EX-99.2 3 exhibit992supplementaloper.htm EXHIBIT 99.2 Exhibit 99.2 Supplemental Operating Data, dated August 5, 2015







CORPORATE PROFILE
 
 
 
 
 
 
 
 
 
NYSE: WSR
 
Whitestone REIT (NYSE: WSR) is a fully integrated real estate investment trust that owns,
Common Shares
 
redevelops, repositions, leases, manages and operates value-add Community Centered Properties TM.
 
 
As of June 30, 2015, we owned 65 Community Centered PropertiesTM wih approximately
65 Community Centers
 
5.6 million square feet of gross leasable area, located in six of the top markets in the United
5.6 Million Sq. Ft. of gross
 
States in terms of population growth: Austin, Chicago, Dallas-Fort Worth, Houston, Phoenix
leasable area
 
and San Antonio. Headquartered in Houston, Texas, we were founded in 1998
1,381 Tenants
 
 
 
 
We focus on value creation in our properties, as we market, lease and manage our properties. We
6 Top Growth Markets
 
invest in properties that are or can become Community Centered Properties TM from which our tenants
Austin
 
deliver needed services to the surrounding community. We focus on properties with smaller rental
Chicago
 
spaces that present opportunities for attractive returns.
Dallas-Fort Worth
 
 
Houston
 
Our strategic efforts target entrepreneurial, service-oriented tenants at each property who provide
Phoenix
 
services to their respective surrounding communities. Operations include an internal management
San Antonio
 
structure providing cost-effective services to locally-oriented, smaller space tenants. Multi-cultural
 
 
community focus sets us apart from traditional commercial real estate operators. We value diversity
Fiscal Year End
 
on our team and maintain in-house leasing, property management, marketing, construction and
12/31
 
maintenance departments with culturally diverse and multi-lingual associates who understand the
 
 
particular needs of our tenants and neighborhoods.
Common Shares &
 
 
Units Outstanding*:
 
We have a diverse tenant base concentrated on service offerings such as medical, educational, casual
Common Shares: 27.0 Million
 
dining and convenience services. These tenants tend to occupy smaller spaces (less than 3,000 square
Operating Partnership Units:
 
feet) and, as of June 30, 2015, provided a 53% premium rental rate compared to our larger
     0.4 Million
 
space tenants. The largest of our 1,381 tenants comprised less than 2.1% of our annualized base
 
 
rental revenues for the three months ended June 30, 2015.
 
 
 
 
 
 
 
 
 
 
 
 
Distribution (per share / unit):
 
Investor Relations:
 
 
 
 
Quarter: $ 0.2850
 
Whitestone REIT
 
 
 
 
 
ICR Inc.
Annualized: $ 1.1400
 
Bob Aronson, Director of Investor Relations
 
 
 
Brad Cohen
Dividend Yield: 8.7%**
 
2600 South Gessner, Suite 500, Houston, Texas 77063
 
 
 
203.682.8211
 
 
713.435.2219 email: ir@whitestonereit.com
 
 
Board of Trustees:
 
website: www.whitestonereit.com
 
 
James C. Mastandrea
 
 
 
 
Daryl J. Carter
 
Analyst Coverage:
 
 
 
 
 
 
Donald F. Keating
 
BMO Capital Markets
 
Hilliard Lyons
 
JMP Securities
 
Ladenburg Thalmann
Paul T. Lambert
 
Paul Adornato, CFA
 
Carol L. Kemple
 
Mitch Germain
 
Daniel P. Donlan
Jack L. Mahaffey
 
212.885.4170
 
502.588.1839
 
212.906.3546
 
212.409.2056
Trustee Emeritus:
 
Paul.Adornato@bmo.com
 
ckemple@hilliard.com
 
mgermain@jmpsecurities.com
 
ddonlan@ladenburg.com
Daniel G. DeVos
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
* As of August 5, 2015
 
Maxim Group
 
Robert W. Baird & Co.
 
Wunderlich Securities, Inc.
 
 
** Based on common share price
 
Michael Diana
 
RJ Milligan
 
Craig Kucera
 
 
of $13.11 as of close of market on
 
212.895.3641
 
813.273.8252
 
540.277.3366
 
 
August 4, 2015.
 
mdiana@maximgrp.com
 
rjmilligan@rwbaird.com
 
ckucera@wundernet.com
 
 

1



WHITESTONE REIT BUILDS ON MOMENTUM BY ANNOUNCING 21% INCREASE IN FFO CORE PER SHARE FOR THE 2015 SECOND QUARTER; RAISES GUIDANCE FOR THE YEAR

Houston, Texas, August 5, 2015 - Whitestone REIT (NYSE: WSR) (“Whitestone” or the “Company”), a fully integrated real estate company that owns, redevelops, repositions, leases, manages and operates value-add Community Centered PropertiesTM, today announced its financial results for the second quarter ended June 30, 2015.

Financial Results and Operating Highlights for Second Quarter 2015 Compared to Second Quarter 2014

•
Total revenues increased 27.3% to $22.0 million, resulting in the Company’s 19th consecutive quarter of year-over-year revenue growth.
•
Property net operating income (“NOI”) increased 33.2% to $14.7 million, resulting in the Company’s 19th consecutive quarter of year-over-year NOI growth.
•
Same store NOI increased 6.9%.
•
Funds from operations (“FFO”) Core increased 27.3% to $8.5 million, resulting in the Company’s 20th consecutive quarter of year-over-year FFO Core growth.
•
FFO Core per diluted common share and operating partnership (“OP”) unit increased 20.7% to $0.35, resulting in the Company’s 9th consecutive quarter of year-over-year FFO Core per share growth.
•
Net income attributable to Whitestone REIT was $1.5 million, or $0.06 per diluted share, compared to $1.3 million, or $0.05 per diluted share, in the second quarter of the prior year.
•
Rental rates on new and renewal leases increased 9.7% and 17.2%, respectively, on a GAAP basis and 2.8% and 10.1%, respectively, on a cash basis.
•
FFO Core guidance range for 2015 increased to $1.27 to $1.32 per diluted share and OP unit.
•
Dividend to FFO Core ratio of 79%.

James C. Mastandrea, Chairman and Chief Executive Officer, stated, “We are pleased with our exceptional second quarter financial results which clearly demonstrate that our real estate investment strategy meets consumers' daily needs and creates value for our shareholders. Our differentiated strategy of owning Community Centered Properties™ in high population growth markets in states such as Arizona and Texas, which are business friendly, continues to gain traction in the retail segment of the industry. Our business model produced a 27.3% increase in total revenues, a 33.2% increase in property net operating income and a 20.7% increase in FFO Core per diluted share and OP unit during the period.

“Our small space tenants, which typically occupy under 3,000 square feet and are at the core of our Community Centered PropertyTM business model, continue to perform exceptionally well and, in turn, drive Whitestone’s stellar performance. We are leasing vacant space at properties we acquired at the bottom of the market, redeveloping and repositioning our legacy properties and developing out parcels adjacent to some of our most recent acquisitions. These activities, combined with our in-house property management, meet the demand for service based retail in the fast growing and economically strong markets of Austin, Dallas/Ft. Worth, San Antonio and Houston, Texas, as well as Phoenix, Scottsdale and Mesa, Arizona.”

Mr. Mastandrea concluded, “We are increasing our annual guidance for the year to reflect our continued confidence in our ability to drive further top-line and bottom-line growth, as well as our enterprise value. Our momentum continues to build from the time of our IPO five years ago by remaining steadfast to the execution of our key initiatives, which are to increase overall occupancy, diversify our tenant mix to better serve the surrounding communities and make value-add acquisitions in high growth markets. Since the second quarter ended, we closed on two additional Class-A properties in Austin, and currently have two additional properties, both with national grocery stores, under contract in Austin and Dallas, which we expect to close in the third quarter.”


2

Operating Results Summary

The Company's total occupancy increased to 86.4% during the second quarter, up 40 basis points from the end of the first quarter of 2015. During the second quarter, the leasing team signed 117 leases totaling 267,065 square feet in new, expansion and renewal leases. The average lease size was 2,283 square feet. Total lease value added was $16.0 million. This compares to 102 new and renewal leases totaling 220,513 square feet and approximately $14.8 million in total lease value during the same period in 2014. The growth over 2014 translates to a 14.7% increase in leases signed, a 21.1% increase in square feet leased and a 7.7% increase in lease value added.

Community Centered PropertiesTM Portfolio Statistics

At the end of the second quarter, the Company's diversified tenant base was comprised of 1,381 tenants, with the largest tenant accounting for only 2.1% of annualized base rental revenues.  Lease terms for our properties range from less than one year for smaller tenants to over 15 years for larger tenants.  The Company’s leases generally include minimum monthly lease payments and tenant reimbursements for payment of taxes, insurance and maintenance.

Acquisition Activity

During the second quarter, Whitestone completed the acquisition of one Community Centered PropertyTM, Davenport Village, for approximately $45.5 million. The 128,934 square foot property, which is located in Austin, Texas, was 85% leased at the time of purchase. Subsequent to the end of the second quarter, the Company purchased two additional properties in Austin, Texas. The two properties, Parkside Village North and Parkside Village South, were purchased for a total of $45.0 million, contain a total of 117,146 square feet and are 100% leased.

