
6.63

Plaza Park
 
Houston
 
1982
 
105,530

 
65
%
 
633

 
9.23

 
10.01

Westbelt Plaza
 
Houston
 
1978
 
65,619

 
81
%
 
436

 
8.20

 
7.64

Westgate
 
Houston
 
1984
 
97,225

 
100
%
 
589

 
6.06

 
6.02

 
 
 
 
 
 
1,201,672

 
88
%
 
8,286

 
7.84

 
7.88

Office Communities:
 
 
 
 
 
  
 
 
 
 
 
  
 
 
9101 LBJ Freeway
 
Dallas
 
1985
 
125,874

 
60
%
 
$
1,095

 
$
14.50

 
$
15.17

Featherwood
 
Houston
 
1983
 
49,760

 
91
%
 
822

 
18.15

 
18.62

Pima Norte
 
Phoenix
 
2007
 
35,110

 
26
%
 
163

 
17.86

 
17.60

Royal Crest
 
Houston
 
1984
 
24,900

 
70
%
 
215

 
12.34

 
12.00

Uptown Tower
 
Dallas
 
1982
 
253,981

 
82
%
 
3,598

 
17.28

 
17.28

Woodlake Plaza
 
Houston
 
1974
 
106,169

 
93
%
 
1,324

 
13.41

 
14.73

Zeta Building
 
Houston
 
1982
 
37,740

 
89
%
 
574

 
17.09

 
16.23

 
 
 
 
 
 
633,534

 
77
%
 
7,791

 
15.97

 
16.26

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total/Weighted Average- Operating Portfolio
 
 
 
 
 
4,126,823

 
86
%
 
42,549

 
11.99

 
12.22

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dana Park
 
Phoenix
 
2007
 
310,979

 
80
%
 
$
4,002

 
$
16.09

 
$
17.40

Fountain Square
 
Phoenix
 
1986
 
118,209

 
71
%
 
1,245

 
14.83

 
17.15

The Shops at Pinnacle Peak
 
Phoenix
 
2000
 
41,530

 
70
%
 
550

 
18.92

 
19.15

Total/Weighted Average - Development Portfolio
 
 
 
 
 
470,718

 
77
%
 
5,797

 
15.99

 
17.47

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Anthem Marketplace
 
Phoenix
 
 
 
—

 
—
%
 
$
—

 
$
—

 
$
—

Dana Park Development
 
Phoenix
 
 
 
—

 
—
%
 
—

 
—

 
—

Pinnacle Phase II
 
Phoenix
 
 
 
—

 
—
%
 
—

 
—

 
—

Shops at Starwood Phase III
 
Dallas
 
 
 
—

 
—
%
 
—

 
—

 
—

Total/Weighted Average - Property Held For Development (4)
 
 
 
 
 
—

 
—
%
 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Grand Total/Weighted Average
 
 
 
 
 
4,597,541

 
85
%
 
$
48,346

 
$
12.37

 
$
12.71


(1)  
Calculated as the tenant's actual September 30, 2013 base rent (defined as cash base rents including abatements) multiplied by 12. Excludes vacant space as of September 30, 2013. Because annualized base rental revenue is not derived from historical results that were accounted for in accordance with generally accepted accounting principles, historical results differ from the annualized amounts. Total abatements for leases in effect as of September 30, 2013 equaled approximately $139,000 for the month ended September 30, 2013.
 
(2) 
Calculated as annualized base rent divided by square feet leased as of September 30, 2013. Excludes vacant space as of September 30, 2013.


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(3) 
Represents (i) the contractual base rent for leases in place as of September 30, 2013, calculated on a straight-line basis to reflect changes in rental rates throughout the lease term and amortize free rent periods and abatements, but without regard to tenant improvement allowances and leasing commissions, divided by (ii) square footage under commenced leases as of September 30, 2013.

(4) 
As of September 30, 2013, these properties are held for development with no gross leasable area.

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