Balance Sheet and Liquidity

At June 30, 2015, the Company had total assets of $685.6 million as compared to $634.3 million at December 31, 2014.

At June 30, 2015, Whitestone had a total of 65 properties, of which 45 are unencumbered by mortgage debt, with an undepreciated cost basis of $480.5 million. The Company had total real estate debt of $402.8 million, of which $223.2 million, or approximately 55%, was subject to fixed interest rates. The Company's weighted average interest rate on all fixed rate debt as of the end of the second quarter was 3.92%.

At quarter end, Whitestone had $6.3 million of cash available on its balance sheet and $270.4 million of available capacity under its credit facility, before the $200 million accordion option.

On June 26th the Company completed a public offering of 3,750,000 common shares. The Company received net proceeds of approximately $49.7 million after paying fees and expenses.

Dividend

On May 11, 2015, the Company declared a quarterly cash distribution of $0.285 per common share and OP unit for the third quarter of 2015, to be paid in three equal installments of $0.095 in July, August and September of 2015.

FFO Core Guidance

The Company is raising its full year FFO Core guidance to a range of $1.27 to $1.32 per share. This guidance reflects the Board’s and management’s view of current and future market conditions, as well as the earnings impact of events referenced in this release and during our scheduled conference call. This guidance does not include the operational or capital impact of any future unannounced acquisition or disposition activity. Please refer to the “2015 Financial Guidance” of the supplemental data package for the full list of guidance information.



3

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

Conference Call Information

Whitestone will host a conference call to discuss its second quarter results on Thursday, August 6, 2015 at 11:00 A.M. Eastern Time. The call will be led by James C. Mastandrea, Chairman and Chief Executive Officer, and David K. Holeman, Chief Financial Officer. Investors and other interested parties can listen to a live webcast of the call via the internet through the Investor Relations section of the Company’s website, www.whitestonereit.com, using the News/Events - Press Releases tab.

The call is also accessible via telephone by dialing 1-888-503-8171 for domestic participants or 1-719-325-2456 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 telephonic replay will be available through August 20, 2015, by dialing 1-877-870-5176 for domestic listeners or 1-858-384-5517 for international listeners and entering the pass code 9266209. 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/Events - Press Releases tab. For those without internet access, the second 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.

About Whitestone REIT

Whitestone REIT (NYSE: WSR) is a fully integrated real estate investment trust ("REIT") that owns, redevelops, repositions, leases, manages and operates Community Centered PropertiesTM. Whitestone focuses on value creation in its community centers, concentrating on local service-oriented tenants. Whitestone's diversified tenant base provides service offerings including specialty retail, grocery, restaurants, medical, educational and financial services. Founded in 1998, the Company is internally managed with a portfolio of 67 commercial properties in Texas, Arizona and Illinois. For additional information about the Company, please visit www.whitestonereit.com.

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"). The Company intends 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 the Company's 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.


4

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 meet its assumptions regarding its earnings guidance, including its ability to execute effectively its acquisition and disposition strategy, to continue to execute its development pipeline on schedule and at the expected costs, and its ability to grow its NOI as expected, which could be impacted by a number of factors, including, among other things, its ability to continue to renew leases or re-let space on attractive terms and to otherwise address its leasing rollover; 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, ("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 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 affect 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.


5

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.

Contact Whitestone REIT:
Bob Aronson
Director of Investor Relations
(713) 435-2219
raronson@whitestonereit.com





6


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

 
 
June 30, 2015
 
December 31, 2014
 
 
(unaudited)
 
 
ASSETS
Real estate assets, at cost
 
 
 
 
Property
 
$
730,165

 
$
673,655

Accumulated depreciation
 
(80,138
)
 
(71,587
)
Total real estate assets
 
650,027

 
602,068

Cash and cash equivalents
 
6,251

 
4,236

Marketable securities
 
422

 
973

Escrows and acquisition deposits
 
4,864

 
4,092

Accrued rents and accounts receivable, net of allowance for doubtful accounts
 
12,830

 
11,834

Unamortized lease commissions and loan costs
 
8,351

 
8,879

Prepaid expenses and other assets
 
2,858

 
2,215

Total assets
 
$
685,603

 
$
634,297

 
 
 
 
 
LIABILITIES AND EQUITY
Liabilities:
 
 
 
 
Notes payable
 
$
403,287

 
$
394,093

Accounts payable and accrued expenses
 
15,940

 
15,882

Tenants' security deposits
 
4,639

 
4,372

Dividends and distributions payable
 
7,800

 
6,627

Total liabilities
 
431,666

 
420,974

Commitments and contingencies:
 
—

 
—

Equity:
 
 
 
 
Preferred shares, $0.001 par value per share; 50,000,000 shares authorized; none issued and outstanding as of June 30, 2015 and December 31, 2014
 
—

 
—

Common shares, $0.001 par value per share; 400,000,000 shares authorized; 26,978,270 and 22,835,695 issued and outstanding as of June 30, 2015 and December 31, 2014, respectively
 
27

 
23

Additional paid-in capital
 
356,517

 
304,078

Accumulated deficit
 
(105,140
)
 
(93,938
)
Accumulated other comprehensive loss
 
(461
)
 
(91
)
Total Whitestone REIT shareholders' equity
 
250,943

 
210,072

Noncontrolling interest in subsidiary
 
2,994

 
3,251

Total equity
 
253,937

 
213,323

Total liabilities and equity
 
$
685,603

 
$
634,297





7

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

 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2015
 
2014
 
2015
 
2014
Property revenues
 
 
 
 
 
 
 
 
Rental revenues
 
$
17,176

 
$
13,443

 
$
33,641

 
$
27,057

Other revenues
 
4,794

 
3,819

 
9,581

 
7,580

Total property revenues
 
21,970

 
17,262

 
43,222

 
34,637

 
 
 
 
 
 
 
 
 
Property expenses
 
 
 
 
 
 
 
 
Property operation and maintenance
 
4,339

 
4,013

 
8,422

 
7,537

Real estate taxes
 
2,925

 
2,205

 
5,829

 
4,482

Total property expenses
 
7,264

 
6,218

 
14,251

 
12,019

 
 
 
 
 
 
 
 
 
Other expenses (income)
 
 
 
 
 
 
 
 
General and administrative
 
4,998

 
3,582

 
9,483

 
6,539

Depreciation and amortization
 
4,675

 
3,834

 
9,239

 
7,663

Interest expense
 
3,516

 
2,434

 
6,924

 
4,763

Interest, dividend and other investment income
 
(162
)
 
(19
)
 
(171
)
 
(40
)
Total other expense
 
13,027

 
9,831

 
25,475

 
18,925

 
 
 
 
 
 
 
 
 
Income from continuing operations before gain (loss) on sale or disposal of assets and income taxes
 
1,679

 
1,213

 
3,496

 
3,693

 
 
 
 
 
 
 
 
 
Provision for income taxes
 
(91
)
 
(55
)
 
(174
)
 
(136
)
Gain (loss) on sale or disposal of assets
 
5

 
(24
)
 
(100
)
 
(111
)
Income from continuing operations
 
1,593

 
1,134

 
3,222

 
3,446

 
 
 
 
 
 
 
 
 
Income (loss) from discontinued operations
 
(33
)
 
146

 
(41
)
 
266

Income (loss) from discontinued operations
 
(33
)
 
146

 
(41
)
 
266

 
 
 
 
 
 
 
 
 
Net income
 
1,560

 
1,280

 
3,181

 
3,712

 
 
 
 
 
 
 
 
 
Less: Net income attributable to noncontrolling interests
 
26

 
27

 
53

 
87

 
 
 
 
 
 
 
 
 
Net income attributable to Whitestone REIT
 
$
1,534

 
$
1,253

 
$
3,128

 
$
3,625


8

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

 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2015
 
2014
 
2015
 
2014
Basic Earnings Per Share:
 
 
 
 
 
 
 
 
Income from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares
 
$
0.06

 
$
0.05

 
$
0.13

 
$
0.15

Income from discontinued operations attributable to Whitestone REIT
 
0.00

 
0.00

 
0.00

 
0.01

Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares
 
$
0.06

 
$
0.05

 
$
0.13

 
$
0.16

Diluted Earnings Per Share:
 
 
 
 
 
 
 
 
Income from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares
 
$
0.06

 
$
0.05

 
$
0.12

 
$
0.15

Income from discontinued operations attributable to Whitestone REIT
 
0.00

 
0.00

 
0.00

 
0.01

Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares
 
$
0.06

 
$
0.05

 
$
0.12

 
$
0.16

 
 
 
 
 
 
 
 
 
Weighted average number of common shares outstanding:
 
 
 
 
 
 
 
 
Basic
 
22,869

 
22,235

 
22,724

 
22,030

Diluted
 
23,401

 
22,443

 
23,314

 
22,192

 
 
 
 
 
 
 
 
 
Distributions declared per common share / OP unit
 
$
0.2850

 
$
0.2850

 
$
0.5700

 
$
0.5700

 
 
 
 
 
 
 
 
 
Consolidated Statements of Comprehensive Income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
 
$
1,560

 
$
1,280

 
$
3,181

 
$
3,712

 
 
 
 
 
 
 
 
 
Other comprehensive gain (loss)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrealized gain (loss) on cash flow hedging activities
 
43

 
(259
)
 
(276
)
 
(297
)
Unrealized gain (loss) on available-for-sale marketable securities
 
(139
)
 
22

 
(98
)
 
105

 
 
 
 
 
 
 
 
 
Comprehensive income
 
1,464

 
1,043

 
2,807

 
3,520

 
 
 
 
 
 
 
 
 
Less: Comprehensive income attributable to noncontrolling interests
 
24

 
23

 
47

 
82

 
 

 

 
 
 
 
Comprehensive income attributable to Whitestone REIT
 
$
1,440

 
$
1,020

 
$
2,760

 
$
3,438



9

Whitestone REIT and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
 
 
Six Months Ended June 30,
 
 
2015
 
2014
Cash flows from operating activities:
 
 
 
 
Net income from continuing operations
 
$
3,222

 
$
3,446

Net income (loss) from discontinued operations
 
(41
)
 
266

Net income
 
3,181

 
3,712

Adjustments to reconcile net income to net cash provided by operating activities:
 
 

 
 

Depreciation and amortization
 
9,239

 
7,663

Amortization of deferred loan costs
 
601

 
405

Amortization of notes payable discount
 
149

 
153

Gain on sale of marketable securities
 
(44
)
 
—

Loss on sale or disposal of assets and properties
 
100

 
111

Bad debt expense
 
771

 
1,052

Share-based compensation
 
3,359

 
1,564

Changes in operating assets and liabilities:
 
 
 
 
Escrows and acquisition deposits
 
(772
)
 
(324
)
Accrued rent and accounts receivable
 
(1,767
)
 
(1,357
)
Unamortized lease commissions
 
(610
)
 
(557
)
Prepaid expenses and other assets
 
323

 
345

Accounts payable and accrued expenses
 
(235
)
 
(739
)
Tenants' security deposits
 
267

 
219

Net cash provided by operating activities
 
14,603

 
11,981

Net cash provided by (used in) operating activities of discontinued operations
 
(41
)
 
250

Cash flows from investing activities:
 
 

 
 

Acquisitions of real estate
 
(51,800
)
 
—

Additions to real estate
 
(5,009
)
 
(4,847
)
Proceeds from sales of marketable securities
 
496

 
—

Net cash used in investing activities
 
(56,313
)
 
(4,847
)
Net cash used in investing activities of discontinued operations
 
—

 
(143
)
Cash flows from financing activities:
 
 

 
 

Distributions paid to common shareholders
 
(13,127
)
 
(12,598
)
Distributions paid to OP unit holders
 
(224
)
 
(310
)
Proceeds from issuance of common shares, net of offering costs
 
49,725

 
5,267

Payments of exchange offer costs
 
—

 
(6
)
Proceeds from revolving credit facility, net
 
9,500

 
3,000

Repayments of notes payable
 
(1,336
)
 
(1,114
)
Repurchase of common shares
 
(772
)
 
(24
)
Net cash provided by (used in) financing activities
 
43,766

 
(5,785
)
Net cash used in financing activities of discontinued operations
 
—

 
(2,905
)
Net increase (decrease) in cash and cash equivalents
 
2,015

 
(1,449
)
Cash and cash equivalents at beginning of period
 
4,236

 
6,491

Cash and cash equivalents at end of period
 
$
6,251

 
$
5,042


10

Whitestone REIT and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
Supplemental Disclosures
(unaudited)
(in thousands)
 
 
Six Months Ended June 30,
 
 
2015
 
2014
Supplemental disclosure of cash flow information:
 
 

 
 

Cash paid for interest
 
$
6,409

 
$
4,447

Cash paid for taxes
 
$
315

 
$
238

Non cash investing and financing activities:
 
 

 
 

Disposal of fully depreciated real estate
 
$
48

 
$
2,560

Financed insurance premiums
 
$
1,057

 
$
888

Value of shares issued under dividend reinvestment plan
 
$
47

 
$
50

Value of common shares exchanged for OP units
 
$
81

 
$
870

Change in fair value of available-for-sale securities
 
$
(98
)
 
$
105

Change in fair value of cash flow hedge
 
$
(276
)
 
$
(297
)





11

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

 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
FFO AND FFO CORE
 
2015
 
2014
 
2015
 
2014
Net income attributable to Whitestone REIT
 
$
1,534

 
$
1,253

 
$
3,128

 
$
3,625

Depreciation and amortization of real estate assets (1)
 
4,643

 
3,871

 
9,183

 
7,772

Loss (gain) on disposal of assets (1)
 
(5
)
 
24

 
100

 
109

Net income attributable to noncontrolling interests (1)
 
26

 
27

 
53

 
87

FFO
 
6,198

 
5,175

 
12,464

 
11,593

 
 
 
 
 
 
 
 
 
Non cash share-based compensation expense
 
1,669

 
1,234

 
3,343

 
1,607

Acquisition costs
 
596

 
162

 
840

 
308

Rent support agreement payments received
 
—

 
76

 
—

 
156

FFO Core
 
$
8,463

 
$
6,647

 
$
16,647

 
$
13,664

 
 
 
 
 
 
 
 
 
FFO PER SHARE AND OP UNIT CALCULATION:
 
 
 
 
 
 
 
 
Numerator:
 
 
 
 
 
 
 
 
FFO
 
$
6,198

 
$
5,175

 
$
12,464


$
11,593

Distributions paid on unvested restricted common shares
 
(163
)
 
(54
)
 
(270
)
 
(73
)
FFO excluding amounts attributable to unvested restricted common shares
 
6,035

 
5,121

 
12,194

 
11,520

FFO Core excluding amounts attributable to unvested restricted common shares
 
$
8,300

 
$
6,593

 
$
16,377

 
$
13,591

 
 
 
 
 
 
 
 
 
Denominator:
 
 
 
 
 
 
 
 
Weighted average number of total common shares - basic
 
22,869

 
22,235

 
22,724

 
22,030

Weighted average number of total noncontrolling OP units - basic
 
390

 
507

 
391

 
531

Weighted average number of total commons shares and noncontrolling OP units - basic
 
23,259

 
22,742

 
23,115

 
22,561

 
 
 
 
 
 
 
 
 
Effect of dilutive securities:
 
 
 
 
 
 
 
 
Unvested restricted shares
 
532

 
208

 
590

 
162

Weighted average number of total common shares and noncontrolling OP units - dilutive
 
23,791

 
22,950

 
23,705

 
22,723

 
 
 
 
 
 
 
 
 
FFO per common share and OP unit - basic
 
$
0.26

 
$
0.23

 
$
0.53

 
$
0.51

FFO per common share and OP unit - diluted
 
$
0.25

 
$
0.22

 
$
0.51

 
$
0.51

 
 
 
 
 
 
 
 
 
FFO Core per common share and OP unit - basic
 
$
0.36

 
$
0.29

 
$
0.71

 
$
0.60

FFO Core per common share and OP unit - diluted
 
$
0.35

 
$
0.29

 
$
0.69

 
$
0.60

(1)  
Includes amounts from discontinued operations.
Whitestone REIT and Subsidiaries
RECONCILIATION OF NON-GAAP MEASURES
(continued)
(in thousands, except per share and per unit data)

 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2015
 
2014
 
2015
 
2014
PROPERTY NET OPERATING INCOME
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to Whitestone REIT
 
$
1,534

 
$
1,253

 
$
3,128

 
$
3,625

General and administrative expenses
 
4,998

 
3,582

 
9,483

 
6,539

Depreciation and amortization
 
4,675

 
3,834

 
9,239

 
7,663

Interest expense
 
3,516

 
2,434

 
6,924

 
4,763

Interest, dividend and other investment income
 
(162
)
 
(19
)
 
(171
)
 
(40
)
Provision for income taxes
 
91

 
55

 
174

 
136

Loss (gain) on disposal of assets
 
(5
)
 
24

 
100

 
111

Loss (income) from discontinued operations
 
33

 
(146
)
 
41

 
(266
)
Net income attributable to noncontrolling interests
 
26

 
27

 
53

 
87

NOI
 
$
14,706

 
$
11,044

 
$
28,971

 
$
22,618


EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTIZATION
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to Whitestone REIT
 
$
1,534

 
$
1,253

 
$
3,128

 
$
3,625

Depreciation and amortization (1)
 
4,675

 
3,908

 
9,239

 
7,816

Interest expense (1)
 
3,516

 
2,449

 
6,924

 
4,821

Provision for income taxes (1)
 
91

 
57

 
174

 
141

Loss on disposal of assets (1)
 
(5
)
 
24

 
100

 
109

Net income attributable to noncontrolling interests
 
26

 
27

 
53

 
87

EBITDA (2)
 
$
9,837

 
$
7,718

 
$
19,618

 
$
16,599


 
 
Three Months Ended
 
 
June 30,
 
March 31,
 
December 31,
 
September 30,
 
 
2015
 
2015
 
2014
 
2014
Net income attributable to Whitestone REIT
 
$
1,534

 
$
1,594

 
$
2,862

 
$
1,103

Depreciation and amortization (1)
 
4,675

 
4,564

 
4,225

 
3,998

Interest expense (1)
 
3,516

 
3,408

 
3,054

 
2,762

Provision for income taxes (1)
 
91

 
83

 
77

 
74

Loss (gain) on disposal of assets (1)
 
(5
)
 
105

 
(1,885
)
 
—

Net income attributable to noncontrolling interests
 
26

 
27

 
51

 
18

EBITDA (2)
 
$
9,837

 
$
9,781

 
$
8,384

 
$
7,955


(1)  
Includes amounts from discontinued operations.

(2) 
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. 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.


12

Whitestone REIT and Subsidiaries
SAME STORE PROPERTY ANALYSIS
(in thousands)

 
 
Three Months Ended June 30,
 
Increase
 
% Increase
 
 
2015
 
2014
 
(Decrease)
 
(Decrease)
Same store (51 properties, exclusive of land held for development) (1)
 
 
 
 
 
 
 
 
Property revenues
 
 
 
 
 
 
 
 
Rental revenues
 
$
14,294

 
$
13,443

 
$
851

 
6
 %
Other revenues
 
3,704

 
3,819

 
(115
)
 
(3
)%
Total property revenues
 
17,998

 
17,262

 
736

 
4
 %
 
 
 
 
 
 
 
 
 
Property expenses
 
 
 
 
 
 
 
 
Property operation and maintenance
 
3,814

 
4,013

 
(199
)
 
(5
)%
Real estate taxes
 
2,378

 
2,205

 
173

 
8
 %
Total property expenses
 
6,192

 
6,218

 
(26
)
 
—
 %
 
 
 
 
 
 
 
 
 
Total same store net operating income
 
11,806

 
11,044

 
762

 
7
 %
 
 
 
 
 
 
 
 
 
New store (8 properties, exclusive of land held for development)(2)
 
 
 
 
 
 
 
 
Property revenues
 
 
 
 
 
 
 
 
Rental revenues
 
2,882

 
—

 
2,882

 
Not meaningful

Other revenues
 
1,090

 
—

 
1,090

 
Not meaningful

Total property revenues
 
3,972

 
—

 
3,972

 
Not meaningful

 
 
 
 
 
 
 
 
 
Property expenses
 
 
 
 
 
 
 
 
Property operation and maintenance
 
525

 
—

 
525

 
Not meaningful

Real estate taxes
 
547

 
—

 
547

 
Not meaningful

Total property expenses
 
1,072

 
—

 
1,072

 
Not meaningful

 
 
 
 
 
 
 
 
 
Total new store net operating income
 
2,900

 
—

 
2,900

 
Not meaningful

 
 
 
 
 
 
 
 
 
Total property net operating income
 
14,706

 
11,044

 
3,662

 
33
 %
 
 
 
 
 
 
 
 
 
Less total other expenses, provision for income taxes and loss on disposal of assets
 
13,113

 
9,910

 
3,203

 
32
 %
 
 
 
 
 
 
 
 
 
Income from continuing operations
 
1,593

 
1,134

 
459

 
40
 %
Income (loss) from discontinued operations, net of taxes
 
(33
)
 
146

 
(179
)
 
(123
)%
 
 
 
 
 
 
 
 
 
Net income
 
$
1,560

 
$
1,280

 
$
280

 
22
 %




13

 
 
Six Months Ended June 30,
 
Increase
 
% Increase
 
 
2015
 
2014
 
(Decrease)
 
(Decrease)
Same store (51 properties, exclusive of land held for development) (1)
 
 
 
 
 
 
 
 
Property revenues
 
 
 
 
 
 
 
 
Rental revenues
 
$
28,266

 
$
27,057

 
$
1,209

 
4
 %
Other revenues
 
7,563

 
7,580

 
(17
)
 
—
 %
Total property revenues
 
35,829

 
34,637

 
1,192

 
3
 %
 
 
 
 
 
 
 
 
 
Property expenses
 
 
 
 
 
 
 
 
Property operation and maintenance
 
7,461

 
7,537

 
(76
)
 
(1
)%
Real estate taxes
 
4,849

 
4,482

 
367

 
8
 %
Total property expenses
 
12,310

 
12,019

 
291

 
2
 %
 
 
 
 
 
 
 
 
 
Total same store net operating income
 
23,519

 
22,618

 
901

 
4
 %
 
 
 
 
 
 
 
 
 
New store (8 properties, exclusive of land held for development)(2)
 
 
 
 
 
 
 
 
Property revenues
 
 
 
 
 
 
 
 
Rental revenues
 
5,375

 
—

 
5,375

 
Not meaningful

Other revenues
 
2,018

 
—

 
2,018

 
Not meaningful

Total property revenues
 
7,393

 
—

 
7,393

 
Not meaningful

 
 
 
 
 
 
 
 
 
Property expenses
 
 
 
 
 
 
 
 
Property operation and maintenance
 
961

 
—

 
961

 
Not meaningful

Real estate taxes
 
980

 
—

 
980

 
Not meaningful

Total property expenses
 
1,941

 
—

 
1,941

 
Not meaningful

 
 
 
 
 
 
 
 
 
Total new store net operating income
 
5,452

 
—

 
5,452

 
Not meaningful

 
 
 
 
 
 
 
 
 
Total property net operating income
 
28,971

 
22,618

 
6,353

 
28
 %
 
 
 
 
 
 
 
 
 
Less total other expenses, provision for income taxes and loss on disposal of assets
 
25,749

 
19,172

 
6,577

 
34
 %
 
 
 
 
 
 
 
 
 
Income from continuing operations
 
3,222

 
3,446

 
(224
)
 
(7
)%
Income (loss) from discontinued operations, net of taxes
 
(41
)
 
266

 
(307
)
 
(115
)%
 
 
 
 
 
 
 
 
 
Net income
 
$
3,181

 
$
3,712

 
$
(531
)
 
(14
)%

(1) 
We define “Same Stores” as properties that have been owned since the beginning of the period being compared. For purposes of comparing the three months ended June 30, 2015 to the three months ended June 30, 2014, Same Stores include properties currently owned that were acquired before April 1, 2014. For purposes of comparing the six months ended June 30, 2015 to the six months ended June 30, 2014, Same Stores include properties currently owned that were acquired before January 1, 2014.

(2) 
We define “New Stores” as properties that have been owned since the beginning of the period being compared. For purposes of comparing the three months ended June 30, 2015 to the three months ended June 30, 2014, New Stores include properties acquired between April 1, 2014 and June 30, 2015. For purposes of comparing the six months ended June 30, 2015 to the six months ended June 30, 2014, New Stores include properties acquired between January 1, 2014 and June 30, 2015.

14

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

 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2015
 
2014
 
2015
 
2014
Other Financial Information:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tenant improvements (1)
 
$
333

 
$
904

 
$
1,202

 
$
1,447

Leasing commissions
 
$
328

 
$
295

 
$
570

 
$
651

Maintenance Capital
 
$
765

 
$
423

 
$
1,279

 
$
564

Scheduled debt principal payments
 
$
406

 
$
325

 
$
808

 
$
730

Straight line rent income
 
$
393

 
$
110

 
$
591

 
$
476

Market rent amortization income (loss) from acquired leases
 
$
44

 
$
(60
)
 
$
83

 
$
(151
)
Non-cash share-based compensation expense
 
$
1,669

 
$
1,234

 
$
3,343

 
$
1,607

Non-real estate depreciation and amortization
 
$
32

 
$
36

 
$
55

 
$
44

Amortization of loan fees
 
$
301

 
$
203

 
$
601

 
$
405

Acquisition costs
 
$
596

 
$
162

 
$
840

 
$
308

Undepreciated value of unencumbered properties
 
$
480,496

 
$
363,235

 
$
480,496

 
$
363,235

Number of unencumbered properties
 
45

 
43

 
45

 
43

Full time employees
 
83

 
78

 
83

 
78


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



15

Whitestone REIT and Subsidiaries
MARKET CAPITALIZATION AND SELECTED RATIOS
(in thousands, except per share amounts and percentages)
 
 
As of June 30, 2015
MARKET CAPITALIZATION:
 
Percent of Total Equity
 
Total Market Capitalization
 
Percent of Total Market Capitalization
Equity Capitalization:
 
 
 
 
 
 
Common shares outstanding
 
98.6
%
 
26,978

 
 
Operating partnership units outstanding
 
1.4
%
 
390

 
 
Total
 
100.0
%
 
27,368

 
 
 
 
 
 
 
 
 
Market price of common shares as of
 
 
 
 
 
 
June 30, 2015
 
 
 
$
13.02

 
 
 
 
 
 
 
 
 
Total equity capitalization
 
 
 
356,331

 
47
%
 
 
 
 
 
 
 
Debt Capitalization:
 
 
 
 
 
 
Outstanding debt
 
 
 
$
403,287

 
 
Less: Cash and cash equivalents
 
 
 
(6,251
)
 
 
 
 
 
 
397,036

 
53
%
 
 
 
 
 
 
 
Total Market Capitalization as of
 
 
 
 
 
 
June 30, 2015
 
 
 
$
753,367

 
100
%


SELECTED RATIOS:
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
June 30,
 
March 31,
 
December 31,
 
September 30,
 
 
2015
 
2015
 
2014
 
2014
INTEREST COVERAGE RATIO
 
 
 
 
 
 
 
 
EBITDA/Interest Expense
 
 
 
 
 
 
 
 
EBITDA
 
$
9,837

 
$
9,781

 
$
8,384

 
$
7,955

Interest expense, excluding amortization of loan fees (1)
 
3,215

 
3,108

 
2,791

 
2,531

Ratio of EBITDA to interest expense
 
3.1

 
3.1

 
3.0

 
3.1

 
 
 
 
 
 
 
 
 
LEVERAGE RATIO
 
 
 
 
 
 
 
 
Debt/Undepreciated Book Value
 
 
 
 
 
 
 
 
Outstanding debt (1)
 
$
403,287

 
$
403,524

 
$
394,093

 
$
304,090

Less: Cash
 
(6,251
)
 
(4,320
)
 
(4,236
)
 
(6,268
)
Outstanding debt after cash
 
$
397,036

 
$
399,204

 
$
389,857

 
$
297,822

 
 
 
 
 
 
 
 
 
Undepreciated real estate assets (1)
 
$
730,165

 
$
682,571

 
$
673,655

 
$
585,741

 
 
 
 
 
 
 
 
 
Ratio of debt to real estate assets
 
54
%
 
58
%
 
58
%
 
51
%


16

Whitestone REIT and Subsidiaries
MARKET CAPITALIZATION AND SELECTED RATIOS
(continued)
(in thousands, except per share amounts and percentages)

 
 
Three Months Ended
 
 
June 30,
 
March 31,
 
December 31,
 
September 30,
 
 
2015
 
2015
 
2014
 
2014
Debt/EBITDA Ratio
 
 
 
 
 
 
 
 
Outstanding debt (1)
 
$
403,287

 
$
403,524

 
$
394,093

 
$
304,090

Less: Cash
 
(6,251
)
 
(4,320
)
 
(4,236
)
 
(6,268
)
Outstanding debt after cash
 
397,036

 
399,204

 
389,857

 
297,822

 
 
 
 
 
 
 
 
 
EBITDA
 
$
9,837

 
$
9,781

 
$
8,384

 
$
7,955

Non-cash share based compensation
 
1,669

 
1,674

 
1,644

 
1,485

EBITDA, adjusted
 
11,506

 
11,455

 
10,028

 
9,440

 
 
 
 
 
 
 
 
 
Impact of partial quarter acquisitions and dispositions
 
516

 
121

 
906

 
346

 
 
 
 
 
 
 
 
 
Pro forma quarterly EBITDA
 
12,022

 
11,576

 
10,934

 
9,786

 
 
 
 
 
 
 
 
 
Pro forma annualized EBITDA (2)
 
48,088

 
46,304

 
43,736

 
39,144

 
 
 
 
 
 
 
 
 
Ratio of EBITDA to debt
 
8.26

 
8.62

 
8.91

 
7.61


(1)  
Includes amounts from discontinued operations.

(2) 
Pro forma annualized EBITDA represents pro forma quarterly EBITDA multiplied by four.


17

 Whitestone REIT and Subsidiaries
SUMMARY OF OUTSTANDING DEBT AND DEBT MATURITIES
TOTAL OUTSTANDING DEBT
(in thousands)

Description
 
June 30, 2015
 
December 31, 2014
Fixed rate notes
 
 
 
 
$10.5 million, LIBOR plus 2.00% Note, due September 24, 2018 (1)
 
$
10,340

 
$
10,460

$50.0 million, 0.84% plus 1.35% to 1.90% Note, due February 17, 2017 (2)
 
50,000

 
50,000

$37.0 million 3.76% Note, due December 1, 2020
 
35,623

 
36,090

$6.5 million 3.80% Note, due January 1, 2019
 
6,273

 
6,355

$19.0 million 4.15% Note, due December 1, 2024
 
19,000

 
19,000

$20.2 million 4.28% Note, due June 6, 2023
 
20,200

 
20,200

$14.0 million 4.34% Note, due September 11, 2024
 
14,000

 
14,000

$14.3 million 4.34% Note, due September 11, 2024
 
14,300

 
14,300

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

 
16,450

$15.1 million 4.99% Note, due January 6, 2024
 
15,060

 
15,060

$9.2 million, Prime Rate less 2.00%, due December 29, 2017 (3)
 
7,887

 
7,888

$2.6 million 5.46% Note, due October 1, 2023
 
2,568

 
2,583

$11.1 million 5.87% Note, due August 6, 2016
 
11,457

 
11,607

$0.9 million 2.97% Note, due November 28, 2015
 
529

 
—

Floating rate notes
 
 
 
 
Unsecured line of credit, LIBOR plus 1.40% to 1.95%, due November 7, 2018
 
129,600

 
120,100

$50.0 million, LIBOR plus 1.35% to 1.90% Note, due November 7, 2019
 
50,000

 
50,000

 
 
$
403,287

 
$
394,093


(1)
Promissory note includes an interest rate swap that fixed the interest rate at 3.55% for the duration of the term.
(2)
Promissory note includes an interest rate swap that fixed the LIBOR portion of our $50 million term loan under our previous unsecured revolving credit facility at 0.84%.
(3) 
Promissory note includes an interest rate swap that fixed the interest rate at 5.72% for the duration of the term. As part of our acquisition of Paradise Plaza in August 2012, we recorded a discount on the note of $1.3 million, which amortizes into interest expense over the life of the loan and results in an imputed interest rate of 4.13%.


SCHEDULE OF DEBT MATURITIES AS OF JUNE 30, 2015
(in thousands)
 
Year
 
Scheduled Amortization Payments
 
Scheduled Maturities
 
Total Scheduled Maturities
 
Percentage of Debt Maturing
 
 
 
 
 
 
 
 
 
2015
 
$
1,549

 
$
—

 
$
1,549

 
0.4
%
2016
 
2,144

 
11,125

 
13,269

 
3.3
%
2017
 
2,374

 
57,838

 
60,212

 
14.9
%
2018
 
2,576

 
139,160

 
141,736

 
35.1
%
2019
 
2,392

 
55,657

 
58,049

 
14.4
%
Thereafter
 
9,238

 
119,234

 
128,472

 
31.9
%
Total
 
$
20,273

 
$
383,014

 
$
403,287

 
100.0
%

18

Whitestone REIT and Subsidiaries
SUMMARY OF OCCUPANCY AND TOP TENANTS

 
 
Gross Leasable Area as of
 
Occupancy % as of
 
 
June 30,
 
June 30,
 
March 31,
 
December 31,
 
September 30,
Community Centered Properties
 
2015
 
2015
 
2015
 
2014
 
2014
Retail
 
3,435,793

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

 
87
%
 
86
%
 
87
%
 
85
%
Office
 
521,134

 
77
%
 
77
%
 
77
%
 
78
%
Total - Operating Portfolio
 
5,158,599

 
87
%
 
86
%
 
87
%
 
86
%
Redevelopment, New Acquisitions (1)
 
473,998

 
83
%
 
85
%
 
85
%
 
87
%
Total
 
5,632,597

 
86
%
 
86
%
 
87
%
 
86
%
 
(1) 
Includes (i) new acquisitions through the earlier of attainment of 90% occupancy or 18 months of ownership, and (ii) properties that are undergoing significant redevelopment or re-tenanting.

19

Whitestone REIT and Subsidiaries
SUMMARY OF OCCUPANCY AND TOP TENANTS
(continued)

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 and Houston
 
$
1,408

 
2.1
%
 
11/14/1982, 5/8/1991, 7/1/2000 and 7/12/2000
 
2017, 2020, 2020 and 2021
Bashas' Inc. (3)
 
Phoenix
 
823

 
1.2
%
 
10/9/2004 and 4/1/2009
 
2024 and 2029
Wells Fargo & Company (4)
 
Phoenix
 
645

 
1.0
%
 
10/24/1996 and 4/16/1999
 
2016 and 2018
Dollar Tree (5)
 
Phoenix and Houston
 
530

 
0.8
%
 
8/10/1999, 6/29/2001, 11/8/2009, 12/17/2009 and 5/21/2013
 
2016, 2017, 2020, 2020 and 2023
Walgreens & Co. (6)
 
Phoenix and Houston
 
530

 
0.8
%
 
11/14/1982, 11/2/1987 and 11/3/1996
 
2017, 2027 and 2049
University of Phoenix
 
San Antonio
 
520

 
0.8
%
 
10/18/2010
 
2018
Sports Authority
 
San Antonio
 
495

 
0.7
%
 
1/1/2004
 
2015
Petco (7)
 
Phoenix and Houston
 
484

 
0.7
%
 
7/6/1998 and 10/15/2006
 
2019 and 2026
Paul's Ace Hardware
 
Phoenix
 
460

 
0.7
%
 
3/1/2008
 
2018
Ross Dress for Less, Inc. (8)
 
San Antonio, Phoenix and Houston
 
443

 
0.7
%
 
2/11/2009, 6/18/2012 and 2/7/2013
 
2020, 2023 and 2023
The Final, LLC (9)
 
Phoenix
 
396

 
0.6
%
 
3/21/2011 and 2/27/2014
 
2015
Rock Solid Images
 
Houston
 
372

 
0.5
%
 
4/1/2004
 
2015
Sterling Jewelers, Inc.
 
Phoenix
 
354

 
0.5
%
 
11/23/2004
 
2020
Super Bravo, Inc.
 
Houston
 
349

 
0.5
%
 
6/15/2011
 
2023
Air Liquide America, L.P.
 
Dallas
 
342

 
0.5
%
 
8/1/2001
 
2018
 
 
 
 
$
8,151

 
12.1
%
 
 
 
 

 (1) 
Annualized Base Rental Revenues represents the monthly base rent as of June 30, 2015 for each applicable tenant multiplied by 12.


20

(2) 
As of June 30, 2015, we had four leases with the same tenant occupying space at properties located in Phoenix and Houston. 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 0.6% 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 0.5% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on July 1, 2000, and is scheduled to expire in 2020, was $321,000, which represents 0.5% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on November 14, 1982, and is scheduled to expire in 2017, was $318,000, which represents 0.5% of our total annualized base rental revenue.

(3) 
As of June 30, 2015, 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 October 9, 2004, and is scheduled to expire in 2024, was $119,000, which represents 0.2% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on April 1, 2009, and is scheduled to expire in 2029, was $704,000, which represents 1.0% of our total annualized base rental revenue.

(4) 
As of June 30, 2015, 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 October 24, 1996, and is scheduled to expire in 2016, was $114,000, which represents 0.2% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on April 16, 1999, and is scheduled to expire in 2018, was $531,000, which represents 0.8% of our total annualized base rental revenue.

(5) 
As of June 30, 2015, we had five leases with the same tenant occupying space at properties in Houston and Phoenix. The annualized rental revenue for the lease that commenced on June 29, 2001, and is scheduled to expire in 2016, was $108,000, which represents 0.2% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on November 8, 2009, and is scheduled to expire in 2017, was $146,000, which represents 0.2% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on August 10, 1999, and is scheduled to expire in 2020, was $55,000, which represents less than 0.1% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on December 17, 2009, and is scheduled to expire in 2020, was $110,000, which represents 0.2% of our total annualized base rental revenue. The lease that commenced on May 21, 2013, and is scheduled to expire in 2023, was $108,000, which represents 0.2% of our total annualized base rental revenue.

(6) 
As of June 30, 2015, we had three leases with the same tenant occupying space at properties located in Phoenix and Houston. The annualized rental revenue for the lease that commenced on November 3, 1996, and is scheduled to expire in 2049, was $279,000, which represents 0.4% of our 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. The annualized rental revenue for the lease that commenced on November 14, 1982, and is scheduled to expire in 2017, was $82,000, which represents 0.1% of our total annualized base rental revenue.

(7) 
As of June 30, 2015,we had two leases with the same tenant occupying space at properties located in Phoenix and Houston. The annualized rental revenue for the lease that commenced on October 15, 2006, and is scheduled to expire in 2026, was $260,000, which represents 0.4% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on July 6, 1998, and is scheduled to expire in 2019, was $224,000, which represents 0.3% of our total annualized base rental revenue.

(8) 
As of June 30, 2015, we had three leases with the same tenant occupying space at properties located in San Antonio, Phoenix and Houston. The annualized rental revenue for the lease that commenced on June 18, 2012, and is scheduled to expire in 2023, was $175,000, which represents 0.3% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on February 11, 2009, and is scheduled to expire in 2020, was $158,000, which represents 0.2% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on February 7, 2013, and is scheduled to expire in 2023, was $110,000, which represents 0.2% of our total annualized base rental revenue.

(9) 
As of June 30, 2015, 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 March 21, 2011, and is scheduled to expire in 2015, was $156,000, which represents 0.2% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on February 27, 2014, and is scheduled to expire in 2015, was $240,000, which represents 0.4% of our total annualized base rental revenue.


21

Whitestone REIT and Subsidiaries
SUMMARY OF LEASING ACTIVITY

 
 
Three Months Ended
 
Six Months Ended
 
 
June 30,
 
June 30,
 
 
2015
 
2014
 
2015
 
2014
RENEWALS
 
 
 
 
 
 
 
 
Number of Leases
 
77

 
52

 
121

 
107

Total Square Feet (1)
 
158,966

 
122,983

 
242,216

 
218,044

Average Square Feet
 
2,064

 
2,365

 
2,002

 
2,038

Total Lease Value
 
$
7,889,000

 
$
6,161,000

 
$
11,250,000

 
$
10,828,000

NEW LEASES
 
 
 
 
 
 
 
 
Number of Leases
 
40

 
50

 
72

 
108

Total Square Feet (1)
 
108,099

 
97,530

 
221,250

 
234,189

Average Square Feet
 
2,702

 
1,951

 
3,073

 
2,168

Total Lease Value
 
$
8,089,000

 
$
8,676,000

 
$
13,278,000

 
$
15,506,000

TOTAL LEASES
 
 
 
 
 
 
 
 
Number of Leases
 
117

 
102

 
193

 
215

Total Square Feet (1)
 
267,065

 
220,513

 
463,466

 
452,233

Average Square Feet
 
2,283

 
2,162

 
2,401

 
2,103

Total Lease Value
 
$
15,978,000

 
$
14,837,000

 
$
24,528,000

 
$
26,334,000


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


22

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:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter 2015
 
91

 
$
9,872,988

 
205,989

 
3.1

 
$
429,689

 
$
2.09

 
$
13.56

 
$
12.46

 
$
226,025

 
8.8
 %
 
$
387,419

 
15.8
%
1st Quarter 2015
 
60

 
5,726,868

 
128,901

 
2.7

 
285,369

 
2.21

 
15.10

 
14.66

 
56,538

 
3.0
 %
 
147,624

 
8.1
%
4th Quarter 2014
 
50

 
6,387,252

 
128,926

 
2.5

 
486,464

 
3.77

 
14.88

 
14.15

 
95,275

 
5.2
 %
 
185,516

 
10.6
%
3rd Quarter 2014
 
55

 
9,810,358

 
178,002

 
3.5

 
602,800

 
3.39

 
13.74

 
14.14

 
(71,154
)
 
(2.8
)%
 
91,492

 
3.8
%
Total - 12 months
 
256

 
$
31,797,466

 
641,818

 
3.0

 
$
1,804,322

 
$
2.81

 
$
14.18

 
$
13.71

 
$
306,684

 
3.4
 %
 
$
812,051

 
9.7
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Comparable New Leases:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter 2015
 
16

 
$
2,048,659

 
49,713

 
4.3

 
$
123,958

 
$
2.49

 
$
9.55

 
$
9.29

 
$
12,940

 
2.8
 %
 
$
42,780

 
9.7
%
1st Quarter 2015
 
18

 
2,737,615

 
50,089

 
2.7

 
177,579

 
3.55

 
17.03

 
16.66

 
18,726

 
2.2
 %
 
40,067

 
4.9
%
4th Quarter 2014
 
13

 
1,483,191

 
19,945

 
3.7

 
235,715

 
11.82

 
17.81

 
17.74

 
1,276

 
0.4
 %
 
14,333

 
4.2
%
3rd Quarter 2014
 
13

 
1,195,188

 
29,704

 
3.2

 
122,946

 
4.14

 
12.12

 
12.41

 
(8,631
)
 
(2.3
)%
 
25,443

 
7.4
%
Total - 12 months
 
60

 
$
7,464,653

 
149,451

 
3.5

 
$
660,198

 
$
4.42

 
$
13.67

 
$
13.51

 
$
24,311

 
1.2
 %
 
$
122,623

 
6.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


 
 
 
 
 
 
 
 
Comparable Renewal Leases:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter 2015
 
75

 
$
7,824,329

 
156,276

 
2.8

 
$
305,731

 
$
1.96

 
$
14.83

 
$
13.47

 
$
213,085

 
10.1
 %
 
$
344,639

 
17.2
%
1st Quarter 2015
 
42

 
2,989,253

 
78,812

 
2.7

 
107,790

 
1.37

 
13.86

 
13.38

 
$
37,812

 
3.6
 %
 
107,557

 
10.9
%
4th Quarter 2014
 
37

 
4,904,061

 
108,981

 
2.2

 
250,749

 
2.30

 
14.35

 
$
13.49

 
93,999

 
6.4
 %
 
171,183

 
12.1
%
3rd Quarter 2014
 
42

 
8,615,170

 
148,298

 
3.6

 
479,854

 
3.24

 
14.07

 
14.49

 
(62,523
)
 
(2.9
)%
 
66,049

 
3.2
%
Total - 12 months
 
196

 
$
24,332,813

 
492,367

 
2.9

 
$
1,144,124

 
$
2.32

 
$
14.34

 
$
13.77


$
282,373

 
4.1
 %
 
$
689,428

 
10.7
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

23

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:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter 2015
 
26

 
$
6,105,128

 
62,156

 
5.6

 
$
978,342

 
$
15.74

 
$
16.87

 
 
 
 
 
 
 
 
 
 
1st Quarter 2015
 
16

 
2,822,752

 
68,818

 
4.1

 
434,677

 
6.32

 
11.75

 
 
 
 
 
 
 
 
 
 
4th Quarter 2014
 
25

 
5,621,126

 
60,726

 
5.2

 
1,000,887

 
16.48

 
15.48

 
 
 
 
 
 
 
 
 
 
3rd Quarter 2014
 
27

 
5,208,713

 
75,500

 
4.9

 
1,105,419

 
14.64

 
16.71

 
 
 
 
 
 
 
 
 
 
Total - 12 months
 
94

 
$
19,757,719

 
267,200

 
4.9

 
$
3,519,325

 
$
13.17

 
$
15.19

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-Comparable New Leases:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter 2015
 
24

 
$
6,040,110

 
59,466

 
5.8

 
$
978,342

 
$
16.45

 
$
16.96

 
 
 
 
 
 
 
 
 
 
1st Quarter 2015
 
14

 
2,450,862

 
64,380

 
3.8

 
339,851

 
5.28

 
11.03

 
 
 
 
 
 
 
 
 
 
4th Quarter 2014
 
25

 
5,621,126

 
60,726

 
5.2

 
1,000,887

 
16.48

 
15.48

 
 
 
 
 
 
 
 
 
 
3rd Quarter 2014
 
24

 
3,823,482

 
67,871

 
4.6

 
971,445

 
14.31

 
16.07

 
 
 
 
 
 
 
 
 
 
Total - 12 months
 
87

 
$
17,935,580

 
252,443

 
4.8

 
$
3,290,525

 
$
13.03

 
$
14.85

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-Comparable Renewal Leases:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter 2015
 
2

 
$
65,018

 
2,690

 
1.6

 
$
—

 
$
—

 
$
14.71

 
 
 
 
 
 
 
 
 
 
1st Quarter 2015
 
2

 
371,890

 
4,438

 
7.9

 
94,826

 
21.37

 
22.15

 
 
 
 
 
 
 
 
 
 
4th Quarter 2014
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
3rd Quarter 2014
 
3

 
1,385,231

 
7,629

 
7.5

 
133,974

 
17.56

 
22.41

 
 
 
 
 
 
 
 
 
 
Total - 12 months
 
7

 
$
1,822,139

 
14,757

 
6.5

 
$
228,800

 
$
15.50

 
$
20.93

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

24

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
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter 2015
 
117

 
$
15,978,116

 
268,145

 
3.7

 
$
1,408,031

 
$
5.25

 
$
14.33

 
 
 
 
 
 
 
 
 
 
1st Quarter 2015
 
76

 
8,549,620

 
197,719

 
3.2

 
720,046

 
3.64

 
13.93

 
 
 
 
 
 
 
 
 
 
4th Quarter 2014
 
75

 
12,008,378

 
189,652

 
3.3

 
1,487,351

 
7.84

 
15.07

 
 
 
 
 
 
 
 
 
 
3rd Quarter 2014
 
82

 
15,019,071

 
253,502

 
4.0

 
1,708,219

 
6.74

 
14.63

 
 
 
 
 
 
 
 
 
 
Total - 12 months
 
350

 
$
51,555,185

 
909,018

 
3.6

 
$
5,323,647

 
$
5.86

 
$
14.48

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter 2015
 
40

 
$
8,088,769

 
109,179

 
5.1

 
$
1,102,300

 
$
10.10

 
$
13.59

 
 
 
 
 
 
 
 
 
 
1st Quarter 2015
 
32

 
5,188,477

 
114,469

 
3.3

 
517,430

 
4.52

 
13.66

 
 
 
 
 
 
 
 
 
 
4th Quarter 2014
 
38

 
7,104,317

 
80,671

 
4.8

 
1,236,602

 
15.33

 
16.05

 
 
 
 
 
 
 
 
 
 
3rd Quarter 2014
 
37

 
5,018,670

 
97,575

 
4.2

 
1,094,391

 
11.22

 
14.87

 
 
 
 
 
 
 
 
 
 
Total - 12 months
 
147

 
$
25,400,233

 
401,894

 
4.3

 
$
3,950,723

 
$
9.83

 
$
14.41

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Renewal
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter 2015
 
77

 
$
7,889,347

 
158,966

 
2.7

 
$
305,731

 
$
1.92

 
$
14.83

 
 
 
 
 
 
 
 
 
 
1st Quarter 2015
 
44

 
3,361,143

 
83,250

 
2.9

 
202,616

 
2.43

 
14.31

 
 
 
 
 
 
 
 
 
 
4th Quarter 2014
 
37

 
4,904,061

 
108,981

 
2.2

 
250,749

 
2.30

 
14.35

 
 
 
 
 
 
 
 
 
 
3rd Quarter 2014
 
45

 
10,000,401

 
155,927

 
3.8

 
613,828

 
3.94

 
14.48

 
 
 
 
 
 
 
 
 
 
Total - 12 months
 
203

 
$
26,154,952

 
507,124

 
3.0

 
$
1,372,924

 
$
2.71

 
$
14.53

 
 
 
 
 
 
 
 
 
 

(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 lease term 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.


25

Whitestone REIT and Subsidiaries
LEASE EXPIRATIONS(1) 

 
 
 
 
 
 
 
 
Annualized Base Rent(2)
 
 
 
 
Gross Leasable Area
 
as of June 30, 2015
Year
 
Number of
Leases
 
Square Feet
 
Percent
of Gross Leasable Area
 
Amount
(in thousands)
 
Percent of
Total
 
Per Square Foot
2015
 
254

 
651,197

 
11.6
%
 
$
8,082

 
11.8
%
 
$
12.41

2016
 
289

 
744,526

 
13.2
%
 
11,160

 
16.3
%
 
14.99

2017
 
238

 
736,459

 
13.1
%
 
10,780

 
15.8
%
 
14.64

2018
 
199

 
792,868

 
14.1
%
 
11,198

 
16.4
%
 
14.12

2019
 
162

 
490,889

 
8.7
%
 
8,491

 
12.4
%
 
17.30

2020
 
103

 
541,862

 
9.6
%
 
6,592

 
9.6
%
 
12.17

2021
 
37

 
203,809

 
3.6
%
 
2,816

 
4.1
%
 
13.82

2022
 
36

 
221,271

 
3.9
%
 
3,006

 
4.4
%
 
13.59

2023
 
17

 
138,455

 
2.5
%
 
1,504

 
2.2
%
 
10.86

2024
 
23

 
175,549

 
3.1
%
 
2,200

 
3.2
%
 
12.53

Total
 
1,358

 
4,696,885

 
83.4
%
 
$
65,829

 
96.2
%
 
$
14.02


(1) 
Lease expirations table reflects rents in place as of June 30, 2015, and does not include option periods.
(2) 
Annualized Base Rent represents the monthly base rent as of June 30, 2015 for each tenant multiplied by 12.


26

Whitestone REIT and Subsidiaries
2015 Financial Guidance
As of August 5, 2015
 
 
 
 
 
 
As of May 5, 2015
As of August 5, 2015
FFO Core per common share and OP unit - diluted
 
$1.25 - $1.30
$1.27 - $1.32
FFO per common share and OP unit - diluted
 
$0.99 - $1.04
$1.00 - $1.05
Same Store Property NOI
 
3% - 5%
3% - 5%
Total Operating Portfolio Occupancy at Year End 2015
 
88% - 90%
88% - 90%



Note: Guidance reflects management’s view of current and future market conditions, as well as the earnings impact of events referenced in our earnings release and supplemental data package. This guidance does not include the operational or capital impact of any future unannounced acquisition or disposition activity. We will update our guidance, on a quarterly basis, or more often as needed, reflecting the impact of acquisition volume and other factors.




27

Whitestone REIT and Subsidiaries
Property Details
As of June 30, 2015

 
 
Community Name
 
 
 
Location
 
 
Year Built/
Renovated
 
Gross Leasable
Square Feet
 
Percent
Occupied at
6/30/2015
 
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

 
92
%
 
$
867

 
$
12.97

 
$
12.87

Anthem Marketplace
 
Phoenix
 
2000
 
113,293

 
95
%
 
1,629

 
15.14

 
15.14

Bellnott Square
 
Houston
 
1982
 
73,930

 
33
%
 
286

 
11.72

 
11.03

Bissonnet Beltway
 
Houston
 
1978
 
29,205

 
95
%
 
419

 
15.10

 
14.89

Centre South
 
Houston
 
1974
 
39,134

 
82
%
 
316

 
9.85

 
9.75

The Citadel
 
Phoenix
 
1985
 
28,547

 
95
%
 
369

 
13.61

 
16.52

City View Village
 
San Antonio
 
2005
 
17,870

 
100
%
 
498

 
27.87

 
28.48

Corporate Park Woodland II
 
Houston
 
1972
 
16,220

 
87
%
 
$
206

 
$
14.60

 
$
14.53

Desert Canyon
 
Phoenix
 
2000
 
62,533

 
89
%
 
684

 
12.29

 
12.16

Fountain Hills Plaza
 
Phoenix
 
2009
 
111,289

 
89
%
 
1,699

 
17.15

 
17.50

Fountain Square
 
Phoenix
 
1986
 
118,209

 
75
%
 
1,479

 
16.68

 
17.49

Gilbert Tuscany Village
 
Phoenix
 
2009
 
49,415

 
88
%
 
709

 
16.30

 
17.91

Heritage Trace Plaza
 
Dallas
 
2006
 
70,431

 
100
%
 
1,509

 
21.43

 
21.43

Holly Knight
 
Houston
 
1984
 
20,015

 
95
%
 
364

 
19.14

 
18.46

Headquarters Village
 
Dallas
 
2009
 
89,134

 
84
%
 
2,107

 
28.14

 
28.74

Kempwood Plaza
 
Houston
 
1974
 
101,008

 
85
%
 
864

 
10.06

 
10.42

Lion Square
 
Houston
 
2014
 
117,592

 
85
%
 
998

 
9.98

 
11.16

The Marketplace at Central
 
Phoenix
 
2000
 
111,130

 
91
%
 
752

 
7.44

 
7.81

Market Street at DC Ranch
 
Phoenix
 
2003
 
242,459

 
91
%
 
4,038

 
18.30

 
19.27

Mercado at Scottsdale Ranch
 
Phoenix
 
1987
 
118,730

 
67
%
 
1,426

 
17.93

 
17.93

Paradise Plaza
 
Phoenix
 
1983
 
125,898

 
92
%
 
1,575

 
13.60

 
14.06

Pinnacle of Scottsdale
 
Phoenix
 
1991
 
113,108

 
93
%
 
1,911

 
18.17

 
17.92

Providence
 
Houston
 
1980
 
90,327

 
88
%
 
834

 
10.49

 
9.96

Shaver
 
Houston
 
1978
 
21,926

 
93
%
 
282

 
13.83

 
13.44

Shops at Pecos Ranch
 
Phoenix
 
2009
 
78,767

 
98
%
 
1,611

 
20.87

 
20.87

Shops at Starwood
 
Dallas
 
2006
 
55,385

 
100
%
 
1,560

 
28.17

 
27.68

South Richey
 
Houston
 
1980
 
69,928

 
100
%
 
795

 
11.37

 
9.75

Spoerlein Commons
 
Chicago
 
1987
 
41,455

 
78
%
 
748

 
23.13

 
23.60

The Strand at Huebner Oaks
 
San Antonio
 
2000
 
73,920

 
91
%
 
1,430

 
21.26

 
21.26

SugarPark Plaza
 
Houston
 
1974
 
95,032

 
98
%
 
1,043

 
11.20

 
11.13

Sunridge
 
Houston
 
1979
 
49,359

 
82
%
 
390

 
9.64

 
10.38

Sunset at Pinnacle Peak
 
Phoenix
 
2000
 
41,530

 
83
%
 
560

 
16.25

 
16.25

Terravita Marketplace
 
Phoenix
 
1997
 
102,733

 
96
%
 
1,398

 
14.18

 
13.97

Torrey Square
 
Houston
 
1983
 
105,766

 
81
%
 
679

 
7.93

 
8.36

Town Park
 
Houston
 
1978
 
43,526

 
100
%
 
831

 
19.09

 
19.78

Village Square at Dana Park
 
Phoenix
 
2009
 
323,026

 
84
%
 
5,377

 
19.82

 
19.98

Webster Pointe
 
Houston
 
1984
 
26,060

 
82
%
 
223

 
10.44

 
10.06

Westchase
 
Houston
 
1978
 
49,573

 
83
%
 
506

 
12.30

 
12.81

Williams Trace Plaza
 
Houston
 
1983
 
129,222

 
94
%
 
1,613

 
13.28

 
13.55

Windsor Park
 
San Antonio
 
1992
 
196,458

 
97
%
 
2,049

 
10.75

 
10.07

Total/Weighted Average
 
 
 
 
 
3,435,793

 
88
%
 
46,634

 
15.42

 
15.60

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Office Communities:
 
 
 
 
 
  
 
 
 
  
 
  
 
 
9101 LBJ Freeway
 
Dallas
 
1985
 
125,874

 
68
%
 
$
1,251

 
$
14.62

 
$
14.04

Pima Norte
 
Phoenix
 
2007
 
35,110

 
54
%
 
315

 
16.61

 
20.31

Uptown Tower
 
Dallas
 
1982
 
253,981

 
78
%
 
3,384

 
17.08

 
16.71

Woodlake Plaza
 
Houston
 
1974
 
106,169

 
96
%
 
1,674

 
16.42

 
17.11

Total/Weighted Average
 
 
 
 
 
521,134

 
78
%
 
6,624

 
16.30

 
16.34


28

 Whitestone REIT and Subsidiaries
Property Details
As of June 30, 2015
(continued)

 
 
Community Name
 
 
 
Location
 
 
Year Built/
Renovated
 
Gross Leasable
Square Feet
 
Percent
Occupied at
6/30/2015
 
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)
Office/Flex Communities:
 
 
 
 
 
  
 
 
 
  
 
  
 
 
Brookhill
 
Houston
 
1979
 
74,757

 
83
%
 
$
240

 
$
3.87

 
$
3.71

Corporate Park Northwest
 
Houston
 
1981
 
185,627

 
82
%
 
1,822

 
11.97

 
11.83

Corporate Park West
 
Houston
 
1999
 
175,665

 
93
%
 
1,658

 
10.15

 
10.66

Corporate Park Woodland
 
Houston
 
2000
 
99,937

 
82
%
 
784

 
9.57

 
9.91

Dairy Ashford
 
Houston
 
1981
 
42,902

 
99
%
 
263

 
6.19

 
5.93

Holly Hall Industrial Park
 
Houston
 
1980
 
90,000

 
100
%
 
816

 
9.07

 
8.50

Interstate 10 Warehouse
 
Houston
 
1980
 
151,000

 
96
%
 
735

 
5.07

 
4.97

Main Park
 
Houston
 
1982
 
113,410

 
96
%
 
669

 
6.14

 
6.93

Plaza Park
 
Houston
 
1982
 
105,530

 
67
%
 
720

 
10.18

 
9.99

Westbelt Plaza
 
Houston
 
1978
 
65,619

 
63
%
 
421

 
10.18

 
9.05

Westgate Service Center
 
Houston
 
1984
 
97,225

 
92
%
 
545

 
6.09

 
6.54

Total/Weighted Average
 
 
 
 
 
1,201,672

 
87
%
 
8,673

 
8.30

 
8.36

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total/Weighted Average - Operating Portfolio
 
 
 
 
 
5,158,599

 
87
%
 
61,931

 
13.80

 
13.94

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Davenport Village
 
Austin
 
1999
 
128,934

 
85
%
 
$
2,477

 
$
22.60

 
$
22.60

Fulton Ranch Towne Center
 
Phoenix
 
2005
 
113,281

 
85
%
 
1,729

 
17.96

 
17.78

The Promenade at Fulton Ranch
 
Phoenix
 
2007
 
98,792

 
74
%
 
1,271

 
17.39

 
18.40

The Shops at Williams Trace
 
Houston
 
1985
 
132,991

 
87
%
 
1,535

 
13.27

 
13.71

Total/Weighted Average - Development Portfolio (4)
 
 
 
 
 
473,998

 
83
%
 
7,012

 
17.82

 
18.10

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Anthem Marketplace
 
Phoenix
 
N/A
 
—

 
—

 
—

 
—

 
—

Dana Park Development
 
Phoenix
 
N/A
 
—

 
—

 
—

 
—

 
—

Fountain Hills
 
Phoenix
 
N/A
 
—

 
—

 
—

 
—

 
—

Market Street at DC Ranch
 
Phoenix
 
N/A
 
—

 
—

 
—

 
—

 
—

Pinnacle Phase II
 
Phoenix
 
N/A
 
—

 
—

 
—

 
—

 
—

Shops at Starwood Phase III
 
Dallas
 
N/A
 
—

 
—

 
—

 
—

 
—

Total/Weighted Average - Property Held For Development (5)
 
 
 
 
 
—

 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Grand Total/Weighted Average
 
 
 
 
 
5,632,597

 
86
%
 
$
68,943

 
$
14.23

 
$
14.38


(1)   
Calculated as the tenant's actual June 30, 2015 base rent (defined as cash base rents including abatements) multiplied by 12. Excludes vacant space as of June 30, 2015. 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 June 30, 2015 equaled approximately $160,000 for the month ended June 30, 2015.
 
(2)   
Calculated as annualized base rent divided by gross leasable area leased as of June 30, 2015.  Excludes vacant space as of June 30, 2015.

(3) 
Represents (i) the contractual base rent for leases in place as of June 30, 2015, adjusted to 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 of June 30, 2015.

(4) 
Includes (i) new acquisitions, through the earlier of attainment of 90% occupancy or 18 months of ownership, and (ii) properties that are undergoing significant redevelopment or re-tenanting.

(5) 
As of June 30, 2015, these parcels of land were held for development and, therefore, had no gross leasable area.


29